TMI Blog1993 (5) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of Eastern Suburbs from U.K. Paints and handed the same over to Keith. It is further alleged that there are four drafts dated October 12, 1991, of the Punjab and Sind Bank, New Delhi, favouring Eastern Suburbs Ltd. for a total amount of Rs. 36,96,443 and one draft of the same date of the State Bank of India, New Delhi, favouring the same company for Rs. 47,39,500. These drafts were deposited in the Standard Chartered Bank, Manchester who sent the same from Manchester to the Punjab and Sind Bank and the State Bank of India, both at Madras with advice to remit the proceeds in the Standard Chartered Bank, Bombay, for onward credit to the account of its Manchester Branch. The proceeds after collection from the Delhi bankers were accordingly credited in the Vostro account of the Standard Chartered Bank, Manchester. During further enquiries it was also revealed that the aforesaid drafts had been purchased by U.K. Paints. The department interrogated K.S. Dhingra, president, G.S. Dhingra, vice president and Prem Narain Kapoor, director of U.K. Paints in February, 1993, and recorded their statements wherein they stated that the petitioner had brought Keith to them and told them th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the duty Magistrate praying that the bail application may be directed to be heard on the same day because the petitioner was suffering from chest pain. The application thereafter was heard by the ACMM on the same day with the consent of Sh. S.P. Ahluwalia, PP for the Enforcement Directorate and Sh. P.K. Rai, Assistant Director. The ACMM after hearing the parties directed on that date that the petitioner may be admitted to Sumit Clinic. Vasant Vihar, New Delhi, under judicial custody immediately and be produced on April 15, 1993, at 2 p.m. when his bail application will be heard on the merits. By a detailed order dated April 19, 1993, the prayer for interim bail on medical grounds was declined because, according to learned ACMM the petitioner himself admitted having taken away the five drafts of the total value of more than Rs. 84 lakhs and handing over the same to Keith, and further that the petitioner had gone abroad more than 30 times during the last 25 months and if he was actually keeping indifferent health there was no reason for him to have gone abroad so frequently. So taking into consideration the gravity of the offence, the interim bail was declined. Thereafter, the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... negotiate any bill of exchange or promissory note, transfer any security or acknowledge any debt, so that a right (whether actual or contingent) to receive a payment is created or transferred in favour of any person as consideration for or in association with any matter referred to in clause ( f ) ..." It is contended on behalf of the petitioner that a comparison of clauses ( a ) and ( c ) of section 9(1) shows that payment to any person resident outside India is different from drawing or issuing a bill of exchange, i.e. , a cheque or a draft, so that a right to receive a payment is created or transferred in favour of any person resident outside India. In other words, the argument further goes, simply because there is a separate mention of drawing and issuing the drafts, as in the present case, to a person outside India, it would not be a payment by itself to or for the credit of any person resident outside India. In such a situation, it is argued, that it is the drawer or issuer of the cheque to a person resident outside India who will be guilty of the commission of the offence under section 9, if it is done without obtaining the special or general exemption from the Reserve Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e guilty of the commission of the offence with reference to which investigation is going on. In this respect, it may be noted that it is not the intention of this court to give a final verdict at this stage because the investigation is still in its infancy and it is not the final stage after trial. It is being judged only with respect to the allegations made against the petitioner at this stage and what ultimately happens after trial, cannot be predicted. The essential ingredients for applicability of section 9 appear to be as follows: ( i )No person in or resident in, India to receive any payment by order or on behalf of any person resident outside India. ( ii )The receipt should not be otherwise than through an authorised dealer. ( iii )There is no general or special exemption, conditional or unconditional, granted by the Reserve Bank from the applicability of the provisions of this sub-section, i.e ., sub-section (1) of section 9. It is not the case of the petitioner that he is not a person not resident in India. Therefore, we must proceed on the premises that he is a person resident in India. According to the case of the prosecution, the petitioner received drafts for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner on behalf of Keith, handing over the same to him and without the credit of the actual proceeds of the drafts in the Vostro account for the benefit of Keith, the petitioner cannot be held guilty of any violation seems to be prima facie without force. Learned counsel for the petitioner also drew my attention to the case of Brojendra Coomar Banerjee v. Sirish Chandra Chatterjee, AIR 1954 Cal 459, in order to support the same argument. The facts of this case were that the respondent landlord filed a suit for ejectment against the appellant tenant on the basis of three consecutive defaults committed by the tenant. There were agreed blocks of two months each and it appears that if the tenent was in default of three units of two months each, he was liable to be ejected. There was no dispute regarding defaults of the units of two months each and the main dispute was with regard to the default of the third unit. The tenant had paid rent by cheque for November. 1951, on December 27, 1951, which was not credited to the account of the landlord till January 5, 1952. The Munsif did not hold default regarding the third unit of two months and dismissed the suit. The District Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed bail now, he is likely to hamper the course of investigation by alerting his contacts. It is also contended that according to the evidence collected so far the amount of commission due to Keith was more than Rs. 2 crores and till now the department could lay its hands only on transactions totalling about Rs. 84 lakhs. Since the department had yet to dig out the deals regarding the balance amount of commission payable to Keith, which U.K. Paints might have passed on to Keith through the petitioner, there is likelihood of a setback to the investigation. It is also refuted if the offence is of a technical nature because the petitioner was instrumental in handing over the drafts to Keith under agreed terms. It is further contended that the reasons for not arresting the officers of U.K. Paints till now are that they were co-operating with the investigation and only because of the information supplied by them this racket could be unearthed. The department, therefore, did not hasten to arrest them. The reason for not arresting Keith was that till now his particulars were not available and since the same are now known during investigation, steps for his arrest will be taken. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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