H.R. SIDDIQUE Vs. DIRECTOR, ENFORCEMENT DIRECTORATE

JUDGEMENT

(1.) The appellant has preferred the present appeal under Section 54 of the Foreign Exchange Regulation Act, 1973 (FERA) read with provisions of Foreign Exchange Management Act, 1999 (FEMA) to assail the order dated 03.10.2008 passed by the Appellate Tribunal for Foreign Exchange (Appellate Tribunal) in Appeal No.241/2005, whereby the appellant's first appeal has been dismissed by the Appellate Tribunal, and the penalty imposed upon the appellant under Section 50 of the FERA in the adjudication order dated 28.01.2005 of Rs.1.5 Lakhs, has been sustained.

(2.) One Dinesh Kumar Goel @ Titu was found to be engaged in receiving and selling gold sent by one Ummu from Dubai. The sale proceeds were then distributed to several persons under the instructions of Ummu. One of the persons whose name was disclosed by Dinesh Kumar Goel as the recipient was the appellant. Dinesh Kumar Goel had stated in his statement recorded before the officers of the Enforcement Directorate (ED) on 16.11.1994 under Section 40 of the FERA that in the morning of 16.11.1994, he had received instructions from Ummu of Dubai to distribute the payments to 17 persons, including the appellant of Rs.5 Lakhs. He had also stated that on the day of search, i.e. 16.11.1994, he had made payment, inter alia, of Rs.5 Lakhs to the appellant. Follow up action was taken at the residential premises of the appellant on the following day, i.e. 17.11.1994 and his statement was recorded, in which he stated that on 16.11.1994, he had received a payment of Rs.5 Lakhs from some unknown persons under instructions of Ubaidullah of Dubai his brother. He also admitted having received earlier payments of Rs.3 Lakhs and 5 Lakhs in a similar manner, and stated that he had distributed the payments under instructions of Ubaidullah of Dubai.

(3.) On the aforesaid basis, a show-cause notice dated 15.05.1995 was issued, inter alia, to the appellant for receiving, and thereafter distributing, the amount of Rs.13 Lakhs on the instructions of the said Ubaidullah, which tantamounts to contravention of Sections 9(1)(b) and 9(1)(d) of FERA. In the proceedings, Dinesh Kumar Goel sought to retract his statement by claiming that he was physically tortured and pressurized to write an involuntary statement under Section 40 of FERA. He claimed that he was forced to give the names of various persons regarding whom he had already received instructions from Ummu for payment of Indian currency. The appellant also sought to retract from his statement recorded on 17.11.1994 under Section 40 of FERA during the course of the personal hearing.