2009 (1) TMI 949 - AT - FEMA

Summary

Issues Involved:
1. Legality of adjudication proceedings based on belated SCNs.
2. Vagueness and improbability of allegations in SCNs III and IV.
3. Admissibility of involuntary statements.
4. Different treatment of appellants compared to co-accused.
5. Nexus between appellants and Iqbal of Dubai.
6. Physical feasibility of executing huge payments.
7. Proof of charges beyond reasonable doubt.

Detailed Analysis:

1. Legality of Adjudication Proceedings Based on Belated SCNs:
The appellants contended that the adjudication proceedings were illegal because the SCNs were issued after the expiry of six months from the date of seizure without an extension of time by the concerned authority. The Tribunal did not explicitly address this issue in the judgment.

2. Vagueness and Improbability of Allegations in SCNs III and IV:
The appellants argued that SCNs III and IV contained vague and improbable allegations based on involuntary and uncorroborated statements. The Tribunal noted that the charges against noticees under SCNs I and II were dropped, indicating inconsistency in the treatment of similar cases.

3. Admissibility of Involuntary Statements:
The appellants contended that the adjudication order was based on involuntary statements extracted under duress and physical torture, as evidenced by an order from the CMM, Mumbai. The Tribunal emphasized that retracted confessional statements must be voluntary and true to be admissible. The Tribunal found that the statements of Ashok and Chandanmal were not corroborated by other evidence, making them inadmissible.

4. Different Treatment of Appellants Compared to Co-Accused:
The appellants argued that the adjudicating officer accepted the retractions of co-accused in SCNs I and II but did not accept similar retractions from the appellants. The Tribunal found this inconsistent and noted that Ashok, who was subjected to the same treatment, should not be treated differently without material evidence.

5. Nexus Between Appellants and Iqbal of Dubai:
The appellants contended that the impugned order failed to establish any nexus between Iqbal of Dubai and the appellants. The Tribunal noted that the impugned order did not specify the person on whose instructions the payments were received or distributed, making the phrase "instructions from abroad" lose its significance.

6. Physical Feasibility of Executing Huge Payments:
The appellants argued that it was highly improbable that three persons could physically execute the receipt and making of huge payments simultaneously. The Tribunal did not explicitly address this issue but noted the lack of corroborative evidence for the figures mentioned in the impugned order.

7. Proof of Charges Beyond Reasonable Doubt:
The appellants relied on the Supreme Court decision in Shanti Prasad Jain v. Director of Enforcement, FERA, to argue that the respondent failed to prove the charges beyond reasonable doubt. The Tribunal agreed, noting the lack of corroborative evidence and inconsistencies in the impugned order.

Conclusion:
The Tribunal set aside and quashed the impugned order, allowing the appeals. The judgment highlighted the need for corroborative evidence and consistency in the treatment of similar cases, emphasizing that retracted confessional statements must be voluntary and true to be admissible. The charges under sections 9(1)(b), 9(1)(d), and 9(1)(f)(i) of the FER Act, 1973, were not sustained due to the lack of evidence and inconsistencies in the adjudication process.