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TMI Blog2009 (9) TMI 1090X X X X Extracts X X X X X X X X Extracts X X X X ..... persons resident outside India in contravention of provisions of Section 9(1)(a) of the foreign Exchange Regulation Act, 1973. 2.) Appeal No. Appeal No. 336/03 has been filed against Adjudication Order no. Adj/692/DZ/2()04/AD(BK)/4708 dated 23.09.2004 passed by Assistant Director, New Delhi imposing a penalty of Rs. 1,50,000/- against the appellant, S.K. Mittal for contravention of provisions of Section 9(1)(a) r/w 64(2) of the Foreign Exchange Regulation Act, 1973 for having abetted co-noticee, Joydeep Halwasiya for having made payment of Rs. 31,90,000/- to or for the credit of NRIs as against the receipt of Rs. 29,00,000/- from the NRE accounts of Subhas Sethi, and Baljeet Kr. Jain, persons resident outside India in contravention of provisions of Section 9(1)(a) of the Foreign Exchange Regulation Act, 1973. 3.) Appeal No. Appeal No.337/03 has been filed against Adjudication Order no. 18/2003/DD(KNS) dated 31.07.2003 passed by Deputy Director. Kolkata (WB) imposing a penalty of Rs. 2.00,000/- (Rupees two Lakh only) against the appellant. S.K. Mittal for contravention of provisions of Section 9(1)(a) r/w 64(2) of the Foreign Exchange Regulation Act. 1973 for having abetted co-noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p Halwasiya. Rajdeep Halwasiya or Joydeep Halwasiya were the recipient of pay orders from the NRIs account Narendra Nath, Subhas Sethi, and Sudesh Kumar who were the persons resident outside India. It is argued by S.K. Mittal that there is no evidence on record to show that the appellant acknowledged the receipt of any cash payment on behalf of the NRIs from the recipients of Pay Orders viz. Kuldeep Halwasiya, Rajdeep Halwasiya. The said recipients never made any acknowledgement having made any cash payment to or for the credit of NRIs Subhas Sethi, Narendra Nath Gupta and Sudesh Kumar. The Pay Orders were issued in their favour on different dates having a wide gap but it was not specific as to when the alleged cash payment against the said receipt of gift Pay Orders were made. It was either in one installment or more than that. There was no mention as to when the cash payment was received, where and how it was received. It was also not mentioned in the SCN that the said cash payment was for the credit of NRIs Subhas Sethi, Narendra Nath Gupta and Sudesh Kumar. The appellant has denied the charges and filed written submissions before the (Enforcement Directorate giving the explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any person resident outside India; ......... 8. Thus under Section 9(1)( a) making any payment to or for the credit of any person resident outside India, by any person in or resident in India, without the general or special exemption of Reserve Bank of India, comes within the purview of the mischief of the provisions of this Act. Though the co-noticee recipients could not be examined in these cases during investigations but the statements of appellant and the mandatee of the said NRE A/c's and other persons, who received similar gift cheques from the said NRE A/c of Subhas Sethi, Narendra Nath Gupta and Sudesh Kumar were recorded under Section 40 of the FERA. The third persons viz. Amarjeet Kr. Ahuja, G.L. Grover, Sanjeev Sethi, M.K. Jain, S.R. Arora admitted having received payments subject to payment of premium either in their own name or in the name of their near relations from the subject NRE Accounts viz. Amarjeet Kr. Ahuja, Subash Sethi, and NN Gupta. The said recipients from the NRE Account of NRIs admitted that they were the recipients of the gift cheque from the account of N.N. Gupta and others. The cheques were arranged by the appellant, S.K. Mittal who was Chartere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the confessional statements of the appellant are fully corroborated by the statements of Mendiratta, the other recipients and attended circumstantial evidence of the case. The averment has no force that the statement of co-noticee cannot be read against the appellant in view of the ruling of the Supreme Court in Naresh Sukhawani v. Union of India, 1996 Supreme Court Cases (Crl.) 76, where the Apex Court observed that where such statement made by a co-notice inculpates not only himself but also another person, it can be used as substantive evidence against that another person connecting him in contravention of the provisions of the Act. The retraction of the confessional statements is thus nothing but an after thought without any basis. These statements contain wealth of information and minute details which were within exclusive knowledge of the appellant and could not be a result of tutoring or compulsion. 12. The appellant has not been able to prove the genuineness of the transactions for want of evidence, thus the fact of love and affection between NRI and recipients is ruled out. However, a gift can never be subject matter of purchase. If consideration is passed from the donee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dkar v. State of M.P. AIR 1952 SC 3443, the Supreme Court discussed the nature of circumstantial evidence as follows : It is well to remember that in cases where the evidence is of a circumstantial nature, the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established, and all the facts so established should be consistent only with the hypothesis of the guilt of the accused. Again, the circumstances should be of a conclusive nature and tendency and they should be such as to exclude every hypothesis but the one proposed to be proved. In other words, there must be a chain of evidence so far complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused. 16. It is argued by the appellant that the Pay Orders were issued in favour of recipients on different dales having a wide gap but it was not specific as to when the alleged cash payments against the said receipt of gift Pay Orders were made. It was either in one installment or more than that. There was no mention as to when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te that burden to discharge which very slight evidence may suffice. 17. It is also argued by the appellant that the declaration about the subject gift cheques were made and the gift cheques were genuine. However, this contention is not acceptable as the subject transactions are covered within the mischief of Section 9(1)(a). It is alleged that the amount was paid out love and affection by N.N. Gupta and other NRI's to various recipients. But there is bald statement not supported by documentary evidence. The averment that the said cheque/drafts were received by the appellant by way of gift and no payment was made by him in lieu thereof does not cut much ice. The statements of the appellant and Mendiratta, and of the several other recipients of the NRE A/c's have raised number of questions. These questions have not been answered by the appellant Which leads to irresistible conclusion that the appellant has rightly been held guilty by the Adjudicating Officer. 18. The averment that the appellant was not permitted to cross examine the third persons as recipients from NRE Accounts cannot help him which cannot be claimed as a matter of right as observed by the Supreme Court in Su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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