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TMI Blog2024 (11) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... despite non-submission of bills of entry and reminders and a report to the RBI? HELD THAT:- The facts available on record shows receipt of the foreign currency against fake insurance claims which was never made by the Hamco Group of Companies with the Insurance Companies and was otherwise to be routed through the banks. The default by the appellants was realized and for that reason alone they subsequently wrote letters to insurance companies to find whether claims for insurance have been made. It was then informed that no claim was reported towards the insurance and specific reply of it has been given for Solo Industries Ltd. Al Sagar National Insurance Company, Dubai addressed the facts on 15.03.1999 that there was no claim reported by Solo Industries Ltd. or any of their consignees or settled by the said Company. The insurance company vide its letter dated 17.03.1999 also confirmed that the documents by Hamco Group of Companies were found to be forged and they were never issued by Al Sagar Insurance Company. They categorically denied receipt of claim or any settlement For the reason that the word abetment has not been defined under the Act of 1973, reference of Section 107 of IP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 8(3) read with Section 64(2) read with section 68 of the Act of 1973. Vijaya Bank - The appellant bank has opened 24 LCs on behalf of Hamco though bill of entry was not submitted in respect of 21 LCs and remittances involving a total amount of US $ 17605540.45. Thus, despite no bill of entry submitted by the Hamco group of companies and despite non-fulfillment of the mandatory obligation by the Hamco group of companies, the bank continued to open LCs and remitted the amount. Thus, the bank is liable for abetment and negligence in terms of Section 8(3) and Section 8(4) read with Section 64(2) of the Act of 1973. The appellant officers concerned processed LCs and issued remittances are liable under Section 8(3) read with Section 64(2) read with section 68 of the Act of 1973. United Western Bank - Despite no bill of entry being submitted by the Hamco group of companies and despite non-fulfillment of the mandatory obligation on part of the Hamco group of companies, the bank continued to open LCs and remitted the amount. The appellant bank has also remitted US $ 34809212.77 to various parties against Merchanting Trade transactions. The bank has also opened 7 LCs in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of Hamcothough bill of entry was not submitted in respect of 3 LCs and 4 remittances involving a total amount of US $ 2033770/-. Thus, despite that no bill of entry was submitted by the Hamco group of companies and absence of fulfillment of the mandatory obligation given under the Manual of 1993 and UCPDC on part of the Hamco group of companies, the bank continued to open LCs and remitted the amount. Thus, the bank is liable for abetment and negligence in terms of Section 8(3) and Section 8(4) read with Section 64(2) of the Act of 1973. The officers concerned in the process of opening LCs and issuing remittances are liable under Section 8(3) read with Section 64(2) read with section 68 of the Act of 1973. - FPA-FE-577/MUM/2003, FPA-FE-578/MUM/2003, FPA-FE-579/MUM/2003, FPA-FE-580/MUM/2003, FPA-FE-581/MUM/2003, FPA-FE-582/MUM/2003, FPA-FE-586/MUM/2003, FPA-FE-591/MUM/2003, FPA-FE-590/MUM/2003, FPA-FE-572/MUM/2003, FPA-FE-574/MUM/2003, FPA-FE-566/MUM/2003, FPA-FE-569/MUM/2003, FPA-FE-571/MUM/2003, FPA-FE-573/MUM/2003, FPA-FE-565/MUM/2003, FPA-FE-576/MUM/2003, FPA-FE-583/MUM/2003, FPA-FE-584/MUM/2003, FPA-FE-585/MUM/2003, FPA-FE-587/MUM/2003, FPA-FE-588/MUM/2003, FPA-FE-5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ign exchange for the purpose for which it was acquired thereby contravened the provisions of Section 8(3) and 8(4) of the Act of 1973. It was also alleged that Hamco had acquired foreign exchange to the tune of US $ 7,71,11,996.76 and remitted the same through various Banks to overseas suppliers in the guise of Merchanting Trade but failed to import or export any such goods, without the general or special permission of the RBI. Therefore, Hamco appeared to have contravened the provisions of Section 8(3) and 8 (4) of the Act of 1973 along with Paragraphs 7C.1 and 7C.2 of Chapter 7 of the Manual of 1993. Its officers were also charged for the same violation in terms of Section 68 of the Act of 1973. The respondents issued six Show Cause Notices as under: SCN-I 4. The first Show Cause Notice was issued to Hamco in reference to the facts given above though these appeals are not by Hamco but the facts are relevant to deal with the issues raised by the appellants i.e., the financial institutions and its employees in these appeals. The appellants are not aware as to whether Hamco along with its entities filed the appeals against the order passed by the Special Director. SCN-II 5. The seco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations were also made against its employees in terms of Section 68 of the Act of 1973. SCN-V 8. The fifth Show Cause Notice was issued again to Hamco in reference to 1995-98. It was alleged that it exported various consignments of goods to companies abroad but failed to take steps to secure the receipt of export proceeds to the tune of US $ 76,13,474.18 within the prescribed period from the date of export without any general or special permission of RBI and thereby had contravened the provisions of Section 18(2) read with Section 18(3) and relevant Central Government Notifications. The allegation was also made against its employees in terms of Section 68 of the Act of 1973. SCN-VI 9. The sixth Show Cause Notice was issued again to Dravya alleging that during the year 1995-98, it exported various consignments of goods to companies abroad but failed to take steps to secure the receipt of export proceeds to the tune of US $ 19,15,389.22 within the prescribed period from the date of export without any general or special permission of RBI and thereby contravened the provisions of Section 18(2) read with Section 18(3) and relevant Central Government Notifications. The allegation for it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts of the case as well as the provision of the law. The appellants had discharged their duties faithfully and without lapse or contravention of any of the provisions of the Act of 1973 yet they were served with the Show Cause Notice and even penalized with imposition of penalty. 14. The learned counsel for the appellants has given facts about the remittance of the Foreign Exchange and procedure adopted for it. It was submitted that documents tendered by the client for foreign exchange remittance are taken prima facie in order and in those circumstances, the financial institution and its employees were having no option but to accept the documents and effect remittance thereunder so long as they are in accordance with the rules. There would be no reason to suspect any foul play. In any case, the banks and its employees are bound and are liable to remit foreign exchange in accordance with the entitlement of its client 15. The impugned order has been passed against the appellants on the premise that they should have exercised a greater degree of care and diligence while remitting funds in view of the fact that the Bills of Entries were not submitted in time or it was not submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted to open letters of credit on behalf of their customers who are known to be participating in the trade. While doing so, they should follow normal banking procedures, UCPDC provisions, etc. The letter of credit should, in particular, stipulate a condition requiring that the bill of lading should indicate the name and address of the importer in India as well as the authorised dealer opening the credit. Remittances for imports under letters of credit or otherwise should be made against shipping documents/lorry/railway receipts/Exchange Control copies of bills of entry/postal/courier wrappers, etc. except where it is otherwise provided in this Chapter. (iii) In terms of item No.54 of the list of consumer goods given under paragraph 156 in Part II(A) of Chapter XV of Export and Import Policy (1992-97), import of designs and drawings is permitted without any restrictions. Remittances towards import of designs and drawings may be allowed by authorised dealers on production of (i) suppliers' invoice; and (ii) postal wrappers/exchange control copy of Bill of Entry as documentary evidence in support of import, subject to the following conditions :- a) Import of designs and drawings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nks could not have gone behind the documents to check their authenticity and validity and thereby the appellants did not fail to exercise due care and diligence while remitting funds . 18. The counsel further submitted that the respondents have referred to the statement of Mr. B.M. Patel to hold financial institutions and its employees for aiding and abetting the contravention. Mr. Patel made a statement that the LCs were opened but there was no actual import of goods from purported foreign suppliers. The statement of Mr. Patel could not have been read against the appellants because the appellants were not under obligation to find out genuineness of the documents and did not expect that the foreign suppliers would send forged and fabricated documents showing export of the goods without actual export, as stated by Mr. Patel that remittance was made by the Banks based on forged and fabricated documents. In any case, the appellants banks and its employees acted strictly in accordance with the prescribed procedure where they had taken due care of the transaction before remittance. 19. Elaborating the arguments, the learned counsel for the appellants submitted that the Banks and its emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nies. Even in the present case, the credit limits in favour of the Hamco group of companies were sanctioned based on the reputation and the past record. Once the LC is opened, the financial institution is left with no option but to accept the documents so long as the same are in accordance with the condition of LC and effect remittance. The Banks were thus left with no option, rather bound to remit the amount unconditionally. The impugned order has yet been passed on the ground that the appellants failed to exercise a greater degree of care and diligence while opening LCs and remittance in ignorance of the fact that there is no provision under the Act or rules to the effect that no LC can be opened if the Bill of Entry in respect of the previous LC has not been submitted by the importer and accordingly the appellants had fulfilled their obligation yet been subjected to penalties alleging aiding and abetment of the contravention of the provisions of the Act of 1973 by Hamco group of companies. 21. The learned counsel for the appellants, however, referred to Paragraph 7.A.20(i) of the Manual of 1993 which makes it obligatory on the part of the importers to submit Exchange Control cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivering the documents against acceptance. NOTES: A. In case of goods imported and stored by 100% Export Oriented Units/Units in Export Processing Zones and Free Trade Zones in bonded warehouses, it will be in order for authorised dealers to accept Exchange Control (quadruplicate) copy of Into Bond Bill of Entry for Warehousing as evidence of import. B. As regards submission of evidence in respect of imports by courier services, please see paragraph 7A.23. C. In respect of imports on D/A basis if importers fail to produce documentary evidence due to genuine reasons such as non-arrival of consignment, delay in delivery/customs clearance of consignment, etc. authorised dealers may, on merits, allow reasonable time not exceeding three months from the date of remittance to the importer to submit the evidence of import. (ii) Authorised dealers should in all cases acknowledge receipt of Exchange Control copy of bill of entry/postal/wrappers from importers by issuing acknowledgement slips containing the following particulars: (a) Importer's full name and address with code number. (b) Import licence number and date (wherever applicable) (c) Bank's reference of letter of credit numbe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RBI but Hamco group was not blacklisted. However, they were penalized for it and at the same time penalty has been imposed on the appellants for aiding and abetment. The remittance under the LC sand non-submission of Bills of Entry are two unconnected matters as they are prima facie given by different banks but ignoring the aforesaid aspects, the respondents have imposed heavy penalty on the appellants and its employees. 24. It is lastly submitted that the financial institutions had taken necessary action against the Hamco group of companies and for that they filed criminal complaint for the fraud committed by them and is also made to recover the money lost by the appellants and, therefore, also the appellants could not have been held responsible for aiding or abetting the contravention. It is also stated that main allegation was only of negligence which would not make out a case of abetment as per Section 107 IPC. The prayer was accordingly made to set aside the impugned order and with that to allow the appeals. Arguments by side opposite 25. The learned counsel for the respondents vehemently contested all the appeals. The counsel submitted that no doubt the main allegation for co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsion of Indian currency into foreign currency or foreign currency into Indian currency at rates of exchange other than the rates for the time being authorised by the Reserve Bank. (3) Where any foreign exchange is acquired by any person, other than an authorised dealer or a money-changer, for any particular purpose, or where any person has been permitted conditionally to acquire foreign exchange, the said person shall not use the foreign exchange so acquired otherwise than for that purpose or, as the case may be, fail to comply with any condition to which the permission granted to him is subject, and where any foreign exchange so acquired cannot be so used or the conditions cannot be complied with, the said person shall, within a period of thirty days from the date on which he comes to know that such foreign exchange cannot be so used or the conditions cannot be complied with, sell the foreign exchange to an authorised dealer or to a money-changer. (4) For the avoidance of doubt, it is hereby declared that where a person acquires foreign exchange for sending or bringing into India any goods but sends or brings no such goods or does not send or bring goods of a value representing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) company means any body corporate and includes a firm or other association of individuals; and(ii) director , in relation to a firm, means a partner in the firm . 28. The facts on record shows that initially six SCNs were given to Hamco group of companies and its employees. So far as the appellants are concerned, they were served with addendum to SCNs I to IV. The replies to it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an merchant exporters who are their customers to the overseas suppliers, provided (a) confirmed orders have been received by them from the overseas buyers, (b) authorised dealer is satisfied about the capabilities of the merchant exporter to perform the obligations under the order, (c) the transactions would result in adequate profit to the merchant exporter and (d) the other conditions stipulated in paragraph 7C.1 are satisfied. Where the amount of advance remittance exceeds US $ 15,000, a guarantee from an international bank of repute outside India should be obtained from the overseas seller. The concerned authorised dealer should also monitor such transactions to ensure that they are completed and proceeds representing cost of goods supplied to the foreign buyer are repatriated to India by the merchant exporter within a period of six months from the date of advance payment . 31. The reference of UCPDC has been given by the appellants and more specifically Articles 13 and 15 which are also quoted hereunder for ready reference: Article-13. Standard for Examination of Documents: a. Banks must examine all documents stipulated in the Credit with reasonable care, to ascertain whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tage, it is necessary to note that earlier these appeals were decided by the Tribunal where the then Chairman had taken the view in favour of the appellants but the learned Member took the different view. Thus, the matter was referred to the third Member. The third Member took the view favourable to the appellants and with the majority opinion, the appeals were allowed. 34. The Union of India challenged the order by filing FERA Appeal No.47 of 2010 before Bombay High Court which decided the appeal vide its order dated 14.02.2012. The earlier order of the Tribunal was set aside with the remand of case for a fresh consideration of the issues. On remand, the matter has been placed before us for afresh order after considering the rival submissions. It is, however, necessary to quote certain relevant paras of the judgment of the Division Bench of the Bombay High Court authored by Justice Dr. D.Y. Chandrachud. Paras 4,6,7,9,11,12 and 13 of the judgment of Bombay High Court are quoted thus: 4. The allegation was that the Hamco Group of Companies had opened a large number of Letters of Credit in eight banks for the purpose of importing goods, following which foreign exchange had been remit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the remitter of funds abroad, the Banks continued to open fresh Letters of Credit and kept on remitting further amounts abroad without verifying the veracity of the claims made by the remitter of funds; (4) The Banks had repeatedly received remittances from abroad in the guise of insurance claims without such claims being processed through them. The Adjudicating Officer held that while on the one hand between 1995-98 the banks were effecting remittances against LCs to the overseas parties, they continued to do so even though the noticee companies failed to submit relevant Bills of Entry indicating the import of goods into India. This continued to take place repeatedly until the bubble burst in 1998. On the other hand, the very same banks had received large amounts from the same overseas parties to whom remittances were made against alleged imports either under the guise of insurance claims or otherwise. The Adjudicating Officer held that the suspicion of the officials should have been aroused and they ought to have exercised care and caution while dealing with the noticee companies. Had the documents been carefully scrutinised before making remittances, the bankers would have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change against large number of confirmed L/Cs opened by purchaser, M/s. Hamco Group of Companies who had not imported the goods: (a) by omitting to detect material irregularity (not identified in impugned order) which otherwise is fabricated by importer or; (b) by depositing remitted foreign currency as received in the guise of insurance claim which were not processed through appellant banks or; (c) by omitting to detect that received foreign currency of insurance claims is of claims never filed before nor processed through insurance companies. (2) Whether any act or omission of the appellants amounts to abetment by intentional aid or instigation or engaging in conspiracy. 9. Counsel appearing on behalf of the Union of India submits that, (1) The Charge against the respondents to this batch of appeals was of abetting the contravention of the provisions of Section 8(3) and 8(4) within the meaning of Section 64(2) of the FERA, 1973; (2) The Special Director in the Enforcement Directorate had held the banks and their officials guilty of an act of abetment within the meaning of Section 64(2) on the basis of a detailed consideration of the facts and circumstances; (3) On a difference of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the year 1995, some of the banks continued to approve of remittances to the same overseas parties again and again until the fraud was investigated into in 1998; (3) Had the Bankers carefully scrutinised the documents submitted by the noticee companies for making the remittances, they would have noticed the fact that the Bills of Lading did not contain the container numbers as required. A Bill of Lading is a receipt for cargo and unless the cargo can be sufficiently and precisely identified, the bill as a document of title would be without consequence; (4) Though in a large number of cases the Bills of Entry remained to be submitted by the remitter of funds, the banks continued to open fresh LCs and kept on remitting further amounts abroad without checking the veracity of the claims made by the remitter; (5) The Banks were receiving large amounts from the same overseas parties to whom remittances were made against alleged imports either under the guise of insurance claims or otherwise. 12. When the matter was carried in appeal before the Appellate Tribunal, the Chairperson of the Tribunal took the view that the circumstances which were relied upon by the Adjudicating Officer were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not extend to a situation where the documents contained material misstatements or omissions. 13. The third Member of the Tribunal before whom the difference of opinion between the two Members was placed for hearing, was required to consider the material and evidence on record in its entirety before proceeding to decide the question referred. The principal difference of opinion was whether the charge against the banks and their officials of abetment under the provisions of the FERA, 1973 had been established. The third Member has held that, (1) The receipt of a Bill of Entry can only happen after the remittance of foreign currency and not before; (2) The insurance claims were received after the remittances took place and not earlier. Since both the acts allegedly took place after the contravention had taken place, the Member was of the view that the charge of abetment could not be established. In our view, there is a considerable amount of merit in the submission which has been urged on behalf of the Union of India that the third Member before whom the matter was placed for resolving the points of difference has completely failed to consider in its entirety the material on record a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the carrier or master must also indicate the name and the capacity of the party, i.e. carrier or master, on whose behalf that agent is acting, and ii) indicates that the goods have been loaded on board, or shipped on a named vessel. Loading on board or shipment on a named vessel may be indicated by pre- printed wording on the bill of lading that the goods have been loaded on board a named vessel or shipped on a named vessel, in which case the date of issuance of the bill of lading will be deemed to be the date of loading on board and the date of shipment. In all other cases loading of lading will be deemed to be the date of loading on board and the date of shipment. In all other cases loading on board a named vessel must be evidenced by a notation on the bill of lading which gives the date on which the goods have been loaded on board, in which case the date of the on board notation will be deemed to be the date of shipment. If the bill of lading contains the indication intended vessel or similar qualification in relation to the vessel, loading on board a named vessel must be evidenced by an on board notation on the bill of lading which, in addition to the date on which the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and/or LASH barge (s) as evidenced by the bill of lading, provided that the entire ocean carriage is covered by one and the same bill of lading, and/or ii) incorporates clauses stating that the carrier reserves the right to trans ship . 36. Article 23 quoted above shows that if a Credit calls for a bill of lading covers a port-to-port shipment, banks will, unless otherwise stipulated in the Credit, accept a document, however named, which appears on the face of it to indicate the name of the carrier and has been signed or otherwise authenticated by the carrier or named agent for or on behalf of the carrier, or the master or a named agent for or on behalf of the master. The Article further requires that the bill of lading should indicate that the goods have been loaded on board, or shipped on a named vessel. Loading on board or shipment on a named vessel may be indicated by pre-printed wording on the bill of lading. The reference of Article 23 was given to show the necessary ingredients of bill of lading and to address the arguments of the appellants that there was no necessity to refer the name of vessel in the bill of lading. 37. However, elaborately the issue would further be dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, insurance claims were never submitted nor processed through the insurance companies as stated by the officers of the insurance companies. Thus, without a claim towards insurance, which was otherwise required to be processed through the appellants, remittance was made. The facts aforesaid cannot be ignored and justification for it could not be given by the appellants. It further shows negligence on the part of the financial institutions and its employees to abet the contravention of the provisions of the Act of 1973. 40. At this stage, it would be necessary to refer to the amount remitted by different financial institutions and their officers where bill of entry was not filed and still the Hamco Group of Companies were allowed to have the facility of remittance of the foreign exchange for years together. The following statement in reference to each financial institution would be relevant and quoted hereunder in reference to each Show Cause Notice and Addendum issued in pursuance thereto: 1) SCN I: Issued to HMSL and the persons in charge of the company under sec. 8(3) of FERA 1973 for their failure to import goods against foreign exchange to the tune of US $. 11,80,48,700.33 D.M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank against L.C. 1722643.55 2.-do-against Collection bills 3442168.00 3. Oman Intl.Bank 316060.00 Total 5480871.50 vi) SCN IV: Issued to the HICL, and the persons in charge of the company under section 8(3) of the FERA 1973 for their failure to import goods against foreign exchange to the tune of US$.33,83,829 remitted abroad through various banks as under: - Name of banks through which remittance effected. Total amount remitted where no B/E filed (US $.) 1. Canara Bank against Collection bills only 256365.00 2. Oman Intl. Bank 1242246.00 3. Indusind Bank 1885218.00 Total US $. 3383829.00 41. The statement given above reflects that remittance of the foreign exchange was made though there was failure to submit Bill of Entry (B/E) and it remained in the knowledge of the appellants and for that reminders were sent. It can be ignored for first remittance but cannot be for subsequent to first failure and that too for years together. The argument that submission of bills of entry is subsequent to remittance but ignoring that after one remittance if bills of entry was not submitted then the appellants should not have opened LC but it remained for years and till matter was taken up by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have been or when/ where it was unloaded. This indicates to Mr. Tan that cargo described in Bills of lading which do not list container numbers did not in fact exist. Similarly para 67 reads as under:- Therefore, the fact that the bills of lading do not mention any number of containers and that the goods were supposed to have been loaded, often in a far port, few minutes or hours after the issuing of the letters of credit prove the non-existence of the goods. The implication of Frobevia which as shipper of the goods mentioned in the bills of lading, ordered the loading, seems obvious. 43. The claim made by one of the financial institutions has been ignored by the appellants and otherwise it would apply to all the financial institutions in regard to their plea for exoneration if in the bill of lading, the name of the vessels and the container number was not mentioned. The plea has thus been made in ignorance of the matter taken up for bankruptcy by few financial institutions. 44. The facts given above are referred to analyze as to whether there was negligence on the part of the appellants/banks for opening of the LCs and remittance of the foreign exchange despite non-submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The period of remittance is otherwise from the year 1995-98. The argument noted by the Division Bench of Bombay High Court is also that if the Banks would have carefully scrutinized the documents submitted by the Hamco Group of Companies for remittance, then it could have been revealed that the bills of lading does not contain the containers number, as required. It is to be noted that the bill of lading is a receipt for cargo. Unless that cargo can be sufficiently and precisely identified, the bill of lading would be a document of no substance. It is also noted that in number of cases, the bill of entry remains to be submitted yet the bank continued to open the LCs and was making remittance of the amount. In view of the observation of the High Court, the main argument raised by the appellants that they were not under obligation to see whether the bill of lading mentions name of vessels or containers number for making remittance of the foreign currency fails. The aforesaid argument shows utter disregard to the direction man date dunder Article 23 of the UCPDC and sufficient to make out a case of abetment by causing negligence for contravention of Section 8(3) and Section 8(4) read w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed persons and has been forged by some unknown party. d) You will note from our above letter head and if anybody can read and write Arabic, it can be easily seen that letter heads appear to be printed in India and not in Dubai especially since many of the Arabic scripts and words are totally wrong . 48. The Tata Marine Agencies, a Division of Tata Ltd who happened to be the official surveyors for the Insurance Companies vide their letter dated 12.01.1998 confirmed that they have not received any claim from any of the Hamco Group of Companies. The aforesaid is sufficient to prove that remittance towards the insurance claim was made without the claim being processed through the bank. It was again in reference to the forged documents for which remittance was made due to utter negligence of the appellants. It shows and proves to make out a case of abetment for contravention of Section 8(3) and Section 8 (4) of the Act of 1973. At this stage and before we take up the matter further, it would be relevant to deal with the argument of the appellants in reference to Section 107 of IPC. The provision aforesaid is quoted hereunder for ready reference: 107. Abetment of a thing.--A person abet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. Law does not require instigation to be in a particular form or that it should only be inwards. The instigation may be by conduct. Whether there was instigation or not is a question to be decided on the facts of each case. It is not necessary in law for the prosecution to prove that the actual operative cause in the mind of the person abetting was instigation and nothing else, so long as there was instigation and the offence has been committed or the offence would have been committed if the person committing the act had the same knowledge and intention as the abettor. The instigation must be with reference to the thing that was done and not to the thing that was likely to have been done by the person who is instigated. It is only if this condition is fulfilled that a person can be guilty of abetment by instigation. 54. The law does not permit the abettor to escape punishment for abetment even if the actual player who commits the offence is not criminally liable for the actual act which results in the commission of an offence (See in this regard, the situation contemplated in illustrations in Explanation III of Section 108 of the IPC). Equally, there need not be meeting of minds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned in the process of opening LCs and issuing remittances are liable under Section 8(3) read with Section 64(2) read with section 68 of the Act of 1973. Canara Bank 54. The appellant bank has provided funds to all the four companies including issuance of LCs and collection bills. The details in respect of the same are reproduced hereunder: Name of the company Total LCs opened No. of LCs where no B/E filed No. of remittances where no B/E filed Amount involved US $ HMSL 38 31 66 24634662.29 DM 20036.54 DICL 14 14 39 27314078.21 NPCIL 5 4 4 1722643.55 The details of the amount remitted by way of collection bills is reproduced hereunder as: Name of the company No. of Bills where no B/E filed Amount involved US $ HMSL 2 17465.70 DICL 11 1226876.45 NPCIL 11 3442168 HICL 2 256365.00 The above statement shows that no bill of entry was submitted by the Hamco group of companies yet bank continued to open LCs and remitted amount by way of collection bills. The appellant bank has provided further details qua the transactions pertaining to the Hamco group of companies wherein advances against export performances have been adjusted by the bank. Further, the appellant bank in the case of Drav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the Hamco group of companies in the same manner as was done by the other appellants thus, abet contravention of Section 8(3) read with Section 64(2) of the Act of 1973. The details of the remittances are given hereunder: Name of the company Total remittances No. of remittances where no B/E filed Amount involved US $ HMSL 96 11 2340883.29 DICL 22 10 1030880.00 NPCIL 14 5 316060.00 HICL 28 12 1242246.00 The appellant bank remitted US $ 22496721.85 on behalf of Hamco and US $ 896135 on behalf of Dravya to various parties against Merchanting Trade transactions without following the mandate of the Manual of 1993 and direction of UCPDC. Thus, the bank is liable for abetment and negligence in terms of Section 8(3) and Section 8(4) read with Section 64(2) of the Act of 1973. The appellant officers processed the LCs and issued remittances are liable under Section 8(3) read with Section 64(2) read with section 68 of the Act of 1973. Indusind Bank Ltd. 58. The appellant bank has opened LCs and made remittances on behalf of the Hamco group of companies in the same manner thus, abet contravention of Section 8(3) read with Section 64(2) of the Act of 1973. The details of the remitt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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