1 IN HE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FERA APPEAL NO. 13 OF 2009 IN APPEAL NO. 148 OF 2000 WITH CIVIL APPLN. NO. 6166 OF 2008 ALONG WITH FERA APPEAL NO. 14 OF 2009 IN APPEAL NO. 149 OF 2000 WITH CIVIL APPLN. NO. 6164 OF 2008 Mohan V. Bhatiya Age 72, ) of Mumbai Indian Inhabitant ) residing at 501, Vastu, Worli Sea Face, ) Mumbai 400 030. ).. Appellant Versus Special Director of Enforcement, ) (Foreign Exchange Regulation Act), ) 2nd floor Mittal Chambers, Nariman ) 2 Point, Mumbai 400 021. ).. Respondent Mr. J. Johar i/b. Mr. Atul G. Damle, Advocates, for the appellant. Mrs. S.V. Bharucha along with Mr. N.D.Sharma, Advocates for Respondent. CORAM: F.I.REBELLO AND J.H.BHATIA, JJ. DATE : 14th July, 2009. JUDGMENT: (PER J.H.BHATIA,J.). 1. Both these Appeals arise out of the common order-in-original and the common order in the appeals and the appellant was also the same. Therefore, both these Appeals may be disposed of by this common Judgment. 2. The appellant was served with Show Cause Notice-I and Show Cause Notice-II dated 13.5.1986 by the Revenue for violation of the provisions of Section 8(1) and Section 9(1)(e) of the Foreign Exchange Regulation Act, 1973 (FERA). He was charged for acquiring UAE Dhs. 10,63,906.90 and for transferring UAE Dhs. 17,66,474.17 during the period from 1.4.1976 to 11.10.1976 as per Show Cause Notice- I. He was also charged for transferring 3 UAE Dhs 71,60,190.07 and UAE Dhs. 41,98,926.20 during the period from 11.10.1976 to 31.12.1977. One Tulsidas Govindji Bhatia was also charged for aiding and abetting the appellant – Mohan Bhatia for the aforesaid transactions in terms of Section 64(2) of the Act as per the same Show Cause Notice I. As per Show Cause Notice II, the appellant was charged under Section 9(1)(e) for acknowledging a debt in favour of M/s. Dubai Clearing . & Forwarding Co. for UAE Dhs 108,746.55 from January 1977 to October, 1977. According to the Revenue, on receipt of certain information that the present appellant and Tulsidas Bhatia were doing business in Dubai without the necessary permission from the RBI and had cheated Bank of Baroda, Dubai, the residence of the present appellant was searched on 20.10.1982 and certain documents were seized. The statements of the present appellant, Tulsidas Bhatia, B.V. Bhatia @ Kavan and others came to be recorded. It was revealed that the present appellant, who is the Indian national and resident of Mumbai, was partner of several firms, Director of Sterling Exports Pvt. Ltd. and Managing Director of Seven Seas Marketing Pvt. Ltd. Situated in Mumbai. The trading licence No. A-1984 was obtained in the name of the present appellant from Dubai Municipality and the business was commenced in the name of M/s.Shyam International. Account No.25131 was opened with Bank of Baroda at Dubai with initial deposit of UAE Dhs. 51,000/-, The licence obtained from the Dubai 4 Municipality was not transferable. However, inspite of that the present appellant managed to close the Account No.25131 and opened a new account No.25185 in the name of M/s. Shyam International, Dubai. The amount lying in the Account No.25131 also came to be transfered in the account No.25185. A loan agreement was entered into between M/s. Shyam International and M/s. Dubai Clearing & Forwarding Co. For repayment of the loan, M/s. Shyam International had issued three cheques of UAE Dhs 50,000/-, 25,000/- and 25,000/- in favour of M/s. Dubai Clearing & Forwarding Co. However, those cheques were dishonoured and the statement of account of M/s. Shyam International revealed the liability of M/s. Shyam International towards M/s. Dubai Clearing & Forwarding co. to the extent of UAE Dhs. 1,08,746.55, After enquiry into the show cause notices, the Special Director, Enforcement Directorate, passed the order-in-original dated 16.12.2000 holding the present appellant guilty for having established a business in Dubai in the name of M/s.Shyam International and for having acquired and transferred foreign exchange in violation of Section 8(1) of FERA and also for having acknowledged a debt of UAE Dhs 1,08,746.55 in favour of a person resident outside India in contravention of Section 9(1)(e) of FERA. Tulsidas Bhatia was held guilty for abetment and contravention of law. The present appellant was imposed penalty of Rs.75 lakh in Show Cause Notice I and penalty of Rs. 5 50,000/- i Show Cause Notice II. Tulsidas Bhatia was awarded penalty of Rs. 7,50,000/- in Show Cause Notice I. 3. As separate penalties were imposed in Show Cause Notice I and Show Cause Notice II, the present appellant preferred two appeals, being Appeal Nos. 148/2000 and 149/2000. Both the appeals came to be dismissed by the appellate Tribunal for Foreign Exchange as per the order dated 20.11.2007. The present appellant has challenged the findings of the Adjudicating Officer as well as the appellate Tribunal in the present two Appeals. 4. The learned Counsel for the appellant vehemently contended that there is no original document to establish that the present appellant was the proprietor of M/s. Shyam International at Dubai and he had entered into any financial transaction at Dubai and had acquired foreign exchange without necessary permission. He also contended that there is no material to show that the present appellant had obtained any loan or had acknowledged any liability in favour of M/s. Dubai Clearig & Forwarding Co. According to him, his brother-in-lawB.V.Bhatia had used his photograph and signature for the purpose of obtaining trading licence from Dubai Municipality in the name of M/s. Shyam International. He had no concern with said M/s. Shyam 6 International and he had made such a declaration also. He heavily relied upon the notings from the officers of Bank of Baroda to support his contention that there is no document bearing his signature to establish that the present appellant had opened the Bank account or had taken the Bank loan or had issued any cheques in favour of M/s. Dubai Clearing & Forwarding Co. He contended that if the record and the details of the transaction as noted in the order-in- original are looked into, it would appear that the cheques issued in favour of M/s. Dubai Clearing and Forwarding Co. were issued by M/s. Shyam International. He contended that one Kulkarni and one Tulsidas Bhatia had claimed to be partners as well as proprietors of M/s. Shyam International and in view of this, the Bank officers noted that no action could be taken against the present appellant for loans taken by M/s. Shyam International. He also contended that previously show cause notice was issued on 19.10.1983. He was also arrested by the Police and produced before the Chief Metropolitan Magistrate, Bombay. He contends that finally no charge sheet was filed against him in the Court and the case was closed and similarly the Assistant Director of Enforcement after holding the enquiry, had by an order dated 30.9.1985 dropped the charges. He contends that this was widely published in newspapers and because of this, the officers of the Enforcement Directorate were annoyed and therefore, on the same cause of action fresh notices were issued on 7 13.5.1986, out of which the present Appeals arise. He contends that the alleged transactions are almost 20 years old when enquiry was held and therefore there was no justification to continue these proceedings. 5. On careful perusal of the record, including the statements of the appellant himself, Kulkarni, Tulsidas Bhatia as well as copies of the documents which were recovered from the office of the appellant himself, it appears that an application was made to the Municipality, Dubai for the purpose of trade licence. That application was signed by the present appellant and there was also photograph of the appellant on the same. The licence was obtained in the name of M/s. Shyam International. The initial period of licence was 25.2.1976 to 31.12.1976 and the trade licence was Numbered A-1984. The documents found in the office of the appellant contaied a xerox copy of the letter dated 24.12.76 written by the present appellant to the Deputy Controller of RBI through Bank of Rajasthan, Branch Mumbai wherein the appellant had specifically stated that “As informed to you earlier, I have already been granted a licence by the local authority and that in Dubai this office shall be under my sole proprietorship”. The record reveals that in in his statement dated 26.12.1982, the appellant, when confronted with the said document, could not explain properly and only stated that he did not remember of having applied to 8 RBI for permission to open office in Dubai. 6. The statement of Tulsidas Bhatia recorded on 20.10.1982 revealed that he was previously working with M/s. Road Transport Corporation where the present appellant was also employed. The present appellant approached him and requested him to proceed to Dubai for employment in his proprietary firm M/s. Shyam International, Dubai. Accordingly, he left for Dubai in May 1976 on employment visa arranged from Dubai. The tickets were arranged by the present appellant M.V.Bhatia. One Ajit Kulkarni had accompanied him to Dubai. Said Ajit introduced Tulsidas to his father B.V.Kulkarni. He stated that even before departure to Dubai, he was aware that M/s. Shyam International belonged to M.V.Bhatia, that M.V.Bhatia had the trade licence in the name of Shyam International and that the licence was not transferable. Tulsidas Bhatia came back to India on health ground in June 1976, but he was pursued to go back to Dubai in October 1976. However, on 10.10.1976 Mohan Bhatia took him to a Court and made a declaration transferring the rights in Shyam International to Tulsidas Bhatia. Both were aware that the licence could not have been transferred and therefore the rights in M/s. Shyam International could not also be transferred by the appellant to Tulsidas or anybody else. The material on record shows that B.V.Kulkarni and Tulsidas both were employees 9 of the present appellant and as per his instructions, they were showing themselves either as partners in M/s. Shyam International and on occasions, each of them had signed the papers as proprietor. The statement also reveals that one Mr. M.Lobo, manager of the Bank of Baroda, Dubai was present at the time of making the declaration by the appellant about transfer of his rights in Shyam International and on the next date same Lobo allowed to open fresh account No.25185. The amount in the old account No.25131 was transferred in the new account. Tulsidas Bhatia repeatedly and consistently stated that he was signing as proprietor of Shyam International under instructions of the present appellant though he was fully aware that the appellant was real proprietor of the firm and the trade licence could not have been transferred. 7. It appears that several transactions were entered into by M/s. Shyam International and for that purpose, the necessary documents were signed either by Tulsidas Bhatia or by B.V.Kulkarni. The record reveals that the present appellant was aware about the opening of Account No.25131 as well as Account No.25185 in the name of M/s. Shyam International, Dubai. The Adjudicating Authority noted that this conclusion was corroborated by several factors. Firstly, he obtained the trading licence from Dubai Municipality and for that purpose his photograph and passport number were used. He had also 10 signed the application for licence. He was shown as the proprietor of the business, on the letter-head of M/s. Shyam International addressed to the Manager, Immigration dept. Dubai and it was signed by the appellant for Shyam International. On 24th April,1976, the appellant had addressed a letter to the Manager, Bank f Baroda, Dubai, for the credit facility as Managing Director of Shyam International. In that letter, he had declared that M/s. Shyam International was his proprietorship concern. His contention that he had transferred all his rights and interest in M/s. Shyam International came to be rejected as the trade licence itself could not be transferred and he continues to be the exclusive owner of the same. 8. The record reveals that from cheque book of Account No.25185, three cheques for total amount of UAE Dhs. 1 lakh were issued by M/s. Shyam International on Dubai Clearing & Forwarding Co. apparently for repayment of the loan taken from the said company. These cheques were dishonoured. DRI collected certain documents including a copy of statement from M/s. Dubai Clearing & Forwarding Co. indicating that amount of UAE Dhs. 1,08,746.55 was due from M/s. Shyam International because the above referred 3 cheques were dishonoured. Copy of the said statement also indicated that it was endorsed by someone from Shyam International and accepted and confirmed 11 the correctness of the statement . Thus, this was an acknowledgment of the liability of M/s. Shyam International towards M/s. Dubai Clearing & Forwarding Co. which is not a resident of India. One of the documents found from the file of Bank of Baroda was a letter in Arabic with English translation. That letter was addressed to the Manager, Immigration Department, Dubai and the letter was signed by the present appellant on behalf of Shyam International. By that letter, the present appellant had informed that one Mr. Mota Mary Muraly Babu was appointed as Manager of Shyam International and he would be signing all the Immigration forms and other documents on behalf of the company. The signatures on each of those cheques issued in favour of Dubai Clearing and Forwarding Co. tally with the signature of Mr. Mota Mary Muraly Babu of m/s. Shyam International. Another signature appear to be of Purushottam Moorjani, who was also authorised to operate account No.25185. 9. Taking into consideration all this material on record, the Special Director, Enforcement Directorate came to conclusion that the charges against the present appellant, as per show cause notice-I and show cause notice-II, were established. 10. The contention of the learned Counsel for the appellant about the 12 delay in proceeding needs to be rejected outright because the record reveals that the present appellant himself was responsible for delay because from June 1986 till December 1999 whenever the appellant or any of his Advocate appeared , they insisted on inspection of the original record. In fact, it was well known to them, that original record could not have been made available by the Enforcement Directorate as some of the documents were in custody of Dubai Municipality and some must have been in possession of the appellant himself. It appears that delay of about 13 to 14 years in hearing the proceeding was only on account of the conduct of the appellant. 11. It is contended that there was no legal evidence to hold him guilty. However, on perusal of record, it appears that there are large number of documents showing that M/s. Shyam International was a proprietorship concern of the present appellant and only to avoid legal complications he had prepared declaration about transfer of his right in favour of Tulsidas Bhatia while in fact Tulsidas Bhatia was only his employee. Tulsidas made consistent statements and repeated the same facts. He never retracted from his statements. Learned Counsel for the appellant vehemently relied upon the file from the Bank of Baroda consisting of some notes by the Bank officers to import his contention that the present appellant was not owner of Shyam International and that he 13 had not opened the accounts and taken loan. In fact, notes reveal that he had very intelligently not signed the papers. They had concluded that the present appellant is the substantial owner while Kulkarni and Tulsidas were only men o straw and could not have stake in the said business, but for want of his signature on the documents, it would be difficult for them to succeed in the Court. They advised Bank against filing a suit. In our considered opinion, the notes prepared by or advice given by the officers to the Bank cannot be binding on the Enforcement Authorities. 12. It is also contended that previously two show cause notices were issued and they were dropped after inquiry by an order dated 30.9.1985. It is contended that on the same cause of action, fresh notices were issued on 13.5.1986. On perusal of the charges in the earlier notice and charges in the present notices,we are not convinced with the argument advanced by the learned Counsel for the appellant. In fact, the subject matters of the notices were totally different. In the earlier notice, the charge was about opening of business without necessary permission and about seizure of some foreign currency. None of the charges are repeated. Therefore,we are satisfied that there can be no question of estoppel on this count nor this could be a case of double jeopardy. Immunity from double jeopardy has been enshrined in 14 Article 20 clause (2) of the Constitution of India which declares that no person shall be prosecuted and punished for the same offence more than once. It only guarantees that no person shall be prosecuted and punished for the same offence more than once. Article 20(2) bars a second prosecution only where the accused has been both prosecuted and punished for the same offence previously. It has also been settled that the proceedings of prosecution must be before a Court of law or a judicial tribunal. A proceeding before an executive authority, who may be discharging duty quasi judicially is not a prosecution nor the penalty or fine which may be imposed by him in such proceeding amounts to conviction and sentence. In the instant case, firstly the previous proceedings on the basis of notice issued in 1983 was dropped because by the then Assistant Commissioner for want of sufficient material. Neither that was prosecution nor the appellant was convicted or punished in that proceeding. Secondly, even the present proceeding cannot be termed to be a prosecution and penalty imposed by the Special Director of Enforcement Directorate cannot be equated with the punishment which can be awarded by the Court of law or judicial tribunal. Thirdly, the charges in the previous proceedings were totally different from the charges levelled against the appellant in the show cause notices issued in May 1986. Therefore, the principles of double jeopardy cannot be invoked in the present case in favour of the appellant. We do not find any substance in the 15 contention of the learned Counsel that merely because of lot of publicity about exoneration of the appellant in the earlier proceeding he has been falsely implicated in these proceedings. 13. Taking into consideration the material on record, we find no fault in the concurrent findings of facts by both the Authorities below. We do not see any perversity in the impugned orders. Therefore, there is no question of law involved in the present Appeals. 14. For the aforesaid reasons, both the Appeals stand dismissed . 15. As the appeals are dismissed, C.A. No.6164/2008 and 6166/2008 do not survive and stand dismissed accordingly. (J.H.BHATIA,J.) (F.I.REBELLO,J.)