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TMI Blog2001 (4) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... New Delhi. 3. The facts of the case in the nutshell are; that the first respondent according to the appellant's case is a citizen of India and has been working in Dubai and is a partner in M/s. Ahamed Illiyas Trading Company, Abu Dabi, U.A.E. The respondent was being approached by the people of Indian origin in Abu Dabi for remitting various amounts to their relatives in India. Respondent-1 according to the appellant's case was collecting the amounts and money in Dirhams at Abu Dabi and was handing over the amount to Sri Tabraz Bhai at Abu Dabi for distribution of the same to the different persons in India. The present respondent-1 was charged for having contravened the provisions of Section 9(3) of the Foreign Exchange Regulation Act, 1973. According to case of the appellant, the Enforcement Directorate the first respondent had caused remittance and used to cause remit from U.A.E. the various amounts collected to the tune of Rs. 2,82,73,700/- to India through the persons other than authorised dealers in such a way that remittances were received by Mohd. Yousuf Kazia, Abdul Mateen Kazia, Abdul Rahim Kazia, Mohd. Isa Kazia and Champalal Singhvi of Bangalore, through persons o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aused to remit various payments to the tune of Rs. 2,82,73,700/- in contravention of Section 9(3) of the Foreign Exchange Regulation Act, 1973. Shri Champalal Singhvi was supplied with the Hindi translation of the documents to be relied upon as per his desire and request vide the letter dated 8-1-1992. He was granted time to file the reply and extension of time for that purpose also was granted and was directed to file the reply by 15-7-1992. The personal hearing of the case was also given to their Counsels. The Special Director, Enforcement Directorate, after having considered the material placed on record, the facts of the case and the evidence recorded in the case found that the recipients and would be recipients have deposed before the investigating officer that they have been receiving money from Champalal Singhvi on the instructions from abroad and that the name of Sartaj and her address became available from the documents seized from Champalal Singhvi and Smt. Sartaj in her statement dated 17-5-1991 admitted delivery of Rs. 15,000/- to her and had identified the photo of Champalal Singhvi as that of the person who had delivered Rs. 15,000/- to her. Certain persons whose name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Deputy Director, Enforcement Directorate, Madras Zonal Office, at No. 26, Haddows Road, Shashtri Bhavan, III Floor, III Block, Madras, within 45 days from the date of receipt of the order dated 6-10-1993. A copy of the order was communicated to the present respondent-l Mohtesham Mohd.Ismail and Champalal Singhvi. 5. From the order of the adjudicating authority dated 6-10-1993 referred to above, Mohtesham Mohd. Ismail filed the appeal in No. 709/1993 which has been decided and allowed by the Foreign Exchange Regulation Appellate Board, vide the order dated 8th July 1994. The appellate Board allowed the appeal and set aside the order of the adjudicating authority. The appellate Board opined that there is no evidence to indicate that those persons had actually brought the amount in question from Abu Dabi/Dubai to India and the evidence does not disclose the fact of actual remittance of any amount from Abu Dabi/Dubai to India. In paragraph 12 of the order, the Appellate Board, observed that it would appear from the above discussion that neither in the documents seized from Champalal Singhvi and those seized from the premises of Yousuf Kazia, nor in the statements of Champ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re received and in such cases actual currency does not move from one place to another. The amounts deposited at one end and paid accounted for at the other end without physical movement of currency on the direction from remitter and the expression remit or caused to be remit cannot be held to require the actual physical movement of cash as held by the Appellate Board. The learned Counsel, as such, contended that the Appellate Board adopted a wrong criteria on the basis of misinterpretation of Section 9(3) of the Foreign Exchange Regulation Act, 1973, by having wrongly interpreted the expression. The expression remit or cause to remit in a narrow sense requiring proof of actual physical movement of the amount or currency. The learned Counsel further contended that apart from this question of law as to interpretation of Section 9(3) of the Foreign Exchange Regulation Act, 1973, the Appellate Board had committed error of law in opining that there was no evidence to support the conclusion of the adjudicating authority that the first respondent has either remitted or caused to be remitted any amount from U.A.E. to India and that the Appellate Board had ignored the material piece of evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AIR 1981 MADRAS 80), and he further made reference to another single Judge decision of the Punjab and Haryana High Court in the case of Director of Enforcement v. Lal Chand and Another reported in 1985 Excise and Customs Cases at page 55. 10. We have applied our mind to the respective contentions advanced by the learned Counsels appearing for the parties. 11. Before proceeding to deal with the merits of the appeal, we propose to dispose of the preliminary objection raised by the learned Counsel for the first respondent. 12. Section 54 of the Foreign Exchange Regulation Act, 1973 reads and provides as under : "54. Appeal to High Court. - An appeal shall lie to the High Court only on question of law from any decision, or order of the Appellate Board under sub-section (3) or sub-section (4) of Section 52 : Provided that the High Court shall not entertain any appeal under this section, if it is filed after the expiry of sixty days, of the date of communication of the decision, or order of the Appellate Board, unless the High Court is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time. Explanation. - In this section, and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it thinks fit to be officers of Enforcement. (2) Without prejudice to the provisions of sub-section (1), the Central Government may authorise a Director of Enforcement, or an additional Director of Enforcement or a Deputy Director of Enforcement, or an Assistant Director of Enforcement to appoint officers of Enforcement below the rank of an Assistant Director of Enforcement. (3) Subject to such conditions and limitations as the Central Government may impose, an officer of Enforcement may exercise the powers and discharge the duties conferred or imposed on him under this Act." 14. A perusal of sub-section (3) of Section 4 of the Foreign Exchange Regulation Act, 1973 per se reveals that unless and until the Central Government has put certain conditions or limitations on the powers of the officers of the Enforcement Directorate, the law authorises and requires the officers of Enforcement Directorate to exercise powers and to discharge the duties conferred and imposed upon them under the Act. No doubt, under Section 5 of the Foreign Exchange Regulation Act, 1973 the Central Government is empowered subject to the conditions and limitations to authorise other officers such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment or its instrumentality through which it works as per explanation (ii) to Section 54 of the Foreign Exchange Regulation Act, 1973, the appeal may be filed before the High Court within whose territorial jurisdiction the respondent or where there are more than one respondent, any of respondents ordinarily reside or carries on business or personally works for gain. It is not to be taken to be creating any rider to the Enforcement Directorate's right to file the appeal. With due respect to the Hon'ble Judges of the High Court of Madras and that of Punjab and Haryana, we are unable to agree with the view expressed in the case of Director of Enforcement, Madras v. Rama Arangannal (AIR 1981 Madras 88) as well as in the case of Director of Enforcement v. Lal Chand and Another (1985 Excise and Customs Cases at page 95). The Punjab and Haryana High Court has only followed the Madras High Court's decision and on the basis thereof it has dismissed the appeal filed by the Director of Enforcement. So far as the Madras High Court's decision is concerned, the interpretation placed by the Madras High Court, in our opinion amounts to legislation and interference with into the field of Legis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount from Abu Dabi/Dubai to India. Section 9 of the Foreign Exchange Regulation Act, 1973 reads as under: "9. Restrictions on payment. - (1) Save as may be provided in and in accordance with any general or special exemption from the provisions of this sub-section which may be granted conditionally or unconditionally by the Reserve Bank, no person in or resident in India shall - (a) make any payment to or for the credit of any person resident outside India; (b) receive, otherwise than through an authorised dealer, any payment by order or on behalf of any person resident outside India; Explanation. - For the purposes of this clause, where any person in, or resident in, India receives any payment by order or on behalf of any person resident outside India through any other person (including an authorised dealer) without a corresponding inward remittance from any place outside India, then such person shall be deemed to have received such payment otherwise than through an authorised dealer. (c) draw, issue or negotiate any bill of exchange or pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the doing by any person of anything within the scope of any authorisation or exemption granted under this Act. (5) For the purposes of this section and section 19 "security" includes coupons or warrants representing dividends or interest and life or endowment insurance policies." 19. Sub-section (3) of Section 9 of the Act very clearly provides that save as may be provided in, and in accordance with, any general or special exemption from the provisions of this sub-section which may be granted conditionally or unconditionally by the Reserve Bank, no person shall remit or cause to be remitted any amount from any foreign country into India except in such a way that the remittance is received in India only through an authorised dealer. Sub-section (3) of Section 9 of the Act bars remitting or causing of remittance of any amount from a foreign country into India, subject to the exceptions indicated therein viz., remittance may be received in India through an authorised dealer. The expression 'remit or cause to be remitted' is important along with the expression 'any amount' from any foreign country. The expression used 'any amount' whether in the form of foreign currency or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the form of currency of that land for paying off that amount or that amount being paid in India in Indian currency and the person taking the money for sending it to the remittee for whom it is to be sent, he collects that money and then directs his agent or his person or his instrumentality in India to pay the amount collected by the former in the foreign land for being sent to the person in India and then payment of money on his direction by his agent to the persons in India may even amount to be an Act of remittance or causing remittance of the amount from a foreign country into India, and if such remittance is not through an authorised dealer, it may amount to breach of sub-section (3) of Section 9 of the Act. In modern days, where Science has developed it is not that the money actually transmitted, but the amount is collected at the one place and the person collecting it on a foreign land directs his own agency in India to distribute that much of amount to the payee to whom it is directed to be paid and for whom it has been sent by the sender or by the relative. So, in the present context of economic and commercial transaction, it appears that it is always not necessary to prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tkal, whether they can distribute amounts in India particularly in Karnataka and Kerala. Sri Mohd. Yousuf Kazia, who is studying in Bangalore has accepted to distribute the amount in India along with his brothers as per instructions from Abu Dabi. Accordingly, Sri Mohd. Yousuf Kazia and his brothers have been distributing amounts. Referring to Sri Champalal Singhvi, Mohtesham Mohd. Ismail states that Champalal Singhvi met him on 12-7-1990 at my room and assured me to give his accounts of distribution the next day. 23. The deposition/statement of Mohtesham Mohd. Ismail coupled with the other evidence placed on record which has been discussed in great detail by the adjudicating authority, it is clearly established that the first respondent used to collect amounts at Dubai in Dirham from the persons who desired to send money to their relatives in India and then he used to pass on the amounts to his agents, Champalal Singhvi and others and then got distributed or remitted to the said persons to whom it was to be paid on behalf of those who wanted their money to be remitted or sent to their relatives. The Appellate Board on the basis of the misconception of law erred in law by hol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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