SUSHILKUMAR R RUIA Vs. DIRECTOR OF ENFORCEMENT

JUDGEMENT

(1.) THIS is an appeal preferred to challenge legality of order dated January 17, 1980 passed by the Foreign Exchange Regulation Appellate Board, New Delhi, confirming order dated April 6, 1974 passed by the Director of Enforcement imposing penalty of Rs. 5 lakhs on the appellant. The facts which gave rise to the passing of this order are as follows : The appellant arrived from Frankfurt by air on August 21, 1964 and the Customs Officer searched his baggage at the Airport and recovered a large number of documents which disclosed contravention of the provisions of Foreign Exchange Regulation Act, 1947. The seized documents, inter-alia, contained counterfoils of two cheque books issued to the appellant by M/s. Bank of India Limited, London and two credit notes dated July 20, 1964 and August 7, 1964. The documents indicated certain deposits made and withdrawals made from the appellant's account in London with the Bank in year 1964.

(2.) ON September 14, 1964, directives under sub-section (2) of Section 19 of the Foreign Exchange Regulation Act, 1947 were issued to the appellant seeking for answers to various queries made therein, The appellant gave reply accepting that he had maintained account with the Bank of India Limited, London but claimed that the account was closed before he had left London. The appellant also pleaded that account was opened more than 10 years before 1965 and the appellant could not recollect the exact date or year of the opening of the account. The appellant was asked to furnish transcript of the appellant's account from the inception but the appellant failed to furnish the same and the reply given was restricted to the entries relating to the period from July 18, 1964 to August 4, 1964. In respect of the entries for the limited period from July 1964 to August 1964 adjudication proceedings were commenced by A.M.Chatterjee, the then Director of Enforcement and by order dated January 7, 1965, the appellant was held guilty of contravention of the provisions of Section 4(l) and Section 9 of the Act. The Director imposed a penalty of Rs.3,000/- after holding that the appellant had maintained account and amounts were credited and were withdrawn by the appellant from the said account.

(3.) ACCORDINGLY, appeal is partly allowed and while upholding the order passed by the two authorities below that the appellant is guilty of contravention of provisions of Section 4(1) and Section 5(i)(a) of the Act, the combined penalty under Section 23(l)(a) of the Act is reduced to Rs.50,000/-. The appellant shall pay the said penalty within two weeks from today. The appellant shall also pay the costs of the appeal to the respondent. Appeal partly allowed.