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Issues:
Violation of section 4(1) read with section 23C(1) of FER Act, 1947 - Unauthorized acquisition of foreign currency - Agency relationship in foreign currency transaction - Vicarious liability of director for company's actions. Analysis: The judgment delivered by the Appellate Tribunal for Foreign Exchange pertains to two appeals challenging an adjudication order imposing penalties for contravention of section 4(1) read with section 23C(1) of FER Act, 1947. The penalties were imposed on an appellant company and another appellant, a director of the company, for unauthorized acquisition of foreign currency amounting to DM 47,500. The payment was made by M/s. Kaiser Engineers International USA to M/s. A. Knoevenagal West Germany on behalf of the appellants, without the required RBI permission. The appellants argued that the material on record did not establish guilt beyond reasonable doubt, citing precedents such as Shanti Prasad Jain v. Director of Enforcement AIR 1962 SC 1764 and Central Government v. Abdul Mohammed 1988 (17) ECC 96 (Ker.). They contended that the transaction did not involve wrongful acquisition of foreign currency as per the FER Act, 1947. The appellants further argued that the payment made by M/s. Kaiser Engineers International USA to M/s. A. Knoevenagal Germany did not create a debt against them, and the alleged transaction did not result in an outflow of foreign currency. However, the Tribunal found that the payment, though made by a third party, was for the benefit of the appellants, establishing an agency relationship. The Tribunal cited the Indian Contract Act, emphasizing that an agency can be implied from circumstances, as seen in Chairman, LIC v. Rajeev Kumar Bhaskar [2005] 6 SCC 188. The Tribunal held that the payment without RBI permission amounted to a violation of section 4(1) of the FER Act, 1947, as it was made on behalf of the appellants. Regarding the director's liability, the Tribunal noted that as a member of the Board of Directors, he was in charge and responsible for the company, leading to vicarious liability under section 23C(1) of the FER Act, 1947. The Tribunal rejected arguments related to contingent debt and upheld the penalties imposed, emphasizing that the same transaction can result in different violations, warranting punishment for each offense committed. Ultimately, the appeals were dismissed for lacking merit, and the impugned order was sustained and affirmed. The pre-deposit amount was directed to be adjusted towards the imposed penalties by the Enforcement Directorate.
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