2013 (10) TMI 1596 - AT - Indian Laws

Tribunal Confirms Voluntary Statements; Appellant Guilty u/ss 9(1)(b) & 9(1)(d) of Foreign Exchange Act; Penalty Reduced.

Raj Kumar Damani Versus Director of Enforcement, Enforcement Directorate

Raj Kumar Damani Versus Director of Enforcement, Enforcement Directorate - TMI 1. ISSUES PRESENTED and CONSIDEREDThe primary legal issues considered in this judgment are:Whether the statements used against the appellant, which were allegedly obtained under duress, were voluntary and admissible.Whether the appellant was rightly held guilty of contravening the provisions of the Foreign Exchange Regulation Act, 1973 (FERA) based on the evidence presented.Whether the penalty imposed on the appellant was excessive and warranted reduction.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Voluntariness and Admissibility of StatementsRelevant legal framework and precedents: The legal framework involves the Foreign Exchange Regulation Act, 1973, particularly sections 9(1)(b) and 9(1)(d). The principle of law requires that statements used in proceedings must be voluntary, especially if retracted, and the burden of proving voluntariness lies with the prosecution.Court's interpretation and reasoning: The Tribunal acknowledged that the appellant had retracted his statements, claiming they were obtained under duress. However, the Tribunal found the statements to be voluntary as they were detailed, consistent, and spread over 20 days, reducing the likelihood of coercion.Key evidence and findings: The appellant's statements were corroborated by documentary evidence and the testimony of employees, supporting the claim of voluntary confession.Application of law to facts: The Tribunal applied the principle that the burden of proving voluntariness lies with the prosecution, which was met through corroborative evidence.Treatment of competing arguments: The appellant argued the statements were coerced, but the Tribunal found no corroborative evidence for this claim, thus accepting the statements as voluntary.Conclusions: The Tribunal concluded that the statements were voluntary and admissible, supporting the charges against the appellant.Issue 2: Guilt under FERA ProvisionsRelevant legal framework and precedents: The appellant was charged under sections 9(1)(b) and 9(1)(d) of the FERA for receiving and making payments on behalf of a person residing outside India without RBI authorization.Court's interpretation and reasoning: The Tribunal found that the appellant's actions, as detailed in his statements and corroborated by evidence, constituted a violation of the FERA provisions.Key evidence and findings: The evidence included the appellant's statements, seized documents, and testimony from employees, all indicating illegal transactions.Application of law to facts: The Tribunal applied the FERA provisions to the facts, finding that the appellant's actions were deliberate and aimed at earning commissions through illegal transactions.Treatment of competing arguments: The appellant's claim of false implication was dismissed due to lack of evidence and corroboration from independent witnesses.Conclusions: The Tribunal upheld the appellant's guilt under the relevant FERA provisions.Issue 3: Penalty ImpositionRelevant legal framework and precedents: The penalty was imposed under the FERA for contraventions, with the Tribunal having discretion to adjust penalties based on circumstances.Court's interpretation and reasoning: The Tribunal considered the confiscation of the seized amount and deemed the initial penalty excessive, opting for a reduction.Key evidence and findings: The Tribunal considered the appellant's financial gain from the transactions and the confiscated amount.Application of law to facts: The Tribunal applied the principle of proportionality in penalties, reducing the penalty to Rs. 2 lakh.Treatment of competing arguments: The appellant's request for penalty reduction was partly granted, considering the confiscated amount.Conclusions: The Tribunal reduced the penalty, finding it excessive relative to the confiscated amount.3. SIGNIFICANT HOLDINGSPreserve verbatim quotes of crucial legal reasoning: 'The Tribunal cannot say that the onus was on a person making the statement to show that there was duress, torture or inducement.'Core principles established: The burden of proving the voluntariness of retracted statements lies with the prosecution, and penalties should be proportional to the offense and circumstances.Final determinations on each issue: The statements were deemed voluntary and admissible; the appellant was found guilty under FERA provisions; the penalty was reduced to Rs. 2 lakh.