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Issues:
Penalty imposed for contravention of sections 8(1), 9(1)(a), and 14 of the FERA, 1973. Analysis: 1. Section 8(1) Contravention: The appellant was penalized for allegedly acquiring foreign exchange and borrowing without complying with the provisions of section 8(1) of FERA, 1973. The appellant acquired stg. Pound 25,000 and borrowed stg. Pound 78,000 for film production expenses. However, the appellant clarified that the funds were provided by Dr. Gaur for film expenses, and he accounted for all expenditures as per their agreement. The Tribunal found that the appellant did not personally acquire the foreign exchange for personal use but for film expenses. The term "acquired" in section 8(1) carries legal significance, and the mere handling of foreign exchange does not constitute acquisition. Therefore, the appellant was not found guilty of contravening section 8(1) concerning stg. Pound 25,000. 2. Section 8(1) Borrowing Allegation: Regarding the borrowing of stg. Pound 78,000, the Tribunal considered the transaction's legal implications. The appellant explained that the funds were arranged by Dr. Gaur through his company, Gaur Developments Ltd., to fulfill the film's financial requirements. The mortgage deed executed was deemed a formal arrangement to justify the fund transfer. The Tribunal concluded that the transaction was not a personal borrowing by the appellant but a financial arrangement between Gaur Developments Ltd. and Kaleidoscope Films. As such, the charge of borrowing stg. Pound 78,000 under section 8(1) was not sustained. 3. Section 9(1)(a) Contravention: The appellant was also penalized under section 9(1)(a) for alleged acquisition and borrowing of foreign exchange. However, the Tribunal found that all expenses were borne by Dr. Gaur, and the appellant did not personally acquire or borrow foreign exchange. Therefore, the charge of contravention of section 9(1)(a) was deemed misconceived and set aside. 4. Section 14 Contravention: The Tribunal ruled that since the appellant did not own or hold the foreign exchange in question, the charge under section 14 did not apply. Section 14 pertains to foreign exchange ownership or holding rights, which the appellant did not possess. Consequently, the charge under section 14 was not sustained. In conclusion, the Tribunal allowed the appeal, set aside the impugned order, and directed the refund of the deposited amount. The judgment highlighted the legal nuances of acquiring, borrowing, and ownership of foreign exchange under FERA, ultimately absolving the appellant of the alleged contraventions.
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