DIRECTOR OF ENFORCEMENT Vs. FR J M STEVENS

JUDGEMENT

(1.) In this appeal by certificate, Enforcement Directorate of Government of India is calling in question the judgment of the High Court of Karnataka in Misc. First Appeal No. 1171 of 1981. The High Court dismissed the appeal filed by the Enforcement Directorate and confirmed the order passed by the Foreign Exchange Regulation Appellate Board, New Delhi in Appeal No. 684 of 1977. The Appellate Board had partly allowed that appeal which was filed against the order dated 28-3-1977 passed by the Special Director of Enforcement.

(2.) The respondent, a Belgium national, came to India in 1948. After completing his religious studies in India he became a priest of the Jesuit Society, Ranchi in 1958. He later qualified himself as an architect in 1959 from Sir J. J. College of Architecture, Bombay. He shifted from Ranchi to Bangalore in 1965 and rendered professional services as an architect in the country and also to persons residing outside India. On information that the respondent was maintaining foreign currency accounts abroad and was crediting the said accounts with foreign exchange earned by him as an architect, his office-cum-residential premises at Bangalore were searched by the Officer of the Enforcement Directorate, under Section 37 of the Foreign Exchange Regulation Act, 1973 on 9-10-1975. The documents found therefrom disclosed that the respondent had collected fees as architect for the services rendered by him in India and Bangladesh and got them credited to his accounts maintained in Belgium, Switzerland and Germany. Foreign currency was also seized from the said premises. The Enforcement Directorate, therefore, framed five charges against him and initiated proceedings for contravention of Section 10(1)(b) of the Foreign Exchange Regulation Act, 1947 and Sections 16(1)(a) and 30 (ii) of the 1973 Act. On inquiry by the Special Director of the Enforcement, Madras charges Nos. 3 and 5 were held not proved. As charges Nos. 1, 2 and 4 were held proved different amounts of penalty were levied by an order dated 28-3-1977. Respondent had preferred an appeal against that order to the Appellate Board. It exonerated the respondent of the first two charges and reduced the penalty imposed in respect of charge No. 4. As the Enforcement Directorate was not satisfied with the order passed by the Appellate Board it filed an appeal to the High Court under Section 54 of the 1973, Act. The appeal was confined to charges Nos. 1 and 2 which read as follows:

(3.) What was contended before the High Court was that the respondent was not entitled to the exemption under clause (iii) of the first proviso to the notification issued by the Central Government on 25-9-1958 in exercise of its power under Section 9 of the 1947 Act which corresponds to Section 14 of the 1973 Act, if he was considered as a person 'domiciled in India' or a 'person resident in India". The High Court after re-appreciating the material on record agreed with the finding of the Appellate Board that the respondent was not a person 'domiciled in India' or a person 'resident in India' and, therefore, upheld the decision of the Appellate Board that the respondent was entitled to the benefit of the exemption granted under clause (iii) of the first proviso to the said notification. It, therefore, dismissed the appeal.