Case: Radheshyam Kejriwal Vs. State Of West Bengal

2. Shorn of unnecessary details facts giving rise to the present appeal are that on 22nd May, 1992 various premises in occupation of the appellant Radheshyam Kejriwal besides other persons were searched by the officers of the Enforcement Directorate. The appellant was arrested on 3rd May, 1992 by the officers of the Enforcement Directorate in exercise of the power under Section 35 of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as the `Act) and enlarged on bail on the same day. Further the appellant was summoned by the officers of the Enforcement Directorate to give evidence in exercise of the power under Section 40 of the Act and in the light thereof his statement was recorded on various dates, viz. 22nd May, 1992, 10th March, 1993, 16th March, 1993, 17th March, 1993 and 22nd March, 1993. On the basis of materials collected during search and from the statement of the appellant it appeared to the Enforcement Directorate that the appellant, a person resident in India, without any general or specific exemption from Reserve Bank of India made payments amounting to Rs.24,75,000/- to one Piyush Kumar Barodia in March/April, 1992 as consideration for or in association with the receipt of payment of U.S. $ 75,000 at the rate of Rs.33/- per U.S. Dollar by the appellants nominee abroad in Yugoslavia. It further appeared to the Enforcement Directorate that transaction involved conversion of Indian currency into foreign currency at rates of exchange other than the rates for the time being authorised by the Reserve Bank of India. In the opinion of the Enforcement Directorate the act of the appellant in making the aforesaid payment of Rs.24,75,000/- in Indian currency for foreign currency at the rate of Rs.33/- per US Dollar against the official rate of Dollar i.e. Rs.30/- per Dollar (approximately), contravened the provision of Section 8(2) of the Act. Further the Said payment having been made without any general or special exemption from Reserve Bank of India, the appellant had contravened the provisions of Section 9(1)(f)(i) of the Act and accordingly rendered himself liable to imposition of penalty under Section 50 of the Act. Enforcement Directorate was further of the opinion that by abetting in contravening the provisions of Sections 9(1)(f)(i) and 8(2) of the Act read with the provisions of the Section 64(2) of the Act the appellant has rendered himself liable for penalty under Section 50 of the Act.3. Accordingly, a show cause notice dated 7th May, 1993 was issued by the Special Director of the Directorate of Enforcement calling upon the appellant to show cause as to why adjudication proceeding as contemplated under Section 51 of the Act be not held against him for the contraventions pointed above. Show cause notice dated 7th May, 1993 referred to above led to institution of proceeding under Section 51 of the Act (hereinafter referred to as the `adjudication proceedings). The adjudication officer came to the conclusion that the allegation made against the appellant of contravention of the provisions of Section 8, 9(1)(f)(i) and Section 8(2) read with Section 64(2) of the Act cannot be sustained. While doing so the Special Director observed aspayment alleged to have been made by Shri Radheshyam Kejriwal amounting to Rs.24,75,000/- has to be examined in the context of Section 9(1)(f)(i) and Section 8(2) r/w Section 64(2) of Foreign Exchange Regulation Act, 1973. The important ingredients for sustaining the conviction under the above provisions would require the proof of payment having been made to the credit of any person @ exchange other than the rate which has been authorized by the Reserve Bank of India. In the case before me, it has not been proved beyond reasonable doubt whether a sum of Rs.24,75,000/- has actually been paid or not. There is no documentary evidence except the statement of Shri Piyush Kumar Barodia and the retracted statement of Shri Radheshyam confirming the fact that Rs.24,75,000/- was exchanged @ of Rs.33/- per dollar. Therefore, it is very relevant to take the above facts and circumstances into consideration before coming to a conclusion as to the correctness of the statements given by S/Shri Radheshyam Kejriwal and Piyush Kumar Barodia. The documentary evidence available and the statements of the other co-accused will definitely throw further light in the matter.After considering all the above facts, I find that the only evidence available against Shri Radheshyam Kejriwal is the fact that his telephone number and name are mentioned in the documents seized from Shri Piyush Kumar Barodia and the fact that some transactions have been noted against his name which do not match the sum of Rs.24,75,000/- which was alleged to have been transferred. Secondly, there is no evidence to show that he was indulging in any foreign exchange transaction to transfer money abroad. In conclusion, the benefit of doubt will have to be given to Shri Radheshyam Kejriwal in the absence of any further evidence and also the fact that both Raju Poddar and Babubhai Umaidmal have denied having taken part in any such transaction. Significantly, on enquiry, it was found that Shri Sirish Kumar Barodia, brother of Shri Piyush Kumar Barodia staying at Bombay, was not available for the past year during which these transactions took place. Shri Piyush Kumar Barodia is absconding, therefore, his case is being decided on merits. However, since the charges against Shri Radheshyam Kejriwal for contravening the provisions of Section 9(1)(f)(i) and Section 8(2) read with Section 64(2) of the Foreign Exchange Regulation Act, 1973 cannot sustained, the charges against Shri Piyush Kumar Barodia can also not be sustained. Therefore, the charges against S/Shri Raju Poddar, Sirish Kumar Barodia and Babubhai Umaidmal Jain @ Babubhai Bhansali, are not sustainable for contravening the provisions of Section 9(1)(f)(i) and 8(2) read with Section 64(2) of the Foreign Exchange Regulation Act, 1973.In view of the foregoing, the proceedings initiated against S/Shri Piyush Kumar Barodia, Radheshyam Kejriwal, Raju Poddar, Sirish Kumar Barodia and Babubhai Umaidmal Jain and Babubhai Bhansali, vide the impugned Memorandum, are herebyis common ground that the Enforcement Directorate has not challenged this order and it has attained finality.4. It is relevant to state that any person contravening the provisions of Sections 8 and 9 of the Act besides other provisions is also liable to be prosecuted under Section 56 of the Act without prejudice to any award of penalty by the adjudicating officer under Section 51 of the Act. However, before launching such prosecution for contravening such provisions of the Act which prohibits the doing of an act without permission, the proviso to Section 61(2) of the Act mandates giving an opportunity to the person concerned to show that he had such permission. Accordingly, by notice dated 29th December, 1994 the appellant was given an opportunity to show permission granted by the Reserve Bank of India. Appellant replied to that but did not produce any permission.5. The Enforcement Directorate on the same allegation which was the subject matter of adjudication proceeding laid complaint against the appellant for prosecution under Section 56 of the Act before the Metropolitan Magistrate. After the issuance of process and exoneration in the adjudication proceeding appellant filed application for dropping the proceedings, inter alia, contending that on the same allegation the adjudication proceedings having been dropped and the appellant exonerated, his continued prosecution is an abuse of the process of the Court. The Metropolitan Magistrate by order dated 2nd September, 1997 rejected his prayer. Aggrieved by the same appellant preferred criminal revision application and reiterated the same submission but it did not find favour with the Calcutta High Court and by the impugned order dated 10th August, 2001, it rejected the revision application. While doing so it observed asthe contention of Mr. Ghosh is unacceptable that in the adjudication proceedings being held by the department concerned the allegations against the petitioner having not been found established the prosecution against him before a Court of law cannot have any legs to stand upon, since the same departmental authority which held the enquiry against him and found no materials for establishing his guilt cannot be expected to lodge the prosecution on the self-same allegations against that person before a Court and cannot be expected to take a different stand on the self-same materials as available against him on the record. As we have noted above, the Enforcement Officer who has investigated into the case is a different agency from that of the adjudicating officer and, what is more important, it cannot be taken for granted that the Court will take the same view on the materials on record which have prompted the departmental authority to find the allegations not substantiated. As it has been already pointed out, the procedure according to which the trial of such an accused by the Court it held has some special features and the two testing processes are so divergent that there is ample scope for the two parallel authorities to hold even diametrically opposite views so far as the question of proof of the charge against the accused is concerned. The most of decisions relied upon by Mr. Ghosh and discussed above in respect of his above contention cannot be attracted to our present case for the simple reason that none of those judicial pronouncements are relating to a case under the Foreign Exchange Regulation Act the provisions of which cannot be equated with those of the Income Tax Act or Customs Act.Being aggrieved, the appellant is before us with the leave of the Court.

Court's reasoning:
Considering the interpretation relating to Sections 50, 51 and 56 by various decisions, I am of the view that in a statute relating to economic offences, there is no reason to restrict the scope of any provisions of the Act. These provisions ensure that no economic loss is caused by the alleged contravention by the imposition of an appropriate penalty after adjudication under Section 51 of the Act and to ensure that the tendency to violate is guarded by imposing appropriate punishment after due transaction in terms of Section 56 of the Act. In fact, it is relevant to point out that Section 23D of the Foreign Exchange Regulation Act, 1947 had a proviso, which indicates that the adjudication for the imposition of penalty should precede making of complaint in writing to the court concerned for prosecuting the offender. The absence of a similar proviso to Section 51 or to Section 56 of the present 1973 Act is a clear indication that the Legislature intended to treat the two proceedings as independent of each other. There is nothing in the present Act to indicate that a finding in adjudication is binding on the Court in a prosecution under Section 56 of the Act or that the prosecution under Section 56 depends upon the result of adjudication under Section 51 of the Act. It is reiterated that the two proceedings are independent and irrespective of the outcome of the decision under Section 50, there cannot be any bar in initiating prosecution under Section 56. The scheme of the Act makes it clear that the adjudication by the concerned authorities and the prosecution are distinct and separate. No doubt, the conclusion of the adjudication, in the case on hand, the decision of the Special Director dated 18.11.1996, may be a point for the appellant and it is for him to put forth the same before the Magistrate. Inasmuch as FERA contains certain provisions and features which cannot be equated with the provisions of Income Tax Act or the Customs Act and in the light of the mandate of Section 56 of the FERA, it is the duty of the Criminal Court to discharge its functions vest with it and give effect to the legislative intention, particularly, in the context of the scope and object of FERA which was enacted for the economic development of the country and augmentation of revenue. Though the Act has since been repealed and not available at present, those provisions cannot be lightly interpreted taking note of the object of the Act.