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Appeal against penalty imposed for contravention of FERA provisions - Contravention of sections 9(1)(c), 18(2), and 8(1) - Liability of firm and partner - Interpretation of partnership firm's liability under FERA. Analysis: The judgment delivered by Km. Vijay Laxmi, Member, Appellate Tribunal for Foreign Exchange, pertains to an appeal against an Adjudication Order imposing a penalty for contravention of FERA provisions. The penalty of Rs. 42,000 was imposed on the appellant, Shri. P. Balasubramaniam, for contravention of section 9(1)(c) of FERA, 1973. The appellant had deposited the full penalty amount in compliance with the Tribunal's order. Three show-cause notices were issued against three sister concerns and the appellant, who was the Managing Partner of these concerns, for various contraventions under FERA. The matter had been previously heard by the Special Director, who imposed penalties against the firms and the appellant for contraventions of sections 18(2), 9(1)(c), and 8(1) of FERA. However, the FERA Board remanded the cases for fresh adjudication, where the charges under sections 18(2) and 8(1) were dropped, but penalties were imposed under section 9(1)(c) against the firms and the appellant. The Adjudicating Officer found the firms guilty of contravening section 9(1)(c) and imposed penalties accordingly. The appellant challenged the order based on a ruling of the Hon'ble High Court of Kolkata regarding the liability of partnership firms and partners for contraventions. The appellant contended that the penalty could be imposed either on the firm or the partner, not both simultaneously, citing the nature of a partnership firm. Conversely, the Respondent argued that the partner is equally responsible for violations committed by the partnership firm under section 68(1) of FERA, relying on a Supreme Court ruling. After considering the submissions and records, the Member found no merit in the appellant's argument regarding the liability of the firm or partner. The Adjudicating Officer's findings were upheld, noting that the firms had admitted to contraventions and had adjusted amounts towards machinery purchases without RBI permission. The Member dismissed the appeal, upholding the impugned order and confirming the penalty. The pre-deposited amount was to be appropriated towards the penalty. The judgment highlights the responsibility of partners in partnership firms for contraventions under FERA and emphasizes that penalties can be imposed on both the firm and the partner for violations.
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