TMI Blog2019 (2) TMI 1799X X X X Extracts X X X X X X X X Extracts X X X X ..... ve, neither the adjudicating authority nor any of the appellate authorities, including the Tribunal, had applied their minds as to whether the said statement was voluntary or not. Thus, the question whether the appellant could be held guilty for violation of provisions of Section 9(1)(b) of FERA, on the sole basis of the statement of Sh. Ashish Jain, must be answered in the negative. Whether there is any material on record to establish that the appellant was guilty of violation of provisions of Section 9(1)(b) of FERA if the statement of Sh. Ashish Jain ? - Clearly, the answer to the above question must also be in the negative as there is no material whatsoever on record to establish the same. None of the orders of the authorities below, namely, the Adjudicating Authority, the Appellate Authority or the Tribunal refer to any cogent material to substantiate the allegation of the commission of an offence under Section 9(1)(b) of FERA. This Court is of the view that confiscation of the amount of ₹ 7,95,000/- from the office of the appellant is unsustainable. Consequently, the present appeal must be allowed. The order dated 17.02.2014 passed by the Adjudicating Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yments in India under the instructions of one Munna Bhai of Dubai, was recorded. He stated that certain payments that were disclosed in the documents seized from his residence were made under instructions from Dubai. According to the Enforcement Directorate, the said documents disclosed that certain payments had been made to one Ashish, telephone no. 528214. Inquiries revealed that the telephone connection corresponding to the said telephone number (528214) was installed in the office of M/s Anukampa Tours and Travels (P) Ltd., 3061, Desh Bandhu Gupta Road, Gali Sangtarashan, Paharganj and one Sh. Ashish Jain was employed with the said concern. 3.2. On 04.10.1995, the business premises of M/s Anukampa Tours and Travels was searched and Indian currency amounting to ₹ 7,95,000/- and various documents were found in the said premises. It is alleged that on that date, Sh. Ashish Jain made a statement that he was employed with M/s Anukampa Tours and Travels for the last one and a half years and was an employee of Sh. Manak Kala (the appellant herein). He stated that Sh. Manak Kala had a travel agency in Jaipur under the same name and that he had instructed him to receive payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. It was also pointed out that Sh. Ashish Jain had retracted his statement as the same had been recorded forcibly and under coercion. 3.9 On 17.02.2014, the Adjudicating Authority passed an order holding that it would be reasonable to infer that the appellant received funds from different persons in India on instructions of persons resident outside India for distribution of compensatory payments. It was further held that Sh. Ashish Jain was only an employee and carried out orders of his employer (the appellant). In view of the said conclusion, the Adjudicating Authority imposed a penalty of ₹ 75,00,000/- and further ordered confiscation of the sum of ₹ 7,95,000/- being the amount seized under Section 63 of FERA. 3.10 Aggrieved by the aforesaid order, the appellant preferred an appeal before the Special Director (Appeals), Enforcement Directorate (hereafter the Appellate Authority ). Before the Special Director (Appeals), it was contended that the Adjudicating Authority had found no document which would indicate violation of any provisions of FERA. It is also pointed out that the Adjudicating Authority (Deputy Director, Enforcement Directorate) had specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned herein). 4. I have heard the learned counsel for the parties. 5. The questions that arise for consideration in this appeal are: (i) Whether it is established that the appellant can be held guilty of violation of provisions of FERA solely on the basis of the statement of Ashish Jain recorded on 4.10.1995? (ii) If the answer to the above question is in the negative, whether there is any other material or material to establish that the appellant had violated the provisions of Section 9(1)(b) of FERA? 6. Ms Malhotra, the learned counsel who appeared for the petitioner submitted that there was no material or evidence on record which could establish commission of any offence under FERA. She submitted that the original order dated 17.02.2014 passed by the Adjudicating Authority, did not even mention any violation of provisions of FERA but merely imposed a penalty of ₹ 75,00,000/-. She submitted that the Appellate Authority had examined the provisions of Section 9(1)(b) of FERA, but did not return any finding to the effect that the said provision was violated. She contended that there was also no evidence on record to even remotely indicate any such violation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cution s case is that the appellant had received certain funds from Sh. Satish Kumar Sharma @ Pappu who, in turn, had received certain funds and had distributed the same at the instance of one Munna Bhai from Dubai. In order to establish this offence, it would be necessary for the Enforcement Directorate to have produced material to the effect that Sh. Satish Kumar Sharma @ Pappu had made payments to the appellant by order or on behalf of a person resident outside India. 13. Although it is alleged that the documents seized from the residence of Sh. Satish Kumar Sharma @ Pappu indicated payments made to Sh Ashish Jain, no such material has been placed on record. Further, the original order passed by the Enforcement Directorate does not mention (i) the particulars of any such documents; (ii) the payments allegedly recorded therein; or (iii) any material to establish that the said payments were in fact, made. The question as to who had made these payments and to whom, remains completely vague. 14. The original order was passed by the Adjudicating Authority solely on the basis of an alleged statement of Sh Ashish Jain, an employee of the appellant. He alleged that he had received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssurance to the court that it may seek to rely thereupon. We are not oblivious of some decisions of this Court wherein reliance has been placed for supporting such contention but we must also notice that in some of the cases retracted confession has been used as a piece of corroborative evidence and not as the evidence on the basis whereof alone a judgment of conviction and sentence has been recorded. (See: Pon Adithan v. Narcotics Control Bureau: (1999) 6 SCC 1 ) 18. In K.T.M.S. Mohd. V. Union of India: (1992) 3 SCC 178 , the Supreme Court had held that the voluntary nature of a statement is sine qua non for the authorities to act on it. The Court had also explained that merely because a statement is retracted does not mean that the said evidence was unlawfully obtained, however, the court intending to act on such statements as being voluntarily made, is required to apply its minds to its retraction and to reject the same for reasons to be set down in writing. The relevant extract of the said decision is set out below:- 34. But suffice it 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom whom funds had been received and whom the said funds had been distributed to. As noticed above, neither the adjudicating authority nor any of the appellate authorities, including the Tribunal, had applied their minds as to whether the said statement was voluntary or not. Thus, the question whether the appellant could be held guilty for violation of provisions of Section 9(1)(b) of FERA, on the sole basis of the statement of Sh. Ashish Jain, must be answered in the negative. 21. The next question to be addressed is whether there is any material on record to establish that the appellant was guilty of violation of provisions of Section 9(1)(b) of FERA if the statement of Sh. Ashish Jain is ignored. Clearly, the answer to the above question must also be in the negative as there is no material whatsoever on record to establish the same. None of the orders of the authorities below, namely, the Adjudicating Authority, the Appellate Authority or the Tribunal refer to any cogent material to substantiate the allegation of the commission of an offence under Section 9(1)(b) of FERA. 22. In view of the above, this Court is of the view that confiscation of the amount of ₹ 7,95,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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