NEMI CHAND JAIN Vs. ENFORCEMENT DIRECTORATE

JUDGEMENT

(1.) THESE appeals are directed against the impugned orders dated 24th April 2006 passed by the learned Single Judge dismissing the Appellants' Writ Petition (C) Nos.5613 of 2006 and 5618 of 2006. The writ petitions were filed by the appellants challenging a common order dated 12th December 2005 passed by the Appellate Tribunal for Foreign Exchange, New Delhi (Tribunal) in Appeal Nos. 76 and 77 of 2005, rejecting the applications made by the Appellants for waiver of the pre-deposit of penalty as a condition for hearing the appeals.

(2.) PROCEEDINGS were initiated against both Appellants by the Respondent Directorate of Enforcement under Section 51 of the Foreign Exchange Regulation Act, 1973 ('FERA') for violation of Section 8(1) thereof. The case of the Respondent against Appellant Shri Nemi Chand Jain @ Shri Chandraswamy and Appellant Shri Vikram Singh was that a sum of US $ 1,49,000 had been withdrawn by them from the non-resident external (NRE) account in Canara Bank R.K.Puram, New Delhi of one Shri Akbar Jaffar Ali Veerjee ('Veerjee') a resident of Leichtenstein who stayed in India between 1st and 3rd July 1992. Veerjee had initially deposited a sum of US $ 500 (equivalent to Rs. 14,850) at the time of opening the account. Thereafter on 4th July 1992 a sum of US $ 10,000 (equivalent to Rs. 2,95,000) came deposited in the account followed by US $ 1,39,000 (equivalent to Rs. 42,29,756) by Foreign Inward Telegraphic Transfer (FITT) from the Swiss Bank Corporation (Jersey) Ltd. The case of the Respondent was that it was revealed during investigation that from Veerjee's NRE account the following persons withdrew various sums through cheques in their favour: Shri Prakash Chandra Yadav withdrew Rs. 30 lakhs on 17th July 1992, Appellant Shri Vikram Singh Rs. 5 lakhs on 18th July 1992 and Vishwa Dharmayatan (which has been held by the Tribunal to be a registered Society of which Appellant Shri Chandraswamy is a key functionary) sums of Rs. 5 lakhs each on 20th July and 12th August 1992. When questioned Veerjee denied having deposited the said sums in his account and stated that soon after opening the account he had left blank signed cheques at the instance of Shri Chandraswamy with Shri Vikram Singh.

(3.) IN the adjudication order dated 30th November 2004 the Deputy Director, Directorate of Enforcement, returned the following findings: