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TMI Blog1991 (3) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... K pounds 20,800 on the ground that the said amount of UK pounds 10,500 belonged to her. 3. Brief facts of the case are as under : The residential premises of Shri B.N. Dhawan at G.-24, N.D.S.E. Part I, New Delhi were searched under section 37 of the Act by the officers of the Enforcement Directorate on 21/22-10-1989 and foreign currency to the tune of UK pounds 51,800, one hundred gold coins and certain incriminating documents seized. Statements were recorded on the same day from Dr. N. Dhawan, a British national and son of Shri B.N. Dhawan under section 40 of the Act. A statement was also recorded under section 40 from Shri B.N. Dhawan. On the basis of the said statements and investigations made in relation to the seized documents and foreign currency. Memorandum No. T-4/10-D/90-SCN-I, dated 8-2-1990 (SCN) was issued to Dr. N. Dhawan, as well as to Shri B.N. Dhawan. The SCN charged Dr. N. Dhawan a person in India, of transferring foreign exchange to the tune of UK pounds 20,800 to Shri B.N. Dhawan, a person resident in India, without the previous, general or special permission of the Reserve Bank of India in contravention of the provisions of section 8(1). The same SCN also charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement given by Shri B.N. Dhawan on 24-10-1989 wherein, while explaining certain entries in the loose sheets of paper seized by the officers, Shri B.N. Dhawan had explained that entries at pages 2-6 of the pocket book seized from him on 22-10-1989 were figures which showed the market value of sterling which Dr. N- Dhawan had given to him during the period November 1988 to August 1989. The Adjudicating Officer rejected the allegations contained in the two affidavits filed at the time of the adjudication proceedings on behalf of Dr. Dhawan and Shri Dhawan to the effect that the statements given by them under section 40 were recorded under force and pressure, as being merely an afterthought. The Adjudicating Officer found that the statements given by both of them were never retracted till the case was fixed for personal hearing. The Adjudicating Officer also found that there was no scope for believing the allegation that the statements given by Dr. Dhawan and Shri B.N. Dhawan were recorded under threat or pressure since Shri B.N.' Dhawan had given detailed explanations to the entries in the pocket book seized from his premises on 22-10-1989 which could not have been dictated and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent his case at the time of the personal hearing on 20-2-1990 as the proceedings on that day related entirely to the case of Dr. Dhawan; (e) that the foreign currency, though kept in his premises, always belonged to his son Dr. Dhawan and no evidence has been produced to establish that he (Shri B.N. Dhawan) exercised any control or title over the said foreign exchange; (f) that other than the statement given by him on 15-11-1989, there was nothing to show that he had made any attempt to sell the said foreign exchange; (g) that for purposes of constituting an offence of attempt, it is necessary to show that the appellant had taken a step which would have, but for events beyond his control, resulted in the commission of the offence; (h) that mere intention to commit an offence would not constitute an attempt; (i) that even if Dr. Dhawan had passed on the said foreign exchange to him, the same could be deemed only to be a gift and not an acquisition requiring the approval of the Reserve Bank of India; (j) that the imposition of a total penalty of Rs. 75,000 without apportioning the quantum for each of the two charges framed against him was illegal since it was not possible to decide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -law each brought pounds 7,500 on 19-10-1989 with a view to purchase property.... In another portion of the said statement, Dr. N. Dhawan stated : 'Today the officers of Enforcement Directorate searched residence G-24, N.D.S.E. Part I, New Delhi as a result of which they recovered and seized foreign currency of pounds 51,800. In this connection I am to state that out of this pounds 16,000 were brought by me from UK on 21-10-1989 and pounds 7,500 each were brought by my wife Mrs. Shobha Dhawan and my sister-in-law Mrs. P. Kumar who came to India on 19-10-1989. Regarding the balance foreign currency of pounds 20,800 I am to state that this was brought by me and my wife to India on our various visits during November 1988 to August 1989. This foreign currency was left by me with my father Shri B.N. Dhawan for meeting his expenses. He, however, did not surrender this foreign currency to any bank as being an Indian national, he thought he was not in a position to do so .... 8. On the other hand, Shri Gudoo, DLA, appearing for the respondent. Has drawn attention to the following answer given by Shri B.N. Dhawan on 24-10-1989 in answer to a question put to him by the Enforcement Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nge whether by way of purchase or acquisition in any manner like borrowing or sale. It also covers transactions like transfer, lending or exchange. It covers also two types of persons namely, persons who are physically in India at the, time of the transaction and persons who arc resident in India. Shri Prashar has strenuously contended that for coming within the ambit of 'transfer', a transaction should be an act by which a living person conveyed property to another living person as envisaged by the definition of 'transfer of property' under section 5 of the Transfer of Property Act, 1882 especially when the word 'transfer' has not been defined in the present Act. Since no ingredients of such transfer has been established, according to him, the charge of transfer should fail. Correspondingly, he has also argued that the charge of acquisition of foreign exchange by Shri B.N. Dhawan should also fail since acquisition by one person can take place only when there is a corresponding transfer by another person. 11. Let us take up this contention. In K. Chandra Dhar v. P.B. Venketasubramaniam [1987] 11 Excise and Customs Cases 381, the Calcutta High Court had consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession of the foreign exchange. If unlawful possession is not equated with acquisition, there was no necessity of incorporating section 19(J)(1) particularly when unlawful possession is not by itself an offence. The fact that without making possession itself an offence the onus of proof has been shifted to the offender clearly suggests the legislative intent that such unlawful and unexplained possession would amount to acquisition. We find no difficulty, therefore, in concluding that the word 'acquisition' in the Act has to be read in the generic sense to mean to receive or to come into possession of. 12. Having regard to observations of the Hon'ble High Court stating that the word 'acquire' in the Act has to be given its generic sense, it follows that the corresponding expression 'transfer' used in section 8(1) has also to be understood in its generic and wider meaning so as to include handingover of such foreign currency by one person to another. Admittedly, Dr. N. Dhawan did make the statement that he had only 'left behind' the said currency with his father with the understanding that he could use the money, if needed. Reading the said sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... politan Magistrate on 6-11-1989 on his furnishing bond for Rs. 50,000 with one surety of like amount. The statements of Shri B.N. Dhawan were recorded on 24-10-1989 and subsequently, on 7-11-1989 and 15-11-1989. Hence, only one statement i.e., dated 24-10-1989 was recorded when his son Dr. Dhawan was in injudicial custody and the other two statements i.e., 7-11-1989 and 15-11-1989 were recorded only after release of Dr. Dhawan on bail and hence there is no force in the allegations of Shri B.N. Dhawan that his statements were obtained under pressure. Shri B.N. Dhawan, in his statement dated 15-11-1989, clarified in detail his intentions to sell the foreign exchange of pounds 20,800 given to him by his son Dr. Dhawan at unauthorised rates. At that time. Dr. Dhawan was not in jail and his statement was recorded after about three weeks of his first statement dated 24-10-1989... 14. We have considered Shri Prashar's submission that where retractions have been made and allegation of undue pressure used, caution should be excercised before relying on such statements. While we are in agreement with the settled position that as a matter of prudence, an adjudicating authority should not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N. Dhawan has been corroborated by the statement given by Shri B.N. Dhawan on 24-10-1989 to the effect that the said foreign exchange had been given by Dr. Dhawan to his father for meeting with certain expenses if need arose. We are, therefore, unable to accept Shri Prashar's contention that the Adjudicating Officer has relied entirely on the retracted statement of Dr. Dhawan without further corroboration. In the result, we find no reason to disagree with the findings of the Adjudicating Officer in relation to the charges against Dr. Dhawan nor the - penalty imposed on him. 16. As regards the charge against Shri. B.N. Dhawan, that of acquiring foreign exchange in contravention of section 8(1), as discussed in the previous paragraphs, we are of the view mat the word 'acquire' used in section 8(1) has to be given its generic meaning. A perusal of the statement given by Dr. Dhawan on 22-10-1989 and the statements given by Shri B.N. Dhawan on 24-10-1989, 15-11-1989 and 24-11-1989 would show that though the explanation that foreign exchange brought by Dr. Dhawan from abroad during his frequent trips to India and kept in the house of his father in Delhi was intended to be use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d expenses. Shri Prashar has, no doubt, disputed the inference made by the Adjudicating Officer in his order that Dr. Dhawan had given the said amount to his father for meeting his 'personal expenses'. However, on a plain reading of the statement given by Dr. Dhawan on 22-10-1989 and the statement given by Shri B.N. Dhawan on 24-10-1989, there can be no doubt that the intention in keeping the said foreign exchange in the house of Shri B.N. Dhawan was the eventual utilisation of the said foreign exchange by Shri B.N. Dhawan, initially for me treatment of Mrs. B.N. Dhawan and subsequently, after the death of Mrs. B.N. Dhawan in August 1989, for order purposes. Making use of die money entrusted to one's custody by another on the occurrence of a certain event or after the expiry of a period certainly confers the former a right over the said money. It cannot be contended with any force, therefore, dial even at the time of exercising the authority to use the money, such person enjoyed no rig. over it. Since no custodian has the right to spend the money entrusted to him by another person, the fact that such 'custodian' was given a certain authority to make use of it wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition to other currency. 20. Shri Prashar has stated that the statements made by Shri B.N. Dhawan on 24-10-1989 and 15-11-1989 were under duress and pressure and, therefore, cannot be relied upon. As referred to earlier, a mere bald assertion of use of coercion and pressure would not make the statement inadmissible in evidence. There is nothing on record to show that any duress or force had been used against Shri B'.N. Dhawan especially in relation to the statement given by him on 15-11-1989 by which time his son Dr. Dhawan had already been released on bail. 21. Shri Prashar has, however, raised the question of 'attempt'. He has drawn attention to the distinction between the intention and attempt. According to him, the statement attributed to Shri B.N. Dhawan would at best show an intention on his part to sell the said foreign exchange at the rate noted down in the pocket book seized from his residence at the time of the search. He has contended that for establishing a charge of attempt, the facts on record should show that the contravention in question would have taken place, but for the intervention of an outside agency. We find considerable force in this argument. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 8(1) and for attempting to sell and to convert the foreign exchange under section 8(2) read with section 64(2) of the Act. As has been correctly contended by Shri Prashar, the Adjudicating Officer has not apportioned the penalties in relation to each of the charges with the result that the penalty will become incapable of execution when only one of the charges has been established. We find force in this contention. In view of our findings, only one of the charges against Shri B.N. Dhawan, i.e., acquisition of sterling pounds 20,800 has been established against him. The charges of attempting to sell and to convert the said foreign exchange, as has been held by us, has not been established. Since the Adjudicating Officer has not imposed separate penalties for the different charges contained in the SCN, the total penalty of Rs. 75,000 would, unless truncated, become unjust and clearly unconscionable. In the interest of justice and in the circumstances of the case, we feel that penalty of Rs. 25,000 on Shri B.N. Dhawan would be appropriate in relation to the charge of 'acquisition' of UK pounds sterling 20,800 as this will correspond to the penalty of Rs. 25,000 impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whom adjudication proceedings were held and who was in full knowledge of the facts and proceedings should have intervened in the adjudication proceedings if she had any claim over the foreign currency which was the subject matter of the adjudication proceedings. Further, although in the affidavits filed by Dr. N. Dhawan and Shri B.N. Dhawan before the Adjudicating Officer, it was claimed that part of the foreign exchange seized was brought by Mrs. Shobha Dhawan, the Adjudicating Officer, relying on the statements given by Dr. N. Dhawan and Shri B.N. Dhawan came to the conclusion that the entire U.K. pound sterling 20,800 belonged to Dr. Dhawan and having found it to be currency in respect of which contravention has taken place directed its confiscation. 27. We have considered the submissions made on behalf of the parties. In terms of section 63 of the Act an Adjudicating Officer adjudging a contravention under section 51 may, if he thinks fit, in addition to imposing a penalty direct, inter alia, that any currency in respect of which contravention has taken place shall be confiscated to the Central Government. As has been held by the Supreme Court in Collector of Customs v. D. Boo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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