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TMI Blog2024 (9) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... n the bank in cash. The evidence on which the Appellant chose to rely upon do not corroborate her contention that the source of such fundswere traceable to her. The paragraphs cited afore bring out that the funds mobilized in the name of R. Susila were for namesake and for the benefit of Smt. N. Sasikala. The discharge which Smt. N. Sasikala got in the prosecution proceedings are independent from the adjudication proceedingsas held by the Hon ble Supreme Court in the cases of Standard Chartered Bank Ors. V.s Directorate of Enforcement Ors [ 2006 (2) TMI 272 - SUPREME COURT ] and Radheshyam Kejriwal vs. State of West Bengal Anr., [ 2011 (2) TMI 154 - SUPREME COURT ]. The scheme of FERA makes it clear that the adjudication by the concerned authorities and the prosecution are distinct and separate. The Hon ble Court has held that the two proceedings are independent of each other and the finding on the adjudication is not conclusive on the prosecution under the Act. In view of the ratios in the two judgements supra coupled with the fact that presently the impugned order which is under challenge has arisen out of the adjudication proceedings, we are unable to persuade ourselves that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharge of the accused. The Respondent Directorate had not even charged the Appellant in the said prosecution. He explained the source of funds as having arisen from her business dealings in Singapore and Dubai. In this regard, the Appellant submitted a copy of letter dated 09.06.1995 from G.W Fashion, Dubai and a certificate dated 10.02.1999 from Charles H. C. Cheung and Company, certified Public Accountant, Hong Kong. He therefore pleaded that the Appeal may be allowed. 3. The Ld. Counsel for the Respondent argued that the SCN was issued to the Appellant as is obvious on perusal thereof. He cited the following from the SCN: Copy to Mrs. R. Susila, W/o. Shri S. Ramasamy. No. 53, Market Street, 10200, Penang, Malaysia. She is hereby required to show cause in writing within 30 days of the receipt of this Memorandum as to why the amount totalling to US $ 6,25,000/- lying blocked under Section 73(3) of the Foreign Exchange Regulation Act, 1973 in four FCNR Account Nos. 0187299, 0187300 and 0187302 all dated 25.04.95 and No. 0187315 dated 05.05.95 in her name with Indian Bank, Abhiramapuram Branch, Chennai, should not be confiscated to the Central Government. account under Section 63 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the confiscation of US $ 6,25,000 in the FCNR accounts of the Appellant because it was believed that the said amount was involved in the contravention of Section 8(1) of FERA. The relied upon documents of the SCN were furnished to the Appellant and subsequently to her advocate Shri A. Ashokan.Infact the advocates from Malaysia had acknowledged the receipt of such documents. We also note that the advocate for the Appellant appeared before the Ld. Adjudicating Authority from time to time. Therefore, to contend that the SCN was not issued to the Appellant in violation of principles of natural justice does not hold good. 7. On perusal of the impugned order, it is obvious that parties have approached the Hon ble Madras High Courton few occasions during the proceedings of adjudication, to challenge interim orders like denial of cross-examination. The Hon ble Madras High Court upheld the holding of the proceedings of adjudication in view of specific provisions of Section 49 of the Foreign Exchange Management Act, 1999. The Ld. Adjudicating Authority has observed that the adjudicating proceedings have been held strictly in accordance with the statutory provisions and the directions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade to India between July, 1994 to May 1995, during which period neither Shri S. Ramamsamy nor Smt. R. Susila declared any income. Smt. R. Susila in her affidavit had claimed that she allowed Smt. T. Chithra of M/s Bharani Beach Resorts to take a loan of 3 crores from her NRNR Rupee deposits with Indian Bank, Abhiramapuram and later foreclosed her deposits to adjust the loan granted to M/s Bharani Beach Resorts. However, neither Smt. R. Susila, nor M/s Bharani Beach Resorts, produced any documentary evidence entered into between them for enabling M/s Bharani Beach Resorts Pvt. Ltd. to avail loan from Indian Bank, Abhiramapuram, against NRNR Rupee deposits of the former. No evidence is also available to indicate the repayment of loan if any made by M/s Bharani Beach Resorts Pvt. Ltd. to Smt. R. Susila. From these unimpeachable evidence it is quite clear that Smt. R. Susila was only a name lender and did not own any part of the amount of US $ 1991610.00 in question. We thus find that the Ld. Adjudicating Authority has meticulously analysed the evidence as to hold that the Appellant did not own the funds in the bank accounts in India. The report from the Inland Revenue Board, Malaysia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 13.8.2009 as per summons dated 4.8.2009. During the course of the proceedings, Shri Navaneethakrishnan, Advocate of Smt. Sasikala insisted that before he commenced his cross-examination, it was essential that examination-in- chief of the witness must be conducted on behalf of the Directorate. The matter was examined and considering the circumstances of the case, the request was allowed as a special case and the examination-in-chief was conducted during the course of which Shri Sudeesh Kumar had explained the charges made out in the impugned SCN and documents relied upon in support of the charges. In this regard the answer to question no.9 given by the witness is found to be very relevant. The officer while answering about the nature of the documents relied upon in the issuance of the SCN stated that the documents that have been relied are details obtained from various Banks, statements recorded from Smt. T. Chitra, Smt. S. Sucharitha then Manager of Indian Bank, Abhirampuram Branch, Smt. N. Sasikala, S/Shri Syed Omamaldeen partner Temple Towers Mylapore, D. Somasekhara Reddy, Manager M/s Kalyani Constructions, V. Jayaprakash, then Manager, S.B.I. CheyyarBranch, P. Palani Kumar, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icee. On examining this request, I find that this report is an inter-office correspondence which is not for the consumption of the noticee or any third party. The ends of justice ismet by furnishing the copies of relied upon documents along with the SCN and opportunity of filing replies as well as oral submissions during the course of personal hearing proceedings which, in this case, had been provided more than sufficiently. 10. The Ld. Adjudicating Authority has given detailed reason as to why the US $ 6,25,000 in four FCNR Accounts of the Appellant have been confiscated in the following paragraphs of the impugned order: 105 It has been argued on behalf of the noticee that there is no evidence on record to indicate that the noticee, had transferred funds from India to outside and re routed it to India through Smt. R. Susila I find from the show cause memorandum that the noticee had been charged for offence u/s 8(1) of FERA, 1973, for having unauthorisedly acquired US$ 199 610.00. No where in the said Memorandum, it has been alleged that the noticee had transferred funds from India to outside India. Hence the arguments advanced by the Ld. Advocate lack credence. 106. The documentar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility of a resident abroad, who is the Appellant herein. In no manner such determination can impact the question of acquisition of funds by a resident in India in the name of the Appellant who was resident abroad. There are statements on record u/s 40 of FERA which clearly bring out the deposits being made in the bank in cash. The evidence on which the Appellant chose to rely upon do not corroborate her contention that the source of such fundswere traceable to her. The paragraphs cited afore bring out that the funds mobilized in the name of R. Susila were for namesake and for the benefit of Smt. N. Sasikala. The discharge which Smt. N. Sasikala got in the prosecution proceedings are independent from the adjudication proceedingsas held by the Hon ble Supreme Court in the cases of Standard Chartered Bank Ors. V.s Directorate of Enforcement Ors. [(2006) 4 SCC 278] and Radheshyam Kejriwal vs. State of West Bengal Anr., [(2011) 2 SCC 581].The scheme of FERA makes it clear that the adjudication by the concerned authorities and the prosecution are distinct and separate. The Hon ble Court has held that the two proceedings are independent of each other and the finding on the adjudication i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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