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TMI Blog2006 (9) TMI 627X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant M/s. Bank of Madurai Ltd. for making three payments totalling to Rs. 5 lakhs by way of loan to Shri K. Abdul Majeed of Malaysia, a person resident outside India without permission of RBI and also for making a payment of Rs. 2 lakhs to M/s. T.V.S. Sons, Madurai, a firm in India, by order or on behalf of Shri K. Abdul Majeed, a person resident outside India without permission of RBI. The whole amount of penalty has been deposited by the appellant while this Tribunal vide its order dated 5-3-1992 directed the appellant to pre-deposit 50 per cent of amount of penalty. Presently, the appeal is taken up for final disposal on merits. 2-3. The main allegation against the appellant is that the appellant M/s. Bank of Madurai Ltd., a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the status of the applicant from Income-tax Assessment Orders where Abdul Majeed had paid all the previous loans promptly without any delay and the loan was granted on his good reputation. There was no reason to suspect that Abdul Majeed was not a resident of India. There has been no violation of any of the provisions of FER Act and respondent has not been able to prove his case beyond reasonable doubt. The appellant has relied on Datar Singh v. State of Punjab [1975] 4 SCC 272 para 3 alleging that on the basis of mere suspicion or suspicious circumstances the appellant cannot be penalized where charges have not been proved beyond reasonable doubt. The applicant was present in India at the time of grant of loan. It is alleged that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary to appoint an agent to do the business. . . ." The impugned order was liable to be confirmed for cogent evidence available on record. 7. I have heard Learned Counsels of both the parties and gone through the records and relevant case law carefully. In his statement dated 3-3-1983 K. Abdul Majeed admitted that his Indian passport was issued by Indian High Commission, Qualalumpur on 22-6-1981 which was valid up to 21-6-1986 and he was mostly staying in Malaysia to look after his business and used to visit India to see his family and children once or twice in a year and used to return to Malaysia after staying in India for a few months. 8. Abdul Khader was also examined by the E.D. Officers on 4-3-1983 who stated that his father ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us of the appellant is as laid down in section 2(p) and (2)(q) of relevant FER Act, 1973. The expression 'person resident in India' is defined in clause (p) of section 2 of FER Act, 1973, which, insofar as it is relevant for the present discussion, is extracted as under : "2. Definitions.--In this Act, unless the context otherwise requires,-- (a) to (o)****** (p)'person resident in India' means-- (i)a citizen of India, who has, at any time after 25th day of March, 1947, been staying in India, but does not include a citizen of India who has gone out of, or stays outside, India, in either case-- (a)for or on taking up employment outside India, or (b)for carrying on outside India a business or vocation outside India, or (c)f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf. Thus it became clearly established that at the relevant time Abdul Mazeed was a non-resident and the inference drawn by the appellant-bank about his residential status on the basis of Incom-tax Returns was not in accordance with the provisions of FER Act, 1973. 12. Under Income-tax Act the test for conferring the status of a resident in India on an individual is statutorily laid down period of residence in India and not any circumstances which could indicate the intention of the person to stay outside India for an uncertain period as in FER Act. Here it will be relevant to mention the judgment of the Apex Court in K. Ramullan v. CIT [2000] 8 SCC 246 where Supreme Court observed that the appellant was entitled to the benefit of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tside India within the meaning of section 2(q) of FERA." 13. In the present case the appellant is staying outside India for last 30 years looking after his business in Malaysia which is indicative of his intention to stay outside India for an uncertain period. This being so, it has rightly been held by the Adjudicating Officer that the appellant-bank has committed a mistake in holding the appellant a resident of India and was consequently guilty for contravening provisions of section 9(1)(a) and 9(1)(d) of the FER Act, 1973. The rulings cited by the appellant do not go to favour him as in the present case the bank has not been able to prove that it has taken reasonable care to decide the status of Abdul Mazeed before granting him loan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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