RAKESH KAPOOR Vs. UNION OF INDIA

JUDGEMENT

(1.) THESE three appeals are directed against the common order dated 12th December 2007 passed by the Appellate Tribunal for Foreign Exchange (AT) dismissing the Appeal Nos. 443, 450 and 451 of 2004, thereby affirming the common Adjudication Order (AO) dated 17th February 2004 passed by the Deputy Director (DD), Enforcement Directorate (ED) imposing the penalty of Rs. 5 lakhs each on each of the Appellants under Section 8 (1) and 8 (2) of the Foreign Exchange Regulations Act, 1973 (FERA).

(2.) THE background facts are that on 28th April 1989, the officers of the ED, Delhi Zonal Office conducted a number of searches at the Oberoi Hotel in Delhi resulting in the recovery of foreign exchange, Indian currency etc. from the front office as well as the guest lockers in the hotel. Relevant to the present appeals, the ED is stated to have recovered from guest locker No. 21 maintained by Arun Sharma (the Appellant in Crl. A. No. 188 of 2008), who was the cashier -cum -night auditor, Indian currency totalling Rs. 49,500 and foreign currency, including US$, UK £, French Francs, Hong Kong Dollars etc., seven gold biscuits, two small gold coins of all foreign origin and one gold pendant. From the other locker No.38 also stated to have been allotted to Arun Sharma, a file with a bunch of 42 pages was recovered. From the person of Rajeev Wadhwa (the Appellant in Crl. A. No. 138 of 2008), who was cashier -cum -night auditor, ED officials recovered one Diners Club international card, 25 US$, 20 French francs and a bunch of 8 loose sheets. From the Employees Locker No. 49 stated to be allotted to and held by Rajeev Wadhwa, 1 Rouble and Indian currency of Rs.8,000 and a bunch of 10 loose sheets were recovered.

(3.) ACCORDING to the ED, during the course of investigation it was noticed that as on 28th April 1989 Arun Sharma, Rajeev Wadhwa and Rakesh Kapoor were authorised signatories of the Oberoi Hotel in terms of the Reserve Bank of India (RBI) changer licence dated 20th November 1986 valid up to 31st December 1989. They were required to issue certificates of encashment in form ECR and information of the purchase of foreign currency towards settlement of bills for services rendered irrespective of whether the encashment certificate was asked for. According to the ED, their investigation, however, revealed that these three persons did not issue the requisite certificates against the foreign currency tendered to them and they instead purchased/acquired other foreign exchange tendered by the public without any previous general or special permission of the RBI.