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TMI Blog2024 (6) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... from AkbarVeerji, an NRI. The penalty of Rs.10 lakhs was imposed on Vikram Singh for contravention of Section 8(1) of FERA,1973. He had also received the amount from an NRE Account of AkbarVeerji in contravention of the Act of 1973. It is stated that the amount was received by Shri Nemi Chand Jain also popularly known as Chandraswamy. The penalty was imposed upon him also for the equivalent amount of Rs.10 lakhs but he has diedthus the appeal is on behalf of Prakash Chandra Yadav and Vikram Singh. 2. It is stated that a case for contravention of Section 8(1) of the FERA, 1973 was not made out on account of receipt of a cheque from the non-resident because to make out a case under Section 8(1) of the FERA, 1973, the requirement was "transfer" or "acquisition" of Foreign Exchange which, in fact, has not taken place. The appellants had received the cheque from NRE account but it was in Indian Currency drawn on the Indian Bank in India thus it would not constitute acquisition of Foreign Exchange to make out a case under FERA, 1973. Thus, on the aforesaid ground itself, the impugned order deserves to be set aside. 3. The learned counsel for the appellants further submitted that Adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The appeal has been contested by the respondents vehemently. It is submitted that not only there is contravention of Section 8(1) of FERA, 1973 but aforesaid has been proved by the respondents. Referring to the facts of this case, it is submitted that Adjudicating Authority has meticulously considered all the issues raised by the appellant other than the issue in reference to the order of ACMM Court which came much subsequent to the impugned order. 8. It is submitted that Delhi Zonal Office of Enforcement Directorate investigated the case. On 21.06.1996, certified true copies of the account opening form, transcription of the account and cheques, vouchers, etc. of NRE Account No. 70119 of one Akbar Jaffar Ali Veerji were obtained from R.K. Puram Branch of Canara Bank, New Delhi. The information was also sought from UCO Bank and ANZ Grindlays Bank where cheques issued from the NRE Account were presented for payment. The account showed three deposits and four withdrawals during 01.07.1990 to 12.08.1992. There was a deposit of 500 US Dollar on 01.07.1992 followed by deposit of 10000 Dollars on 04.07.1992 and thereupon 1,39,000 Dollars on 17.07.1992 in the bank account of AkbarVeerji. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the amount was received by them in Indian currency from the NRE account and once it is transferred from NRE account, the compliance of FERA, 1973 was required but in contravention of the said Act, the amount was received by them. 12. Section 8(1) of FERA, 1973 puts restrictions on dealing in foreign exchange. It may be to purchase or otherwise acquire or borrow from, or sell, or otherwise transfer or lend to or exchange with, any person not being an authorised dealer, any foreign exchange. A reference to the Explanation added below to the proviso to Section 8(1) of FERA, 1973 has been given to demonstrate that even receipt of money in Indian currency from an NRE Account without general or special permission of the Reserve Bank would be in contravention of Section 8(1) of FERA, 1973. Thus, it is submitted that the first issue raised by the appellant that a case under Section 8(1) of FERA, 1973 is not made out deserves to be rejected at the outset. 13. It is further submitted that an application to cross-examination of AkbarVeerji was made but looking to the summary proceedings before the quasi-judicial authority, the request was declined as was not otherwise appropriate. The res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation sufficient to prove the case, any lacuna in prosecution case resulting in acquittal would not prevail on this Tribunal. To support the argument, a reference of the judgment of the Apex Court in the case of RadheshyamKejriwalVs. State of West Bengal & Anr. reported in 2011 (3) SCC 581 has been given. The Apex Court laid down certain principles to resolve the similar controversy where the order of the Adjudicating Authority or Appellate Tribunal was not held to be binding on the Magistrate Court and at the same time, the order of the Court may not be binding on the Tribunal. Para 38 of the said judgment has been referred in this regard. Looking to the aforesaid, prayer was made not to accept the argument of the appellant in reference to the order of ACMM Court. 16. It is further submitted that as per the statement of the appellants themselves under Section 40 of FERA, 1973, they have admitted receipt of money from NRE account. The NRE account denotes an account where foreign exchange is deposited. It can thereafter be transferred either in the foreign or Indian currency. Thus, the transfer of the amount would not be permissible without the previous permission of the Reserv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia in the year 1992 and prior to leaving India, an envelope was delivered to Chandraswamy. He admitted opening of account in Canara Bank and giving cheque book to Chandraswamy. 20. The legal question for our consideration is as to whether a case of contravention of Section 8(1) of FERA, 1973 would be made out even if the appellants admitted receipt of the money from an NRE account because it was received by them in Indian currency. The further argument is that they had not acquired or transferred foreign exchange so as to make out a case under Section 8(1) of FERA, 1973. To analyse the legal arguments, we may refer to Section 8(1) of FERA, 1973 and is quoted hereunder: "8. Restrictions on dealing in foreign exchange. (1) Except with the previous general or special permission of the Reserve Bank, no person other than an authorised dealer shall in India, and no person resident in India other than an authorised dealer shall outside India, purchase or otherwise acquire or borrow from, or sell, or otherwise transfer or lend to or exchange with, any person not being an authorised dealer, any foreign exchange: Provided that nothing in this sub-section shall apply to any purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy but out of the Foreign Exchange. In the light of the aforesaid admission and even the documents collected by the respondents during the course of investigation, the question comes as to whether denial of the cross-examination of AkbarVeerji was fatal. At the outset, it needs to be clarified that the proceedings before the Adjudicating Authority are of quasi-judicial and otherwise summary in nature. Cross-examination in such proceedings cannot be claimed as a rule. It may be required in Courts dealing civil or criminal cases. This is apart from the fact that cross-examination can be allowed when statement is recorded. In this case, statement could not be recorded in absence of presence of Akbar Veerji. The cross-examination cannot be sought of a person who never deposed statement before the Court or the authority. It is a fact that AkbarVeerji could not be produced before the Adjudicating Authority and thereby there was no question of recording of his statement. He was, in fact, a non-resident Indian and despite the efforts of the respondents, they could not secure him rather received a reply to the letter. In those circumstances, when the witness was not available and otherwise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as out of Foreign Exchange. Thus, the conclusion drawn by the ACMM Court cannot be made binding when the respondents have sufficiently proved their case before us. The judgment of the Apex Court in the case of Radhey shyam Kejriwal(supra) is relevant. Para 38 of the said judgment is quoted hereunder: "38. The ratio which can be culled out from these decisions can broadly be stated as follows: i) Adjudication proceeding and criminal prosecution can be launched simultaneously; ii) Decision in adjudication proceeding is not necessary before initiating criminal prosecution; iii) Adjudication proceeding and criminal proceeding are independent in nature to each other; iv) The finding against the person facing prosecution in the adjudication proceeding is not binding on the proceeding for criminal prosecution; v) Adjudication proceeding by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20 (2) of the Constitution or Section 300 of the Code of Criminal Procedure; vi) The finding in the adjudication proceeding in favour of the person facing trial for identical violation will depend upon the nature of finding. If t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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