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TMI Blog2020 (4) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable on record, but also not in line with the law laid down by this Court and, accordingly, the said finding of the trial court is liable to be interfered with. Insofar as the issue relating to contravention of Section 18 (3) of FERA by A-4 to A-6 is concerned A-4 to A-6 not only gave their quotas to A-1 to A-3 for being used, but have also jointly signed the declaration and that A-4 and A-5 have also given letter to their bankers to credit the realisation of the export proceeds in the account of A-1. That being the undisputed case, it is not now open to A-4 to A-6 to contend that they have not contravened the provisions of Section 18 (3) of FERA. Though it is not A-4 to A-6, who have sold the goods, but have only given their quotas to A-1 to A-3, however, A-6 being a joint declarant, a duty is cast upon A-4 to A-6 to see that all reasonable steps have been taken to receive or recover the payment for the goods sold and in the absence of following the provisions by taking the necessary steps to recover the export proceeds, it is to be presumed that A-4 to A-6 have contravened the provisions of Sections 18 (2) and (3) of the Act. The quota used by A-1 to A-3 is that of A-4 to A- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-1-2020 - HONOURABLE MR. JUSTICE M. DHANDAPANI J. For Appellant: Ms. G.Hema, Spl. PP (ED Cases) For Respondents: Mr. C.V.Kumar for RR-1 to 3 Mr. G.Krishnakumar for RR-4 to 6 JUDGMENT The accused/respondents herein, who were arrayed as A-1 to A-6, were charged and tried before the learned Addl. Chief Metropolitan Magistrate, Egmore, Chennai, in E.O.C.C. No.181/01 for the offences u/s 18 (2) r/w 18 (3) of Foreign Exchange Regulation Act (for short FERA ) punishable u/s 56 (1) (i) of FERA r/w Section 49 (3) (4) of Foreign Exchange Management Act and the trial court found that the prosecution, having not proved the case as against the accused beyond reasonable doubt, acquitted all the accused. The Union of India, aggrieved by the said order of acquittal has preferred the present appeal. For the sake of convenience, the accused/respondents herein will be referred to as the accused. 2. The case of the prosecution could be briefly summarised as under :- Pursuant to information received, the officials of the Enforcement Directorate conducted search on the factory and residential premises of A-1 and A-2 in which documents and related correspondence were seized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances appearing against them, they denied the same as false. On the side of the defence, A-2 was examined as D.W.1 and A-3 was examined as D.W.2 and Ex.D-1, the copy of passport of A-3 was marked. The trial court, after hearing either side and after considering the materials, both oral and documentary, on record, acquitted the accused/respondents as aforesaid, aggrieved by which the appellant has filed the present appeal. 5. Mrs.Hema, learned Special Public Prosecutor appearing for the appellant submitted that though the entire export proceeds were covered by GR Form 32, in which all the accused persons signed and have given declaration to the bankers and, thereafter, the export proceeds were not realised by the respondents, which is a gross violation of the provisions of the Act and the Rules. It is the further submission of the learned Special Public prosecutor that the adjudication proceedings initiated against the persons also ended in penalty being imposed against which appeals have been filed before the appellate authority and that no penalty, as imposed, has been paid and that the appellate proceedings is pending. It is the submission of the learned Special Public Prosec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of their quota by A-1 to A-3 and the non-realisation of the payment from the buyer, have definitely contravened the provisions of FERA. However, the trial court has not properly appreciated the materials on record and has come to an erroneous conclusion, which warrants interference at the hands of this Court. 10. Per contra, the respective learned counsel appearing for the accused vehemently countered the submissions advanced on behalf of the appellant by submitting that the accused have not contravened Sections 18 (2) and (3) of FERA and the trial court has appreciated the materials placed by the prosecution and has rightly held that there is no contravention of Section 18 (2) of FERA by A-4 to A-6 and that the trial court has further held that no opportunity notice was served on A-1 to A-3 as contemplated under the proviso to Section 61 (2) (ii) of FERA and, therefore, the non-issuance of opportunity notice to A-1 to A-3 coupled with A-4 to A-6 having not contravened the provisions of FERA, the prosecution deserves to fail and has rightly acquitted the accused and, therefore, no interference is called for with the order passed by the court below. 11. In dealing with mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view of the trial court with regard to the credibility of the witness, the presumption of innocence in favour of the accused, the right of accused to the benefit of any doubt and the slowness of appellate court in justifying a finding of fact arrived at by a judge who had the advantage of seeing the witness. No doubt it is settled law that if the main grounds on which the court below has based its order acquitting the accused, are reasonable and plausible, and the same cannot entirely and effectively be dislodged or demolished, the High Court should not disturb the order of acquittal. ...... 13. The Hon ble Apex Court, in V.Sejappa Vs State by Police Inspector, Lokayukta, Chitradurga (2016 (12) SCC 150) reiterating the principles to be followed in an appeal against acquittal, as has been laid down in a catena of judgments, held as under :- 22. If the evaluation of the evidence and the findings recorded by the trial court do not suffer from any illegality or perversity and the grounds on which the trial court has based its conclusion are reasonable and plausible, the High Court should not disturb the order of acquittal if another view is possible. Merely becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eddy v. State of A.P., (1979) 1 SCC 355 : 1979 SCC (Cri) 305], Tota Singh [Tota Singhv.State of Punjab, (1987) 2 SCC 529 : 1987 SCC (Cri) 381], Ram Kumar [Ram Kumar v. State of Haryana, 1995 Supp (1) SCC 248 : 1995 SCC (Cri) 355], Madan Lal [Madan Lal v. State of J K, (1997) 7 SCC 677 : 1997 SCC (Cri) 1151], Sambasivan [Sambasivan v. State of Kerala, (1998) 5 SCC 412 : 1998 SCC (Cri) 1320], Bhagwan Singh [Bhagwan Singh v. State of M.P., (2002) 4 SCC 85 : 2002 SCC (Cri) 736], Harijana Thirupala [Harijana Thirupala v. Public Prosecutor, (2002) 6 SCC 470 : 2002 SCC (Cri) 1370], C.Antony [C. Antony v. K.G. Raghavan Nair, (2003) 1 SCC 1 : 2003 SCC (Cri) 161], K. Gopalakrishna [State of Karnataka v. K.Gopalakrishna, (2005) 9 SCC 291 : 2005 SCC (Cri) 1237], Sanjay Thakran [State of Goav.Sanjay Thakran, (2007) 3 SCC 755 : (2007) 2 SCC (Cri) 162] and Chandrappa [Chandrappa v. State of Karnataka, (2007) 4 SCC 415 : (2007) 2 SCC (Cri) 325]. It is not necessary to deal with these cases individually. Suffice it to say that this Court has consistently held that in dealing with appeals against acquittal, the appellate court must bear in mind the following: (i) There is presumption of innoce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have contravened the provisions of Section 18 (3) of FERA; and iv) Whether the judgment of acquittal recorded by the trial court requires any interference. 16. The entire case of the prosecution revolves around P.W.1, the investigating officer. The search conducted by A-1, the seizure of documents in pursuance to the search and the investigation leading to the adjudication by the Special Director of Enforcement, New Delhi, holding the accused guilty and the penalties imposed penalties on them and the opportunity notices dated 6.2.01 issued to all the accused by the complainant leading to the laying of the complaint A-1 to A-9 have been clearly and elaborately spoken to by P.W.1 in his chief examination. In cross examination, P.W.1 has categorically deposed that for realising the export proceeds beyond the time prescribed, extension of time has to be sought for from Reserve Bank of India and that Reserve Bank of India is alone vested with the power to grant extension of time to realise the amount. It is the further deposition of P.W.1 in cross examination that in response to the query from the Enforcement Directorate, Reserve Bank of India have stated that they have not gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious section of the Act. In reply to this specific issue, the learned counsel for the respondent would urge, that the Supreme Court was considering the scope of a statement made under Section 107 and 108 of the Customs Act, by a person against whom an enquiry was made, vis-a-vis the provisions of Article 20(3) of the Constitution of India and also with reference to Sections 24 and 25 of the Indian Evidence Act, to hold that at that stage any statement made by a person against whom an enquiry was made, was not a statement made by a person accused of an offence. He would further add that adjudication proceedings were quasi-criminal in nature and while show cause notices were issued, there was already an accusation by the Deputy Director of Enforcement against the petitioner. The words the person accused of an offence in the proviso, will have to be read, keeping in view the context in which it had been used and the effect of the words in the same proviso has been given an opportunity of showing . 10. In the Repealed 1947 Act, Section 23-D(1) contemplated an initial adjudication and a prosecution only in the event of the Director of Enforcement arriving at an opinion that havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8(1) and (2) specifically refer to the previous general or special permission of the Reserve Bank of India under Section 29 of the Act which uses the word permission . In the former case only the person accused of an offence, must have been given an opportunity, for showing cause that he had such permission. 13. It is, therefore, apparent that if a prosecution is initiated even before the adjudication proceedings, the person accused of an offence must have had an opportunity of showing cause that he had permission. However, if the adjudication proceedings had been initiated earlier in which show cause notice had been given, especially with reference to Section 8(1) and (2) of the Act, a second opportunity does not appear to be intendment of the proviso. All that the proviso contemplates is that before a prosecution is instituted, the person accused of an offence should have been given an opportunity. The words had been used in the Section also gives an insight to the object behind the provision. In my view, the words has been given denote the furnishing of an opportunity to the person accused of an offence, but does not contemplate issue of a second show cause notice be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Director Enforcement Directorate, Government of India, reported in 1970 Cri.L.J. 295 , a Division Bench of Mysore High Court while considering a similar provision in the repealed Foreign Exchange Regulation Act, 1947 observed:- Indeed, the opportunity contemplated by the proviso to Section 23(3) need not necessarily be afforded by means of the issue of a notice, but can also be afforded in the course of an adjudication under Section 23-D(1). 15. Under the old Act the Director of Enforcement was empowered to make a complaint only if he considered that his own powers of punishment were inadequate to meet the situation or the gravity of the offence, while the first step of instituting adjudication proceedings had already been taken. I am in respectful agreement with the view expressed by the Mysore High Court, which found favour with Natarajan,J. while deciding Crl.M.P.No.2288 of 1980. 16. The decisions in P.Joseph John Vs. The State of Travancore, Cochin reported in AIR 1955 SC 160 and Chintapalli Agency of Taulk Arrack Sales Co-operative Society Ltd., Vs. Secretary (Food and Agriculture) Government of Andhra Pradesh reported in Air 1977 SC 2313, can have no bear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above settled law and admitted fact that the respondents/accused had been given an opportunity by the Enforcement authority, of being heard during the adjudication contemplated under Section 51 of the Act, non-issuance of the opportunity notice as contemplated under the proviso to Section 61(2)(ii) of the FERA,1973 shall not vitiate the case of the prosecution 12.10. Question No.(i) is answered accordingly. 18. In view of the above categorical pronouncement of this Court following the law laid down in a catena of cases, which have attained finality, this Court has no hesitation in holding that even non-issuance of opportunity notice as contemplated u/s 61 (2) (ii) of FERA will not vitiate the case. However, in the case on hand, Ex.P-41, opportunity notice as contemplated u/s 61 (2) (ii) of FERA has been issued to the accused. In such circumstances, the finding of the trial court that no opportunity notice has been issued to the accused is not only against the materials available on record, but also not in line with the law laid down by this Court and, accordingly, the said finding of the trial court is liable to be interfered with. 19. Insofar as the issue relating to cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Losing sight of the above materials, the finding recorded by the trial court is not only illegal, but is also perverse, which requires interference. 21. Once this Court comes to the conclusion that the findings recorded by the trial court are illegal and perverse, then there is no legal bar for this Court to interfere with the said acquittal, in the light of the decisions aforesaid. Accordingly, this Court is of the considered view that the findings recorded by the trial court are illegal and perverse and is against the materials available on record and in the above circumstances, this Court is left with no other option, than to overturn the verdict of acquittal recorded by the trial court and convict the accused. 22. At this juncture, learned counsel appearing for the accused/respondents herein pray that after acquittal having been recorded, a decade has passed since then, this Court, may consider imposing a lesser sentence in lieu of imposition of some fine, considering the age and other ailments suffered by the accused. 23. Though minimum sentence has been prescribed for the offence under Section 18, however, this Court, after taking into consideration the submission ..... X X X X Extracts X X X X X X X X Extracts X X X X
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