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TMI Blog2013 (11) TMI 1815X X X X Extracts X X X X X X X X Extracts X X X X ..... and the same was listed on 7-11-2013 for the first time before this Bench with the report of the Registry dated 30-10-2013 explaining therein that the appeal No.99/2013 is listed for the first time for hearing before the Tribunal as the file was not traceable. The said file most probably has been mixed up with other files during the shifting process of this Tribunal. The registry has now re-constructed the file after getting the papers from the Enforcement Directorate as well as from the Appeal No.98/2011. The appeals No.98/2011 and 99/2011 are connected appeals which have been filed against the common order. The appeal No.98/2011 has already been heard and the same is reserved for order. The Hon'ble High Court of Bombay, Goa Bench vide their order dated 6-8-2013 has directed the Tribunal to dispose of appeal Nos. 98/2011 and 99/2011 expeditiously and in any case on or before 30-11-2013. It has further been specified in the said report of the Registry that another court fee in appeal No.99/2011 of Rs. 10,000/- has already been deposited vide D.D.No. 000109 dated 09-08-2011. When the matter was listed on 7-11-2013 before this Tribunal, in spite of hearing notice dated 25-10-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order was reserved. The arguments of the Ld. ALA that a single appeal has been filed for the company and for the director of the company Ms. Yulia Yaskova has forced to be relied upon. In paragraph 7 of the appeal No.98/2011 filed on behalf of M/s Queri Resorts (P.) Ltd. (in short company) it has been stated as below: The appellant company and its director Ms. Yulia Yaskova aggrieved by the impugned order prefer an appeal to this Hon'ble Tribunal . Paragraphs 6 8 of the copy of said Writ Petition No. 69/2013 filed by the Ld. ALA read as under: '6. In compliance of said order No. ADJ/19/B/SDE/RAJ/2011/FEMA/4043 dated 17-6-2011 of respondent No.2 the petitioner company deposited the penalty amount to Rs. 12,00,000/- and other amounts with respondent No.2 on 10-08-2011. The copy of covering letter under which the amount was deposited with respondent No.2 is annexed hereto and marked as EXHIBIT-C .' '8. Being aggrieved by said order No. ADJ/19/B/SDE/RAJ/2011/FEMA/4043 dated 17-6-2011 of the respondent No.2 the petitioner preferred an Appeal before the respondent No. 1 Appellate Authority under the FEMA, 1999 challenging said order of Respondent No.2, which appeal is reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel and the oral submissions of Ld. Counsel and Ld. ALA and Ld. Legal Consultant appearing for both the parties in appeal No. 98/2011 and oral submissions of Ld. ALA ex parte in appeal No.99/2011. 4. The brief facts, relevant for the disposal of the appeal Nos.98-99/2011 filed by the joint appellants, M/s Queri Resorts (P) Ltd. (in short company) and its director Ms. Yulia Yaskova, are that both the appeals are arisen from common Adjudicating Order No. ADJ/19/B/SDE/RAJ/2011/ FEMA/4043 dated 17-06-2011 passed by the Special Director, Enforcement Directorate, Mumbai (in short impugned order). By the impugned order the penalty of Rs. 12,00,000/- has been imposed on the company and a penalty of Rs. 1,00,000/- on each Ms. Yulia Yaskova director of the company and the appellant in Appeal No.99/2011 and 5 other directors who are not appellant in these appeals. Further the three properties purchased by the company for a total amount of Rs. 1,53,17,000/- involved in the contravention of the provisions of section 6(3)(b) of FEMA read with item No.6 of List B of Annexure A to Schedule 1 of Regulation 5 (1) of Foreign Exchange Management (Transfer or Issue of Security by a person resident outs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.07 Formulex LLP 29997 1321668 -do- 4. 08.04.07 Formulex LLP 14997 644121 -do- 5. 01.06.07 Electrade Holdings Ltd 40000 1616000 -do- 6. 28.04.08 M/s Lorenzini Ventures Ltd. 60000 2391000 -do- 7. 12.06.08 M/s Lorenzini Ventures Ltd. 287863 12320536 Foreign Direct Investment 8. 18.09.08 M/s Lorenzini Ventures Ltd. 5019 237411 -do- 9. 19.09.08 M/s Lorenzini Ventures Ltd. 27893 1289493 -do- 10. 23.12.08 M/s Lorenzini Ventures Ltd. 42773 2023163 -do- Total 643756 27781886 8. It is further obvious from para 12 of the impugned order that from the certificates of Foreign Inward Remittance, issued by Centurial Bank of Punjab Ltd./Axis Bank Ltd., Goa, the company received Foreign Remittance of USD643756.00 equivalent to Rs. 2,77,81,886/-. The said amount of Rs. 2,77,81,886/- was received by the company under the Automatic Route of Foreign Direct Investment Scheme promulgated under Regulation 5(1) of Foreign Exchange Management (Transfer or Issue of Security by a person resident outside India) Regulations, 2000 for subscription of the equity shares. 9. It also appears from para 27 of the impugned order that/the Special Director ( in short authorized officer) has found that the foreign remit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e impugned order. Therefore, such charges for which no penalty has been imposed is not required to be discussed for disposing of the appeals. 10. In the light of the facts and discussions specified in the preceding paragraphs, the following issues are required to be analyzed for understanding and disposing of the appeals: (I) Whether the company has purchased the agricultural land worth Rs. 1,53,17,000/- by utilizing the foreign remittances obtained under the Automatic Route for the purchase of agricultural-land and thereby contravened the provisions of section 6(3)(b) of FEMA read with item No.6 of List B of Annexure A to schedule 1 of regulation 5(1) of Foreign Exchange Management (Transfer or issue of Security by a person resident outside India) Regulations, 2000 and the penalty of Rs. 12,00,000/- imposed on the company is appropriate. (II) Whether the appellant in Appeal No.99/2011 Ms. Yulia Yaskova is guilty for the aforesaid contravention by the company specified in issue (i) in terms of section 42(1) of FEMA and a penalty of Rs. 1,00,000/- imposed on her is appropriate. (III) Whether three properties purchased by the company for a total amount of Rs. 1,53,17,000/- involved i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Collector-I, Collectorate of North Goa vide letter No.4/20-72-RB/FEMA/2010 dated 04.05.2010, informed the Directorate that no conversion Sanad from agricultural to non-agricultural purpose was issued for the properties held by the company at Survey Nos.116/1 (Vill. Querim), 116/1 (Vill. Keri) and 117/0 (Vill. Querim), Goa admeasuring 4167, 2000 and 7861 square meters respectively. Regarding purchase and approval by the Panchayat and other bodies Government of Goa the following have been submitted in paragraphs 18 to 21 of the Memorandum of Appeal in appeal No. 98/2011: 18. It is the contention of the appellant company that they have purchased a residential house along with the attached land for usage of tourism related activities, which is permissible under the provisions of FEMA. 19. Such tourism related activities from residential premises are common in the rural village areas of Goa, subject to the approvals and clearances from the appropriate authorities, being the panchayat etc. 20. In the present case the panchayat and other bodies of the Government of Goa had provided their approvals for construction of an appropriate building which could he used for tourism related a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant in appeal No. 98/2011 has submitted in respect of the statement of Mr. Francisco X Souza that the statement is of ex-director of the company who allegedly claimed that the properties purchased by the appellant are agricultural properties. The statement is mere statement of a citizen and not of the appropriate authority of the company to conclude on the status of the land purchased. The said submission of the Ld. Counsel is not cogent and reasonable. It is un-controversial that Mr. Francisco X Souza was the director when the properties were purchased as such he was well conversant with the facts relating to the properties as to whether the properties were agricultural lands or not. He has no enmity with the company or its directors. Further, more there is nothing on the record to prove that the statement of Mr. Francisco X Souza was prejudiced statement or the statement given under coercion or under any pressure or otherwise to condemn the statement as not to be the true statement. As such the statement of Mr. Francisco X Souza is reliable to prove the facts that the properties purchased by the company were agricultural lands. The properties stated by him to be purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultural lands. Such purchasing of agricultural lands by the company is in contravention of the provisions of section 6(3)(b) of FEMA read with item No. 6 of List B of Annexure A to Schedule 1 of regulation 5(1) of Foreign Exchange Management (Transfer or issue of Security by a person Resident Outside India) Regulations, 2000. Section 6(3)(b) of FEMA empowers the Reserve Bank of India (in short RBI) without prejudice to the generality of the provisions of sub-section (2) to make regulations to prohibit, restrict, or regulate the transfer or issue of any security by a person resident outside India. Inter alia in exercise of this power the RBI has made the regulation, namely, Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 and regulation 5(1) of said Regulations of 2000 as was prevailing at the time of purchase of three lands which were agricultural lands specified above in the preceding para 5 permits a person resident outside India (Other than an citizen of Bangladesh and Pakistan) or an entity incorporated outside India (other than a entity in Bangladesh or Pakistan) to purchase shares or convertible debentures of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company, for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention. (2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. Explanation For the purposes of this section (i) comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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