A.Tajudeen vs Union Of India

1. Through memorandum dated 12.3.1990 it was alleged, that the appellant herein – A. Tajudeen, without any general or special exemption from the Reserve Bank of India, had received an amount of Rs.8,24,900/- in two installments, at the behest of Abdul Hameed, a person resident in Singapore. The first installment was allegedly received on 23.10.1989 which comprised of Rs.4,00,000/-. The remaining amount was allegedly received in the second installment on 25.10.1989. As per the memorandum the aforesaid amounts had been received from a local person, who was not an authorised dealer in foreign exchange.

3. Before adjudicating upon the merits of the controversy, it is essential to narrate the factual position leading to the issuance of the aforesaid memorandum dated 12.3.1990. The facts as they emerge from the pleadings, and the various orders leading to the passing of the impugned judgment rendered by the High Court of Judicature at Madras (hereinafter referred to as, the High Court) on 28.9.2006, are being chronologically narrated hereunder:-

For expanding the said shop and for improving the business, I required about Rs.9,00,000/-. My relatives are working in Singapore and Malaysia. One Abdul Hameed from my native place is carrying on business for the past 15 years at no. 24, Sarangoon Road, Singapore. He is dealing in clothes, VCRs etc. He came down to Madras about 2 months back. At that time, he met me at my residence. I told him that a jewellery business to be commenced and that I require about Rs.9,00,000/- for the said business and to discharge certain small loans. Further I requested him to help me by providing the said money assuring to repay the same in 2 or 3 years’ time with small interest during his visit to India.

5. Having examined the response of the appellant, the Additional Director of Enforcement, Southern Zone, Madras, by an order dated 22.4.1991, arrived at the conclusion, that the appellant was guilty of violating Section 9(1)(b) of the 1973 Act. Having so concluded, the seized amount of Rs.8,24,900/- was ordered to be confiscated. In addition, the appellant was imposed a penalty of Rs.1,00,000/- for contravening the provisions of Section 9(1)(b) of the 1973 Act. Dissatisfied with the order dated 22.4.1991 passed by the Additional Director of Enforcement, Southern Zone, Madras, the appellant preferred an appeal before the Foreign Exchange Regulation Appellate Board (hereinafter referred to as, the Appellate Board). The aforesaid appeal bearing number 316 of 1991 was allowed by an order dated 31.12.1993. While allowing the appeal, the Appellate Board directed the refund of penalty of Rs.1,00,000/- imposed on the appellant. The Appellate board also quashed the direction pertaining to the confiscation of Rs.8,24,900/- seized from the residence of the appellant.

6. Aggrieved by the order passed by the Appellate Board, the Union of India through the Director of Enforcement preferred an appeal under Section 54 of the 1973 Act, before the High Court. The High Court allowed the above appeal being C.M.A. NPD no. 1282 of 1994 by an order dated 28.9.2006. While allowing the aforesaid appeal, the High Court placed reliance on the statement made by the appellant, before the officers of the Enforcement Directorate on 20.4.1989. The aforesaid statement was referred to, as having been voluntarily made by the appellant. The High Court expressed the view, that the statements recorded by the appellant on 25.10.1989 and 26.10.1989 were voluntarily made by him, and as such, the retraction of the said statements, was not accepted. Likewise, the High Court accepted the statement of T. Sahira Banu made at the office of the Enforcement Directorate at Madras on 26.10.1989, as voluntary. Her retraction of the said statement was also not accepted by the High Court. The High Court placed reliance on the fact, that the appellant had been produced before the Additional Chief Metropolitan Magistrate, Madras, during the course of his detention, but he had not indicated to the Magistrate during his production, that he and his wife were compelled to make the above statements, by the officers of the Enforcement Directorate. This was the primary reason for the High Court, in rejecting the retractions made by the appellant and his wife.

21. Based on the above determination, and the various conclusions recorded hereinabove, we are satisfied, that the impugned judgment passed by the High Court deserves to be set aside. The same is accordingly hereby set aside. Resultantly, the entire action taken by the Enforcement Directorate against the appellant in furtherance of the memorandum dated 12.3.1990, is also set aside. As a consequence of the above, the Enforcement Directorate is directed to forthwith refund the confiscated sum of Rs.8,24,900/-, to the appellant, as also, to return the amount of Rs.1,00,000/-, which was deposited by the appellant as penalty.

22. The instant appeal is, accordingly, allowed in the abovesaid terms.

October 10, 2014.

[HEARD BY HON'BLE JAGDISH SINGH KHEHAR AND HON'BLE C. NAGAPPAN, JJ.] Date : 10/10/2014 This appeal was called on for judgment today.

For Appellant(s) Mr. R. Nedumaran,Adv.

For Respondent(s) Mr. B. V. Balaram Das,Adv.(Not present) Hon'ble Mr. Justice Jagdish Singh Khehar pronounced the judgment of the Bench comprising His Lordship and Hon'ble Mr. Justice C. Nagappan.

For the reasons recorded in the Reportable judgment, which is placed on the file, the appeal is allowed. As a consequence, the Enforcement Directorate is directed to forthwith refund the confiscated sum of Rs.8,24,900/- to the appellant, as also, to return the amount of Rs.1,00,000/-, which was deposited by the appellant as penalty.