2008 (12) TMI 846 - AT - FEMA

Tribunal Upholds Penalty for FERA Violation; Affirms Evidence Link to Appellant's Economic Offense, Rejects Cross-Examination Claim.

Bawarlal C. Jain Versus Director Enforcement Directorate

Bawarlal C. Jain Versus Director Enforcement Directorate - TMI Issues:1. Contravention of provisions of Section 9(1)(b) of the Foreign Exchange Regulation Act, 1973.2. Cross-examination of witnesses and its relevance in the case.3. Burden of proof in economic offenses under FERA, 1973.Analysis:1. The appeal was filed against an Adjudication Order imposing a penalty for contravention of Section 9(1)(b) of FERA, 1973. The appellant received a payment from a person resident outside India, as revealed during investigations following a seizure of documents from another individual, Mohanlal. The appellant denied receiving any payment and argued lack of evidence against him. However, the tribunal found a clear link between Mohanlal and the appellant based on seized documents and the appellant's association with the firm mentioned in the documents. The tribunal upheld the guilt of the appellant under Section 9(1)(b) due to the established link and lack of explanation for the association.2. The appellant raised the issue of not being allowed to cross-examine witnesses, specifically Mohanlal. However, it was noted that the appellant did not make a separate application for cross-examination of witnesses, including Mohanlal, before the Adjudicating Officer. Citing a Supreme Court ruling, the tribunal emphasized that the denial of cross-examination without sufficient reason does not violate principles of natural justice. The tribunal found no merit in the appellant's argument regarding the denial of cross-examination, as there was no specific request made for Mohanlal's cross-examination and no valid reason provided for the same.3. The tribunal discussed the burden of proof in economic offenses under FERA, 1973, emphasizing that the prosecution is not required to prove its case with mathematical precision. Referring to a Supreme Court case, it was highlighted that legal proof does not require absolute certainty but a degree of probability that a prudent person may believe in the existence of the fact in issue. The tribunal concluded that the impugned order correctly established the guilt of the appellant under Section 9(1)(b) and the penalty imposed was commensurate with the violations. The appeal was dismissed, affirming the impugned order and appropriating the pre-deposited amount towards the penalty.