2012 (4) TMI 561 - AT - FEMA

Tribunal Reverses FERA Penalties Due to Lack of Evidence

DUNGARMAL S. DOSHI Versus SPECIAL DIRECTOR, ENFORCEMENT DIRECTORATE

The Tribunal set aside penalties imposed on Mody Brothers and Anil Mody for contravention of specific sections of FERA, 1973 due to lack of evidence. ... - Issues Involved:1. Validity of penalties imposed for contravention of Section 9(1)(a) and Section 9(1)(e) of FERA, 1973.2. Reliance on retracted statements and unauthenticated documents.3. Applicability of procedural provisions of FEMA, 1999 to cases under FERA, 1973.4. Inherent power of the Tribunal to review its own orders.Summary:Issue 1: Validity of penalties imposed for contravention of Section 9(1)(a) and Section 9(1)(e) of FERA, 1973The Tribunal reviewed penalties imposed on the appellants for contravention of Section 9(1)(a) and Section 9(1)(e) of FERA, 1973. The Tribunal concluded that the penalties imposed on Mody Brothers and Anil Mody for violation of Section 9(1)(a) and 9(1)(e) were set aside due to lack of evidence. However, the penalty of Rs. 15,00,000/- on the appellant for violation of Section 9(1)(a) was maintained, while the penalty of Rs. 20,000/- for violation of Section 9(1)(e) was set aside.Issue 2: Reliance on retracted statements and unauthenticated documentsThe appellant argued that the impugned order relied on a retracted statement and unauthenticated handwritten documents. The Tribunal noted that the handwritten letter dated 24-5-1994, which was critical in concluding the violation, was not authenticated by a handwriting expert and was recovered from the premises of Shri Anil Mody, not the appellant. The Tribunal acknowledged that the reliance on such unauthenticated documents was erroneous.Issue 3: Applicability of procedural provisions of FEMA, 1999 to cases under FERA, 1973The Tribunal clarified that the procedural provisions of FEMA, 1999 cannot be imported into FERA, 1973 cases. The Tribunal emphasized that FERA, 1973 is a self-contained code and the adjudication proceedings must be governed by the provisions of FERA, 1973, even though the Tribunal is constituted under FEMA, 1999. Section 49(4) of FEMA, 1999 clearly saves the provisions of the repealed FERA, 1973 for offences committed under it.Issue 4: Inherent power of the Tribunal to review its own ordersThe Tribunal examined whether it has the inherent power to review its own orders. It was concluded that the Tribunal is allowed to correct clerical errors u/s 65 of FERA, 1973 but cannot modify the contents of an order unless an apparent error is demonstrated on the face of the order. The Tribunal referenced several Supreme Court judgments to emphasize that a review is not an appeal in disguise and is limited to correcting patent errors.Conclusion:The Tribunal rejected the review petition, stating that there is no provision in FERA, 1973 enabling the Tribunal to review its own order passed on merits. The petition for rehearing and recalling the order dated 21-2-2011 was dismissed as neither maintainable in facts nor in law.