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TMI Blog1987 (9) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... n Act, 1947, by the officers of the Nagapattinam unit of the Madras Zonal office of the Enforcement Directorate and there was a search of the residential premises of the appellant on December 2, 1967. The search did not result in seizure of any incriminating documents. But the appellant who was questioned by the Officers of the Enforcement Directorate, in a statement, admitted in writing that he received an amount of Singapore $ 15,000 in Singapore in March, 1967, towards life insurance, provident fund and gratuity of his deceased brother, G. Masilamoney. Out of the said amount, he had spent a sum of Singapore $ 8,000 towards advocate's fees and payment of his brother's debts and other expenses, and out of the remaining amount of Singapore $ 7,000 he had taken a draft for Rs. 2,500 in Singapore and credited the proceeds thereof in his savings bank account No. 1421 with the Indian Bank Limited, Mannargudi, on March 31, 1967, and the balance of Singapore $ 6,000 was spent by him for his journey expenses. No documentary evidence was produced by him in support of the explanation with regard to the expenditure incurred by him. The respondent took up adjudication proceedings as contemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntravened the provisions of section 10(1)( b ) of the Act and accordingly held that the appellant is guilty of the charge and imposed penalty of Rs. 20,000 under section 23(1)( a ) of the Act. Against the said order, the appellant herein filed an appeal before the Appellate Board and the Foreign Exchange Regulation Appellate Board at Madras dismissed the appeal confirming the order passed by the Additional Director with regard to the contravention, but reduced the quantum of penalty to Rs. 10,000. Aggrieved with the said order, the present appeal has been filed. The appellant has come forward with this appeal contending that the proceedings initiated under section 10 of the Act are not sustainable that the appellant was an Indian citizen and his brother a citizen of Singapore died in Singapore intestate leaving a sum of 15,523'31 Singapore dollars payable to the deceased under life insurance, provident fund and employment benefits and the appellant as his only heir left for Singapore on August 3, 1966, and stayed there till March 24, 1967, and collected the amounts after expending monies to realise the said sums. The appellant, during his stay for a period of about eight months, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty under section 23(1)( a )of the Act and therefore in the absence of a proper finding with regard to the value of the foreign exchange in respect of such contravention taking place, the appellate order imposing penalty is liable to be set aside. Further, having regard to the nature of the contravention and the circumstances of the case, the imposition of Rs. 10,000 as penalty is not justifiable. The point that arises for consideration in this appeal is as to whether section 10 of the Foreign Exchange Regulation Act, 1947, will not be attracted to the facts of this case and accordingly the appellant is not liable to be penalised. There is no dispute with regard to the facts of this case. Since the appellant's brother who was a citizen of Singapore died there on January 20, 1966, intestate, the appellant proceeded to Singapore on August 3, 1966, and stayed there till March 24, 1967. During his stay, the appellant had taken steps to receive Singapore $ 20,000 payable under the insurance policy in the name of his deceased brother and another sum of Singapore $ 4,000 from the Central Board -Provident Fund, Singapore, due to his deceased brother. The appellant is also stated to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount due under the insurance policy taken by him as well as the amount due under the provident fund account, the appellant had taken steps to collect the amounts as a legal representative at Singapore. I am unable to accept the contention put forward on behalf of the appellant that the right claimed by the appellant as a legal representative is not a right as such of the appellant and only when the appellant becomes entitled in his own right, section 10 of the Act will be attracted. Having regard to the death of the appellant's brother, who was a citizen of Singapore and not a citizen of India, the appellant became entitled as heir to the said brother and had the right to receive the foreign exchange. Therefore, there could be no hesitation in coming to the conclusion that the appellant had the right to receive the amount as legal heir of his deceased brother. For receiving such amount, the appellant failed to get permission from the Reserve Bank of India. And without such permission, the appellant has repatriated only a portion of the amount and has failed to realise the entire foreign exchange to which he became entitled. Under section 10 of the Act, if any person becomes enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M. Syed Mohammed Bukhari v. Director of Enforcement, AIR 1977 Mad. 23, the facts reveal that a person resident in India was charged for contravention of section 5(1) and there were charges relating to his payments to persons resident outside India without any prior, general or special, permission of the Reserve Bank of India and about his borrowing foreign exchange at Singapore without the previous general or special permission of the Reserve Bank of India and also about maintaining an account with the Singapore Branch of Bukhery and Co., a firm resident outside India without the prior permission of the Reserve Bank of India. N. S. Ramaswami J. after discussing the facts held that having regard to the admitted facts in that case, the charge relating to the appellant therein borrowing foreign exchange from persons other than authorised dealers in foreign exchange in India without the previous, general or special, permission, and thereby contravening the provisions of section 4(1) of the Act was clearly established, but with regard to other charges, in view of the fact that proper opportunity had not been given, those charges were held to be not established. The decision in Esco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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