9911796707
TMI Blog1994 (1) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... n deposited. He, therefore, prayed that the appeal could be taken up for consideration on merits. Shri Handoo had no objection. I, therefore, proceed to consider the appeal on merit. 2. Shri Maingi submitted that the facts are not disputed and the submissions made by the appellant in respect of each contravention for which she had been charged in Show-Cause Notices (SCNs) numbers I, II, III, IV and VII have been fully stated in the impugned order. The learned Dy. Director has held the appellant guilty of the charges contained in SCNs II, III, IV and VII. This appeal is, therefore, confined to the charges in those SCNs. As the facts are not disputed, I would straightway proceed to deal with charges contained in SCNs II, III, IV and VII. 3. U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd denied the payment in view of the provisions of section 5(1)(c) of the Foreign Exchange Regulation Act, 1947 which is the pari materia with section 9(1)(b). The High Court observed as follows : 9. When question of making payment 'by order or on behalf of' any foreigner arises, such payment cannot be made without the approval of the Reserve Bank. The question of obtaining the approval of the Reserve Bank would arise only when payment has to be made 'by order of a foreigner', or 'on behalf of any foreigner. Here Sri King wants payment on the strength of a deed of gift. When Mrs. Clarke executed the deed of gift its immediate effect was the divesting of her title and interest in the estate and the vesting of that title a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion there is full force in the contention made by the appellant that a payment of an amount in Indian currency to a person who is claiming the amount as a matter of his own right would not amount to payment contemplated under section 9(1)(b) which admittedly aims at prohibiting compensatory payment. There is no force in the argument that the judgment of the Allahabad High Court as relied upon by the appellant is distinguishable. Here the appellant received the amount because she was entitled to it in terms of the settlement of accounts of the firm of which she was one of the partners. The argument that Shri D'Souza, the non-resident had control of the money in the sense that unless and until he ordered the payment could not be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riend was in urgent need of money and he could not open a bank account which was possible only with the permission of the RBI. It was in order to help her friend that she deposited the draft in her account and gave Shri Tonnemann Indian currency of equivalent amount through cheques. Shri Maingi submitted that the appellant received the money through proper banking channels and she gave back an equivalent amount which was converted by the bank itself on the then current exchange rate. He, therefore, contended that there is neither any loss of foreign exchange to the country nor any gain whatsoever to the appellant. On the other hand, the purpose of the Act has been fully achieved by depositing the draft of foreign currency with the authorise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by resulting in loss of foreign exchange which otherwise would have come to the country. In view thereof, it cannot be the intention of the Legislature to prohibit payments or transactions in money where there could be no scope or possibility of any compensatory payment. In any transaction where it is ex facie clear that there is no possibility of any compensatory payment, the transactions would not come within the purview of section 9. In the present case, since the appellant made the payment by cheque to Shri Tonnemann of an amount equivalent of which, in foreign exchange, was received by her from Shri Tonnemann himself, there could be no possibility of any compensatory payment involved in the transaction. It is also to be noted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings, Shri Maingi submitted that even if there is a contravention on the part of the appellant, looking to the circumstances and the amount involved, the imposition of the penalty of Rs. 3,000 as well as confiscation of the amount is excessive. He contended that it is not the case of the department that the appellant was engaged in transactions in foreign exchange in contravention of the provisions of the Act and, therefore, a token penalty would have been adequate. After considering the facts and circumstances of the case, I am of the opinion that the penalty of Rs. 3,000 as imposed by the learned Dy. Director, would meet the ends of justice, but the confiscation of foreign currency which has not been received in deliberate violation ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
