BARKATHALI Vs. DIRECTOR OF ENFORCEMENT

JUDGEMENT

(1.) THIS is an appeal under S. 23 EE of the Foreign exchange Regulation Act, 1947 (for short the Act) directed against the order passed in an appeal under S. 23-E of the Act.

(2.) THE appellant is a resident of Chowghat in Trichur district having properties, a house and a shop in the area. His father, saidali, is a resident of Malayasia. When he comes down to India he resides with this son. On the basis of information that the appellant was receiving compensatory payment in violation of S. 5 (l) (aa) of the Foreign exchange Regulation Act, 1947, the house and shop were searched on 16-8-1972 by the Officers of the Calicut Unit of the Directorate of Enforcement, in the presence of the appellant's father but in the absence of the appellant Foreign currency notes as well as certain documents were seized On the same day, saidali gave a statement admitting that he had been sending money through unauthorised agents to his son the present appellant between 1966 to 1972 subsequently, the appellant was served notice under S. 19-F of the Act for the purpose of recording his statement. THE statement was so recorded on 27-9-1972; the appellant admitted that be had been receiving such payments from abroad through unauthorised agents On the next day he appears to have sent a letter to the Deputy Director of Enforcement, Madras, raising objections in regard to this statement. As per memorandum dated 7-8-1973 the Additional Director attached to the Directorate at New Delhi issued a show cause notice to the appellant (as well as to Saidali) alleging that he had been receiving such payments as alleged in contravention of S, 5 (1 ) (aa) of the Act without any authority and rendering himself liable under S 23 (1) (a) of the Act and directing him to show cause why adjudication proceedings under S. 23-D of the act should not be held against him and why Rs. 31,000/- blocked in his S. B A/c. No. 4 of 1970 with the Catholic Syrian Bank, Trichur, should not be confiscated under S. 23 (1b) of the Act. THE appellant submitted a statement dated 30-11-1973 pleading his innocence and also challenging the statement dated 27-9-1972. THE memorandum also informed him that inspection of documents relied on by the department can be had after fixing an appointment It appears that an inspection was requested, allowed and availed of in the. course of proceedings THE matter was heard and the Additional Director passed order holding that the appellant has violated S. 5 (l) (aa) of the Act and rendered himself liable under S. 23 (1) (a)of the Act. Accordingly, a penalty of R. 5000/- was imposed on him. Further, the amount of Rs. 31,000/- lying in Bank was also directed to be confiscated under s. 23 (1b) of the Act as the amount was found to be involved in the violation of s. 5 (l) (aa) of the Act.

(3.) THE appellant is a resident of Chowghat in Trichur district. He is an agriculturist and a businessman. His father Saidali is a resident of Malayasia. Ft is alleged that during period 1966-72 the appellant received payments totalling Rs. 65,000/-from persons other than the authorised dealers of the Foreign Exchange by order and on behalf of his father Saidali, a resident of Malayasia. without an appropriate exemption from Reserve Bank of india and in violation of S. 5 (1) (aa) of the Act. Though Saidali is a resident of Malayasia. on his visits to India he resides with his son at Chowghat. On 16 81972 the house as well as the shop of the appellant were searched by the officers of the Calicut Unit of the Directorate on the basis of information that the appellant was receiving compensatory payments. Foreign currency notes were found in the house. Currency notes are said to belong to Saidali On the same day he gave a statement wherein he stated that he has been sending money unauthorisedly to his son, the present appellant. In view of this statement, a notice was issued under S. 19f of the Act to the appellant. In response, he appeared and gave a statement on 27 91972 wherein he made specific admission of the receipt of money through unauthorised sources under instructions from his father.