9911796707
TMI Blog2015 (1) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... was the person responsible for day to day operation of foreign currency dealing. The foreign currency was sold to Hotel Zam zam, which was admittedly the licensed full fledged foreign money changer. It is in these circumstances that we are of the opinion that some of the allegations on page no. 55 of the paper book pertaining to lack of authorization should not be seen in isolation. Court is unable to accept the argument that the money or the foreign exchange leaving the authorized persons and reaching or being passed off to the unauthorized person was not the matter which was dealt with by the Hon’ble Supreme Court. Further, violation and contravention emphasized by him was not the subject matter of the Supreme Court judgment and proceedings. Once the Supreme Court was dealing with an identical allegation, identical breach and of similar legal provision and manual, then, we are unable to accept Shri Desai’s argument. The Hon’ble Supreme Court’s judgment is binding upon us. It is too well settled to require any reiteration that the judgment of the Hon’ble Supreme Court continues to bind us and will not lose its binding value merely because some argument which was canvassed befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49(3) and (4) of the FEMA should not be held in respect of the alleged contravention of the provisions of Sections 8(1), Section 6(4) and Section 6(5) read with Section 7 of Foreign Exchange Regulation Act, 1973 and paragraph 3 of the Memorandum of Instructions to full fledged money changers issued by the Reserve Bank of India. The allegations were in relation to foreign exchange of ₹ 20,86,005/- sold by the appellants to Foreign Exchange Money Changers M/s. Hotel Zam Zam at Mumbai. A reply was filed to this show cause notice. An order came to be passed on 28th October 2004 pursuant to this show cause notice holding that the appellants have violated and contravened the provisions of Foreign Exchange Regulation Act (FERA) and a penalty was imposed in a sum of ₹ 50,000/- each on both the appellants. 6. It is alleged that in identical circumstances, one M/s. LKP Merchant Financing Ltd. and its Executive Director Shri Parag Mehta and Shri Chitrang Ashok Mehta were also charged with similar violation and contraventions. That was also a transaction with M/s. Hotel Zam Zam. The adjudication proceedings against M/s. LKP Merchant Financing Ltd. ended in their exoneration. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly through this judgment which is reported in 2014 (5) SCC 162 = 2014 (302) E.L.T. 19 (S.C.). 9. On the other hand, Mr. Desai, learned Senior Counsel appearing on behalf of the respondent submitted that there is a distinction on facts of the present case and in the Supreme Court judgment. Therefore, would not cover the issue raised in this appeal. It is submitted by Shri Desai that insofar as authorized dealers are concerned, their acts are held to be fully within the four corners of law. However, those authorized dealers have allowed the money to reach the unauthorized and illegal person. The persons who had gone to collect foreign exchange were not deputed. As such they were not authorized and hence judgment of the Hon ble Supreme Court in the backdrop of Section 73(3) of the FERA and clear statutory prescription, therefore, cannot be said to be binding on us. It does not cover the controversy raised before us. In any event, it is submitted that all such persons who have been referred to by the Hon ble Supreme Court are also before this Court. It is submitted by Shri Desai that the allegations in the show cause notice would reveal that Hotel Zam Zam may be a full fledged money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EMA Appeals in this Court. A Division Bench of this Court having confirmed the orders under challenge, the appellants M/s. Tulip and Mr. Peter Kerkar had to approach the Hon ble Supreme Court. The arguments of the appellants Senior Counsel and that of the Additional Solicitor General were noted. 12. We find that the show cause notices that have been issued in the present case to the appellants alleged violation of identical provisions of FERA, identical Memorandum and the allegations referred to search operation of M/s. LKP Merchant Financing Ltd., two persons of this entity were intercepted. Two persons identified themselves as Hanif and Rajesh Mhatre of Hotel Zam Zam. Mhatre was carrying briefcase along with him. A search revealed that one Suleman Patel with the help of Ms. Pinky Jaisinghani and Sanjay Jadhwani were operating two FFMCs. As a result of the search documents, the authorities recovered and seized the articles under a Panchanama. The identical allegations pertaining to Hanif and Mhatre tendering two pay orders along with the advice letter on the cash counter of M/s. LKP Merchant Financing Ltd. are to be found in the present show cause notice. The statements of all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, the question that would arise for consideration would be whether in a case of this nature where such a transaction had taken place in between two licensed FFMCs and the said transaction was carried on by exchange of foreign currency by way of payment in the form of pay orders and that the sale effected by the appellants and the purchase made by the other FFMC, namely, M/s. Hotel Zam Zam was not disputed, can it still be held that there was any violation at all in order to proceed against the appellants for imposing a penalty? When we examine the said issue, we are unable to accede or countenance the stand of the respondent that the foreign currencies to the values mentioned in the earlier paragraphs were handed over to the representative of M/s. Hotel Zam Zam by one Mr. Rakesh Mahatre and, therefore, the whole transaction was in contravention of Sections 6(4) and 6(5) of FERA and Para 3 of FLM. 15. When we examine Para 3 of FLM, we find that the caption of the said paragraph is Authorised officials . The purport of the said paragraph was to ensure that any licensed money changer should allow transaction of its money-changing business in its premises only through such person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in the impugned order of the original authority as noted by the Tribunal, as well as the Division Bench of the High Court, we are convinced that there was no scope to allege a violation of Para 3 of ELM or for that matter Sections 6(4) and 6(5) of FERA, 1973. Based on the interpretation of Sections 6(4), 6(5) of FERA, 1973 and Paras 3 and 9 of ELM, we have held that the original authority, the Appellate Tribunal as well as the Division Bench of the High Court failed to appreciate the issue in the proper perspective while holding the appellant guilty of the violation alleged. Therefore, none of the judgments relied upon by the respondents for the proposition that concurrent findings of fact should not be interfered with does not apply to the facts of this case. 13. We are unable to accept the argument of Mr. Desai that the money or the foreign exchange leaving the authorized persons and reaching or being passed off to the unauthorized person was not the matter which was dealt with by the Hon ble Supreme Court. Further, violation and contravention emphasized by him was not the subject matter of the Supreme Court judgment and proceedings. Once the Supreme Court was dealing wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
