1992 (6) TMI 191 - AT - FEMA

Tribunal Confirms Charges Against Appellants for Violating Foreign Exchange Regulation Act; Penalties Imposed.

R. Murugesan Versus Director of Enforcement

The Tribunal upheld the adjudication orders, dismissing the appeals and confirming the charges against the appellants for contravening sections 9(1)(a), ... - Issues:Violation of sections 9(1)(a), 9(1)(b), and 9(1)(d) of the Foreign Exchange Regulation Act, 1973.Detailed Analysis:1. Violation of Section 9(1)(d):- The appellant, Shri R Murugesan, paid Rs. 20,000 to Shri Munisamy under instructions from Shri Srinivasan, a person resident outside India.- The appellant contended that he acted as an agent of Shri Srinivasan and had no connection in the transaction.- The Tribunal held that section 9(1)(d) prohibits any payment by or on behalf of a person resident outside India through his agent in India.- The contention of acting as an agent did not absolve the appellant from contravening section 9(1)(d).- The Tribunal confirmed the charge of contravention of section 9(1)(d) against the appellant.2. Violation of Section 9(1)(b):- Shri Munisamy received Rs. 20,000 from Shri Murugesan under instructions of his brother, Shri Sivaprakasam of St. Paul Reunion.- The money was deposited into the account of Mrs. Sarojini, wife of Shri Srinivasan.- The appellant maintained that he acted in good faith and rendered a service without any benefit.- The Tribunal held that even receipt of money on behalf of a person resident outside India falls under section 9(1)(b) if no permission from the Reserve Bank is obtained.- The charge of contravention of section 9(1)(b) was established against the appellant.3. Violation of Section 9(1)(a):- Shri Munisamy made a payment for the credit of Smt. Sarojini, a person resident outside India, without permission from the Reserve Bank.- The appellant admitted to the payment but claimed it belonged to Shri Srinivasan and was deposited in his wife's account.- The Tribunal held that family transactions are not excluded from the scope of section 9(1)(a).- The charge of contravention of section 9(1)(a) was established against the appellant.4. Penalty Imposition:- The Adjudicating Officer imposed a penalty of Rs. 500 for each violation, considering the contravention involving Rs. 20,000.- The Tribunal found the penalty reasonable and lenient, especially since the amount was not confiscated in addition to the penalty.- The Tribunal dismissed the appellants' argument that the penalty was excessive.5. Final Decision:- The Tribunal found no merit in the appeals and confirmed the adjudication orders.- The appeals were dismissed, upholding the penalties and charges against the appellants for violating the Foreign Exchange Regulation Act.