TMI Blog2019 (8) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1 have not been proved as the respondent has failed to discharge its burden. The Appellant Nos. 2 to 4, the Directors herein as such are not liable under Section 68 of FERA 1973. The orders and/or directions for production of the said file and inspection of the said original Fax message and the arrest memo of Mr. Rajneesh Verma by the Respondent became final and absolute and non-production thereof by the Respondent led to Adverse Inference being drawn under the Illustration (g) of Section 114 of the Indian Evidence Act, 1872 against the respondent even as per settled law - the impugned order dated 20th May, 2005 passed by the Special Director, Enforcement Directorate, New Delhi is not sustainable - appeal allowed. - FPA-FE-569/DLI/2005, FPA-FE-570/DLI/2005, FPA-FE-571/DLI/2005, FPA-FE-572/DLI/2005 - - - Dated:- 5-7-2019 - Justice Manmohan Singh Chairman And Shri G.C. Mishra Member For the Appellant : Shri R.K. Khanna, Advocate, Ms. Madhumool Chandani, Advocate For the Respondent : Shri Kaushlesh Pandey, Legal Consultant JUDGEMENT FPA-FE-569-572/DLI/2005 1. The above-me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in Moscow. However, he admitted that the company effected exports to M/s. AGIO Countertrade, Singapore who also have an office in Moscow; that AGIO Countertrade Pvt. Ltd., Singapore of Shri Ravindra Chamaria has share holding of about 20% in their company namely M/s. AGIO Exports Ltd; that M/s. AGIO Countertrade Pvt. Ltd., Singapore has offices in Moscow; that Mr. Ravindra Chamaria is not related to Rajesh Chamaria; that none of their directors as well as the company has any interest or shareholding or investment in M/s. AGIO Countertrade, Singapore. To a question as to what s the relation of AGIO Exports, Delhi to AGIO Countertrade, Singapore, AGIO Houston, AGIO Investment and AGIO Moscow, he stated that except AGIO Investment, Singapore who was holding about 20% shareholding in AGIO Delhi, other companies have no relation; that no RBI permission was applied for allotting shares (2-3) months back to M/s. AGIO Investment, Singapore. He further stated that he was discharging his duties under the directions of Shri K.K. Tekriwal and whatever communication he sent on behalf of M/s. AGIO Export Ltd., the same have been as per the orders of Shri K.K. Tekriwal. On being asked about the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave received the payment of US$ 5 lakhs from M/s. CDB ME RUBIN, St. Peterburg, Russia and they also forwarded a statement of advances received from Escrow Accounts from different buyers wherein the name of M/s. CDB-ME-RUBIN, Russia also appeared. v). M/s. O.P. Khaitan Company, Solicitor Advocates vide their forwarding letter No. OK/M-1066 dated 27.03.1995 enclosed an affidavit stated to have been signed by Shri S.N. Surekha, while denying the recovery of purported Xerox copy of fax message dated 3.4.1994, supposed to have been sent by him (Shri Surekha) to Mr. Rajesh Verma in Moscow Office, had alleged that this document was only produced by Shri R.K. Rawal, Officer of Enforcement. He further stated in the affidavit that in his statement made before the Enforcement Directorate he has stated that the same did not belong to them and that he did not know about this. He further stated therein that another document brought by Shri Rawal was Xerox copy of letter which was sent by his company to Canara Bank. Shri Surekha referred in his affidavit that both the aforementioned documents were not recovered from their office but alleged that they were brought in while t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the Memorandum was received by him on 19th September, 1995 and while denying charges requested to grant time in furnishing detailed reply to show cause notice. Shri Krishna K. Tekriwal vide his letter dated 05th October, 1995 intimated that he received the Memorandum on 20.09.1995 and requested to grant time in submitting the reply. He also denied the allegations leveled in the show cause notice. The documents relied upon were supplied to one Shri M.K. Singh representative of Shri K.K. Tekriwal on 05.01.1996. Also copies of the relied upon documents were supplied to the representative of M/s. AGIO Exports Ltd. on 18.12.1995. xi). Shri S.N. Surekha, on behalf of M/s. AGIO Exports Ltd., submitted reply vide letter dated 09.021996 and raised the objection regarding retention of seized documents based on which the show cause notice issued which has been received by them after expiry of six month from the date of seizure of the documents and that the notice is not valid and no action can be taken thereon. They also contended that the notice violated the principle of natural justice as there was no indication of nature of offence. He further wanted that reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igned plain paper purported fax message being Page 31 of File marked D out of 2425 seized documents from the Delhi office of the Appellant No. 1 on March 13, 1995, which was inadmissible in evidence under the law. The said document is denied by the appellants. 4. The appellants submits as follows:- a) On 13th March 1995 the Officers of the Enforcement Directorate searched the office premises of the Appellant No. 1 at New Delhi which started at 10.30 a.m. in the morning and continued up to 6.15 p.m. In course of search, the search party seized 2425 documents (Seizure Memo dated 13.03.1995 has been filed as Annexure P-1 ). b) There was also a simultaneous search in the residential premises of the Appellant Nos. 2, 3 and 4, being the directors of the Appellant No. 1, both at Delhi and Calcutta but no incriminating documents were seized from them. c) The Investigating Officer (I.O.) of this case immediately after search on 13th March 1995 till 18.15 hours, served a Notice under Section 40 of The Foreign Exchange Regulations Act, 1973 on the Appellant No.2 Shri S.N. Sureka directing him to appear before him (I.O.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer and were not recovered from and did not belong to the Appellant no. 1 and were brought in while the search was going on. On March 21, 1995, March 23, 1995 and 5th May, 1995 K.K. Tekriwal was served with purported Summons Under Section 40 of 1973 Act and his statement were recorded. The relevant statement of K.K. Tekriwal on May 5, 1995 at page 209/210 of the Paper Book are extracted below:- Q2. Please see Page 31 of the said seized document marked D which is a fax dated 3.4.94 from S. N. Sureka, India to Mr. Rajesh Verma, Moscow, Russia. It transpires that US $ 4,50,000/- was transferred from London Office in A/c. of C.D.B. ME Rubin. Please state who is Mr. Rajesh Verma and what relationships you and your company, Agio Exports Ltd. have with him and how the said transfer of USD 4,50,000/- from London office in the account of CDB ME Rubin was arranged by your company and through whom and who acted in this business affairs of your company. Ans.2 I have seen page 31 of the seized documents marked D , which is a FAX dt. 3.4.94 from S. N. Sureka to Rajesh Verma. In this connection, I state that I do not know any Rajesh Verma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tten Reply dated 12th, 19th and 14th February, 1996 to the said Show Cause Notice. Thereafter call memo dated 16th September 2004 was served by the Respondent after 9 years (Annexure P 18 Page 171 of the Paper Book). 9. The appellants had also filed an application dated 11th November 2004 before the Adjudicating Officer at the first instance for issuance of Summons under Section 53 of 1973 Act for cross-examination of the ten persons (search party of FERA) and two independent seizure list witnesses as mentioned in para 10 thereof. However, the Adjudicating Officer allowed to cross-examine only two officers i.e. Mr. R.K. Rawal, CEO Delhi Zone (the then EO) of Delhi Zonal Office against whom the allegation of the appellants was made for plantation of the said purported Fax Message at the time of search and Mr. M.R. Chander, EO Delhi Zonal Office, the Investigating Officer (I.O.) of the case. 10. Shri R. K. Rawal the then Enforcement Officer of Delhi Zone was cross examined on 20th December, 2004 and 14th January, 2005. The relevant portions of the cross of R. K. Rawal are extracted below:- OBS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts when seized are authenticated one and all by the witnesses and the parties. File whenever seized are got authenticated on 1st and the last page Q. Mr. Rawal since you have said that you have seen on that date (on 13.3.95) the original pages of 31 32 of the alleged file marked D so the original papers are lying in the file marked D, please confirm ? Ans. I have not seen the original. I cannot say if the seized document is a photostate or original. However, I state that the seized documents bears the page No. written in the hand of one of the members of the raiding party. Q.1. Mr. Rawal pursuant to this Hon ble adjudicating authority s direction custodian of documents of the Enforcement Directorate produced today the original alleged seized File marked D seized on 13.3.95. I am showing page 31 of the documents which was under the control and possession of Enforcement Directorate, now look at it and tell us whether this is the seized document marked at page 31 ? Ans. I have seen page 31 of seized file marked D this is one of the documents recovered and seized on 13.3.95 and it came int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Q. 55. So you could not distinguish between original or xerox? Ans. We the officers see the contents of the documents if some contravention is suspected, we seized the documents whether it is original or xerox or hand written. As it was found kept by the company, it was seized. Q. 56. My specific question is that whether you can distinguish between original or xerox? Ans. This question has been replied in the first part of my earlier answer. All the times it is not possible to ascertain whether it is xerox or original. Q.57. Kindly tell us what is the fax number? Ans. I have seen this document it appears it is 323-00-06 however after my long illness my eye sight has gone down. Q.58. Will you agree with me that each and every fax machine is installed against a telephone number? Ans. Yes, according to my knowledge the telephone number is necessary for fax machine. Q. 59.During the course of investigation have been ever tried to unearth from which telephone number this fax message was sent. Ans. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd at whose place the fax was installed. iii) Number to which fax was sent does not and cannot exist as neither the Country Code nor the Area Code nor the correct number of recipient is printed on the fax. iv) Such purported fax machine not seized by E.D. v) Even the fax number printed on the fax message is illegible. vi) No activity Report displayed or printed when fax is sent nor such activity report seized. vii) Fax message is fabricated as there is a glaring spelling error as Moscow is printed as Mosow . viii) Existence of Mr. Rajesh Verma ix) Address of Mr. Rajesh Verma s office at Russia x) Address of Mr. Rajesh Verma s Delhi office. xi) Existence of London office of M/s. AGIO Export Ltd. xii) Existence of Bank Account at London of M/s. AGIO Export Ltd. xiii) No investigation made at all by the E.D. as to contents of such purported fax message. 14. It is specifically stated by the Appellants that Pages 31 and 32 of the file marked D have not been recovered from the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35. We have reached this conclusion on a consideration of the evidence on record, without reference to any abstract doctrine as to burden of proof. But it is only right to observe, that the proceedings under the Act are quasi-criminal in character and it is the duty of the respondents as prosecutor to make out beyond all reasonable doubt that there has been a violation of the law. Vide the decision In re. H.P.C. Productions Ltd. [(1962) 2 WLR 51] cited for the appellant. The learned Attorney-General did not contest this position. 19. As far as cross examination of other witnesses are concerned, the Appellants counsel submits that there was gross violation of the principles of natural justice by the Adjudicating Authority refusing to allow cross examination of all the remaining witnesses including the search list witnesses. 20. The records of the appeal would reveal that these appeals were heard by the Division Bench of this Hon ble Tribunal presided over by different Chairman and Members on more than 38 different dates viz. 28th March, 2007, 23rd July, 2007, 20th December, 2007, 14th May, 2008, 25th July, 2008, 23rd September, 2008, 16th D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts which have been argued before us must have also been argued before our Ld. predecessors or were available to the respondent. It may be significant to mention that no formal request to recall the earlier orders has been made on behalf of the respondent and since 2009 to 2014 the respondent had been seeking time for making compliance and for reasons better known to them inspection, in spite of the orders of this Tribunal was not facilitated, initially. The allegations leveled by the appellants are indicative that the respondent deliberately wanted to suppress the document and did not want to produce the record containing original document. It also appears that supply of copy of the full fax message had been withheld despite the orders of the Tribunal. By a judgement and order dated 13th January, 2016 delivered by Justice V. K. Mathur, Chairperson it was inter alia held :- In our view, the request of the appellants is liable to be allowed and the respondents are directed to furnish the copy of the complete fax message i.e. part -1 and part II to the appellants by next date of hearing and original fax message be produced before the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Maneka Gandhi v. Union of India, AIR 1978 SC 597 Paras 59 Pgs.626 627 and Union of India-Vs- Tulsiram Patel, (1985) 3 SCC 398 : 1985 SCC (L S) 672 at page 470, the Hon ble Supreme Court held that there can be no distinction between a quasi-judicial function and an administrative function for this purpose and the rules of Natural Justice shall be applicable in these cases as well. In the cases of State of Kerala-Vs- K.T. Shaduli Grocery Dealer reported in AIR 1977 SC 1627 (Vol. 64) at page 1631 para 5. The usual mode recognized by law for proving fact is by production of evidence and evidence includes oral evidence of witnesses. The opportunity to prove the correctness or completeness of the return would, therefore, necessarily carry with it the right to examine witnesses and that would include equally the right to cross examine witnesses examined by the Sales Tax Officer . The ratio of foregoing judgements state that any unsigned documents cannot be admitted in evidence and is not admissible and if the original document is misplaced or not available being a primary evidence, it is the duty of the party to prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rter says it is and what that value actually is. That onus cannot be shifted to the importer. We have no doubt that all this has been said by the courts again and again, but to no avail . (e ). The judgement of the Division Bench of the High Court at Calcutta in the case of Shree Balaji Steels vs. Gontermann-Peipers (India) Ltd. , reported in (2003) 114 Comp Cas 193, wherein it was held: 12. The only document that was produced in support of such claim of interest was a statement annexed to the winding up petition, which was unsigned, and without any authentication. Such being the state of affairs before the learned company judge we do not find any reason to hold otherwise as we find that the document annexed to the winding up petition was not at all a signed and authenticated document and, therefore, the learned company judge was fully justified in not relying on the said document and thereby refused to grant interest . (f ) The judgement in the case of Anjlus Dungdung-Vs- State of Jharkhand reported in 2005 SCC (Crl) 1468 wherein it was held : These two circumstances raise strong suspicion agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 72 of FERA 1973 are not attracted and cannot be invoked. 29. The Special Director had also erroneously presumed the facts without proper authentication and corroboration from independent witnesses under Section 72 of the FERA, 1973, the charges against the Appellant No. 1 have not been proved as the respondent has failed to discharge its burden. The Appellant Nos. 2 to 4, the Directors herein as such are not liable under Section 68 of FERA 1973. 30. In the light of the above-mentioned facts and circumstances, the orders and/or directions for production of the said file No. T-4/37-D/95/Vol-1 and inspection of the said original Fax message and the arrest memo of Mr. Rajneesh Verma by the Respondent became final and absolute and non-production thereof by the Respondent led to Adverse Inference being drawn under the Illustration (g) of Section 114 of the Indian Evidence Act, 1872 against the respondent even as per settled law. 31. In the light of the ratio of the aforesaid judgements, the impugned order dated 20th May, 2005 passed by the Special Director, Enforcement Directorate, New Delhi is not unsustainable and the same is set asid ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
