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TMI Blog2023 (4) TMI 1360X X X X Extracts X X X X X X X X Extracts X X X X ..... factory. HELD THAT:- As there is nothing to show that the Appellant made an admission either during the investigation or subsequently of existence of a debt and of a jural relationship of creditor and debtor between the Company and the NRIs. To acknowledge a debt, the Company/ Promoter should have issued an acknowledgement admitting in writing that there is a debt owed by the Appellant. It is important to note that section 9(1)(c) FERA requires draw, issue or negotiate any bill of exchange or promissory note or acknowledge of debt. Reading of the Judgment Supra and these wordings of the section it is inescapable not to infer that even acknowledge of debt requires an instrument. Even if for argument sake if it is taken that no instrument is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbhir, Managing Director of M/s DD Gears (P) Ltd. The Appeals were filed against Adjudication Order No. Adj/FERA/01/DZ/2014/JD/AR passed on 28/02/2014 by the Joint Director Delhi Zonal Unit, Enforcement Directorate for the contravention of section 9(1)(c) r/w section 68(1) of the Foreign Exchange Regulation Act 1973 (FERA) for which Show Cause Notices were issued to the Appellants on 16-5-2002. 2. The Joint Director in the Adjudication Order dated 28-2-2014 made a finding that it is an admitted fact that against the amount of Rs. 1,03,21,220/-received from the NRIs by the Noticees (the Appellants here-in), as share application money, no share was allotted to them and the said amount continued under the head 'Share Application Money' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maria AIR 1961 SC 1236 to support his argument. 5. Learned Counsel for the Respondent strongly opposed the prayer of the Appellant. He pleaded that the Appellant failed to produce any evidence to show issuing of shares against money received from the NRIs. The appellant failed to return the amount to the NRIs. Hence, the Company acknowledged a debt and thereby created a right in favour of persons resident outside India. FERA is a special law and hence the provisions of the Special Act shall apply to the exclusion of the other. He quoted part of the impugned Adjudication Order whereby the Adjudicating Authority rejected the plea of the Appellant that the records were lost in fire and the lock-out. He reiterated the written submission filed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er understanding of these words the judgment dated 1-3-1961 of the Hon'ble Supreme Court in Khan Bahadur Shapoor Freedom Mazda (supra) though pronounced in the context of then prevalent Limitation Act has been looked at. 9. In the case supra, cited by the Appellant in his written submission filed on 19-4-2018, the meaning of acknowledgement of debt has been clarified in the context of section 19 of the then prevalent Limitation Act: The essential requirements of a valid acknowledgement under section 19(1) of the Limitation Act are that it must be made before the relevant period of Limitation has expired, it must be in regard to the liability in respect of the right in question and it must be made in writing and must be signed by the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liberal construction of such statements though it does not mean that where no admission is made one should be inferred, or where a statement was made clearly without intending to admit the existence of jural relationship such intention could be fastened on the maker of the statement by an involved or far-fetched process of reasoning. Broadly stated that is the effect of the relevant provision contained in section 19 of then prevalent Limitation Act. The Judgment further states that the substance of the provisions contained in section 19 of then prevalent Limitation Act has been succinctly given by Justice Fry L as early as 1884 in Green vs Humphreys in my view an acknowledgement is an admission by the writer that there is a debt owing by hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beginning they have denied owing a debt to the NRIs from where there was in-flow of share capital money. They have all through maintained the inflow of funds was for share capital. It also does not imply that since the Appellants could not produce documents for issuance of shares the money received by them becomes debt either as a matter of implication or that of Law. The Respondents have also failed to produce any evidence documentary or otherwise to show how acknowledge of debt got created. 11. In view of the aforesaid the appeals are allowed and the impugned Adjudication Order dated 28-2-2014 is set aside. The pre-deposit of penalty amount of Rs. 50,000/- each vide DD No. 312683 dated 19-4-2017 and DD No. 312684 dated 19-4-2017 made by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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