J S MUTHU Vs. UNION OF INDIA

JUDGEMENT

(1.) This is an appeal filed by the appellant J. S. Muthu under Section 54 of the Foreign Exchange Regulation Act, 1973 (Act 46 of 1973). The only charge framed in this case is that the appellant has received a sum of Rs. 50,000/- in contravention of provisions of Section 9(1)(b) of Foreign Exchange Regulation Act, 1973.

(2.) The charge against the appellant is that he received a payment of Rs. 50,000/- on 1st June, 1974, from a person other than an authorised dealer in foreign exchange by order or on behalf of Shri J. Asirvatham of Kualalampur, a person resident outside India, which is a contravention of the provisions of Section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 (Hereinafter called the "Act"). According to the, department, on receipt of reliable information that one J. S. Muthu had been to a foreign exchange racketeer's place at Aminjikarai, Madras, on 1st June 1974 and he had been directed to wait at a place on the Armenian Street, Madras-1 for receiving the amount, the officers of the Enforcement Directors, Madras kept surveillance at the area fixed far receiving the payment and after making sure that the payment was made to the suspect of the Enforcement Officers followed the suspect to the Broadway bus stand and he was stopped therein and his baggage was searched which resulted in the seizure of Indian currency of Rs. 50,000/-. On interrogation, the statement was recorded from him. It is further contended that in his voluntary statement dated 1-6-74 given before the Chief Enforcement Officer, Madras, the appellant inter alia stated that his brother J. Asirvatham was working as a Fitter in Railway carriage, work-shop at Kualalumpur. He wrote to his brother Asirvatham to send Rupees 50,000/- for the purpose of setting up two pump-sets in his village and he also received a letter from his brother that an amount of Rs. 50,000/- had been arranged and that the said letter contained coded words for the receipt of Rs. 50,000/-. He also confessed at the Broadway bus stop. After the receipt of the said sum, the Officers of the Enforcement Directorate stopped hi m, searched his person and baggage and seized the said amount of Rs. 50,000/-. Again on 22-6-74 the appellant herein made a further statement and admitted that his brother J. Asirvatham, Kualalumpur had sent the amount through unauthorised channel on the ill-advice of some persons. With the above facts and circumstances, the Enforcement Directorate framed a charge against the appellant herein for contravention of the provision of Section 9(1)(b) of the Act for having received payment of Rs. 50,000/- on 1-6-74 from a person in India by order or on behalf of his brother residing in Kualalumpur, a person resident outside, India without the permission of the Reserve Bank of India. A show cause notice dated 28-8-1974 was issued to the appellant for the above mentioned charge. He was required to show cause as to why adjudication proceedings as contemplated in Section 51 of the Act should not be held against him for the aforesaid contravention and why the Indian currency of Rs. 50,000/- seized from him on 1-6-74 being the amount involved in the contravention should not be confiscated to the Central Government under Section 63 of the Act.

(3.) The appellant herein an his reply dated 20-9-74 to the show cause notice, has denied the charge and requested for personal hearing in the matter. It is seen from the records that a personal hearing was given to the appellant on 16-5-1977 at Madras. It is also seen that the appellant' appeared through his counsel and filed a written submission on 16th May 1977. The appellant here in before the adjudicating officer placed some documents to show that he was having funds Rs. 29,750/- drawn from the Banks for which saving bank account pass books have been produced. For the balance amount of Rs. 20,250/- it was the case of the appellant herein that it was from the sale of agricultural produces periodically sold in shandy and retailers.