DIRECTOR OF ENFORCEMENT Vs. ROHIT B JHAVERI

JUDGEMENT

(1.) -

(2.) THE Director of Enforcement, Foreign Exchange has preferred this appeal to challenge legality of order dated March 6, 1986 passed by foreign Exchange Regulation Appellate Board in Appeal No.5 of 1984. By impugned order, the Appellate Board set aside the order passed by the Director of Enforcement imposing penalty of Rs.1,00,500/- on the respondent. THE facts which gave rise to the passing of this order are as follows :- THE Director received information that the respondent was to make certain payment to one Arunbhai of Ahmedabad on the instructions received from one Modi, residing at Mombassa, Kenya. On the strength of the information, the residential premises of the respondent was searched under section 37 of Foreign Exchange Regulation Act, 1973 and on January 21, 1982 certain incriminatory documents were seized. THE statement of the respondent was recorded on the same day under section 40 of the Act and the respondent stated that he was permanently residing in India and doing brokerage business in diamonds. THE respondent stated that in the year 1981 he went to Nairobi on the invitation of his friend. THE respondent further stated that Suresh Makanji, with whom he was residing, informed the respondent that in case any persons are in need of help, then he should make the payment in India on behalf of Suresh. In other words, the respondent was advised to carry out Hawala transactions. THE respondent further stated that he had been receiving remittances through certain persons sent by Makanji from Nairobi and accordingly he had disbursed the payment to several parties since year 1979. From the seized documents, the respondent pointed out that total payments amounting to Rs.5,10,599/- were made against payments received amounting to Rs.4,93,100/-. THE respondent also admitted of maintaining a bank account with Midland Bank Ltd., London and that account was opened in the month of November 1980. THE respondent stated that he used to provide funds for those who were to visit United Kingdom and his account in London was accordingly operated. From the statement made by the respondent, it was clear that the respondent did contravene provisions of sections 9(1)(b) and 9(1)(d) of the Act.

(3.) ACCORDINGLY, appeal is allowed and impugned order dated March 6, 1986 passed by Foreign Exchange Regulation Appellate Board in Appeal No.5 of 1984 is set aside and that passed by the Director of Enforcement on November 24, 1983 is restored. The respondent shall pay the costs of the appellant throughout.