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TMI Blog2010 (11) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... steps to recover the amount or not - any amount of correspondence sent by the appellant to the foreign buyers or to the Legal Representative or to the Agent-Commercial, is only an internal correspondence - The letter correspondence between the appellant and their foreign buyers is not sufficient enough to prove the reasonableness of the appellant to secure the foreign proceeds within the purview of the Act - civil miscellaneous appeals are dismissed - 491-492 of 2008 - - - Dated:- 3-11-2010 - R. Subbiah, J. REPRESENTED BY : S/Shri B. Kumar, Senior Counsel for M. Balagopal, for the Appellant. Shri M. Dhandapani, Spl. Counsel, for the Respondent. [Judgment (Common)]. These appeals are preferred being aggrieved over the common final order dated 30-10-2007 passed in Appeal Nos. 04/2002 and 05/2002 on the file of the Appellate Tribunal for Foreign Exchange, New Delhi, confirming the Adjudication Order No. DD-MAS/42/2000 (SS) dated 13-10-2000 passed by the Deputy Director, Directorate of Enforcement, Chennai. 2. The facts, which are necessary to decide the issue involved in these appeals, are as follows : (a) The appellant firm, who is an exporter of cotton an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Section 68 of the FERA. The respondent held that the appellant and its Director were guilty of the charges and levied a penalty of Rs. 3,00,000/- on the company and that Rs. 1,00,000/- on the Director of the appellant company under Section 50 of the FERA. Aggrieved over the said adjudication order dated 13-10-2000, the appellant had preferred two appeals before the Appellate Tribunal for Foreign Exchange, New Delhi; but the Appellate Tribunal, by its final order dated 30-10-2007 dismissed both the appeals and confirmed the adjudication order passed by the Deputy Director. 3. Challenging the same, the appellant filed the present appeals raising the following substantial questions of law : (a) Whether in the facts and circumstances of the case, the appellate Tribunal was right in coming to the conclusion that the appellant company had not taken all reasonable steps to recover the sale proceeds of the exported goods when it is evident that the purchaser of goods in France had gone into liquidation and the official liquidator appointed by the Court at France have stated that chance of recovery of any money from the company in liquidation is remote and next to impossible? (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant contacted, the Agent-Commercial by name Vincent Sandana, after getting knowledge from the Legal Representative of the said company viz., Yannick Guguen, informed them that M/s. Betty Blanc, had become an insolvent. Even thereafter, the appellant had sent several communications to their Agent-Commercial to recover the export proceeds from the foreign buyer and after contacting the Legal Representative of the Company through various communications, finally the Agent-Commercial sent a reply to the appellant stating that he had done the maximum possible under French Commercial Law to recover the amount and also through the income tax department and thereby impliedly expressed his inability to recover the export proceeds. Thus, the learned senior counsel for the appellant, by producing various correspondences between the appellant, their Agent-Commercial and the Legal Representative of the company, submitted that the appellant had taken all reasonable steps to realise the export proceeds and in spite of that, they did not realise the same. Since there are ample evidence on the side of the appellant to prove that they had taken all reasonable steps to recover the export proceeds a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er side, the short question that has to be decided in this appeal is, whether any requisite and reasonable steps had been taken by the appellant to recover the export proceeds from the overseas buyers? From the evidence on record, I find that out of 6 shipments, two G.R. forms were pertaining to the export made to M/s. N.X. General Trading Company, UAE. Since one of the partners in the said firm viz., Chandrasekaran died and as such, the company had been closed, which would be evident from the letter sent by the foreign buyer to the appellant. Similarly, a bunch of correspondences exchanged between the appellant, their Agent-Commercial and their Legal Representatives in respect of the export made to SA, Arguel, France, would show that the said company had become insolvent. It is, no doubt the appellant was continuously in touch with their Agent- Commercial at France to take steps to recover the amount and finally the Agent-Commercial expressed his inability to recover the amount. In this regard, the appellant did not take any further steps. Now, according to the appellant, further steps such as filing a suit at France, contacting the Indian Embassy at foreign countries, etc. would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontroversy. The question whether a particular gift made by a Hindu father is within reasonable limits must be answered with reference to the facts and circumstances of the particular cause, the word reasonable meaning what is just, fair and equitable in view of the value, income and financial position of the estate, the number of persons who constitute the joint Hindu family, the relationship which the donor bears to the donee and any other circumstances which may appear in the case and are relevant and material to its determination. Ragabir Singh v. Income-Tax Commissioner, (1958) 60 Punj. L.R.104 at p. 111 : A.I.R. 1958 Punj. 250. The word reasonable in Sec. 10(2)(x), Income-tax Act or in rule 12 of Schedule I of the Excess Profits-tax Act, and the words necessary having regard to the requirements of the business in the same rule do not mean that there must be a legal liability to pay. Messrs. Shyamlal Pragnarain v. Commissioner of Income-Tax U.P., Lucknow, 1955 A.L.J. 122 at p. 126 : A.I.R. 1955 All. 299. Reasonable is an objective expression and its objectivity is to be determined judicially by the Court to consider the nature of the restrictions. The Court must look up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed the Reserve Bank of India for getting extension of time to realise the foreign proceeds. Therefore, I am not satisfied with the explanation given by the appellant for not getting permission from the Reserve Bank of India. 13. In my considered opinion, any amount of correspondence sent by the appellant to the foreign buyers or to the Legal Representative or to the Agent-Commercial, is only an internal correspondence. Unless the appellant approaches the Reserve Bank to get the extension for recovery of the export proceeds and unless the Reserve Bank of India on its adjudication, waives the recovery of the proceeds, it cannot be construed that the appellant had taken all reasonable steps within the terms of the relevant Act, especially when the object of FERA is not to waste the foreign exchange resources and to utilise the same to advance the national interest. Further more, I find that no substantial question of law is involved in this appeal. In this regard, a reference could be placed on the decision relied on by the respondent in the case reported in Raghavan Nair .v. Deputy Director, Enforcement Directorate - CFC (Ker.) 83, as follows : 11. We are of the opinion that a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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