MOOLCHAND S SHAH @ CHOKSI Vs. UNION OF INDIA

JUDGEMENT

(1.) By this petition, the petitioner challenges the order passed by the tribunal declining to dispense with the condition of predeposit for entertaining his appeal. By the order which has been impugned before the tribunal passed under Section 50 of the FERA, penalty of Rs. 35,00,000/- has been imposed on the petitioner. The reason why penalty has been imposed is that it has been found that the petitioner during the period 1992-93 had received and made payments to the tune of Rs. 1,89,73,000/- in India by an order for and on behalf of persons outside India without the permission of the R.B.I. The tribunal has passed a reasoned order. The tribunal has found that the petitioner was deeply involved with Tiger Memon, who was responsible for 1993 blast in Mumbai. The tribunal has also held that the contention of the petitioner that he was not given personal hearing also cannot be prima facie accepted. The tribunal has also referred to the confessional statement made by the petitioner before the TADA Court proceedings. The learned counsel appearing for the petitioner argued the matter at length. He submitted that though initially he appeared before the original authority, but after the change in the adjudicating authority he never received any notices and, therefore, the order has been passed in breach of principles of natural justice. The learned counsel for the petitioner relied on a judgment of the Hon'ble Supreme Court in the case of Sangfroid Remedies Limited V/s. Union of India, 1998 103 ELT 5. The learned counsel submits that the aspect of undue hardship has also not been considered by the tribunal properly. He relied on a judgment of the Supreme Court in the case of Benara Valves Limited vCommissioner of Central Excise, 2006 204 ELT 513 and specially the observations made in para 8 of that judgment. The learned counsel also took us through the portion of the judgment of TADA Court which has convicted the petitioner and has sentenced him to undergo imprisonment for a period of five years. The learned counsel informed us that he has filed an appeal against that judgment before the Supreme Court and it is pending. According to the learned counsel, because the petitioner was in custody for a period of five years and thereafter till judgment was pronounced by the TADA Court, he was required to attend the TADA Court almost daily, he could not do any business and, therefore, he is not in a position to deposit the amount which he is required to deposit according to law before his appeal can be entertained and, therefore, according to the learned counsel requiring him to deposit money will cause undue hardship to the petitioner. He further submitted that it is also not established that when he allegedly received money and made payment to Tiger Memon he was not residing in India.

(2.) This is a petition filed under Article 226 of the Constitution of India. Article 226 confers extraordinary jurisdiction on this Court to interfere when the Court find that the action impugned before it has resulted in failure of justice and the jurisdiction is always to be exercised to advance public interest. The order either dispensing with the requirement of predeposit or not dispensing with the requirement is essentially an order in the discretion of the tribunal. After having gone through the record, we find that passing any order, which is in the discretion of the Court in favour of the petitioner would not be in public interest and, therefore, in our opinion the tribunal was fully justified in declining to dispense with the requirement of predeposit in favour of the petitioner. We have gone through the confessional statement made by the petitioner. Perusal of that confessional statement shows that the petitioner was involved in clandestine banking activities for a very long time. Even after his arrest by the C.B.I. in the year 1991, he recommenced his clandestine banking activities. Perusal of the judgment of TADA Court shows that though the TADA Court acquitted him of the charge of conspiracy, there is clear finding recorded by the TADA Court that he had clear knowledge of the terrorist activities of Tiger Memon. The material available on record shows that the petitioner was deeply involved with the outlaws. Following paragraphs from the Judgment of the TADA Court show his involvement with the persons involved in the Bombay Bomb blast :-

(3.) It was submitted by the learned counsel appearing for the petitioner that because of the detention of the petitioner for five years and because of the requirement of attending the TADA Court continuously thereafter the petitioner has not been able to carry on any business and, therefore, he is not in a position to deposit the amount. In our opinion, if the financial position of the petitioner is such as is submitted by the learned counsel, then if the tribunal had dispensed with the requirement of pre-deposit and if the appeal was ultimately dismissed, it would have been difficult to recover the amount. One of the aspect that has to be considered while dispensing with the requirement of predeposit is safeguarding the interest of the Revenue. In other words, the financial position of the petitioner should be such as can satisfy the tribunal that in case applicant is held liable, he will be in a position to deposit the amount immediately. So far as the contention of the petitioner that he was not served with the notice of personal hearing is concerned it being a question of fact will be considered by the tribunal at the final hearing of the appeal. So far as the contention of the petitioner that it is not established that at the relevant time Tiger Memon was not residing in India is concerned, we have gone through the record and we find that there is sufficient material on record to show that the petitioner was dealing in money with persons who were not residing in India. The record reveals that two brothers of Tiger Memon were living in Dubai and were collecting money there in foreign currency. It is also on record that in 1992 Tiger Memon also went to Dubai.