TMI Blog2003 (1) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... accused as contemplated under section 61(2)( ii ) of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as "FERA, 1973") vitiates the case of the prosecution ? ( ii )Whether the courts below are right in acquitting the respondents/accused, holding that the appellant/complainant has failed to prove the charges, beyond all reasonable doubts, against the respondents/accused that they are guilty of the offences punishable under the provisions of the FERA, 1973 ? ( iii )Are the respondents/accused not entitled for the benefit of the enactment of the Foreign Exchange Management Act, 1999 (hereinafter referred to as "FEMA, 1999") whereunder no provision is made for punishment, assuming that the respondents/accused are liable to be convicted for the offences punishable under section 9(1)( b ) and 9(1)( d ) of the FERA, 1973 in the respective criminal cases, and could they be punished for the said offences under the FERA, 1973, which stands repealed by the enactment of the FEMA ?" 4. The case of the prosecution in C.C. Nos. 673, 676, 674 and 675 of 1991 is as under. 5. One Khader Sulaiman is the accused in C.C. Nos. 673, 676, 674 and 675 of 1991, which were trie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved on Khader Sulaiman, to which Khader Sulaiman submitted his explanation dated August 16, 1988, (exhibit P6). 12. In exhibit P6, Khader Sulaiman stated that he had already, by his letter dated November 11, 1985 (exhibit D1) and his telegram dated February 24, 1986 (exhibit P11), retracted the statements made on November 9, 1985 (exhibit P4) and November 11, 1985 (exhibit P8) and hence they are not binding on him. It was also contended that the onus of proving the receipts and payments, in violation to the provisions of the FERA, 1973 lays on the appellant/complainant. 13. After giving a personal hearing to the accused Khader Sulaiman and his counsel on September 16, 1989, the adjudication authority, viz., Additional Director of Enforcement, by proceedings dated October 11, 1989 (exhibit P7), held that Khader Sulaiman had contravened the provisions of section 9(1)( b ) and 9(1)( d ) of the FERA, 1973 and imposed a penalty of Rs. 65,000 and Rs. 60,000 for the said offences respectively, in addition to the confiscation of Rs. 30,000 under section 63 of the FERA, 1973. 14. In the light of the evidence of P.W.1 and the documentary evidence exhibits P4, P8 and P9, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted the contentions of the accused Khader Sulaiman and acquitted him of all the four charges, holding that : "( a )the statements of the accused Khader Sulaiman were obtained by force and coercion; ( b )the statement (exhibit P4) obtained from the accused Khader Sulaiman while he was under illegal custody could not be relied upon; ( c )the prosecution failed to prove the charges against the accused Khader Sulaiman by independent witness, satisfactorily; and ( d )exhibit P3 series could not be relied upon for want of Mahazar witnesses to the same." 18. Hence, C.A. Nos. 23, 31, 32 and 33 of 1995. 19. Criminal Appeal No. 148 of 1995 is directed against the judgment of acquittal dated June 15, 1994 in C.C. No. 333 of 1993 of the learned Additional Chief Metropolitan Magistrate (E.O.II), Chennai. 20. The case of the prosecution in C.C. No. 333 of 1993, in brief, is stated as follows : 21. P. Krishnasamy and J. Sampath Kumar are the first and second accused respectively in C.C. No. 333 of 1993. 22. P.W.1, equipped with a search warrant (exhibit P1) dated July 9, 1991, issued under section 37 of the FERA, 1973 by the Assistant Director of Enforcement, cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, and conducted a search on July 10, 1991, in the place of SRK Bankers (Office- cum -house) at No. 12B, Shastri Road, Thillai Nagar, Trichy, in the presence of two independent witnesses and one Muthuraman, managing partner of SRK Bankers. During the search, some incriminating documents, viz., five sheets and Rs. 40,000 were seized under Mahazar report (exhibit P11). Two incriminating documents were seized from Muthuraman and they were marked as exhibit P12 series. Muthuraman gave a statement (exhibit P13) during the search on July 10, 1991, confirming his connection in the dealings of foreign exchange along with the second accused-Sampath Kumar, as per the instructions of Srinivasagam of Colombo. 29. On the direction of the Assistant Director of Enforcement (exhibit P14), the Enforcement Officer, K. Dhandayuthapani (P.W.3), conducted a search in the house of Krishnasamy at No. 6, Diwan Bahadur Shanmugam Salai, Chennai-600 010 on July 9, 1991 and one Bommamani, wife of Krishnasamy, alone was present at the time of search. During the search, some documents, 100 US dollars as travellers cheque and 24 US dollars were seized, under Mahazar report (exhibit P15). The documents and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 40,000 and releasing US dollars 124 to the first accused with a direction that the same should be surrendered to an authorized dealer in foreign exchange as required under section 8(3) of the FERA, 1973 within 15 days of the release and submit proof thereof to the enforcement officer. 35. Based on the above investigation and the evidence collected, a criminal case was lodged against the first accused and second accused in C.C. No. 333 of 1993 on the file of the learned Additional Chief Metropolitan Magistrate (E.O.), wherein the first accused and second accused were tried for the following charges : ( i )That they, during the period starting from January, 1991 to July, on the directions of Srinivasakam of Ceylon, received Rs. 1,15,26,000 in India from person who were unauthorized to deal in foreign exchange thereby committed an act contrary to section 9(1)( b ) of the FERA, 1973 and punishable under section 56(1)( i ) of the abovesaid Act; ( ii )That first accused, who was unauthorized to deal with foreign exchange, on the directions of Srinivasakam of Ceylon, delivered Rs. 1,15,26,000 to various persons in India thereby committed an act contrary to section 9(1)( d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f in the course of normal transactions, argued that, there would not be any necessity for any secretive description or codes used for disbursement of the amounts; ( c )The retraction letter (exhibit D1) and the retraction telegram (exhibit P11) in Crl. A. Nos. 23, 31, 32 and 33 of 1995 and the retraction letters (exhibits P19 and P21) in Crl. A. No. 148 of 1995, much less the statements made in the bail application that the statements were obtained by the enforcement officers by using force and coercion are liable to be rejected as untrustworthy, as the respondents/accused did not complain anything about such force and coercion to the magistrates, when they were produced for remand; ( d )Since the accused were arrested and produced before the magistrates concerned within 24 hours in the respective cases, the statements made before the respective enforcement officers could not be said to have been obtained during the illegal custody; ( e )The non-examination of the persons who either paid or received the money on the instructions of the persons resident outside India, or the bank through which the amounts were disbursed, in the respective cases, is not fatal to the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the statements made by the accused are liable to be scrutinized by the court in the same manner as confession made by an accused person to any non-police personnel and the court has to be satisfied in such cases, that any inculpatory statement made by the accused person to the gazetted officer must also pass the test prescribed in section 24 of the Indian Evidence Act. 41. Both learned counsel for the respondents contended that assuming the respondents/accused could be convicted based on the evidence on record for the respective charges, no punishment can be imposed on them in view of the repeal of the FERA, 1973 and the enactment of the FEMA, 1999, where there is no provision for punishment. In this regard reliance was placed on the decision in State v. Gian Singh [1999] 9 SCC 312 and T. Barai v. Henry Ah Hoe AIR 1983 SC 150. 42. Mr. M. Abdul Razack, learned counsel for the respondents in Crl. A. Nos. 23, 31, 32, and 33 of 1995 emphatically contends that the charge framed in C.C. No. 676 of 1991 is not sustainable in law as the said charge is with reference to the payments made in the month of November, 1985, with reference to which there is no evidence avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accused in C.C. No. 676 of 1991, had contravened section 9(1)( d ) of the FERA, 1973 with respect to the disbursement/payment of Rs. 20,000 in the month of October, 1985, even though at the stage of framing the charges the court is not expected to go deep into probative value of the materials on record, the court is obliged to see whether there is prima facie evidence in support of the charge levelled against the accused. While framing charges, there is no need to maintain the same standard to be adopted by the court in scrutinizing the evidence at the time of trial, but all due diligence should be taken even at the stage of framing the charge as to whether the charge framed is supported with prima facie and sufficient material evidence. Therefore, the court should satisfy itself that the charge levelled against the accused is supported with prima facie and sufficient material evidence before issuing process to the accused and committing him for trial with respect to the charge framed. Want of such due diligence while framing the charge in C.C. No. 676 of 1991, in my considered opinion, resulted in failure of justice, not only to the appellant/complainant, but also caused muc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... my and national interest. 50. I am, therefore, of the considered opinion that, assuming there is an error or omission in the charge itself, or the charge is totally vague or is not supported with any material evidence to be relied upon by the prosecution, the court would not be justified to proceed with from that stage of the framing of an erroneous charge. Bearing this in mind, and finding that the trial court has acted with material irregularity, by exercising the powers conferred under section 464(2) of the Criminal Procedure Code, I am inclined to allow the appeal, viz., Crl. A. No. 31 of 1995, set aside the judgment of acquittal of the learned Additional Chief Metropolitan Magi-strate, Economic Offences I, Madras, dated April 7, 1994, made in C.C. No. 676 of 1991, remit the matter to the learned Additional Chief Metropolitan Magistrate, Economic Offences I, Madras, and direct a new trial to be held upon a charge framed in whatever manner he thinks fit, and complete the trial expeditiously and pronounce the judgment within six months from the date of receipt of copy of this order. 51. Criminal Appeal No. 31 of 1995 is allowed with the direction indicated above. 52. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 58 ( a )where the offence is alleged to have been committed by an officer of Enforcement not lower in rank than an Assistant Director of Enforcement, except with the previous sanction of the Central Government; ( b )where the offence is alleged to have been committed by an officer of Enforcement lower in rank than an Assistant Director of Enforcement, except with the previous sanction of the Director of Enforcement; or ( ii )of any offence punishable under section 56 or section 57, except upon a complaint in writing made by ( a )the Director of Enforcement; or ( b )any officer authorized in writing in this behalf by the Director of Enforcement or the Central Government; or ( c )any officer of the Reserve Bank authorized by the Reserve Bank by a general or special order : Provided that where any such offence is the contravention of any of the provisions of this Act or of any rule, direction or order made thereunder which prohibits the doing of an act without permission, no such complaint shall be made unless the person accused of the offence has been given an opportunity of showing that he had such permission." 55. Relevant portion of section 23 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch penalty as he thinks fit in accordance with the provisions of the said section 23 : Provided that if, at any stage of the inquiry, the Director of Enforcement is of opinion that having regard to the circumstances of the case, the penalty which he is empowered to impose would not be adequate, he shall, instead of imposing any penalty himself, make a complaint in writing to the court." 58. The Apex Court, speaking about the features of foreign exchange, the subject-matter of the above legislations, in Shanti Prasad Jain v. Director of Enforcement, Foreign Exchange Regulation Act AIR 1962 SC 1764 held that ". . . the subject-matter of the legislation, viz., foreign exchange, has features and problems peculiarly its own, and it forms a class in itself. A law which prescribes a special procedure for investigation of breaches of foreign exchange regulations will therefore be not hit by article 14 as it is based on a classification which has a just and reasonable relation to the object of the legislation. The vires of section 23(1)( a ) is accordingly not open to attack on the ground that it is governed by a procedure different from that prescribed by the Code of Crimi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Corpn. s case ( supra ), held as follows: ". . . I do not think it necessary to go into the question whether the direction contained in the proviso for a show-cause notice being given is mandatory in character or directory in nature. Even if it is to be held that the proviso contains a mandate, the question for consideration is whether a second show-cause notice should be given to a person before a criminal prosecution is launched against him under section 56 of the Act. I find no basis in the proviso for holding that such a notice should be given. All that the proviso states is that before a court takes cognizance of an offence which relates to the contravention of any provision of the Act, which prohibits the doing of an act without permission, the complainant must have given an opportunity to the accused to show cause that he had such a permission. What follows from this is that at some point of time prior to the filing of the complaint, the accused must have been given opportunity to show cause that he had obtained the requisite permission and he had not contravened the provisions of the Act on any manner. It is, however not necessary that the show-cause notice must have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Customs Act, by a person against whom an enquiry was made, vis-a-vis the provisions of article 20(3) of the Constitution of India and also with reference to sections 24 and 25 of the Indian Evidence Act, to hold that at that stage any statement made by a person against whom an enquiry was made, was not a statement made by a person accused of an offence. He would further add that adjudication proceedings were quasi-criminal in nature and while show-cause notices were issued, there was already an accusation by the Deputy Director of Enforcement against the petitioner. The words the person accused of an offence in the proviso, will have to be read, keeping in view the context in which it had been used and the effect of the words in the same proviso has been given an opportunity of showing." 63. In the repealed 1947 Act, section 23D(1) contemplated an initial adjudication and a prosecution only in the event of the Director of Enforcement arriving at an opinion that having regard to the circumstances of the case, the penalty which he was empowered to impose would not be adequate, when instead of imposing any penalty himself, he shall make a complaint in writing to the court. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he person accused of an offence, must have been given an opportunity, for showing cause that he had such permission. 66. It is, therefore, apparent that if a prosecution is initiated even before the adjudication proceedings, the person accused of an offence must have had an opportunity of showing cause that he had permission. However, if the adjudication proceedings had been initiated earlier in which show-cause notice had been given, especially with reference to section 8(1) and (2) of the Act, a second opportunity does not appear to be intendment of the proviso. All that the proviso contemplates is that before a prosecution is instituted, the person accused of an offence should have been given an opportunity. The words "had been" used in the section also gives an insight to the object behind the provision. In my view, the words "has been given" denote the furnishing of an opportunity to the person accused of an offence, but does not contemplate issue of a second show-cause notice before the launching of the prosecution. Therefore, the decision of the Supreme Court in Ramesh Chandra Mehta v. State of West Bengal AIR 1970 SC 940, holding that under the Customs Act, 1962, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the proviso to section 23(3) need not necessarily be afforded by means of the issue of a notice, but can also be afforded in the course of an adjudication under section 23D(1)." 69. Under the old Act the Director of Enforcement was empowered to make a complaint only if he considered that his own powers of punishment were inadequate to meet the situation or the gravity of the offence, while the first step of instituting adjudication proceedings had already been taken. I am in respectful agreement with the view expressed by the Mysore High Court, which found favour with Natarajan, J., while deciding Crl. M. P. No. 2288 of 1980. 70. The decisions in P. Joseph John s case ( supra ) and Chintapalli Agency Taluk Arrack Sales Co-operative Society Ltd. v. Secretary (Food and Agriculture) Government of Andhra Pradesh AIR 1977 SC 2313, can have no bearing to the issue involved in these petitions. In the earlier case the Supreme Court held that under article 311 of the Constitution a civil servant was entitled to have a reasonable opportunity to defend himself and show cause, both at the time of enquiry into the charges brought against him and at the stage when definite c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. 73. Question No. ( i ) is answered accordingly. 74. Question No. ( ii ) : Whether the courts below are right in acquitting the respondents/accused, holding that the appellant/complainant has failed to prove the charges, beyond all reasonable doubts, against the respondents/accused that they are guilty of the offences punishable under the provisions of the FERA, 1973 ? 75. For analysing the rival contentions of learned counsel on either side with respect to the above point, it would be appropriate to refer various provisions of the FERA, 1973. 76. The FERA, 1973, was enacted to consolidate and amend the law regulating certain payments, dealings in foreign exchange and securities, transactions indirectly affecting foreign exchange and the import and export of currency for the conservation of the foreign exchange resources of the country and the proper utilization thereof in the interests of the economic development of the country. 77. Under the scheme of the FERA, 1973, certain special restrictions were introduced with regard to the dealings in the foreign exchange, the object being to see that the country s foreign exchange resources were not wasted under a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 52 of the FERA, 1973, and a further appeal to the High Court is provided under section 54 of the FERA, 1973. Section 53 of the FERA, 1973, prescribes the powers of the adjudicating officer and the appellate authority. 82. Section 56 of the FERA, 1973, in addition to the award of penalty by the adjudication officer, declares the contravention of any of the provisions of the Act, other than the one specified therein, an offence for which a person who contravenes such provisions shall be convicted and punished. Even though section 56 prescribes a minimum punishment of six months imprisonment, the court is also empowered to impose a sentence less than six months for adequate and special reasons. 83. Under section 59 of the FERA, 1973, the court shall presume the existence of culpable mental state on the part of the accused and it shall be the burden for the accused to prove the fact that he had such mental state with respect to the act charges as an offence in the prosecution. Section 59 of the FERA, 1973, referred to above makes it clear that no mens rea, viz., culpable mental state has been prescribed for such contravention. In other words, the existence of mens rea shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ident in India shall place any sum to the credit of any person resident outside India, except in accordance with any general or special exemptions, which may be granted conditionally or unconditio-nally by the Reserve Bank of India. 87. Placing strong reliance on the above provisions of the FERA, 1973, viz., sections 8, 9, 59 and 71 of the FERA, 1973, Mr. Kumar, learned counsel appearing for the appellant, assails the judgments of acquittal, acquitting the respondents herein, on the ground that the courts below erred in holding that the respondents/accused had not contravened sections 9(1)( b ) and 9(1)( d ) of the FERA, 1973, and they were not guilty under section 56(1)( d ) of the FERA, 1973; and in shifting the burden on the appellant/prosecution, instead of holding that the respondents/accused failed to discharge their burden contemplated under sections 59 and 71 of the FERA, 1973, referred to above, particularly in the context of the statements of the respondents/accused in respective cases (exhibits P4, P8 and P9 in Crl. A. Nos. 23, 31, 32 and 33 of 1995 and exhibits P5, P7, P8 and P9 in Crl. A. No. 148 of 1995). 88. It is settled law that the statements recorded b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accused, therefore, cannot, by itself, form a sole basis for conviction, particularly when the respondents/accused pleaded that the confessional statement relied upon by the prosecution in respec- tive cases (exhibits P4, P8 and P9 in Crl. A. Nos. 23, 31, 32 and 33 of 1995 and exhibits P5, P7, P8 and P9 in Crl. A No. 148 of 1995) were retracted by the respondents/accused. 93. In a criminal trial, the court is required to marshal evidence. The evidence may consist of direct evidence, confession or substantial evidence. But for the offence punishable under the provisions of the FERA, the well settled legal position is that confession could be the sole basis for conviction. But, if it is retracted, it has to be tested whether the confession is voluntary and truthful inculpating the accused in the commission of crime. Confession is one of the species of admission dealt with under sections 24 to 30 of the Indian Evidence Act and section 164 of the Criminal Procedure Code. It is an admission against the maker of it, unless its admissibility is excluded by some of those provisions. But, when it is retracted by the accused. The burden is on the accused to prove that the statement was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 33 of 1995 before the learned Additional Chief Metropolitan Magistrate, (E.O. II), Madras, in C C. No. 333 of 1993, to the effect that the statements were obtained by the appellant/complainant, by exercising force and threat and therefore, they were not made voluntarily. 97. Learned counsel for the respondents/accused effectively contends that the averments made in the respective bail applications filed by the respondents/accused themselves would show that they retracted the confessional statements even before the magistrates concerned, at the earliest point of time. 98. To buttress their submission that the confessional statement of the respondents/accused were obtained by threat, force and coercion, learned counsel for the respondents/accused also submits that the respondents/accused were not produced before the magistrates concerned within twenty four hours from the time of the arrest, which itself would prove that the respondents/accused were subjected to harassment and ill-treatment and therefore, the letter of retraction (exhibit D1) and retraction telegram (exhibit P11) in Crl. A. Nos. 23, 31, 32 and 33 of 1995 and the retraction letters (exhibits P19 and P21) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 674 and 675 of 1991. Even though in the said bail application, the respondent/accused stated that the statement obtained was not voluntary, but the same was obtained by force and coercion, I find that the learned magistrate, while remanding the accused-Khader Sulaiman, recorded that there was no complaint of ill-treatment. 104. Similarly, I have perused the records relating to the bail applications, viz., Crl. M. P. No. 733 of 1991 filed by first accused - Krishnasamy and Crl. M. P. No. 734 of 1991 filed by the second accused - Sampath Kumar, before the learned Additional Chief Metropolitan Magistrate (E.O. II), Madras, in C.C. No. 333 of 1993. The said bail applications were filed on July 10, 1991. Of course, the first accused - Krishnasamy averred that the statement was obtained from him by force and threat and the second accused - Sampath Kumar averred that the enforcement officers had extracted the statement from him, and the same were not binding on him. However, when the accused were produced at 3.30 p.m. on July 10, 1991, for remand, the learned Additional Metropolitan Magistrate (E.O. II), Madras, remanded them till July 24, 1991, after recording that no complaints o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sagam in the respective cases, in my consi-dered opinion, is not fatal to the case of the prosecution, as the confessional statement of the respondents/accused made before the enquiry officer during the investigation, enquiry and thereafter during the adjudication proceedings substantially corroborate with the supporting material evidence referred to above. 109. For a better appreciation of evidence, I am inclined to reappreciate the evidence relied upon by the prosecution, particularly the confessional statements in respective cases (exhibits P4, P8 and P9 in Crl. A. Nos. 23, 31, 32 and 33 of 1995 and exhibits P5, P7, P8 and P9 in Crl. A. No. 148 of 1995). 110. As already referred to above, in the earliest statement P4, Khader Sulaiman confessed that he used to receive letters from S.K. Haja Mohideen, a person resident outside India, viz. , UAE, who was arranging funds to his friends and relatives in India, in May 1985, requiring Khader Sulaiman to disburse the funds to persons in India and directed by S. K. Haja Mohideen for a commission of Rs. 300 for every Rs. 1,00,000 as per the code words viz., "cold finger" which denotes as follows : C 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the name Khader. The said demand drafts were drawn on : ( i )Indian Bank, Esplanade Branch; ( ii )Indian Overseas Bank, Esplanade Branch; ( iii )Andhra Bank, Sowcarpet; ( iv )Canara Bank, Audiappa Street; ( v )United Commercial Bank, Mount Road; ( vi )Vijaya Bank, II Line Beach; ( vii )Bank of India, Armenian Street; and ( viii )State Bank of India, Govindappa Street. 116. The details of the names and addresses of persons furnished by S.K. Haja Mohideen would be destroyed after the disbursement of the funds. 117. The explanation offered by Khader Sulaiman in exhibit P4 with reference to the incriminating documents, viz., exhibit P3 series (7 sheets seized on November 9, 1998) also deserves to be examined. 118. Three sheets out of seven sheets, contain the names and addresses of the persons, furnished by S.K. Haja Mohideen, to whom the funds were to be disbursed as per the code mentioned against the respective name. The first sheet contains the names and addresses of six persons with a number "45"; the second sheet contains the names and addresses of six persons with a number "52"; and the third sheet contains names and addresses of five persons wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India on February 6, 1986, as he was dismissed from service on February 5, 1986 and that her husband himself would state with respect to the payment which she used to receive from her husband through a third party. 121. Similarly, in C.C. No. 333 of 1993, three searches were conducted. 122. PW1, investigating officer, during his search in the business premises of Raja Traders at No. 58, Thana Street, Purasawalkam, Madras-600 007, on July 9, 1991 seized certain incriminating documents, viz., telephone file containing telephone bills and other documents containing 28 pages (exhibit P3 series) and a diary containing 38 pages (exhibit P4), under a mahazar report dated July 9, 1991 (exhibit P2) and obtained a statement from Krishnasamy (exhibit P5) at the time of search on July 9, 1991 and statement of one Perumal (exhibit P10), partner of Raja Traders, Madras, was recorded on July 16, 1991. 123. P.W.2 conducted a search on July 10, 1991, in the place of SRK Bankers (Office- cum -house) at No. 12B, Shastri Road, Thillai Nagar, Trichy, in the presence of two independent witnesses and one Muthuraman, managing partner of SRK Bankers and seized some incriminating documents, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeared before PW1 on July 10, 1991, in response to the summon marked as exhibit P6 and again gave a statement dated July 10, 1991 (exhibit P7), in his own handwriting. 127. The first accused - Krishnasamy, in his statement marked as exhibit P7, stated that the contents in exhibit P5 and the statement of Sampath Kumar given on July 9, 1991 that he gave Rs. 37,40,000 to him, as per the instruction of Srinivasagam, were true. He further stated that he had disbursed most of the money to Basheer and some to Roshan, Murugesh of Mayura Textiles and Murugesh of Nathan Avenue, Harrington Road. He had no reference for the amount he received and disbursed from January to June 1991. He would write in small slips and thereafter, would destroy them and therefore, was not in a position to give details about the disbursement of the amount and the persons relating to the receipts and disbursement of the funds. He received Rs. 27,86,000 in the month of June 1991 and disbursed the same leaving a balance of Rs. 4,73,500 and that he delivered the balance amount and Rs. 6,00,000 given by Sampath Kumar, i.e., up to July 8, 1991, in July 1991. He received Rs. 1,40,000 from Sampath Kumar on July 8, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presented Rs. 33,20,000 received by him as instructed by Srinivasagam; he disbursed Rs. 24,33,448 as per the instruction of Srinivasagam. Similarly, "21,740.60" mentioned in the second sheet represented Rs. 21,74,060 received by him as instructed by Srinivasagam; and he disbursed Rs. 23,49,460 to one Raju, Sundar Nagar, Trichy, on July 6, 1991, as directed by Srinivasagam. As per the said two sheets, he had received Rs. 54,94,060 and disbursed Rs. 52,82,948 from January 1991, as per the instructions of Srinivasagam. The addresses of the persons to whom the amounts were delivered were not known. He confirmed the statement made on July 9, 1991, that Basheer gave him a sum of Rs. 60,00,000 in Trichy as per the instructions of Srinivasagam and disbursed Rs. 59,60,000 and the balance of Rs. 40,000 was given to Muthuraman. He also identified the photo of Basheer and stated that Basheer came and collected Rs. 1,40,000 on July, 9, 1991, which was to be handed over to Krishnasamy at his shop Raja Traders. He also stated that except the lodging and conveyance expenses, he did not receive any commission for the above money transactions and he only assisted his brother-in-law Srinivasagam in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contravention of the Customs Duty Act and also FERA. When the petitioner seeks for cross-examination of the witnesses who have said that the recovery was made from the petitioner, necessarily an opportunity requires to be given for the cross-examination of the witnesses as regards the place at which recovery was made. Since the dispute concerns the confiscation of the jewellery, whether at the conveyor belt or at the green channel, perhaps the witnesses were required to be called. But in view of the confession made by him, it binds him and, therefore, in the facts and circumstances of this case the failure to give him the opportunity to cross-examine the witnesses is not violative of principle of natural justice. It is contended that the petitioner had retracted within six days from the confession. Therefore, he is entitled to cross-examine the panch witnesses before the authority takes a decision on proof of the offence. We find no force in this contention. The Customs officials are not police officers. The confession, though retracted, is an admission and binds the petitioner. So there is no need to call panch witnesses for examination and cross-examination by the petitioner." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ERA, 1973, as mentioned under section 56 of the FERA, 1973, is an offence and the person who commits such offence can be prosecuted by competent court and be punished as prescribed therein. 142. Concedingly, the FERA, 1973, was repealed and replaced by FEMA, 1999, taking into account substantial increase in our foreign exchange reserves, growth in foreign trade, rationalization of tariffs, current account convertibility, liberalization of Indian investments abroad, increased access to external commercial borrowings by Indian corporates and participation of foreign institutional investors in our stock markets. Thus FERA, 1973, stood repealed and FEMA, 1999, came to be enacted with effect from June 1, 2000, with a repealing and saving clause namely section 49 of the FEMA, 1999, which reads as follows: "Section : 49 Repeal and saving. (1) The Foreign Exchange Regulation Act, 1973 (46 of 1973) is hereby repealed and the Appellate Board constituted under sub-section (1) of section 52 of the said Act (hereinafter referred to as the repealed Act ) shall stand dissolved. (2) On the dissolution of the said Appellate Board, the person appointed as Chairman of the Appellate Board a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General Clauses Act, 1897 (10 of 1897) with regard to the effect of repeal." 143. Admittedly, there is no provision prescribing any punishment for any violation of the provisions of the FEMA, 1999 similar to section 56 of the FERA, 1973. 144. Section 49(3) of the FEMA, 1999 prescribes a statutory limitation that no court shall take cognizance of an offence under the repealed Act, namely, the FERA, 1973 and no adjudication officer shall take notice of any contravention under section 51 of the repealed Act, after the expiry of a period of two years from the date of the commencement of the Act. 145. As per section 49(4) of the FEMA, 1999, all offences committed under the repealed Act shall be governed by the provisions of the repealed Act as if that Act had not been repealed. Therefore, no doubt, the present appeals have to be disposed of, holding that the offences committed by the respondents/accused, which are the subject-matter in the above appeals, shall continue to be governed by the provisions of the repealed Act, FERA, 1973. 146. Mr. K. Kumar, learned counsel for the appellant, therefore, strenuously contends that the offence said to have been committed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... describes an offence created by an earlier statute and imposes a different punishment or varies the procedure, the earlier statute is repealed by implication. 151. It is apposite to refer to the following observation in Michell v. Brown [1858] 120 ER 909, 912 : "It is well settled rule of construction that, if a later statute again describes an offence created by a former statute and affixes a different punishment, varying the procedure, the earlier statute is repealed by the later statute." 152. The above ratio is also supported by the decision in Smith v. Benabo [1937] 1 All ER 523. 153. Indeed, in Regina v. Youle [1861] 158 ER 311, 315, it is held that: "If a statute deals with a particular class of offences, and a subsequent Act is passed which deals with precisely the same offences, and a different punishment is imposed by the later Act, I think that, in effect, the Legislature has declared that the new Act shall be substituted for the earlier Act." 154. In another occasion, when the Terrorist and Disruptive Activities (Prevention) Act, 1985 was repealed and replaced by the Terrorist and Disruptive Activities (Prevention) Act, 1987, prescribing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... litan Magistrate, Economic Offences I, Madras, and direct a new trial to be had upon a charge framed in whatever manner he thinks fit, and complete the trial expeditiously and pronounce the judgment within six months from the date of receipt of copy of this order; ( ii )the respondent/accused in Crl. Appeal No. 23 of 1995 is found guilty for the offence punishable under section 9(1)( d ) read with section 56(1)( i ) of the FERA, 1973 (two counts); ( iii )the respondent/accused in Crl. Appeal No. 32 of 1995 is found guilty for the offence punishable under section 9(1)( b ) read with section 56(1)( i ) of the FERA, 1973 (two counts); ( iv )the respondent/accused in Crl. A. No. 33 of 1995 is found guilty for the offence punishable under section 9(1)( b ) read with section 56(1)( ii ) of the FERA, 1973 (three counts); and ( v )the respondents/accused in Crl. Appeal No. 148 of 1995 are found guilty for the offences punishable under section 9(1)( b ) read with section 56(1)( i ) of the FERA, 1973 (one count each) and section 9(1)( d ) read with section 56(1)( i ) of the FERA, 1973 (one count each). 158. However, before imposing punishment, the respondents/accused are directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h s case, referred to supra, giving the benefit of the legislative benevolence to the respondents/accused, and exercising the discretionary powers conferred under section 56 of the FERA, 1973, to impose a lesser sentence for adequate and special reasons that are put forth by the respondents/accused in the respective criminal cases, this court, passes the following order : ( i )allow the appeal, in Crl. A. No. 31 of 1995, set aside the judgment of acquittal of the learned Additional Chief Metropolitan Magistrate, Economic Offences I, Madras, dated April 7, 1994 made in C.C. No. 676 of 1991, remit the matter to the learned Additional Chief Metropolitan Magistrate, Economic Offences I, Madras, and direct a new trial to be had upon a charge framed in whatever manner he thinks fit, and complete the trial expeditiously and pronounce the judgment within six months from the date of receipt of copy of this order ; ( ii ) the respondent/accused in Crl. A. No. 23 of 1995 is found guilty for the offence punishable under section 9(1)( d ) read with section 56(1)( i ) of the FERA, 1973 and sentenced till the rise of the court, and also to pay a fine of Rs. 5,000 for each of two counts; ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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