KHIRODE CHANDRA DHAR Vs. P B VENKATA SUBRAMANIUM

JUDGEMENT

(1.) This appeal under Section 23EE of the Foreign Exchange Regulation Act, 1947 ("Act" for short) is directed against an order passed by the Foreign Exchange Regulation Appellate Board, confirming an order of the Director of Enforcement imposing a penalty of Rs. 40,000 on the appellant herein.

(2.) The case against the appellant was as follows. Acting on a secret information, some officers of the Enforcement Directorate searched the business premises of the appellant at 7/4, Watgunge Street, Calcutta on April 25, 1968. In course of the search currencies of different foreign countries including 1273 US dollars and 20,700 Japanese yen were recovered. When the search was in progress there was a telephone call for the appellant which was attended to by a search witness present there. The caller, who did not disclose his identity, enquired as to whether "the goods" were ready for delivery, and in reply thereto the search witness asked him to come to the spot. After sometime, a man came to the business premises of the appellant carrying a leather bag in his hand and disclosed his identity as Ramabatar Kabra of 12, Sikdarpara Street, Calcutta. In reply to questions put by the officers of Enforcement Branch conducting the search. Sri Kabra disclosed that he came with Indian currency to purchase dollars from the appellant, as per previous appointment. Sri Kabra was thereupon searched and a sum of Rs. 32,000 was found in the leather bag he was carrying.

(3.) After investigation into the case, adjudication proceedings in accordance with the provisions of the Act were initiated against, amongst others, the appellant and he was asked to show cause why the foreign currencies seized from him should not be confiscated for his having acquired the same from different parties in Calcutta, who were not authorised dealers, in contravention of Section 4(1) of the Act. In showing cause and at the time of hearing of the adjudication proceeding the appellant denied the charge and claimed that nothing was recovered from his possession. On perusal of the materials placed before him the Director of Enforcement, who initiated the adjudication proceeding, found that the foreign currencies were recovered from the appellant and that the same were not acquired in a lawful manner. The Director also observed that from the circumstances relating to the presence of Sri Kabra in the shop of the appellant at the time of the search, it was crystal clear that the appellant was in the habit of illegally dealing in foreign currency. He, therefore, held the appellant guilty of contravening the provision of Section 4(1) of the Act and imposed a penalty of Rs. 40,000. In the appeal preferred by the appellant, the Foreign Exchange Regulation Appellate Board concurred with the finding of the Director that foreign currencies were found in possession of the appellant and that they were not planted, as was contended by the appellant. The Board, therefore, upheld the finding of the Director that the appellant had unlawfully kept foreign exchange of considerable value in his premises without obtaining necessary permission from the Reserve Bank and dismissed the appeal. No comment was however made by the Board regarding the finding of the Director that the appellant was in the habit of illegally dealing in foreign currency.