2007 (10) TMI 273 - SC - Customs

Appeal by authority on government's behalf invalid without specific empowerment; voluntary confessions need independent corroboration before reliance

MOHTESHAM MOHD. ISMAIL Versus SPL. DIRECTOR, ENFORCEMENT DIRECTORATE

The SC allowed the appeal, holding that an adjudicating authority cannot file an appeal on behalf of the Central Government unless specifically empowered ... Remittance of payments to India from United Arab Emirates (UAE) through persons other than authorized dealers - Relevancy of confession of a co-accused person - Contravention of the provisions of Section 9(1)(b), 9(1)(d) and 9(3) - Whether a Special Director appointed under the Foreign Exchange Regulation Act, 1973 himself can prefer an appeal before the High Court against an order passed by the Foreign Exchange Regulation Appellate Board - HELD THAT:- From the notification dated 22.09.1989, whereupon reliance has been placed by Mr. Bhan, it would appear that the officer authorized by the Central Government for the purpose of enforcing the provisions of the Act was specifically empowered to adjudicate upon the dispute. The said notification itself is a pointer to the fact that for the purpose of exercising the functions of the Central Government under one provision or the other, the officer concerned must be specifically empowered in that behalf. A general empowerment would, however, be permissible. Before the High Court, no notification was filed to show that the authority concerned was empowered to prefer an appeal on behalf of the Central Government. The Central Government was not even impleaded as a party to the appeal. First Respondent did not file the appeal on behalf of or representing the Central Government. It was filed in its official capacity as the adjudicating authority and not as a delegatee of the Central Government. An adjudicating authority, although an officer of the Central Government, should act as an impartial Tribunal. An adjudicating authority, therefore, in absence of any power conferred upon it in this behalf by the Central Government, could not prefer any appeal against the order passed by the Appellate Board. The decision in Rama Arangannal [1980 (8) TMI 203 - HIGH COURT OF MADRAS] held that, as per Explanation to Section 54 of the Foreign Exchange Regulation Act 1973, only the Central Government can file and prosecute an appeal against the order of the Appellate Board, and not any other authority - Furthermore, the jurisdiction of the High Court could be exercised only when there existed a question of law and not a question of fact. The Board, as noticed hereinbefore, arrived at a finding of fact that there did not exist any material for holding that any violation of Section 9(3) of the Act had taken place. We may, however, notice that recently in Francis Stanly @ Stalin v. Intelligence Officer, Narcotic Control Bureau, Thiruvanthapuram [2006 (12) TMI 480 - SUPREME COURT], this Court has emphasized that confession only if found to be voluntary and free from pressure, can be accepted. A confession purported to have been made before an authority would require a closure scrutiny. It is furthermore now well-settled that the court must seek corroboration of the purported confession from independent sources. Thus, the High Court, in our opinion, should not have interfered with the findings of fact arrived at by the Appellate Board; without arriving at a finding that the same was perverse or in arriving thereat, the Board ignored legal principles. Appeal is allowed. Issues Involved:1. Maintainability of the appeal by the Special Director under the Foreign Exchange Regulation Act, 1973.2. Jurisdiction of the High Court to interfere with the findings of fact by the Foreign Exchange Regulation Appellate Board.3. Consideration of retraction of confession by the appellant.Issue-wise Detailed Analysis:1. Maintainability of the Appeal by the Special Director:The central issue was whether a Special Director appointed under the Foreign Exchange Regulation Act, 1973 (the Act) could prefer an appeal before the High Court against an order passed by the Foreign Exchange Regulation Appellate Board (the Board). The appellant was served a show cause notice by the Enforcement Directorate for alleged contravention of the Act's provisions. The Special Director adjudicated the matter and imposed a penalty, which was later overturned by the Board. The respondents (Enforcement Directorate) appealed to the High Court, which upheld the appeal's maintainability, stating that the Special Director had the authority to enforce the Act's provisions and thus could file an appeal. However, the Supreme Court disagreed, emphasizing that only the Central Government could file such an appeal, and the Special Director was not specifically authorized to do so. The Court cited previous judgments from the Madras High Court and the Punjab & Haryana High Court, which supported this view.2. Jurisdiction of the High Court to Interfere with the Findings of Fact by the Board:The appellant contended that the High Court could not interfere with the Board's factual findings. The High Court had opined that the Board's order was erroneous both on facts and in law, and restored the adjudicating authority's order. However, the Supreme Court held that the High Court's jurisdiction was limited to questions of law, not facts. The Board had found no evidence of actual remittance of amounts from abroad, and this factual finding should not have been interfered with by the High Court unless it was perverse or ignored legal principles.3. Consideration of Retraction of Confession by the Appellant:The appellant argued that the High Court failed to consider his retraction of the confession. The Supreme Court emphasized that a confession of a co-accused cannot be treated as substantive evidence and requires corroboration from independent sources. The Court cited several precedents highlighting that confessions need to be scrutinized closely and must be voluntary and free from pressure. The High Court should have taken into account the retraction and sought corroboration before relying on the confession.Conclusion:The Supreme Court set aside the High Court's judgment, holding that the appeal by the Special Director was not maintainable and that the High Court had overstepped its jurisdiction by interfering with the Board's factual findings. The Court also underscored the necessity of considering the retraction of the confession and seeking corroboration. The appeal was allowed, and the impugned judgment was not sustained.