: 1 : IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY Civil Jurisdiction Civil Jurisdiction Civil Jurisdiction FERA APPEAL NO.10 OF 2009 FERA APPEAL NO.10 OF 2009 FERA APPEAL NO.10 OF 2009 Dipak J. Shukla residing at Flat No.11, Khatau Apartment, 243, Walkeshwar Road, Mumbai 400 006. ...Appellant. V/s. 1. The Deputy Director of Enforcement Directorate, having his office at 2nd floor, Mittal Chambers, Nariman Point, Mumbai 400 021. 2. The Institute of Chartered Accountants of India, having their office at ICAI Bhuvan 27 Cuffe Parade, Mumbai 400 005 ...Respondents. Mr.M.S.Sanklecha i/by Daphtary Ferreira and Divan , advs. for the Appellant. Mr.A.S.Rao with Mr.H.V.Mehta, Ms.S.V.Bharucha and Mr.H.P.Chaturvedi , advs. for the Respondents. CORAM: F.I.Rebello & CORAM: F.I.Rebello & CORAM: F.I.Rebello & J.H.Bhatia,JJ J.H.Bhatia,JJ J.H.Bhatia,JJ. DATE : 7th May, 2009. DATE : 7th May, 2009. DATE : 7th May, 2009. JUDGMENT: (Per J.H.Bhatia, J.) JUDGMENT: (Per J.H.Bhatia, J.) JUDGMENT: (Per J.H.Bhatia, J.) 1. By this appeal, the appellant seeks to challenge the order passed by the Appellate Tribunal for Foreign Exchange dismissing the appeal no.88 of 2004 wherein order of the respondent no.1 Deputy Director of Enforcement Directorate imposing penalty of Rs.26 lacs was challenged. : 2 : 2. To state in brief, according to the appellant, he is Chartered Accountant by profession and is also a partner of M/s.D.J.Shukla & Company Chartered Accountants at Mumbai. Prior to his departure for U.K., the appellant was active partner of M/s. D.J.Shukla & Company. However, after his departure for U.K., he is a dormant partner. According to him, on 2nd September, 1992, he was appointed by M/s. Synthetic and Chemicals Ltd. as their representative in U.K. and on 25th March, 1993 M/s. Synthetic Chemicals Ltd. placed the appellant’s services at the disposal of M/s. Nova Atliantis in England. Accordingly, the appellant shifted to U.K. in September, 1992 and he was granted residence permit in U.K. from 16th November, 1992. His wife and two children also left India in June, 1993 and settled down in U.K. alongwith the appellant. On 8th August, 1998, M/s.D.J.Shukla & Company made an application to the Reserve Bank of India for permission for continuation of the appellant, as non resident partner of the said firm and by letter dated 5th January, 1990, Reserve Bank of India informed that there was no requirement to obtain such permission. On 2nd November, 2000, respondent no.1 issued a show-cause notice t the appellant contending that he had transferred an amount of sterling pounds 75,000 in contravention of the provisions of 8(1), 25(1) and 14(a) of the FERA Act for purchase of the house in London in the name of his wife and : 3 : two sons. The appellant replied on 8th March, 2001 and 19th May, 2003 contending that he is not a person residing in India for the purpose of FERA and he also had not transferred the amount of sterling pounds 75,000 or anyother amount in contravention of the FERA Act and, therefore, show-cause notice is liable to be withdrawn. However, on 10th July, 2003, the respondent no.1 passed an order-in-original confirming the charges and imposing penalty of Rs.26 lacs. In the said order, respondent no.1 noted that one Tanil Kilachand had transferred huge funds abroad through hawala to use a portion of the same to purchase / procure the house at London for the appellant. The respondent no.1 also noted that the documents produced by the appellant in support of his contentions were not authenticated in terms of Section 72 of the said Act and, therefore, they could not be relied. The appellant preferred an appeal before the Appellate Tribunal which was heard on 10th November and 17th November, 2006. However, for a long time, no order was passed in appeal. On 23rd April, 2007, the appellant received notice dated 30th March, 2007 from the Appellant Tribunal to the effect that the appeal was required to be heard and for that purpose, appeal was fixed on 18th July, 2007. On 18th July, 2007 authorised representative of the appellant appeared before the Appellate Tribunal for re-hearing. At that time Bench of the Appellate Tribunal observed that no hearing was : 4 : required. On that day, no order was pronounced by the Appellate Tribunal. On 2nd January, 2009, the appellant received the order purporting to have been passed by the Appellate Tribunal on 6th December, 2007 whereby the order passed by the respondents imposing penalty was confirmed. According to the appellant for more than one year, the Appellate Tribunal had not passed any order after completion of the hearing and that order was communicated for more than one year after the order dated 6th December, 2007 was passed. 3. Heard the learned counsel for the Parties. The learned counsel for the appellant vehemently contended that the voluminous documentary evidence to show that the appellant is not a person resident in India within the meaning of Section 2(p) of the FERA Act and that evidence was wrongly ignored by the respondents on the ground that the documents were not authenticated in terms of Section 72. He also contends that enquiry could be held against the appellant only on the basis of the allegations made in the show-cause notice and he could not be held guilty for anything for which no charge was levelled against him. It is contended that even though in the show-cause notice there was no reference to transfer of any funds by Tanil Kilachand for purchase of the house by the appellant in London, in the final order, the respondents held him guilty : 5 : on this ground. It is contended that when no action was initiated against said Tanil Kilachand, the appellant could not be held guilty. It is further contended that the Appellate Tribunal did not decide the appeal for more than one year after the hearing was completed and this itself is sufficient ground to set aside the order passed by the Appellate Tribunal. 4. Section 2(p) of the FERA Act reads as follows: "2(p) "person resident in India" means- (i) a citizen of India, who has, at any time after the 25th day of March, 1947 been staying in India, but does not include a citizen of India who has gone out of, or stays outside, India, in either case- (a) for or on taking up employment outside India, or (b) for carrying on outside India a business or vocation outside India, or (c) for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period; As per Section 2(q) "person resident outside India" means a person who is not resident in India; According to the appellant, he has been staying in U.K. since September, 1992 and not in India due to his employment there, therefore, he is not resident in India. Section 8(1) provides that no person other than an authorised dealer shall in India, and no person resident in India other than : 6 : an authorised dealer shall except the previous general or special permission of the Reserve Bank of India, purchase or otherwise acquire or borrow from, or sell, or otherwise transfer or lend to or exchange with, any person not being an authorised dealer, any foreign exchange: From this it is clear that no person, who is resident in India, other than authorised dealer, shall outside India deal in foreign exchange. Section 25(1) provides that " no person resident in India shall, except with the general or special permission of the Reserve Bank of India, acquire or hold or transfer or dispose of by sale, mortgage, lease, gift, settlement or otherwise, any immovable property situate outside India; On perusal of both the sections, it is clear that restrictions are on a person who is resident in India but these restrictions are not applicable to a person, who is not resident in India. 5. According to the appellant, he had left India in September, 1992 to accept a service in Synthetics and Chemicals Ltd. as their U.K. representative and since then, he is resident in U.K. He has been granted residence permit in U.K. His family also joined him in June, 1993 and settled there. According to the appellant, there is sufficient documentary evidence to show that he is settled in U.K. and he is not resident in India. In spite of this, the respondents ignored all the documentary evidence : 7 : produced by the appellant to prove that he was not resident of India and held him guilty of the contravention of provisions of Sections 8, 25 and 51 and imposed penalty. It is contended that if these documents would have considered, he could not be held resident of India and, therefore, he could not be held guilty of contravention of these provisions. On perusal of the order passed by the adjudicating authority, i.e., the respondent no.1 as well as by the appellate authority, we are satisfied that both these authorities ignored documentary evidence produced by the appellant only on the ground that none of these documents were authenticated in terms of Section 2 of the Act and Authentication of Documents Rules. 6. Section 72 of the FERA Act reads as follows: "72. Presumption as to documents in certain cases Presumption as to documents in certain cases Presumption as to documents in certain cases -Where any document- (i) is produced or furnished by any person or has been seized from the custody or control of any person, in either case, under this Act or under any other law, or (ii) has been received from any place outside : 8 : India (duly authenticated by such authority or person and in such manner as may be prescribed) in the course of investigation of any offence under this Act alleged to have been committed by any person, and such document is tendered in any proceedings under this Act in evidence against him, or against him and any other person who is proceeded against jointly with him, the court or the adjudicating officer, as the case may be, shall- (a) presume, unless the contrary is proved, that the signature and every other part of such document which purports to be in the handwriting of any particular person or which the court may reasonably assume to have been signed by, or to be in the handwriting of, any particular person, is in that person’s handwriting, and in the case of a document executed or attested, that it was executed or attested by the person by whom it purports to have been so executed or attested; (b) admit the document in evidence notwithstanding that it is not duly stamped, if such document is otherwise admissible in evidence; : 9 : (c) in a case falling under clause (i), also presume, unless the contrary is proved, the truth of the contents of such document." On perusal of Section 72, it becomes clear that certain presumptions about the signature and contents of a document shall be raised if document is either produced or furnished by any person or has been seized from the custody or control of such person and if the document is received from any person outside India and is duly authenticated when the document document is tendered in any proceeding in evidence against such person or against such person alongwith some other person. From this it is clear that Section 72 provides for presumption about documents received from outside if they are duly authenticated when such documents are tendered in the evidence by the department in any enquiry or proceeding against the person against whom proceeding is initiated. 7. In the present case, the appellant tendered certain documents in respect of his claim that he is non resident of India since September, 1992 and, therefore, provisions of Section 8 and Section 25 are not applicable to him. Infact, the first question in the present matter would be whether, during the relevant period, when the : 10 : appellant had allegedly purchased the house in London in the name of his wife and two sons, he was or was not resident in India within the meaning of Section 2(p) of FERA Act. It was not necessary for the Appellate Authority to raise any presumptions under Section 72 in respect of documents produced by him in support of his claim that he was not resident of India. The appellant could prove the facts and those documents independently by leading evidence without any presumption about the genuineness or otherwise of the said documents. Record reveals that the appellant had produced several documents including letters from his employer. his passport and certain correspondence with the Reserve Bank of India which would indicate that he was not resident in India since September, 1992. In our considered opinion, the documentary evidence which was placed by the appellant before the Appellate Authority should have been considered independently of provisions of Section 72 of the FERA Act. The appellant could prove his contention with evidence available including the documents. If the documents are not authenticated the appellant could be given opportunity to prove the documents and their contents. His contention could not be rejected merely because the documents were not authenticated. The authorities below committed error by ignoring those documents only because those documents were authenticated as required under Section 72. In such circumstances, we : 11 : are of the opinion that matter needs to be remanded back to the respondent no.1 Appellate Authority to hear de-novo and consider the documentary and other evidence on which the appellant seeks to rely to prove that he was not resident in India during the relevant period. 8. For the aforesaid reasons, the appeal is allowed. The Order-in-Original passed by the Deputy Director, Enforcement as well as the impugned order passed by the Appellate Tribunal are hereby set aside. Matter is remanded back to the respondent no.1 for hearing the matter afresh after giving due opportunity to the appellant and to pass the appropriate orders as per law. (F.I.Rebello, J.) (F.I.Rebello, J.) (F.I.Rebello, J.) (J.H.Bhatia, J.) (J.H.Bhatia, J.) (J.H.Bhatia, J.)