AJN 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION F.E.R.A. APPEAL NO.70 OF 2008 IN APPEAL NO.303 OF 2000 Bhavarlal N. Parihar, 406-B, Laxmi Enclave, Shaji Raje Marg, Vile Parle (E), Mumbai – 400 057. ) ) ) .... Appellant Versus Union of India, through Special Director, Enforcement Directorate, Mumbai. ) ) ) ..... Respondent Mr. B. Sheshagopalan i/b Girsish Agarwal for the appellant. Mr. A.S. Rao for the respondents. CORAM : SMT. RANJANA DESAI & J.P. DEVADHAR, JJ. DATED : 24TH FEBRUARY, 2009. P.C. :- 1. The appellant had challenged Order dated 30/5/2008 passed by the Appellate Tribunal for Foreign Exchange, New Delhi (for short, “the Tribunal”) in Appeal No.303 of 2000. By the impugned AJN 2 order, the Tribunal dismissed the appeal. 2. The facts disclose that on 4/8/1995, the officers of Enforcement Directorate, Bombay searched the business premises of the appellant. The search resulted in the recovery of the foreign currencies worth US$ 7507, UAE, Dhs. 1005, S.R. 4172, BD 90 and O.R. 76 from the cash chest of the shop of the appellant. The same were seized under panchnama dated 4/8/1995. Statement of the appellant was recorded on 4/8/1995. The appellant, inter alia, stated that he had purchased the seized foreign currencies valued at Rs.3,07,526/- at unauthorized rates from various persons at his shop premises without previous special or general permission of the Reserve Bank of India (for short, “the RBI”). 3. Search of Ashok Manik Lashkare, who was entering the said premises was also conducted and the said search resulted in recovery of following foreign currencies : “US$ 2027, K.D. 251½, O.R. 317, UAE Dhs. 7765, S.R. 12535, BD 321.5, O.R. 5617 and Netherland Guilders 100, Indian Rs.27,000/-”. AJN 3 4. Search of another person by name Yashwant Pandurao Patil, who entered the said premises was also conducted and the search resulted in the recovery of following foreign currencies : “US$ 50, K.D. 50½, UAE Dhs. 860, S.R. 9991, B.D. 7½, O.R. 2138 and Indian currency of Rs.20,000/-”. 5. Investigation disclosed that the appellant had purchased and sold foreign currencies in violation of the Foreign Exchange Regulation Act, 1973 (for short, “the said Act”). In the show cause notice, it was, inter alia, stated that by purchasing and selling foreign currencies worth Rs.1,00,00,000/- and Rs.97,17,474/- respectively without previous general or special permission of the RBI, the appellant had contravened the provisions of Sections 8(1) and 8(2) of the the said Act. 6. Show cause notice was adjudicated upon and the Special Director of Enforcement passed Order-in-Original dated 28/3/2000 imposing the following penalties on the appellant. AJN 4 “a) for contravention of sec. 8(1) ibid for purchasing foreign exchange to Rs.41,47,526/- and for selling foreign exchange equivalent to Rs.38.5 lacs – a consolidated penalty of Rs.10,00,000/- (Rs. Ten Lacs only) keeping inter alia, in view the fact of duality of the offences in respect of common amounts. b) for contravention of sec. 8(1) r/w sec.64(2) ibid to the extent of Rs.4,86,532/- - penalty of Rs.30,000/- (Rs. Thirty Thousand only). c) Confiscation of seized foreign exchange equivalent to about Rs.3,07,526/- as indicated in the SCN I under sec.63 ibid has already been ordered in this order' s earlier paras.” 7. Being aggrieved by the said order, the appellant preferred appeal to the Tribunal. The Tribunal dismissed the appeal. Hence, this appeal. 8. We have heard learned counsel for the appellant at some length. He drew our attention to Section 71 of the said Act and submitted that this section requires that where any person is prosecuted or proceeded against for contravening any of the provisions of the said Act, which prohibit him from doing an act without permission, the burden of proving that he had the requisite AJN 5 permission shall be on him. Learned counsel submitted that according to the respondent, foreign currencies valued at Rs.3,07,526/- were seized from the appellant. He submitted that, therefore, assuming the case of the respondents to be true, the burden of proving that the foreign currencies were purchased by him without the permission of the RBI was restricted to Rs.3,07,526/- only. He submitted that the appellant cannot be expected to prove whether the requisite permission was there in respect of the remaining currencies which was seized from others. 9. Learned counsel for the appellant also referred to Section 72 of the said Act. He submitted that no documents were seized from the appellant's premises. He submitted that in any case, presumption as to documents referred to in Section 72 can arise only if such documents are tendered in evidence in any proceedings under the said Act against him or any other person who is proceeded against jointly with him. Learned counsel submitted that there were no joint proceedings and, therefore, presumption under Section 72 does not arise in this case. Learned counsel also submitted that the Tribunal erred in dismissing the appellant's appeal as there was no corroboration to the retracted AJN 6 confessional statement of the appellant. The Tribunal could not have relied upon the uncorroborated statement of the appellant. Learned counsel submitted that the appellant was not permitted to cross-examine Ashok Lashkare and Yashwant Patil and that has caused serious prejudice to the appellant. He submitted that therefore, the impugned order deserves to be set aside. 10. Learned counsel for the respondents on the other hand submitted that the impugned order calls for no interference as there is no substantial question of law involved in this case. He submitted that there is sufficient corroboration to the confessional statement of the appellant and, therefore, the appeal deserves to be dismissed. 11. It is the case of the respondents that the foreign currencies valued at Rs.3,07,526/- were recovered from the cash chest in the office premises of the appellant. The currencies were seized under a panchnama. The fact that such huge amount of foreign currencies should be recovered from the cash chest of the appellant's office is a very significant and incriminating circumstance. It furnishes the required corroboration to the AJN 7 confessional statement of the appellant. The appellant has not demonstrated what prejudice was caused to him because he was not allowed to cross-examine the co-noticees Ashoka Lashkare & Yashwant Patil from whom also foreign currency is stated to have been recovered. This submission therefore must be rejected. Mr. Rao learned counsel for the respondents has submitted that the appellant and the co-noticees were proceeded against jointly. This is also evident from the impugned order. Therefore, submission based on Section 72 of the FERA must be rejected. Even if it is accepted that the appellant has to only prove that he had requisite permission to purchase the foreign currencies seized from him, the appellant has failed to discharge the said burden. Besides there is no substantial question of law involved in this appeal. Therefore, the impugned order is perfectly justified. Besides the value of foreign currencies recovered from the appellant is Rs.3,07,527/-. Under Section 50 of the FERA, the amount of penalty for contravention of any of the provisions of FERA shall not exceed five times the amount of value involved in any such contravention or five thousand rupees, whichever is more, as may be adjudicated upon by the Director of Enforcement. Total penalty of Rs.10,30,000/- imposed on the petitioner is therefore reasonable. AJN 8 12. Taking an overall view of the matter, in our opinion, no interference is necessary with the impugned order. The appeal is, therefore, dismissed. [SMT. RANJANA DESAI, J.] [J.P. DEVADHAR, J.]