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TMI Blog2014 (5) TMI 784X X X X Extracts X X X X X X X X Extracts X X X X ..... als of the Enforcement Directorate ('ED') in the intervening night of 6th/7th March 1991 at the residential premises of Prem Singh at S-291' Greater Kailash' Part-II' New Delhi resulting in the recovery and seizure of Indian currency of Rs. 20'36'000 and some documents. It was stated that during the course of the raid' the Appellant' Rajendra Singh' son-in-law of Prem Singh was also present. He too was searched under Section 34 FERA. The search resulted in the seizure of some documents including Indian currency Rs. 1750. When the car of Rajendra Singh was searched some documents were recovered from the brief case belonging to him. His residential premises at J-209' Saket' New Delhi was also searched on 6th March 1991 resulting in the seizure of Indian currency of Rs. 80'000 and certain documents. Searches were also undertaken at the residential premises of Mr. Hanwant Singh father of Tarlochan Singh @ Bittoo at JG-3/81-C' Vikaspuri. 3. Rajendra Singh is stated to have made a statement on 7th March 1991. When he was asked to explain about the seized documents recovered from the residence of Prem Singh' he denied knowing about the said documents. As far as Prem Singh and Tarlochan S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued to the Appellants. It was alleged therein that they had without the permission of the RBI purchased and sold foreign exchange totalling Rs. 1.5 crores and thus contravened Sections 8 (1) and 8 (2) FERA read with Section 63 FERA. 7. In reply to the SCN each of the Appellants had denied violation of the provisions of FERA. They pointed out that besides the entries on the loose sheets there was no evidence and that their retracted statements under Section 40 FERA could not be relied upon. 8. A perusal of the impugned AO dated 13th June 2005 showed that learned counsel for the Appellants had asked for cross-examination of the officials of the ED. This request was declined by the SD for the following reasons: '15.2 As regards counsel's demand for cross-examination of officers and co-noticees' I find that documents/ statements relied upon have been furnished to the noticees and they were given adequate opportunity by way of personal hearing over the years as well as for written replies/submissions etc. The noticees had sufficient time and opportunities to defend their case. It is an established legal position that in quasi-judicial proceedings' the opportunities of cross-exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o produce the translation of these documents in Hindi or in English in order to show that such inscription was made by Prem Singh in the documents or that they actually related to the transactions of foreign exchange. The learned ACMM also noted that the ED had failed to prove the so-called voluntary statements of the Appellants under Section 40 FERA in accordance with law. It was held that the ED had failed to produce any material against the Appellants to establish that they had entered into foreign exchange transactions. In that view of the matter' the Appellants were held entitled to be discharged. 13. This Court has heard the submission of Mr. S.S. Gandhi' learned Senior counsel for the Appellants. Although none appeared for the ED despite a pass over' this Court has perused the replies filed by the ED in the present appeals. 14. The ED appears to have relied essentially upon the retracted confessional statements of Prem Singh and Tarlochan Singh which purportedly explained the writings on the loose sheets. While the documents were in Gurmukhi language as noticed by the learned ACMM in the order dated 2nd November 2012. The fact of the matter remains that those writings were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings initiated under the Foreign Exchange Management Act' 1999 ('FEMA') as under: '29. The legal position that would follow is that normally if the credibility of a person who has testified or given some information is in doubt or if the version or the statement of the person who has testified is in dispute normally right to cross-examination would be inevitable. If some real prejudice is caused to the complainant' the right to cross-examine witnesses may be denied. No doubt' it is not possible to lay down any rigid rules as to when in compliance of principles of natural justice opportunity to cross- examine should be given. Everything depends on the subject matter. In the application of the concept of fair play there has to be flexibility. The application of the principles of natural justice depends on the facts and circumstances of each case.' 18. The impugned order of the AO fails to discuss this aspect although it has noticed the submission of learned counsel for the Appellants that the said statements had been retracted as they had been given under threat and coercion. In order to determine whether the claim of the Appellants that they were subjected to torture' threat and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gnificant that even in the criminal proceedings the ED was unable to prove the so-called confessional statements of the Appellants under Section 40 FERA in accordance with law. A perusal of the original records shows that only the photocopies of the loose handwritten sheets are available. The originals of the Section 40 statements have not been marked as exhibits by examining the persons who recorded them. 22. The AT also erred in proceeding on the basis that the failure to supply English translations of the seized documents was not violative of natural justice since the author of the documents was Prem Singh. The writings on the loose sheets were in Gurmukhi and not Pushto as thought by the ED during the adjudication proceedings. If reliance was going to be placed on the said loose sheets' then surely they ought to have been translated if they had to corroborate the retracted statements of Prem Singh and Tarlochan Singh. 23. For the aforesaid reasons' this Court is of the view that the impugned common order dated 30th November 2007 of the AT as well as the AO dated 13th June 2005 of the SD cannot be sustained in law. They are accordingly set aside. 24. The Appeals are allowed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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