1982 (2) TMI 326 - HC - FEMA

Summary

Issues:
Violation of Sections 5(1)(aa) and 5(1)(c) of the Foreign Exchange Regulation Act, 1947; Validity of show cause notices issued under the 1947 Act after its repeal by the 1973 Act; Admissibility of statements taken by officers other than the Director of Enforcement; Justification of penalties imposed on the appellants.

Analysis:

1. The judgment involves cases where the appellants were found guilty of contravening Sections 5(1)(aa) and 5(1)(c) of the Foreign Exchange Regulation Act, 1947. The charges were upheld by the Appellate Board based on evidence including statements from the appellants and documents seized during a search at their residence.

2. The appellants raised a legal plea regarding the issuance of show cause notices under the repealed 1947 Act after the enactment of the 1973 Act. The court held that liabilities incurred under the old Act could be enforced even after the new Act came into force, citing Section 6 of the General Clauses Act, which preserves liabilities incurred under repealed enactments.

3. Another contention was the admissibility of statements taken by officers other than the Director of Enforcement under Section 19(E) of the 1947 Act. The court ruled that the Additional Director's role in conducting the enquiry did not violate Section 19(E) as it pertained to adjudication proceedings and not preliminary investigations.

4. The judgment also addressed the justification of penalties imposed on the appellants. The court considered factors such as the familial relationship between the appellants and the circumstances under which the violations occurred in determining the reasonableness of the penalties. The penalty amounts were adjusted based on these considerations.

5. Ultimately, the court dismissed two appeals while partially allowing one and reducing the aggregate penalty levied on the appellant in that case. The appellant was granted two months to pay the reduced penalty amount. The judgment highlighted the importance of considering individual circumstances in determining the appropriate penalties for violations of the Act.