9911796707
TMI Blog1995 (12) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... ment contacted the Dy. Commissioner of Police immediately and took over the seized foreign currency of US $47,500 and Indian currency of Rs. 4,104 along with other seized articles and the Fiat Car bearing No. ADY-2838. They also obtained a copy of the panchnama dated 13-3-1986 drawn by the Police authorities. The said two persons, one of them being the appellant and the other alleged to be his associate Gajanand Agarwal, were also handed over to the Enforcement Directo-rate for their further enquiries under the Act. Both the appellant and Gajanand Agarwal were interrogated and their statements were recorded on the same day, i.e., on 13-3-1986. It appears that based on the information given by the appellant in his statement dated 13-3-1986 the department also recorded the statements of Aziz Khan, Sheikh Ibrahim and Sheikh Mehboob Ali of Kamareddy. After investigation, the department issued a show-cause notice (SCN) dated 11-3-1987 to the appellant alleging contravention of section 8(1) and 8(2) on the factual allegations contained therein. It was stated that in issuing the SCN, reliance was placed, inter alia, on the documents listed in the Annexure. The Annexure to the SCN refers t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earched was given by the appellant on 13-3-1986 after 12.30 hrs., how could the Assistant Director issue search warrants relating to these persons on 12-3-1986? He submitted that the entire case is fabricated by the department and the appellant has been falsely implicated. After the conclusion of the oral hearing before us, Shri Arora, also filed, with the leave of the Board, voluminous case law in support of his plea that the respondent be directed to return the seized articles including the foreign currency to the appellant as the finding of contravention of section 8(1) and 8(2) on the part of the appellant cannot be sustained and for that reason the order of confiscation is also liable to be set aside. Shri Arora vehemently argued that since the department's case is that the said articles including the foreign currency were seized from the appellant, they should be directed to return the same to him. 4. We have gone through the memorandum of appeal and the submissions made by the parties. The first contention raised by the appellant is that the respondent did not apply his own mind to the facts of the case and the relevant evidence. He also violated the principle of natural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Annexure to SCN. Of course he has taken into consideration the depositions made by the panchas witnesses during their cross-examination. In view thereof, although it was not judicious on the part of the adjudicating authority to examine certain documents without disclosing the same to the appellant, this has not resulted in any material miscarriage of justice. 5. Shri Arora assailed the order on two more substantial grounds. He submitted that the appellant was framed and a false case of recovery of foreign exchange and Indian currency from him was foisted on him, that the panchnama has been proved to be false and the other evidence of the appellant's statement dated 13-3-1986 is not voluntary and neither true and cannot form the basis of allegations on which he has been found to be guilty. 6. We have seen the panchnama which is witnessed by Mehedi Hussain and Syed Sarvath Hussain. It mentions that we panchas physically searched and found the articles are present which are as follows . Shri Arora rightly submitted that panchas are not authorised to make a search. He also pointed out that in the report filed in the Court of Special Judge for Economic Offences, it is stated o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... longing to one Smt. Ameerunissa Begum. As the car was not registered in the appellant's name, there was every reason for the police to make enquiries so as to find out whether the car was stolen. It is also difficult to understand as to why only such facts are recorded in the panchnama as are solely indicative of the contravention of the provisions of the Act and that too almost in the nature of a confessional statement. We find it difficult to accept the panchnama to be a true and faithful record of the search and recovery if at all made. 8. Shri Arora further submitted that in any case, the search and seizure has been proved to be false by the deposition made by the panchas witnesses during their cross-examination in the course of the adjudication proceedings. We have seen the depositions made by the panch witnesses which are reproduced in paras 16 and 17 of the impugned order. This evidence is adequate, in our opinion, to disprove the department's case that the appellant was intercepted while driving the said Fiat Car and that the foreign and Indian currency and other articles as mentioned in the panchnama were recovered from him. 9. The learned Adjudicating Officer reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department. In view of the above, we are of the view that there is no evidence on which the alleged fact of search and seizure of foreign currency from the appellant could be sustained. As the department's case of recovery of foreign exchange from the appellant is not proved, the impugned order is liable to be set aside on this ground alone. 10. In the SCN which preceded the oral hearing the allegation is that the appellant entered into a (sic) transaction for purchase of foreign exchange, viz., US $20 lakhs at rates of exchange other than the rates prescribed by the Reserve Bank of India and that he purchased and sold the said foreign exchange from and to the persons other than the authorised dealer in foreign exchange. This allegation is obviously based solely on the statement of the appellant except to the extent of US $ 6,200 alleged to be purchased from Sheikh Mehboob Ali of Kamareddy who confirms the allegation in his statement under section 40 of the Act. Other persons whose names appeared in the statement of the appellant have denied, in their statement under section 40, whatever is stated with reference to them in the appellant's statement. In any case, the allege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Enforcement Directorate. The question of issuing any summons under section 40, therefore, does not arise. The circumstances in which the statement was made, it cannot be accepted as voluntary. Although as submitted by Shri Arora, once the statement is found to be not voluntary, it is not permitted by law to look into the statement even to see whether it is true. However, we find that even if the statement had been voluntarily made, it cannot be accepted as true. It is difficult to accept a bald statement of the appellant for dealings in foreign exchange to the tune of 20 lakh dollars without any evidence, even circumstantial, that he had the financial means to carry on the sale and purchase of foreign currency to the tune of 20 lakh US$. The other transactions of dealing in foreign exchange have been denied by the persons with whom he is alleged to have such dealings. Even Mohd. Ali of Kamareddy did not support the department's case and refused to answer any question during his cross-examination. In the circumstances, the appellant's statement cannot be accepted as any piece of evidence. The reasonings given by the learned Adjudicating Officer in his findings are totally m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No doubt, normally, if the charges are not proved, the articles seized from the person proceeded against ought to be ordered to be returned to him. However, this would be liable in such cases to be returned to the person from whom they were recovered and seized. It will not apply to a case where it is proved from the evidence on record that those articles were not seized from the person against whom the proceedings were initiated. We have seen the voluminous case law filed by Shri Arora for our consideration. In none of the cases there was any dispute about the recovery of those articles from the person to whom the articles were ordered to be returned consequent on the setting aside of the proceedings against him. Those judicial decisions, in our opinion, do not help the appellant. Shri Arora vehemently argued that the respondent should not be allowed to go back on the allegation that the foreign currency, etc., were seized from the appellant and, therefore, irrespective of the finding of recovery of foreign currency from the appellant being not sustainable, the department should be directed to return the articles to the appellant on the basis of their own case. We do not find any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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