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TMI Blog2014 (3) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, that amount is in excess of Rs. 10,00,00,000 and, therefore, on the basis of the parameters set out in Section 50, it cannot be said that the penalty imposed on BTC and the two Appellants, i.e., Mr. Lekh Raj Chopra and Mr. Ramesh Kumar Chopra is excessive or unreasonable or illegal. The penalty imposed in the order dated 10th April 1986 by the SD did not preclude him, on remand, from determining afresh the penalty amount. - CRL. A. No. 91 of 2008, CRL. A. No. 92 of 2008, CRL. A. No. 93 of 2008 - - - Dated:- 31-1-2014 - S. Muralidhar,JJ. For the Appellant : Mr. Pavan Narang, Mr. Anish Dingra, Mr. Lohitaksh Shukla,Mr. K.R. Dogra and Ms. Vasundhara Chauhan, Advocates. For the Respondent : Mr. Subhash Bansal and Mr. Shashwat, Advocates for Enforcement Directorate. Mr. Jatan Singh, CGSC for UOI. JUDGMENT 1. These three appeals are directed against the common order dated 27th December 2007 passed by the Appellate Tribunal for Foreign Exchange ( AT ) dismissing Appeal Nos. 691, 692 and 693 of 2004 hereby affirming the adjudication order ( AO ) dated 18th May 2004 passed by the Special Director ( SD ), Enforcement Directorate ( ED ). 2. Criminal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts were made in India. These instructions were received at the shop of BTC at Delhi. After making of the payments, Mr. Niranjan Singh used to handover the Rukka to Mr. Brij Lal Chopra. 7. The statement of Mr. Ganesh Das Chopra under Section 40 of FERA was also recorded by the ED. Mr. Ganesh Das Chopra also stated that the accounts seized in the briefcase were written mainly by Mr. Niranjan Singh. The statement of Mr. Shiv Saran Kakkar was recorded on 15th February 1980. He, too, admitted to having received hawala payments as shown in the documents found in the briefcase. On 23rd December 1980, Mr. Brij Lal submitted an affidavit before the First Secretary, Indian Embassy, Kabul asserting that the documents in the briefcase recovered from the residence of Mr. Mukund Lal Khanna belonged to him and that he had left the said briefcase with Mr. Mukund Lal Khanna for safe custody before he left for Kabul. 8. On 22nd August 1981, a memorandum was issued by the ED to BTC as well as Mr. Ganesh Dass Chopra and Mr. Ramesh Kumar Chopra, addressed as partners of BTC, Mr. Brij Lal, Mr. Lekh Raj Chopra, Mr. Mukund Lal Khanna and Mr. Niranjan Singh, requiring the firm, BTC, to show cause as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an order dated 19th May 2003, set aside the said order of the SD and remanded the Appeals to the SD to inquire into whether the entries relating to illicit transactions were made during the course of the business of the firm and with the concurrence and knowledge of the firm. 11. Thereafter, the SD again dealt with the Appeals of the Appellants and passed an order on 18th May 2004, holding the Appellants to be guilty of violating the provisions of the FERA. The SD imposed a penalty of Rs. 2,00,00,000 on BTC for contravention of Sections 9(1)(b)(d) and (f) of FERA. Likewise, a penalty of Rs. 1,00,00,000 each was imposed on Mr. Ganesh Dass Chopra, Mr. Ramesh Kumar Chopra and Mr. Lekh Raj Chopra. A personal penalty of Rs. 1,00,00,000 was also imposed on Mr. Pritam Lal @ Mr. Brij Lal. 12. Aggrieved by the second order of the SD, the Appellants again approached the AT, which dismissed the said Appeals on 27th December 2007. By the impugned order, the AT held that the order of the SD was correctly passed and that the penalty imposed was also commensurate with the violations found to have been committed by the Appellants. It was held that the penalties were sufficient to create det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vinod Solanki v. Union of India (2008) 16 SCC 537, which reiterated that the evidence brought on record pointing at a confession which stood retracted, must be substantially corroborated by either independent or cogent evidence. Further, the burden was on the prosecution to show that the confession made by Mr. Niranjan Singh was voluntary in nature. 16. Relying on the decision in Central Bureau of Investigation v. V.C. Shukla (1998) 3 SCC 410, Mr. Narang submitted that the entries in the rukkas could alone not be sufficient to charge a person with the liability and, at best, they could only be corroborative evidence. In terms of Section 34 of the Evidence Act, 1872, it has to be shown that the documents seized from the firm reflected the entries that were made in the course of business of the firm. The statement made by a party to the proceedings as an admission can be proved against him, but not against the others who are being jointly tried, unless it amounted to a confession. Reliance is also placed on the decision in K.T.M.S. Mohd. v. Union of India (1992) 3 SCC 178. Mr. Narang also referred to the statements made by Mr. Niranjan Singh and Mr. Ganesh Dass Chopra, which did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 2004, merely repeated the earlier order. 21. Having carefully perused both the orders of the SD, this Court is unable to agree with the above submission. It is correct that by its order dated 19th May 2003, the AT specifically required the SD to consider the following questions: (i) Whether the breaches of the provisions of the statue were committed by Mr. Niranjan Singh as an employee of BTC with the knowledge and concurrence of BTC? (ii) Whether the entries relating to illicit transactions were made in due course of the business of BTC and with the concurrence and knowledge of BTC? 22. The tenor of the order dated 19th May 2003 of the learned AT is that if the violations of the law were committed by individuals, without the knowledge of the firm or its partners, then the firm could not be held liable for such violations. There was, in terms of the aforementioned order of the AT, no question of any fresh material being produced before the SD. In other words, the SD was required to pass a fresh reasoned order on the basis of the existing material. 23. A perusal of the order dated 18th May 2004 of the SD shows that the precise role of BTC in the transactions has been exh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being received from abroad and he link between the abroad and Delhi Office is through Lekh Raj Chopra and Brij Lal at Kabul and the three partners namely S/Shri Ramesh Chopra, Ganesh Chopra and Lekh Raj Chopra in India. Such an elaborate hawala network can only run on the basis of networks/contacts abroad which was among the partners. It has never been the case of the department nor at any point of time has it been brought through evidence that any of the employees were having hawala transaction independently through their separate contact abroad. Therefore, on the facts of the case it is very clear that the said hawala network between Indian and Kabul/Peshawar etc. was due to the contact of the partners and the employees were only working as per the directions received from these partners from time to time. The documents found in the briefcase also contained several letters written by Shri Lek Raj from Kabul addressed to Shri Brij Lal (Brij Lal was available in India most of the time) containing instructions for making and receiving payments in India. Part of the accounts found in the briefcase was written by Shri Lekh Raj as stated by Niranjan Singh. Therefore, without the Kabul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... denied receiving any hawala payments. Therefore, according to him, the case of the ED was not proved. He further submitted that nothing prevented the ED from examining the remaining witnesses whose names figured in the rukkas. 30. The Court has examined the statements of Mr. Niranjan Singh and Mr. Ganesh Dass Chopra. The Court finds that they give definite particulars which support the case of the ED as regards the hawala undertaken by BTC as well as its partners. For instance, Mr. Ganesh Dass Chopra admitted to receiving rukkas and making payments and to receiving letters addressed to Mr. Lekh Raj Chopra, Mr. Brij Lal and Mr. Ganesh Dass Chopra. The statements of Mr. Niranjan Singh and the documents recovered from him completed the transactions involved in the case. He was examined and cross-examined by learned counsel for the noticees, including the Appellants herein. The SD has analysed the further documents tendered by Mr.Niranjan Singh on 11th December 1982 during the course of adjudication proceedings and those seized from the residence of Mr. Ganesh Dass Chopra on 8th February 1994. The probative value of these and the other evidence on record has been exhaustively discuss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that once the original order dated 10th April 1986 of the SD was set aside by the AT by its order dated 19th May 2003, there had to be a fresh adjudication on the basis of the show cause notice and, therefore, the question of penalty had to be determined afresh. 35. The order of the SD may not have explained the precise basis for arriving at the penalty amount of Rs. 2,00,00,000 imposed on BTC and Rs. 1,00,00,000 each on Mr. Lekh Raj Chopra and Mr. Ramesh Kumar Chopra. However, Section 50 of the FERA does envisage a penalty five times the amount involved in the violation. In the present case, that amount is in excess of Rs. 10,00,00,000 and, therefore, on the basis of the parameters set out in Section 50, it cannot be said that the penalty imposed on BTC and the two Appellants, i.e., Mr. Lekh Raj Chopra and Mr. Ramesh Kumar Chopra is excessive or unreasonable or illegal. The penalty imposed in the order dated 10th April 1986 by the SD did not preclude him, on remand, from determining afresh the penalty amount. 36. For the aforementioned reasons, this Court does not find any merit in any of the grounds urged by the Appellants and upholds the order dated 18th May 2004 passe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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