Dismissed

FPA-FE-98/CHN/2018 of R. Viswanathan v/s The Joint Director, Directorate of Enforcement, Chennai

ATFP13 Nov 2018FPA-FE-98/CHN/2018

Case brief

AI extract

What is this about?

Appellant challenged an adjudication order and sought stay of penalty under FEMA. Court held evidence gathered under PMLA is admissible for FEMA. Appellant's ITRs were deemed irrelevant. Stay petition dismissed; penalty amount to be paid within two months.

What did the court decide?

Stay petition dismissed; appellant ordered to pay penalty of Rs. 39,00,000/- within two months from date of order.

FPA-FE-98/CHN/2018 of R. Viswanathan v/s The Joint… — Pension and Retirement Benefits | ATFP (2018)

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

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DATE OF DECISION: 22.11.2018

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MP-FE-352/CHN/2018 (Stay) & FPA-FE-98/CHN/2018

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R. Viswanathan … Appellant

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Versus The Joint Director, Directorate of Enforcement, Chennai … Respondent

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Advocates/Authorized Representatives who appeared

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For the Appellant	: Shri S. Hariharan, Advocate
For the Respondent	: Mrs. Aagam Kaur, Legal Consultant
CORAM
SMT. ANANYA RAY	: MEMBER

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JUDGEMENT

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MP-FE-352/CHN/2018 (Stay)

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This is an appeal against the adjudication order T-4/02/CHE/2016 dated 26.07.2018 passed by the Joint Director, Directorate of Enforcement, Chennai. Presently, the stay petition is before me. The appellants have pleaded for dispensation of the pre-deposit in terms of Section 19 of FEMA. The crux of the stay petition as well as the arguments before me is that no evidence has been brought forth under FEMA or under the Foreign Exchange Management (Acquisition &

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FPA-FE-98/CHN/2018

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Transfer of Immoveable Property in India) Regulations, 2000. All the evidences whereupon the case under FEMA has been built, has been acquired during the course of investigation under the proceedings against the appellant under PMLA, Customs Act, the Foreign Trade policy etc. The main submission of the appellant was that these evidences cannot be used under FEMA. In response, the counsel for the respondent stated that there is no bar in the law to use the evidences/information etc. procured during the course of investigation of case under a separate law. Moreover, the adjudication order did bring out that the Enforcement Directorate had done investigation simultaneously both under PMLA and FEMA. She relied on the judgment of the Bombay High Court in FERA appeal No. 8/2012 in the case of Vinod M. Chitalia vs. Union of India dated 28.03.2012.

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I have examined the stay petition as well as the arguments from both the sides. It is a fact that the appellant is being investigated/action taken under various laws of the country. As per Regulation 7 of FEM (Acquisition & Transfer of Immoveable Property in India) Regulations, 2000, ‘no person being a citizen of Pakistan, Bangladesh, Sri Lanka , Afghanistan………. without prior permission of the Reserve Bank shall acquire or transfer immoveable property in India, other than lease not exceeding five years’. This therefore stipulates that a Sri Lankan citizen cannot acquire any property in India without the permission of the Reserve Bank. There is no dispute that there was no such permission taken. With regard to his citizenship there are many details given in the adjudication order which the appellant has not refuted. Moreover, the Deputy High Commission for the Democratic Socialist Republic of Sri FPA-FE-98/CHN/2018 Page 2 of 4

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Lanka in Southern India vide letters dated 22.12.2008, 14.07.2015 and 06.08.2015 has intimated that Shri R. Vishwanathan (the appellant in the present case) is a holder of Sri Lankan passport bearing No. M1154587, that his Sri Lankan ID card No. 611483619V, that his address in Sri Lanka is 27/4, Dr. S.D. Fernando Mawatha, Colombo-15. The above therefore proves his Sri Lankan nationality. Coming to the question of whether evidences or information gathered during the course of investigation under other Acts/Law can be used under FEMA or not, I do not find any bar or any provision in FEMA or the Regulations made there under debarring use of such evidences for the purpose of FEMA. On a specific question in this regard, to the counsel of the appellant he also was not able to show anything to the contrary. The reliance of respondent on the Chitalia case also appears to be acceptable as in that case the High Court had held that the statements made to DRI under the Customs Act can be used for the purposes of FEMA as they pertain to the same transaction issue (although the action and contravention would be as per the respective laws).

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The appellant has also pleaded financial hardship and have enclosed copies of ITR although at the stage of hearing the learned counsel for the appellant did not go into them. As per records, the ITR submitted are of four financial years i.e. 1999-2000, 2000-2001, 20012002 and 2002-2003. I find that none of these ITRs are relevant as we are dealing with an adjudication order of 2018 and does not reflect the current position. On the basis above, I do not find any reason to stay the dispensation of the penalty amounting to Rs. 39,00,000/- levied on Shri R. Vishwanathan. With regard to the confiscation of the ten properties as FPA-FE-98/CHN/2018 Page 3 of 4

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listed in the impugned order no orders are passed since they are already under attachment under the PMLA, 2002. The above amount shall be paid within a period of two months from today.

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List on 01^st February, 2019 for reporting compliance.

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(Ananya Ray) Member

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New Delhi, 22^nd November, 2018 ‘A’

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FPA-FE-98/CHN/2018

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