Case: Shri Ashok Chopra &amp; Others Vs. Union of India &amp; Others

the appellants. 7. On perusal of the record, it also appears that about the transaction, based on the invoice No.548/94 dated 14.6.1994, firstly the notice was issued under Section 40 of FERA on 21.8.1996 and thereafter several notices were issued and opportunity was given to the appellants to explain the difference between the two invoices and finally the show cause notice was issued to all the appellants under Section 9(1) on 17.1.2002 and thus action was initiated by the adjudicating authority. It is material to note that FERA was repealed as per Section 49 by FEMA, 1999. Fema came into force on 1.6.2000. As per provisions of Section 49(3) of FEMA, no Court shall take cognizance of an offence under the repealed Act and no adjudicating officer shall take notice of any contravention under section 51 of the repealed Act after the expiry of a period of two years from the date of commencement of FEMA. In view of this provision, no cognizance of offence could be taken and no notice of any contravention under Section 51 of the FEMA could be taken after the expiry of to years from 1.6.2000 when FERA came into force. In the present case, as indicated above, the notices were issued since 21.8.1996 and as the appellants could not satisfy the adjudicating about the difference in the two invoices carrying the same number and date, the adjudicating authority issued the show cause notice on 17.1.2002 and initiated action. Thus, the action was taken by the adjudicating authority within a period of two years after the FERA was repealed. In view of this, we do not find any question of law of law in respect of both these points. 8. On hearing the learned Counsel for the parties and perusal of the record, we find that in FERA Appeal Nos. 6 and No.7 of 2009, filed by Ashok Chopra and Suresh Chopra respectively, the following question of law arises:- Whether the appellants - Ashok Chopra and Suresh Chopra could be individually penalized once M/s. Natural Granite Exports, proprietorship concern was penalized for contravention of Section 9(1)(c) of FERA 9. On perusal of the record, it appears that M/s. Natural Granite Exports is a proprietorship concern and the appellant Ashok Chopra is its proprietor. This fact is clear from a number of documents, particularly Income-tax returns which were submitted by Ashok Chopra as well as the notices issued to M/s. Natural Granite Exports by the officers of the Sales Tax from the year 1994-95 wherein Ashok Chopra was shown to be the proprietor. There is no material to show that M/s. Natural Granite Exports is a partnership firm. From para 20 of the Judgment of the appellate Tribunal it appears that it was argued on behalf of the appellants that both the proprietorship concern and the proprietor cannot be charged separately and cannot be held liable for separate penalty. However, this argument as rejected by the Tribunal observing that the Explanation appended to Section 68 of FERA clearly provides that "company" means any body corporate and includes a firm or other association of individuals and though the proprietorship concern and proprietor both are same, the Tribunal lost sight of the provisions of the FERA, factual matrix including the amount involved in the contravention. 10. Section 68 of FERA provides for offences by companies and for punishment and penalty for the contravention of the provisions of FERA by the companies. Section 68(1) provides that where a person committing a contravention of any of the provisions of the Act and the rules, directions and orders made under the said Act is by company, every person who, at the time the contravention was committed, was in charge of, and was responsible to the company for the conduct of business as well as the company shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. The Explanation to Section 68 provides that "company" means any body corporate and includes a firm or association of individuals and "director" in relation to a firm, means a partner in the firm. In the present case, Natural Granite Exports is not a company nor it is a partnership firm nor Hindu Joint Family (HUF), but it is a proprietorship concern of which Ashok Chopra alone is a proprietor. Therefore, neither it can be treated as a company nor as a firm nor an association of individuals. Ashok Chopra was carrying on the business in the assumed name and style of M/s. Natural Granite Exports and if any contravention of any provisions of law or rules is committed by the said concern, that contravention shall be presumed to have been committed by its proprietor i.e. Ashok Chopra. In view of this, M/s. Natural Granite Exports as the concern and its proprietor Ashok Chopra could not be held guilty separately and penalty could not be imposed on each of them. Imposing penalty on the proprietorship concern as well as on the proprietor would amount to punishing the same person twice for the same contravention. Therefore, when the proprietorship concern is found guilty and penalty is imposed on it, that penalty should be presumed to have been imposed on its proprietor and, therefore, no separate penalty could be imposed on the proprietor as has been done in the present case. 11. It may also be noted that Suresh Chopra is neither a partner nor a proprietor of the said proprietorship concern. However, the concurrent finding of both the Authorities below is that Suresh Chopra was the authorized signatory on behalf of the proprietorship concern and, therefore, besides the proprietorship concern, he, as an authorized signatory, has also contravened the provisions of law. It can be said that he also abetted the contravention of the provisions of FERA by the said proprietorship concern and therefore, the contravention is proved, he can be rightly held guilty for abetment of the same and penalty can be imposed on him separately.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]6. On perusal of the orders passed by the adjudicating authority as well as the appellate Tribunal, it appears that the appellants had initially objected to the said invoice on the ground that it did not bear the name of COGEMAR. However, it was found that it actually bears name of COGEMAR and both the invoices were similar except the contents of the same about quality, quantity and price of the goods. The adjudicating authority noted that the Advocate for the appellants had contended that the source of invoice received from the DRI was not disclosed. The adjudicating authority observed that it is not necessary to disclose the source and it is definitely issued by M/s. COGEMAR, Italy, as is clear from the face of the invoice. He also noted that it is not the case of the defence that it is a fabricated document. Once the genuineness of the document is not disputed, merely because the officer, who collected the document is not examined or that the document is not authenticated makes no difference. There is nothing on record to show that the officer of the DRI had any reason to create any false document against the appellants.On perusal of the record, it also appears that about the transaction, based on the invoice No.548/94 dated 14.6.1994, firstly the notice was issued under Section 40 of FERA on 21.8.1996 and thereafter several notices were issued and opportunity was given to the appellants to explain the difference between the two invoices and finally the show cause notice was issued to all the appellants under Section 9(1) on 17.1.2002 and thus action was initiated by the adjudicating authority. It is material to note that FERA was repealed as per Section 49 by FEMA, 1999. Fema came into force on 1.6.2000. As per provisions of Section 49(3) of FEMA, no Court shall take cognizance of an offence under the repealed Act and no adjudicating officer shall take notice of any contravention under section 51 of the repealed Act after the expiry of a period of two years from the date of commencement of FEMA. In view of this provision, no cognizance of offence could be taken and no notice of any contravention under Section 51 of the FEMA could be taken after the expiry of to years from 1.6.2000 when FERA came into force. In the present case, as indicated above, the notices were issued since 21.8.1996 and as the appellants could not satisfy the adjudicating about the difference in the two invoices carrying the same number and date, the adjudicating authority issued the show cause notice on 17.1.2002 and initiated action. Thus, the action was taken by the adjudicating authority within a period of two years after the FERA was repealed. In view of this, we do not find any question of law of law in respect of both these points.On hearing the learned Counsel for the parties and perusal of the record, we find that in FERA Appeal Nos. 6 and No.7 of 2009, filed by Ashok Chopra and Suresh Chopra respectively, the following question of lawhok Chopra and Suresh Chopra could be individually penalized once M/s. Natural Granite Exports, proprietorship concern was penalized for contravention of Section 9(1)(c) ofOn perusal of the record, it appears that M/s. Natural Granite Exports is a proprietorship concern and the appellant Ashok Chopra is its proprietor. This fact is clear from a number of documents, particularlyreturns which were submitted by Ashok Chopra as well as the notices issued to M/s. Natural Granite Exports by the officers of the Sales Tax from the yearwherein Ashok Chopra was shown to be the proprietor. There is no material to show that M/s. Natural Granite Exports is a partnership firm. From para 20 of the Judgment of the appellate Tribunal it appears that it was argued on behalf of the appellants that both the proprietorship concern and the proprietor cannot be charged separately and cannot be held liable for separate penalty. However, this argument as rejected by the Tribunal observing that the Explanation appended to Section 68 of FERA clearly provides that "company" means any body corporate and includes a firm or other association of individuals and though the proprietorship concern and proprietor both are same, the Tribunal lost sight of the provisions of the FERA, factual matrix including the amount involved in the contravention.Section 68 of FERA provides for offences by companies and for punishment and penalty for the contravention of the provisions of FERA by the companies. Section 68(1) provides that where a person committing a contravention of any of the provisions of the Act and the rules, directions and orders made under the said Act is by company, every person who, at the time the contravention was committed, was in charge of, and was responsible to the company for the conduct of business as well as the company shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly. The Explanation to Section 68 provides that "company" means any body corporate and includes a firm or association of individuals and "director" in relation to a firm, means a partner in the firm. In the present case, Natural Granite Exports is not a company nor it is a partnership firm nor Hindu Joint Family (HUF), but it is a proprietorship concern of which Ashok Chopra alone is a proprietor. Therefore, neither it can be treated as a company nor as a firm nor an association of individuals. Ashok Chopra was carrying on the business in the assumed name and style of M/s. Natural Granite Exports and if any contravention of any provisions of law or rules is committed by the said concern, that contravention shall be presumed to have been committed by its proprietor i.e. Ashok Chopra. In view of this, M/s. Natural Granite Exports as the concern and its proprietor Ashok Chopra could not be held guilty separately and penalty could not be imposed on each of them. Imposing penalty on the proprietorship concern as well as on the proprietor would amount to punishing the same person twice for the same contravention. Therefore, when the proprietorship concern is found guilty and penalty is imposed on it, that penalty should be presumed to have been imposed on its proprietor and, therefore, no separate penalty could be imposed on the proprietor as has been done in the present case.It may also be noted that Suresh Chopra is neither a partner nor a proprietor of the said proprietorship concern. However, the concurrent finding of both the Authorities below is that Suresh Chopra was the authorized signatory on behalf of the proprietorship concern and, therefore, besides the proprietorship concern, he, as an authorized signatory, has also contravened the provisions of law. It can be said that he also abetted the contravention of the provisions of FERA by the said proprietorship concern and therefore, the contravention is proved, he can be rightly held guilty for abetment of the same and penalty can be imposed on him separately.