2024 (11) TMI 795 - AT - FEMA

Condonation of delay in filing appeal under FEMA - allegation against the Respondent No.1 was regarding his support to the accused involved in Bombay Blast Case and for which a case was registered under TADA - case for contravention of Section 9(1) (b) and (d) of Foreign Exchange Regulation Act, 1973 - prayer is made to dismiss the appeal filed beyond the period of limitation without proper explanation of delay of more than 800 days. HELD THAT - In the instant case, the appellant Directorate have failed to show that there was receipt of payment from any person resident outside India and that Tiger Memon was resident out of India or for that any other person with whom alleged Hawala Transaction took place. In the light of the aforesaid, the appellant Directorate have failed to satisfy the ingredients of Section 9(1)(b)(d) to pass the order against the Respondent No.1. Further issue is in reference to the order of the Apex Court under TADA where Respondent No.1 has been extended benefit. It is mainly on the ground that his statements were recorded under coercion and with duress thus cannot be relied. The appellant Directorate have relied on the same statement despite being discarded by the Apex Court. In the light of the aforesaid, the appellant Directorate was required to show other material to prove the case. It is also when other statements were also discarded and in any case if the pleadings of the appeal are taken into consideration, the appellant Directorate have not pleaded that Tiger Memon was a resident out of India. What has been stated is that Tiger Memon has shifted his Mumbai base to Dubai after Bombay blast case. The facts have been otherwise controverted by the Respondent No.1 to show that a case was registered against Tiger Memon for Bombay Blast case where his passport was seized showing him to be the resident of India. Appellant Directorate could not make out a case to cause interference in the impugned order passed by the Adjudicating Authority not only in reference to the order of the Apex Court but on the facts of this case also. Finding no merit, we would now come to the application for condonation of delay. Delay in filing of the appeal is of more than 800 days i.e. nearly more than two years. The cogent reasons to condone the delay have not been given. At times delay occurs in taking a decision for filing the appeal where the Government or its machinery is involved. However, it would not mean that even if there is unexplained delay, it has to be condoned. We do not find a case on merit and even for condonation of delay.

Summary

Issues:
1. Condonation of delay in filing appeal under Section 19 of FEMA, 1999.
2. Allegation of contravention of Section 9(1)(b) and (d) of the Act of 1973.
3. Interpretation of Section 9(1)(b)(d) regarding payment transactions with persons resident outside India.
4. Reliance on the Apex Court's order under TADA in the adjudication process.
5. Failure to prove contravention of Section 9(1)(b)(d) and lack of merit in the appeal.
6. Application for condonation of delay in filing appeal beyond the limitation period.

Analysis:
1. The appeal was filed by the Assistant Director, Directorate of Enforcement under Section 19 of FEMA, 1999 against an order passed by the Adjudicating Authority, with a delay of 838 days. An application for condonation of delay was submitted, emphasizing the need for a liberal view due to the merit of the appeal. The case involved illicit monetary dealings related to the "Bombay Bomb Blast" case of 1993, where the Respondent was alleged to be involved in hawala transactions with Tiger Memon and others. The appeal challenged the dropping of charges against the Respondent by the Adjudicating Authority, leading to the penalty amount refund eligibility.

2. The primary allegation against the Respondent was contravention of Section 9(1)(b) and (d) of the Act of 1973, related to hawala transactions. The appellant Directorate failed to establish the necessary elements of the contravention, specifically regarding payments from persons resident outside India. The Adjudicating Authority's decision heavily relied on the Apex Court's order under TADA, which favored the Respondent due to statements being recorded under coercion and duress.

3. The interpretation of Section 9(1)(b)(d) was crucial in determining the legality of the transactions in question. The provision outlined restrictions on payments involving persons resident outside India, emphasizing the need for corresponding inward remittances. The appellant Directorate's failure to demonstrate such transactions with non-residents and the lack of evidence regarding Tiger Memon's residency status weakened their case for contravention.

4. The reliance on the Apex Court's order under TADA, which discredited the Respondent's statements, played a significant role in the adjudication process. Despite the dismissal of criminal charges under TADA, the appellant Directorate persisted in using the same statements to support their case, disregarding the court's findings of coercion and torture during the recording of statements.

5. The lack of merit in the appeal was evident from the failure to establish contravention of Section 9(1)(b)(d) and the inability to provide substantial evidence of transactions with persons resident outside India. The Adjudicating Authority's decision, based on the Apex Court's order and the factual inconsistencies regarding Tiger Memon's residency status, was deemed appropriate, leading to the dismissal of the appeal.

6. The application for condonation of delay, exceeding 800 days, lacked sufficient reasons to justify the delay. Despite potential delays in governmental decision-making processes, the absence of cogent explanations warranted the dismissal of both the application for condonation of delay and the appeal itself.