Allowed

FPA-FE-257/CHD/2009 of Shri Inder Vijay Singh v/s The Special Director, Directorate of Enforcement, Chandigarh

ATFP5 Dec 2018FPA-FE-257/CHD/2009

Case brief

AI extract

What is this about?

This appeal challenged an adjudication order alleging a Foreign Exchange Regulation Act contravention. The court held that the order lacked evidence linking the appellant to foreign exchange dealings or establishing the required contravention, noting that holding Indian currency is not a crime. The appeal was allowed and the order set aside without needing to address natural justice arguments.

What did the court decide?

The adjudication order made against the appellant was set aside, and the appeal was allowed.

FPA-FE-257/CHD/2009 of Shri Inder Vijay Singh v/s The Special Director, Directorate of Enforcement, Chandigarh — ATFP (2018) — LawSathi Research

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APPELLATE TRIBUNAL FOR SAFEMA, FEMA, PMLA, NDPS, PBPT ACT AT NEW DELHI

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DATE OF DECISION: 05.12.2018

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FPA-FE-257/CHD/2009

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Shri Inder Vijay Singh … Appellant Versus The Special Director, … Respondent Directorate of Enforcement, Chandigarh

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Advocates/Authorized Representatives who appeared

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For the appellant	:	Dr. Aashutosh, Advocate
For the respondent	:	Shri Prashant Pandey, Legal Consultant

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CORAM SMT. ANANYA RAY : MEMBER JUDGMENT

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FPA-FE-257/CHD/2009

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This is an appeal filed against the adjudication order No. SDE(PKD)I/3/2009 dated 30.06.2009 by one Shri Inder Vijay Singh. He was one of the defendants before the adjudicating authority. Briefly the case is that one Mr. Darshan Singh had received payments totalling to Rs. 69,54,675/- and made payments totalling Rs. 69,35,675/- to persons resident in India on the instructions of one Shri Gurcharan Singh of Canada, a person resident outside India, and had therefore contravened the provisions of Sections 9(1)(b) and 9(1)(d) of FERA, 1973. That the appellant in the present case Shri Inder Vijay Singh had made payments

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FPA-FE-257/CHD/2009

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Page 1 of 5

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totalling Rs. 10,00,000/- to Shri Darshan Singh on the instructions of Shri Gurcharan Singh of Canada and had thereby contravened the provision of Section 9(1)(d) of FERA. A show cause notice was issued to all of them which was duly served on them. The entire case is based on statements given before the DRI under the Customs Act.

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The appellant has in its appeal, written submissions as well as during the hearing before me pleaded the following:

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i. That principles of natural justice was not followed in as much as they had not been heard by the adjudicating authority nor their request for cross-examination was accepted by the adjudicating authority.

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ii. That the statement given by the appellant was under duress which they have duly retracted before the Competent Authority. The retraction has not been dealt at all by the adjudicating authority.

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iii. That the whole case is built up purportedly on the basis of some loose sheets seized from the residence of Mr. Darshan Singh.

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iv. That nothing incriminating has been found or established by the adjudicating authority to implicate him in the said contravention.

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They relied on the following judgments:

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a. Vinod Solanki vs. Union of India Civil Appeal No. 7407 of 2008 dated 18.12.2008.

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b. AIR 1992 Supreme Court 1831 KTMS Mohd. & Anr. Vs. Union of India dated 28.04.1992.

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FPA-FE-257/CHD/2009

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Page 2 of 5

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In response, the respondent stated:

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i. That principles of natural justice has been duly followed as has been recorded at para 21 to 31 of the impugned order. The case was fixed for personal hearing on more than five occasions and it is clearly recorded at para 31 of the impugned order “all (for all the defendants) the call notices were received undelivered except Shri Inder Vijay Singh.” It is therefore clear that they had received the notices of hearing but did not appear, a fact which is not denied by the appellant.

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ii. That cross-examination is not mandatory and is not a principle of natural justice. The adjudicating authority was right in rejecting their request for cross-examination since the appellant had shown least regard to appear for the personal hearings when fixed. It was only a delaying tactics.

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iii. That the retraction was before the court separately while arguing their bail application and no intimation of the same was given to the adjudicating authority whatsoever.

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They relied on the following judgments:

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i. Surjeet Singh Chabra vs. Union of India , SLP(C)14028 of 1996 decided by SC on 25.10.1996.

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ii. In the Supreme Court of India SLP(C)/23708 of 1995 decided on 06.11.1995.

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FPA-FE-257/CHD/2009

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Page 3 of 5

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iv. (2013)9 SCC 549 Telestar Travels Pvt. Ltd. & Ors. vs. Special Director of Enforcement dated 13.02.2013.

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v. (1973)2 SCC 438 Kanungo & Company vs. Collector of Custom .

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I have carefully examined the case and gone through the records available and have also heard both the parties. The crux of the entire case against the appellant is the loose sheets found in the house of the main accused Shri Darshan Singh and the statement of the appellant. The adjudication order is based on investigations which revealed that, inter alia Shri Inder Vijay Singh resident in India without any general or special exemption from the RBI made payment of Rs. 10,00,000/- to Shri Darshan Singh. However, the entire impugned order does not throw any light as to what these investigations were or how the payment of Rs. 10,00,000/- (Indian currency) to the said Mr. Darshan Singh has contravened the provisions of FERA. No linkages have been established to show the relationship between Inder Vijay Singh and Darshan Singh to Gurcharan Singh of Canada financial or otherwise. For any contravention of FERA underhand foreign exchange dealings have to be established. There is no evidence to that effect on record. In fact, the appellant in his statement before the DRI and which finds a mention in the impugned order has not stated that the alleged Darshan Singh was in any way involved in foreign exchange transactions. The so-called loose sheets recovered from the residence of Shri Darshan Singh does not establish that the appellant had received or given any money in contravention of FERA. There are no statements or any other evidence which has been produced by the adjudicating authority to prove the involvement of the

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FPA-FE-257/CHD/2009

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Page 4 of 5

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appellant in receipt or making payments of foreign exchange. Holding of Indian currency or dealing with it is not a crime and if there is a violation of any other law like the income tax etc. that would be dealt with by the respective authorities.

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In this background, I do not find any merits in the impugned order in so far as it relates to the appellant and therefore set aside the said order in so far as it relates to the appellant and allow the appeal. Because of this decision, I do not think it is necessary to go into the issue of natural justice or the judgments quoted by either of the parties on the same.

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The appeal is accordingly allowed.

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(Ananya Ray) Member

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New Delhi, 5^th December, 2018

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„A‟

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FPA-FE-257/CHD/2009

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FPA-FE-257/CHD/2009 of Shri Inder Vijay Singh v/s The Special Director, Directorate of Enforcement, Chandigarh

Case brief

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FPA-FE-257/CHD/2009 of Shri Inder Vijay Singh v/s The Special Director, Directorate of Enforcement, Chandigarh

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