TMI Blog2014 (10) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... 20.4.1989, was not available with the officers of Enforcement Department at the time of the raid on 25.10.1989, yet to state that the aforesaid record was not available when the second statement was made on 26.10.1989 at the office of the Enforcement Directorate, is quite ununderstandable. It is pertinent to mention, that the second statement was recorded by the Chief Enforcement Officer when the appellant – A. - in the absence of having established through cogent evidence, that the appellant had made the above statement dated 20.4.1989, it was not open to the Enforcement Directorate to place reliance on the same, for establishing the charges levelled against the appellant in memorandum dated 12.3.1990. Had the statements of the appellant and his wife been corroborated by independent evidence of the nature indicated hereinabove, there could have been room for accepting the veracity of the statements made by the appellant – A. Tajudeen and his wife T. Sahira Banu to the officers of the Enforcement Directorate. Unfortunately, no effort was made by the Enforcement Directorate to gather any independent evidence to establish the veracity of the allegations levelled against the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gulation Act, 1973 (hereinafter referred to as, the 1973 Act). Section 9(1)(b) aforementioned, is being extracted hereunder:- 9. Restrictions on payments (1) Save as may be provided in, and in accordance with any general or special exemption from the provisions of this sub-section which may be granted conditionally or unconditionally by the Reserve Bank, no person in, or resident in, India shall (a) xxx xxx xxx (b) receive, otherwise than through an authorized dealer, any payment by order or on behalf of any person resident outside India; Explanation For the purposes of this clause, where any person in, or resident in, India receives any payment by order or on behalf of any person resident outside India through any other person (including an authorized dealer) without a corresponding inward remittance from any place outside India, then, such person shall be deemed to have received such payment otherwise than through an authorized dealer; Based on the aforesaid statutory provision, and the factual position noticed hereinabove, the Enforcement Directorate initiated proceedings against the appellant under Section 50 of the 1973 Act. 3. Before adjudicating upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid house and seized a sum of ₹ 8,24,900/- as set out in the Mahazar. I wanted to establish a jewellery shop in Madras. I commenced a jewellery shop in the name and style of M/s. Banu Jewellers on 19.10.1989 at No. 12, Ranganathan Road, Nungambakkam, Madras-34. It is a partnership business wherein my wife T. Sahira Banu is a partner. For that I sold my wife s gold jewels and also taken hand loans from my friends. The said business was started with a capital of ₹ 2,20,000/- in my wife s name. The other partner Mr. S. Muthuswamy of No. 20, Indira Nagar, Adyar (I do not remember his address) has contributed to the capital a sum of ₹ 30,000/-. For expanding the said shop and for improving the business, I required about ₹ 9,00,000/-. My relatives are working in Singapore and Malaysia. One Abdul Hameed from my native place is carrying on business for the past 15 years at no. 24, Sarangoon Road, Singapore. He is dealing in clothes, VCRs etc. He came down to Madras about 2 months back. At that time, he met me at my residence. I told him that a jewellery business to be commenced and that I require about ₹ 9,00,000/- for the said business and to dischar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so did not disclose his name and address. He must be around 40 years old. He is also medium built and also medium height. Since both of them left my house within a few minutes on delivering the said sums, I could not notice their identifiable marks. I was making arrangements to export readymade garments. In respect thereof, I required the place apart from my house to meet my customers. For that I have taken on rent room no. 402, in Ganpat Hotel, Nungambakkam High Road about 4- 5 months back from its owner one M.R. Prabhakaran. I am using the telephone no. 477409 in the said shop, A/C machine and fridge available in the said room. Since Export business did not suit me, I left it. The said room is in my possession. (emphasis is ours) (v) During the course of the raid conducted on 25.10.1989, the appellant - A. Tajudeen, was detained by the officers of the Enforcement Directorate. His statement was again recorded on 26.10.1989 by the Chief Enforcement Officer, whilst he was in custody. Relevant portion of his above mentioned statement is being extracted hereunder:- I have earlier given statement before you on 25.10.1989. In that I have disclosed that by searching my hous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement of his wife T. Sahira Banu was also recorded on 26.10.1989. The same was allegedly scribed by M.J. Jaffer Sadiq, a nephew, and then signed by T. Sahira Banu. In the above statement, T. Sahira Banu, the wife of A. Tajudeen admitted the recovery of ₹ 8,24,900/- by the officers of the Enforcement Directorate, from the residence of the appellant i.e., no. 6, Dr. Muniappa Road, Kilpauk, Madras. (vii) On 27.10.1989, A. Tajudeen and T. Sahira Banu retracted their earlier statement(s), alleging that the same had been recorded against their will and under the threat and compulsion of the officers of the Enforcement Directorate. 4. In response to the memorandum dated 12.3.1990, the appellant filed a reply (which is available on the record of the present case as Annexure P-9). In his reply, he denied having made any statement on 20.4.1989. He asserted, that a copy of the aforesaid statement dated 20.4.1989 had never been furnished to him, nor had been relied upon in the memorandum dated 12.3.1990. He also denied the factual contents of the statements dated 25.10.1989 and 26.10.1989. He denied having ever met Abdul Hameed. He also denied, that there was any occasion for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 1,00,000/- for contravening the provisions of Section 9(1)(b) of the 1973 Act. Dissatisfied with the order dated 22.4.1991 passed by the Additional Director of Enforcement, Southern Zone, Madras, the appellant preferred an appeal before the Foreign Exchange Regulation Appellate Board (hereinafter referred to as, the Appellate Board). The aforesaid appeal bearing number 316 of 1991 was allowed by an order dated 31.12.1993. While allowing the appeal, the Appellate Board directed the refund of penalty of ₹ 1,00,000/- imposed on the appellant. The Appellate board also quashed the direction pertaining to the confiscation of ₹ 8,24,900/- seized from the residence of the appellant. 6. Aggrieved by the order passed by the Appellate Board, the Union of India through the Director of Enforcement preferred an appeal under Section 54 of the 1973 Act, before the High Court. The High Court allowed the above appeal being C.M.A. NPD no. 1282 of 1994 by an order dated 28.9.2006. While allowing the aforesaid appeal, the High Court placed reliance on the statement made by the appellant, before the officers of the Enforcement Directorate on 20.4.1989. The aforesaid statement was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve statement dated 20.4.1989 in the memorandum dated 12.3.1990. It was further submitted, that a copy of the aforesaid statement dated 20.4.1989 was never furnished to the appellant. In fact it was the vehement contention of the learned counsel for the appellant, that no such statement was ever made by the appellant - A. Tajudeen, to the officers of the Enforcement Directorate. Learned counsel for the appellant, in fact emphatically invited our attention to the fact, that the High Court in para 16 of the impugned judgment had inter alia, observed as under:- 16. .. Referring to the explanation given by the officer that they had no record of the statement made on 20.4.1989 at the time when the statement was made by Tajudeen on 26.10.1989 .. It was also submitted, that if the appellant had made any such statement on 20.4.1989, as was now being relied upon by the Enforcement Directorate, he would have most definitely been proceeded against for violation of the provisions of Section 9(1)(b) of the 1973 Act. The very fact that he was not proceeded against, shows that no such earlier statement may have been recorded by the appellant on 20.4.1989. 9. We have given our thoughtfu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le inference, that the record was not available at all. For the reasons recorded hereinabove, we are satisfied in holding, firstly, that the statement dated 20.4.1989 could not be relied upon by the Enforcement Directorate to establish the allegations levelled against the appellant through the memorandum dated 12.3.1990. And secondly, in the absence of having established through cogent evidence, that the appellant had made the above statement dated 20.4.1989, it was not open to the Enforcement Directorate to place reliance on the same, for establishing the charges levelled against the appellant in memorandum dated 12.3.1990. 10. With reference to the statement of the appellant dated 20.4.1989, it is also necessary to record, that we had an impression during the course of hearing, that the above statement would lead us to a clearer understanding of the truth of the matter. After the hearing concluded on 6.6.2014, we required the learned counsel for the respondent to hand over to us the record of the case. We had clearly indicated to learned counsel, that the purpose for this was, that we wished to examine the alleged statement of the appellant dated 20.4.1989, along with the reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by two independent witnesses, namely, R.M. Subramanian and Hayad Basha. In addition to the above, the Enforcement Directorate also relied upon the newspaper sheets of the Hindu and Jansatha, in which the bundles of notes recovered from the residence of the appellant, were wrapped. Insofar as the Hindu newspaper sheets are concerned, they were of the Delhi and Bombay editions dated 19.2.1989, 14.4.1989, 23.7.1989 and 4.10.1989. The sheets of the Jansatha newspaper also pertain to its Delhi and Bombay editions of February, 1989 and 23.10.1989. 12. Insofar as the aforesaid remaining evidence is concerned, it was the vehement contention of the learned counsel for the appellant, that the same was not sufficient to discharge the onerous responsibility of the Enforcement Directorate, to establish the charge levelled against the appellant. It was the submission of the learned counsel for the appellant, that reliance could not be placed on the statements made by the appellant, as also, his wife (on 25.10.1989 and 26.10.1989). In this behalf, it was sought to be cautioned, that if this manner of establishing charges was affirmed, the officers of the Enforcement Directorate, could easily ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be running his business. 13. In order to contend that the statements made by the appellant A. Tajudeen and his wife T. Sahira Banu could not be relied upon in law, learned counsel for the appellant, placed reliance on K.T.M.S. Mohd. v. Union of India, (1992) 3 SCC 178 and invited our attention to the observations made in paragraph 34. The same is extracted hereunder: 34. We think it is not necessary to recapitulate and recite all the decisions on this legal aspect. But suffice to say that the core of all the decisions of this Court is to the effect that the voluntary nature of any statement made either before the Custom Authorities or the officers of Enforcement under the relevant provisions of the respective Acts is a sine quo non to act on it for any purpose and if the statement appears to have been obtained by any inducement, threat, coercion or by any improper means that statement must be rejected brevi manu. At the same time, it is to be noted that merely because a statement is retracted, it cannot be recorded as involuntary or unlawfully obtained. It is only for the maker of the statement who alleges inducement, threat, promise etc. to establish that such improp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f threat, coercion, etc. but the requirement is that it may appear to the court as such. 38. In the instant case, the investigating officers did not examine themselves. The authorities under the Act as also the Tribunal did not arrive at a finding upon application of their mind to the retraction and rejected the same upon assigning cogent and valid reasons 18herefore. Whereas mere retraction of a confession may not be sufficient to make the confessional statement irrelevant for the purpose of a proceeding in a criminal case or a quasi criminal case but there cannot be any doubt whatsoever that the court is obligated to take into consideration the pros and cons of both the confession and retraction made by the accused. It is one thing to say that a retracted confession is used as a corroborative piece of evidence to record a finding of guilt but it is another thing to say that such a finding is arrived at only on the basis of such confession although retracted at a later stage. 39. The appellant is said to have been arrested on 27.10.1994; he was produced before the learned Chief Metropolitan Magistrate on 28.10.1994. He retracted his confession and categorically stated the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken in the ultimate analysis, the innocence or guilt of the appellant will have to be determined on the basis of the statements made by the appellant and his wife (on 25.10.1989 and 26.10.1989) to the officers of the Enforcement Directorate. Therefore, for the case in hand, the above statements are not to be referred to as corroborative pieces of evidence, but as primary evidence to establish the guilt of the appellant. It is in this background, that we shall endeavour to apply the legal position declared by this Court, to determine the veracity and reliability to the statements, which later came to be retracted by the appellant and also by his wife. Insofar as the above statements are concerned, there is no doubt whatsoever, that they were all made either at the time of the raid, which was carried out by the officers of the Enforcement Directorate at the residence of the appellant, or whilst the appellant was in custody of the Enforcement Directorate. Immediately after the appellant was released on bail by the Additional Chief Metropolitan Magistrate, Madras on 27.10.1989, on the same day itself, both the appellant A. Tajudeen and his wife T. Sahira Banu addressed communications ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hered to show, whether he was related to the appellant from his paternal side. Furthermore, the Enforcement Directorate could have easily substantiated whether or not, as asserted by the appellant, the aforesaid Abdul Hameed had contacted him over telephone from Singapore, to inform him about the delivery of the amount recovered from his residence on 25.10.1989. Additionally, the Enforcement Directorate could have led evidence to establish that the aforesaid Abdul Hameed with reference to whom the appellant made statements on 20.4.1989, 25.10.1989 and 26.10.1989, was actually resident of Singapore, and was running businesses there, at the location(s) indicated by the appellant. Still further, the officers of the Enforcement Directorate could have ascertained the truthfulness of the factual position from Shahib, the shop boy of the appellant A. Tajudeen, whom he allegedly sent to hand over a sum of ₹ 60,000/- to Shahul Hameed (a relative of Abdul Hameed) of Village Pudhumadam. Had the statements of the appellant and his wife been corroborated by independent evidence of the nature indicated hereinabove, there could have been room for accepting the veracity of the statements m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90, the appellant had acknowledged the recovery of ₹ 8,24,900/- from his residence, but that acknowledgment would not establish the violation of Section 9(1)(b) of the 1973 Act. In the above view of the matter, we are of the opinion that the execution of the mahazar on 25.10.1989, is inconsequential for the determination of the guilt of the appellant in this case. 20. The only other independent evidence relied upon by the Enforcement Directorate is of pages from the Hindu and the Jansatha newspapers, in which the bundles of money were wrapped, when the recovery was effected on 25.10.1989. In view of the position expressed in the foregoing paragraph, we are satisfied that the charge against the appellant under Section 9(1)(b) of the 1973 Act, cannot be established on the basis of newspaper sheets, in which the money was wrapped. The newspaper sheets relied upon, would not establish that the amount recovered from the residence of the appellant A. Tajudeen was dispatched by Abdul Hameed from Singapore, through a person who was not an authorized dealer. 21. Based on the above determination, and the various conclusions recorded hereinabove, we are satisfied, that the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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