R RAJGOPAL Vs. ASSISTANT DIRECTOR ENFORCEMENT DIRECTORATE

JUDGEMENT

(1.) This is an appeal under section 54 of the Foreign Exchange Regulation Act, 1973 against the order dated 8th December, 1981 of the Foreign Exchange Regulation Appellate Board (Southern Zone), confirming the order dated 30th June, 1978 of the Assistant Director, Enforcement Directorate, Madras, finding the appellant guilty of contravention of section S (1)(aa)and 5(1)(c) of the Foreign Exchange Regulation Act, 1947 and imposing upon him penalties of Rs. 5,000 for contravention of each of the above said sections.

(2.) The facts of the case are briefly as follows: The appellant received a total sum of Rs. 20,000 in two installments of Rs. 10,000 each from a local person and disbursed a sum of Rs. 17,282 out of that amount, under instructions from his younger brother Manickam of Singapore, a person resident outside India, without the permission of the Reserve Bank of India. The appellant's house was searched on 5-8-1973, resulting in the seizure of Indian currency valued Rs. 2,718, two chits containing some writings, one letter dated 3-8-1975, written by the appellant but not posted and one empty registered Airmail cover addressed to one Doraiswami by one Arumugham of Singapore. The appellant was then called upon to give his statement in respect of the transactions he was indulging in. In that statement recorded on 3-8-1973, he admitted the receipt and disbursement of the aforesaid amounts through un-authorised channel and explained the documents seized from him. The amount seized from him, viz., Rs. 2,718 was the balance left with him after disbursements. From that statement, it also flowed that be had credited an amount of Rs. 2,000 in the savings bank account in the name of one Radhakrishnan as per the instructions received from abroad. He then was issued three show cause notices as follows: (a) T.4/650/MAS/74 (SON I) dated 15-7-1974, for contravention of section 5(i)(a) of the Foreign Exchange Regulation. Act, 1947 for having received two payments for Rs. 10,000 and Rs. 20,000 in each 1973 by order of Sri R. Manickam of Singapore a person resident outside India, He was also asked to show cause why the Indian currency of Rs. 2,718 seized from him being the amount involved in the contravention and Rs. 2,000 credited into the account of Sri G. Radhakrishnan, which was blocked, being the amount involved in the contravention should not be confiscated to the Central Government, under section 23 (1-B). A copy of the show cause notice was also sent to Shri S. Radhakrishnan asking him to show cause why the amount of Rs. 2,000 credited into his bank account involved in the contravention should not be confiscated. (b) T.4/650/MAS/74 (SON II) dated 15-7-1974 for contravention of section 5(1)(c) of the Foreign Exchange Regulation Act, 1947 in having made a total payment of Rs. 17,282 to persons in India during 1973, by order of Sri R. Manickam of Singapore, a person resident outside India. (c) T.4/553/MAS/73 (SON) dt. 10,2-1975 for contravention of section 5(1)(aa) read with section 23-B of the Foreign Exchange Regulation Act 1947, in having attempted to receive Rs. 20,000 by order of R. Manickam of Singapore, a person resident outside India. The Deputy Director, Enforcement Directorate, Madras, found the first two charges proved and accordingly imposed a total penalty of Rs. 10,000, and dropped the remaining charges. On appeal, after hearing the appellant, the Board confirmed the findings and the penalty of Rs. 5,000 in respect of each of the charges and accordingly dismissed the appeal.

(3.) The two points of law urged before us by the learned counsel for the appellant are as follows: - (1) The Authorities below have acted upon a retracted confession without adequate corroborations, which is against law; (2) They have imposed a penalty under section 5(1)(aa) of the Foreign Exchange Regulation Act 1947 without any clear finding in that regard. Point No. 1