TMI Blog2014 (2) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Appellants, if at all. The statements by Rajeev Wadhwa and Arun Sharma have been retracted. Consequently the ED cannot take advantage of Section 72 FERA as regards presumption of the correctness of those documents. The presumption was a rebuttable one and in the present case must be held to have stood rebutted on account of the statements of the co-accused being retracted. There appears to be no reliable and independent evidence to show that Arun Sharma acquired foreign exchange worth ₹ 6 lakhs and sold foreign exchange of that value to Rakesh Kapoor or that Rajeev Wadhwa acquired foreign exchange of US$ 72,800 and sold them to Rakesh Kapoor or that Rakesh Kapoor acquired foreign exchange of the above worth from Arun Sharma and Rajeev Wadhwa. The orders against the appellant are not sustainable and accordingly set aside. - Crl.A. No. 134 of 2008, Crl.A. No. 138 of 2008, Crl.A. No. 188 of 2008 - - - Dated:- 19-2-2014 - S. Muralidhar,JJ. For the Appellant : Mr. Puneet Mittal with Mr. Nitin Sharma, Mr. Ankur Aggarwal and Mr. Ankit Goel, Advocates. For the Respondents : Mr. Anupam Yadav, Advocate for Mr. Vineet Malhotra, Advocate for UOI. Mr. Sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... They were required to issue certificates of encashment in form ECR and information of the purchase of foreign currency towards settlement of bills for services rendered irrespective of whether the encashment certificate was asked for. According to the ED, their investigation, however, revealed that these three persons did not issue the requisite certificates against the foreign currency tendered to them and they instead purchased/acquired other foreign exchange tendered by the public without any previous general or special permission of the RBI. 5. According to the ED, the investigations revealed that during 1987 to April 1989, Arun Sharma had purchased/acquired foreign exchange worth Rs. 6 lakhs and foreign exchange of various denominations of US$, UK etc. and that he also sold foreign exchange worth Rs. 6 lakhs to Rakesh Kapoor at rates of exchange other than those authorised by the RBI without any previous general or special permission of the RBI, and that the seven gold biscuits, two small gold coins had been seized from the locker held by Mr. Arun Sharma and the sum of Rs. 29,500 out of the seized sum of Rs. 49,500 were towards the proceeds of the foreign exchange sold. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n documents. 10. On 17th February 1992, a hearing was fixed before the Special Director (SD), ED and Arun Sharma on that date requested for issuance of summons for cross-examination of Sunil Kher, witness. This requested was reiterated on 20th May 1992. By a letter dated 22nd June 1992, the SD rejected the request and fixed the hearing on 31st August 1992. The hearings on 31st August 1992; 30th April 1993 and 15th June 1994 were adjourned at the request of the noticees. Thereafter more than one year and four months, no effective hearing took place. The case was listed on 19th October 1995 and again adjourned. At the next hearing on 10th January 1996, none appeared. According to the Appellants, no intimation was received of the dates of hearing on 26th July 1996, 31st July 1996; 6th December 1996; 4th February 1997; 22nd March 2000; 27th March 2000; 14th August 2002 and 22nd December 2013. One of the striking features of the case is the inordinate delay in disposal of the Memorandum/SCN by the DD. 11. In the meanwhile, the FERA was repealed by the Foreign Exchange Management Act, 1999 (FEMA). The proceedings purportedly continued thereafter. 12. According to the Appellants, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ravention of any of the provisions of this Act (other than those referred to in that section) or of any rule, direction or order made thereunder, the adjudicating officer shall hold an inquiry in the prescribed manner after giving that person a reasonable opportunity for making a representation in the matter and if, on such inquiry, he is satisfied that the person has committed the contravention, he may impose such penalty as he thinks fit in accordance with the provisions of that section. 16. In the context of the present case, reasonable opportunity to the noticees included affording them an opportunity of cross-examining the witnesses of the ED. Placed on record is the letter dated 14th January 1991 written by Rakesh Kapoor to the ED making a specific request for cross-examination. He reiterated this request in the letter dated 23rd December 1996. Yet, the record does not show that any such opportunity was granted. On the other hand, it shows that without assigning any reasons, it was decided by the SD not to further proceed with the examination of the witnesses. There is no doubt, therefore, that an adequate opportunity was not granted to any of the Appellants to crossexami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India (2008) 16 SCC 537 the Supreme Court held (SCC @ p. 548): 26......The initial burden to prove that the confession was voluntary in nature would be on the Department. The special or peculiar knowledge of the person proceeded against would not relieve the prosecution or the Department altogether of the burden of producing some evidence in respect of that fact in issue. It may only alleviate that burden to discharge and very slight evidence may suffice. 20. Again in Mohtesham Mohd. Ismail v. Spl. Director, Enforcement Directorate (2007) 8 SCC 254, it was observed as under (SCC @ p. 263): 20. We may, however, notice that recently in Francis Stanly v. Intelligence Officer, Narcotic Control Bureau, Thiruvananthapuram (2006) 13 SCC 210, this Court has emphasised that confession only if found to be voluntary and free from pressure, can be accepted. A confession purported to have been made before an authority would require a closer scrutiny. It is furthermore now well settled that the court must seek corroboration of the purported confession from independent sources. 21. Apart from the above statements of the co-accused which were retracted, there was no independent rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act etc. the detaining authority should consider the subsequent retraction and record its opinion before accepting the inculpatory statement lest the order will be vitiated. 23. Neither the AO nor the impugned order of the AT, have dwelt on the recovery of the foreign exchange from the guest lockers, and connected those recoveries with the Appellants. The specific case of Rakesh Kapoor was that he did not have in his possession the keys of Guest Locker No. 55 and the duplicate key was provided by the hotel management though the locker was not found to be allotted to any person. It is only from the statements of the co-accused which were in any event retracted, that the connection between Rakesh Kapoor and Locker No. 55 was sought to be made. Therefore, the evidence in this regard was weak and not corroborated by other independent witnesses. Moreover, it is not as if all the lockers were checked by the ED to determine which of the guest lockers were in fact being used by the Appellants, if at all. 24. Mr. Bansal, learned counsel for the ED, referred to Section 72(1) of the FERA and to the fact that the slips recovered from the lockers were sufficient to show that the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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