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TMI Blog2008 (10) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of the FLM r/w 73 (3) of FERA 1973. 3. I have heard elaborate arguments from Learned Senior Advocate, Shri. A.N. Haksar on behalf of the appellant and Shri. A.C. Singh, DLA, for the respondent and gone through the record, relevant law and judicial pronouncements carefully. A Show Cause Notice was issued against the appellant company, M/s. Cox Kings (India) Ltd., a Full Fledged Money Changer alleging that the instructions laid down by the RBI subject to which licence was issued for dealing in foreign exchange were not followed by the company as FFMC. During the search of the premises of the company, the Enforcement Officers seized and recovered certain documents including Travellers Cheques totalling to US $ 12610 and US $ 4709 in cash. During investigation it emerged from the evidence that the appellant-company, M/s. Cox and Kings (India) Ltd. had release foreign exchange not only in cash but also in the form of T/Cs without having any application from passengers and even without their identification etc. The appellant company was held guilty by the Adjudicating Officer where being aggrieved this appeal has been filed by the appellant to set aside the impugned order. 4. It is arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was required that along with other documents, passports, etc., entries should be made in the passports of the applicants. In the instant case, the appellant company, M/s. Cox and Kings (India) Ltd. had released foreign exchange not only in cash but also in the form of T/Cs without having any application from passengers and without identification process. The amount was shown as debited in the daily account register where the two officers in charge have admitted in their statements that they have done so on' assumption that it would be handed over to the concerned persons when they come forward for taking T/Cs at a future date. 7. The statement of Ramesh Sundaresan, Manager of Cox Kings is worth mentioning to appreciate the factual position in this case. He admitted that foreign currencies were booked in the name of passport holders without having any application from them or without having their signatures where the BTQ applications were generated on computers in the division of the Company. He tried to shift the responsibility on the shoulders of seniors by stating that this was done as per the instruction of Mr. A. Ramesh, the Financial Controller of the Company itself. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nge. Thus by not insisting the passengers for moving applications for purchasing foreign exchange from M/s. Cox Kings (India) Ltd. and by debiting the subject foreign exchange in the daily account register the appellant has failed to prove that it has taken as much care and caution as is expected to be taken from them as a money-changer. Sub-Section (4) of Section 6 makes all the general or special directions or instructions issued by RBI as binding on the authorised dealer/money changers by providing that they shall not engage in any transaction involving foreign exchange which is not in conformity with the terms of his authorisation. 11. Under Section 7 (1) of the FERA the Reserve Bank may, on an application made to it in this behalf, authorise any person to deal in foreign currency as Money-changers. Sub-section (4) of Section 7 provides that the provisions of sub-sections (4) and (5) of section 6 shall, in so far as they are applicable, apply in relation to a money-changer as they apply in relation to an authorised dealer. Sub-section (5) of Section 6 provides that an authorised dealer shall,bef ore undertaking any transaction in foreign exchange on behalf of any person, requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of this Act, be deemed to have contravened that provision, rule, direction or order, as the case may be. 13. The preparation or the attempt on the part of the appellants is fully proved in this case where the amount of the subject foreign exchange had been admittedly endorsed on passports and the amount was shown debited in the daily account register. On being asked about the preparation or the attempt by the appellant to commit the contravention of the relevant provisions, Ld. Senior Advocate could not give satisfactory reply particularly in view of statement of Mr. J. Upponi, General Manager, who admitted that the foreign currency were shown released to the passengers without any application from them and in some cases even without the knowledge of the passengers. Moreover, the assurance given by J. Upponi, General Manager, in a letter dt. 11.01.2000 that he had taken cognizance of the issue of signing of BTQ forms by the applicants before the transaction of sales of forex and that there will be no recurrence of cases of above nature in future go on to prove the charge against the appellant. 14. As regards the non mentioning or wrong mentioning the charge in the SCN rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o prove that such care and caution was taken was on the appellant which it failed to prove and I find no force in the argument of the appellants that they had not violated the provisions of the FERA. 17. The defiance of substantive provision in these appeals of Section 7 and Section 73 (3) of the FERA is established in this case against which the penalty has rightly imposed under the impugned order . e appellant can't be allowed to take benefit of his own wrong. The argument that violation is technical offence and there is no mens rea difficult to accept because the contraventions created by FERA, 73 being regulatory in nature mens rea is presumed against the appellant under the provisions of Section 59 FERA, 1973. It has been observed by the Supreme Court that the violation of statutory regulation cannot be technical violation when plain language of the statute does not permit, except from the imposition of penalty. In this regard observations of the Supreme Court in a recent judgement, The Chairman, SEBI v. Shriram Mutual Fund Anr. J.T. [2006] (11) SC 4 can be quoted as below: In our considered opinion, penalty is attracted as soon as the contravention of the statutory obliga ..... 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