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Smt. N. Sasikala Versus The Assistant Director, Enforcement Directorate, Government of India

2017 (2) TMI 656 - MADRAS HIGH COURT

Complainant preferred a complaint under Sections 8(1), 9(1)(c) and 9(1)(a) of the Foreign Exchange Regulation Act, 1973, punishable under Section 56(1)(i) of Foreign Exchange Regulation Act, 1973 - Held that:- On perusal of the entire materials available on record, it is clearly revealed that so many incriminating materials available against the petitioner/A3. It is also revealed that the petitioner/A3 was informed by A2 about the business transaction of the A1 Company then and there. - Furt .....

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titioner/A3 that the petitioner is not in-charge of the company and she does not know about the contravention took place in the day today administration of the company is not acceptable, at the present stage, since so many materials were produced on the side of the Enforcement authorities. - Further, the learned Senior counsel appearing for the petitioner has submitted that at the time of interrogation by the respondent authorities, the petitioner has denied all the questions and she has spe .....

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ailable on record, it is presumed that the petitioner/A3 is responsible and liable for the contraventions done by the A1 Company and there are sufficient records and evidences produced on the side of the enforcement authority. Hence, this court is of the considered view that there are prima facie materials available to frame charges against the petitioner/A3 under Sections 8(1), 9(1)(a) and 9(1)(c) of the Foreign Exchange Regulation Act, 1973 and the trial Judge has rightly come to the conclusio .....

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revision is directed against the order passed in Crl.M.P.No.1267 of 2014 in C.C.No.163 of 1996, dated 18.05.2015 by the Additional Chief Metropolitan Magistrate (E.O.I), Egmore, Chennai, refusing to discharge the petitioner from the case. 2. The facts leading to the case are as follows:- The respondent/complainant preferred a complaint under Sections 8(1), 9(1)(c) and 9(1)(a) of the Foreign Exchange Regulation Act, 1973, punishable under Section 56(1)(i) of Foreign Exchange Regulation Act, 1973 .....

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discharge her from the case. After hearing both sides and considering the entire evidence available on record, the learned Additional Chief Metropolitan Magistrate, (EO.I), Chennai-8, has dismissed the discharge petition filed by the petitioner holding that there are incriminating materials available to frame charges against the petitioner. Aggrieved by the same, the present revision has been filed by the petitioner/A3. 3. Mr.B.Kumar, the learned Senior counsel appearing for the petitioner would .....

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o see that the company had a Managing Director, who has arrayed as A2 and that the petitioner/A3 was only an ordinary Director and that the learned Judge failed to see that to invoke vicarious liability under Section 68 of the Act, the complainant must make averments in the complaint itself, is Director concerned was in-charge of and response for the day to day management of the company, where there is no such averment made in the complaint, it is wholly not maintainable against the Director and .....

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rticipated in the affairs of the company in any other manner and that the learned Judge failed to see that acing as Chairperson in a particular meeting of the Board of Directors of the company, cannot, by any reason, show on the Chairperson must be considered as having been in-charge of the day today administration of the company and that the learned Judge failed to see that no material has been produced to show that J.Jay TV ever made TV Broadcast and that the learned Judge failed to see that t .....

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een examined in this case and that the Officer of the Enforcement has no jurisdiction to go to Malaysia and exercise the power in a country other than India and that all the legislation by the Parliament can only have territorial operation within India. In support of his contention, the learned Senior counsel appearing for the petitioner relied upon the following decisions:- 01.(2005)8 SCC 89 [S.M.S. Pharmaceuticals Ltd. vs. Neeta Bhalla and another]; 2.(2011)1 SCC 176 [Pepsico India Holdings Pr .....

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Kalani alias Pappu Kalani vs. State of Maharashtra] 9.(1994)3 SCC 440 [Directorate of Enforcement vs. Deepak Mahajan and another]; 10.(2009)6 SCC 65 [Narender G. Goel vs. State of Maharashtra and another] 11.2002 CRL.L.J.3026 [J.Jayalalitha and etc., vs, State and others] 12.1983(4) Delhi Reported Judgments 272 [Smt. Motia Rani Bhatia vs. Addl. Director of Enforcement & others] 13.(2012)5 SCC 661 [Aneeta Hada vs. Godfather Travels and Tours Private Limited] 14.2013-2-L.W (Crl.)289 [S.Balasub .....

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ghole vs. Manikrao Shivaji Kokate]. 21.(1986)2 SCC 716 [R.S.Nayak Vs. A.R.Antulay] wherein it has been held that: 43.As pointed out by the Constitution Bench in the judgment to which reference has been made, the relevant Sections of the Code of Criminal Procedure ('Code' for short) for the trial of a case of this type are Sections 244, 245 and 246, Section 245(1) provides:- If, upon taking all the evidence referred to in Section 244 the Magistrate considers, for reasons to be recorded, t .....

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m, he shall frame in writing a charge against the accused. The Code contemplates discharge of the accused by the Court of Sessions under Section 227 in a case triable by it cases instituted upon a police report are covered by Section 239 and cases instituted otherwise than on police report are dealt with in Section 245. The three sections contain somewhat different provisions in regard to discharge of the accused. Under Section 227, the Trial Judge is required to discharge the accused if he cons .....

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ordered before the recording of evidence and the consideration as to whether charge has to be framed or not is required to be made on the basis of the record of the case, including documents and oral hearing of the accused and the prosecution or the police report, the documents sent along with it and examination of the accused and after affording an opportunity to the two parties to be heard. The stage for discharge under Section 245, on the other hand, is reached only after the evidence referr .....

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CC On Line Mad 913 [Karam Chand Thaper and Brothers (Coal Sales) Ltd. vs. T.G.Vasanth Gupta], wherein, it has been held as follows:- 7.The counsel for the respondent argued that since the company has not been added as an accused, the Managing Director alone cannot be an accused. To this, the revision petitioner replied what is complained against the respondent is the offence of cheating which requires a mental element. A corporate body cannot have a mental status. Further, the complaint by the c .....

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ndent. If this evidence remains unrebutted, a conviction can be sustained. The mere fact that ultimately the accused may be acquitted is not a ground to discharge the accused exercising the power under Section 245(1) Cr.P.C. Therefore, at that stage, the Magistrate has no power to assess the evidence and pass a judgment. Therefore, the act of the Magistrate in assessing the evidence and rendering a judgment holding that some evidence cannot be believed in the absence of corroborative evidence. T .....

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le. It cannot doubt the statement made in evidence. Therefore, applying the test laid down by the Supreme Court in Antulay's case, the power of the Magistrate under Section 245(1) is only to see whether a prima facie case has been made out. For that, he has to take the evidence as it is and arrive at a conclusion. Applying this test, the order passed by the Magistrate does not appear to be within the scope of Section 245(1) Cr.P.C. Therefore, the order of the Magistrate is liable to be set a .....

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ng therefrom, taken at their face value, discharged the existence of all the ingredients constituting the alleged offence. At that stage, the court is not expected to go deep into the probative value of the materials on record. What needs to be considered is whether there is a ground for presuming that the offence has been committed and not a ground for convicting the accused has been made out. At that stage, even strong suspicion found on material which leads the court to form a presumptive opi .....

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o put it differently, if the court were to think that the accused might have committed the offence it can frame the charge, though for conviction the conclusion is required to be that the accused has committed the offence. It is apparent that at the stage of framing of a charge, probative value of the materials on record cannot be gone into; the materials brought on record by the prosecution has to be accepted as true at that stage. 25.(2009)14 SCC 115 [Ajaykumar Ghose vs. State of Jharkhand &am .....

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rge. It is after all this, evidence is taken, then the Magistrate4 has to consider under Section 245(1) CrPC, whether any case against the accused is made out, which, if unrebutted, would warrant his conviction, and if the Magistrate comes to the conclusion that there is no such case made out against the accused, the Magistrate proceeds to discharge him. On the other hand, if he is satisfied about the prima face case against accused, the Magistrate would frame a charge under Section 246(1) CrPC. .....

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ction. But the fall out of the above practice is this : Suppose the trial Court, in a case, upholds a particular objection and excludes the material from being admitted in evidence and then proceeds with the trial and disposes of the case finally. If the Appellate or Revisional Court, when the same question is recanvassed, could take a different view on the admissibility of that material in such cases the Appellate Court would be deprived of the benefit of that evidence, because that was not put .....

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d help acceleration of trial proceedings. 14. When so recast, the practice which can be a better substitute is this : Whenever an objection is raised during evidence taking stage regarding the admissibility of any material or item of oral evidence the trial Court can make a note of such objection and mark the objected document tentatively as an exhibit in the case (or record the objected part of the oral evidence) subject to such objections to be decided "at the last stage in the final judg .....

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will have two advantages. First is that the time in the trial Court, during evidence taking stage, would not be wasted on account of raising such objections and the Court can continue to examine the witnesses. The witnesses need not wait for long hours, if not days. Second is that the superior Court, when the same objection is recanvassed an reconsidered in appeal or revision against the final judgment of the trial Court, can determine the correctness of the view taken by the trial Court regard .....

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erein it has been held as follows:- 31.The position in made abundantly clear by Section 3 of the DIPLOMATIC AND CONCSULAR OFFICER (Oath and Fees) Act, 1948, which this Court's office missed and which provides inter alia as follows: (1) Every diplomatic or consular officer may, in any foreign country or place where he is exercising his functions administer any oath and take any affidavit and also do any notarial act which any notary public may do within a State; and every oath, affidavit and .....

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gnature being the seal or signature of that person, of the official character of that persons. 32.Now that being the express statute in India, there is no difficulty here. The Notarial Act of Elizabeth Levy has not only been certified under the seal of the County Clerk and Clerk of Supreme Court, New York, but has also been forwarded under the certificate of the Consulate General of India in New York for legislation of the seal of the Clerk of the County of New York. In that context, I see no di .....

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the practice and procedure of the Court. 33.As I have said above, admitting this affidavit on the records of this Court will be following the practice and procedure of this Court. That is how I understand the cursus curiae of this Court for may years. 4. Per contra, Mr.G.Rajagopalan, the learned Additional Solicitor General appearing for the respondent would contend that there are sufficient materials available against the petitioner/A3 and the petitioner/A3 has passed the resolution of the com .....

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hat there is no incriminating material available against the petitioner is not at all maintainable in law. Hence, he prayed that the revision filed by the petitioner has to be dismissed. 5. This court has carefully heard the submissions made on either side and perused the entire materials available on record. 6. Admittedly, the petitioner is one of the Directors in J.J TV Private Limited. It is also admitted that the petitioner was acting as Chairperson at a meeting and she signed in all the rel .....

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the company in any other manner. 8. On reading of the complaint, it is mentioned that the Chairperson and Director of M/s.J.Jay TV. Pvt. Ltd., as A3. Mere mentioning in the order as Chairman and Director is not a ground to discharge the petitioner in this case. 9. At this juncture, it is relevant to refer Sections 8(1), 9 and 68 of FERA, which reads as follows:- Section 8(1):- Restrictions on dealing in foreign exchange: Except with the previous general or special permission of the Reserve Bank, .....

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of this sub- section, a person who deposits foreign exchange with another person or opens an account in foreign exchange with another person, shall be deemed to lend foreign exchange to such other person. (2)Except with the previous general or special permission of the Reserve Bank, no person, whether an authorised dealer a money changer or otherwise, shall enter into any transaction which provides for the conversion of Indian currency into foreign currency or foreign currency into Indian curre .....

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ted to him is subject, and where any foreign exchange so acquired cannot be so complied with, the said person shall, within a period of thirty days from the date on which he comes to know that such foreign exchange cannot be so used or the conditions cannot be complied with, sell the foreign exchange to an authorised dealer or to a money changer. (4)For the avoidance of doubt, it is hereby declared that where a person acquires foreign exchange for sending or bringing into India any goods but sen .....

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o acquired otherwise than for the purposes for which it was acquired. (5)Nothing in this section shall be deemed to prevent a person from buying from any post office, in accordance with any law or rules made thereunder for the time being in force, any foreign exchange in the form of postal orders or money orders. Section 9: Restrictions on payment: (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 co .....

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uding an authorised 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 authorised dealer. (c)draw, issue or negotiate any bill of exchange or promissory note or acknowledge any debt, so that a right (whether actually or contingent) to receive a payment is created or transferred in favour of any person resident outside India: (d)make any payment to or for the credit of any person .....

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to be proceeded against and punished accordingly. Provided that nothing contained in this sub section shall render any such person liable to punishment, if he proves that the contravention took place without his knowledge or that he exercise all due diligence to prevent such contraventions. (2)Notwithstanding anything contained in sub section 1), where a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder has been committed by a company and it i .....

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follows:- 39. Power to examine persons.-The Director of Enforcement or any other officer of Enforcement authorised in this behalf by the Central Government, by general or special order, may, during the course of any investigation or proceeding under this Act, (a) require any person to produce or deliver any document relevant to the investigation or proceeding; (b) examine any person acquainted with the facts and circumstances of the case. 71.Burden of proof in certain cases. (1) Where any person .....

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hich the permission to acquire it was granted shall be on him. (3) If any person is found or is proved to have been in possession of any foreign exchange exceeding in value 1[fifteen thousand rupees], the burden of proving that the foreign exchange came into his possession lawfully shall be on him. 72. Presumption as to documents in certain cases. Where any document (i) is produced or furnished by any person or has been seized from the custody or control of any person, in either case, under this .....

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ay be, shall (a) presume, unless the contrary is proved, that the signature and every other part of such document which purports to be in the handwriting of any particular person or which the court may reasonably assume to have been signed by, or to be in the handwriting of, any particular person, is in that person s handwriting, and in the case of a document executed or attested, that it was executed or attested by the person by whom it purports to have been so executed or attested; (b) admit t .....

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n of the A1 Company then and there. 12. Further, the petitioner/A3 has acted as Chairperson for the Board of Directors of the Company meeting and passed resolution in the Board Meeting and A1 Company entered into contract with some other companies and the subsequent transactions were also informed by A2 to the petitioner/A3. Hence, it is very reasonable to presume that the petitioner/A3 was knowing about the in-charge and responsibility for the conduct of the business. Hence, the argument of the .....

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