2024 (9) TMI 121 - AT - FEMA

Validity of order passed - violation of principles of natural justice - prayer for cross-examination was not granted - scope of retracted statement of the noticee - Adjudicating Authority failed to consider the opinion of the handwriting expert with respect to the matter written on the diaries and certain loose sheets recovered during the search. The statements which were recorded by the Appellants were retracted as during the custody they were tortured and beaten HELD THAT - We find that the contentions which have been reiterated during the present proceedings had been meticulously dealt with by the Ld. Adjudicating Authority. The relied upon documents were provided to the Appellants. It does not appear to be convincing that merely because hearing was not held just before the passing of the impugned Order, in-spite of a number of opportunities given to the Appellants earlier that the impugned Order is vitiated by the violation of the principles of natural justice. The retractions have been dealt with by the Respondent Directorate from time to time as mentioned in the afore cited paragraphs. Since, the statements were explanatory in nature, providing explanation of the documents recovered during the search, the denial of cross-examination does not cause pre-judice to the interest of the Appellants. It is to be noted that since Sh. Samsul Huda was resident of Dhaka, the demand to cross-examine him was ab initio infructuous. The Appellant Sh. Liakat Ali failed to cooperate during the investigation and the adjudication proceedings. His belated participation through his Appeal at this stage cannot come to his rescue as to deny his involvement by raising the bogey of the alleged person being someone else other than him, without any corroboration. After having served the SCN and having furnished the relied upon documents, even so during the proceedings of adjudication, there does not appear to be any prejudice caused to the interest of the Appellants by the denial of cross examination, which in any case may not have been necessary in the present proceedings. A number of hearings were given to the Appellants during the course of the Adjudication proceedings. No reason to cause intervention in the impugned Order. We accordingly dismiss the Appeals.

Issues Involved:
1. Violation of principles of natural justice.
2. Denial of cross-examination requests.
3. Admissibility of retracted statements.
4. Legitimacy of search and seizure operations.
5. Adequacy of evidence provided to the appellants.
6. Identity confusion regarding one of the appellants.
7. Delay in proceedings and non-cooperation by appellants.

Detailed Analysis:

1. Violation of Principles of Natural Justice:
The appellants contended that the impugned order was ex-parte and violated principles of natural justice as they were not given an effective hearing. The Tribunal, however, found that the appellants were given numerous opportunities to present their case and that the procedural requirements were met. The Tribunal noted that the appellants had a tendency to request adjournments without valid reasons, leading to prolonged proceedings. Thus, the claim of violation of natural justice was not upheld.

2. Denial of Cross-Examination Requests:
The appellants argued that their request for cross-examination of co-noticees was denied, which was crucial as the statements were allegedly obtained under coercion. The Tribunal held that the appellants did not provide sufficient evidence to substantiate their claims of coercion. It was noted that the search and seizure operations were conducted in compliance with legal procedures and in the presence of independent witnesses. Therefore, the denial of cross-examination did not prejudice the appellants' interests.

3. Admissibility of Retracted Statements:
The appellants retracted their statements, claiming they were made under duress. The Tribunal referred to the Supreme Court judgments in *Vinod Solanki Vs Union of India* and *K.T.M.S Mohamed Vs. Union of India*, which held that retracted statements could be admissible if corroborated by independent evidence. The Tribunal found that the retracted statements were corroborated by documents seized during the search, making them admissible.

4. Legitimacy of Search and Seizure Operations:
The appellants questioned the legitimacy of the search and seizure operations, alleging that documents were fabricated. The Tribunal found no merit in these allegations, noting that the operations were conducted in the presence of independent witnesses and the concerned parties. The seized documents were signed for identification and confirmation of recovery, thus validating the operations.

5. Adequacy of Evidence Provided to the Appellants:
The appellants claimed they were not provided with all the relied-upon documents. The Tribunal found that the documents seized from the business premises were explained in the appellants' statements and were made available for inspection. Therefore, the claim that the adjudicating authority failed to provide necessary details was deemed irrelevant.

6. Identity Confusion Regarding One of the Appellants:
One appellant, Sh. Liakat Ali, argued that the allegations were against a different individual with the same name. The Tribunal dismissed this claim due to the appellant's failure to cooperate during investigations and adjudication proceedings. The Tribunal held that the appellant's belated participation could not exonerate him without corroborative evidence.

7. Delay in Proceedings and Non-Cooperation by Appellants:
The respondents contended that the appellants were responsible for delays and non-cooperation during proceedings. The Tribunal observed that the appellants' conduct contributed to the prolonged adjudication process. The Tribunal also noted that the appellants' retractions and claims were addressed and dismissed by the adjudicating authority, which had carefully considered the evidence and circumstances.

Conclusion:
The Tribunal dismissed the appeals, finding no reason to intervene in the impugned order. The Tribunal held that the adjudicating authority had duly considered the appellants' contentions and provided sufficient opportunities for them to present their case. The principles of natural justice were not violated, and the retracted statements were deemed admissible as they were corroborated by independent evidence. The search and seizure operations were conducted lawfully, and the denial of cross-examination did not prejudice the appellants' interests.

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