2024 (9) TMI 121 - AT - FEMA

SAFEMA Appellate Tribunal upholds adjudication order dismissing natural justice violation claims and cross-examination denial arguments

The Appellate Tribunal under SAFEMA dismissed appeals challenging an adjudication order. Appellants claimed violation of natural justice principles, ... Admissibility of retracted statements - requirement of corroboration for retracted confessions - principles of natural justice - denial of cross-examination - reliance on seized documents and statements recorded under Section 40 FERA - lawful conduct of search and seizureAdmissibility of retracted statements - requirement of corroboration for retracted confessions - Whether retracted statements of the noticees were admissible and could be relied upon in the adjudication proceedings - HELD THAT: - The Tribunal upheld the Adjudicating Authority's view that retracted inculpatory statements are admissible in quasi judicial proceedings provided they are corroborated by independent documentary evidence. The Adjudicating Authority had applied its mind to the subsequent retractions and recorded reasons for accepting the statements. The statements in the present case were explanatory of documents seized during search, and those documents corroborated the statements. Reliance placed upon Supreme Court authorities recognising that retracted confessional statements may be used as corroborative evidence was approved. The Tribunal found no infirmity in treating the retracted statements as admissible given the corroboration and the Adjudicating Authority's recorded consideration of the retractions. [Paras 6, 8]Retracted statements were admissible and properly relied upon as they were corroborated by independent seized documents and the Adjudicating Authority had recorded reasons after considering the retractions.Principles of natural justice - denial of cross-examination - reliance on seized documents and statements recorded under Section 40 FERA - Whether denial of the request for cross examination vitiated the adjudication for lack of fair hearing - HELD THAT: - The Tribunal accepted the Adjudicating Authority's finding that the noticees had been repeatedly granted opportunities over the long course of proceedings and that the relied upon documents and statements had been supplied to and inspected by the noticees. The Adjudicating Authority concluded that the demand for cross examination was not substantiated by material showing prejudice, and in any event cross examination of a foreign resident witness (allegedly resident in Dhaka) was impracticable. Authorities were noted to the effect that disclosure of documents and opportunity to explain them may constitute substantial compliance with natural justice where cross examination is not demonstrably necessary to avoid prejudice. On the facts the Tribunal found no miscarriage of justice from refusing further cross examination. [Paras 7, 9]Denial of cross examination did not vitiate the proceedings; there was substantial compliance with principles of natural justice because relied upon documents were disclosed and opportunities to be heard had been afforded.Lawful conduct of search and seizure - reliance on seized documents and statements recorded under Section 40 FERA - Whether the search, seizure and identification of seized documents were illegal or rendered the proceedings unsustainable - HELD THAT: - The Adjudicating Authority recorded that searches and seizures were conducted in the presence of independent witnesses and concerned persons who signed the seizure memo and the seized documents. The Tribunal found that these factual findings had been adequately considered and that allegations of fabrication were unsubstantiated by any material. Because the seized documents were produced, inspected by the noticees and explained in statements, the Tribunal found no reason to hold the seizures illegal or to set aside reliance on the seized material. [Paras 6]Search and seizure were held to have been carried out in accordance with procedure and the seized documents could be relied upon.Requirement of proof for allegations of coercion - burden on maker to establish inducement, threat or coercion - Whether allegations that statements were recorded under threat, coercion or torture were established and vitiated the proceedings - HELD THAT: - The Tribunal endorsed the Adjudicating Authority's view that mere allegations of coercion without supporting material were insufficient. It noted the legal principle that the maker of a statement who alleges inducement, threat or coercion must establish such improper means; absent such proof, the authority must still consciously consider retraction but may accept the statement if corroborated. On the record the Adjudicating Authority had considered and rejected the coercion claims in writing and the Tribunal found no error in that approach. [Paras 6, 8]Allegations of coercion were not established and did not vitiate the statements or proceedings.Effect of delay and non cooperation on entitlement to relief - Whether appellants' delay, repeated adjournments and/ or non cooperation warranted intervention in the Adjudicating Authority's conclusion - HELD THAT: - The Adjudicating Authority noted the noticees' pattern of seeking adjournments and the long duration of proceedings; it also recorded lack of co operation by certain noticees during investigation and adjudication. The Tribunal accepted that these factual findings supported the Adjudicating Authority's decision to proceed on available materials after giving multiple opportunities. The appellants' belated attempts to challenge identity of agents or other factual denials without corroboration were held insufficient to upset the adjudication. [Paras 6, 7]Delay and non cooperation did not afford appellants relief; the Adjudicating Authority was justified in deciding on the materials on record.Final Conclusion: The Tribunal found no infirmity in the impugned order: retracted statements corroborated by seized documents were admissible, the refusal to permit further cross examination did not deny principles of natural justice on the facts, searches and seizures were held lawful, and allegations of coercion were unproved. The Appeals are dismissed. Issues Involved:1. Violation of principles of natural justice.2. Denial of cross-examination requests.3. Admissibility of retracted statements.4. Legitimacy of search and seizure operations.5. Adequacy of evidence provided to the appellants.6. Identity confusion regarding one of the appellants.7. Delay in proceedings and non-cooperation by appellants.Detailed Analysis:1. Violation of Principles of Natural Justice:The appellants contended that the impugned order was ex-parte and violated principles of natural justice as they were not given an effective hearing. The Tribunal, however, found that the appellants were given numerous opportunities to present their case and that the procedural requirements were met. The Tribunal noted that the appellants had a tendency to request adjournments without valid reasons, leading to prolonged proceedings. Thus, the claim of violation of natural justice was not upheld.2. Denial of Cross-Examination Requests:The appellants argued that their request for cross-examination of co-noticees was denied, which was crucial as the statements were allegedly obtained under coercion. The Tribunal held that the appellants did not provide sufficient evidence to substantiate their claims of coercion. It was noted that the search and seizure operations were conducted in compliance with legal procedures and in the presence of independent witnesses. Therefore, the denial of cross-examination did not prejudice the appellants' interests.3. Admissibility of Retracted Statements:The appellants retracted their statements, claiming they were made under duress. The Tribunal referred to the Supreme Court judgments in *Vinod Solanki Vs Union of India* and *K.T.M.S Mohamed Vs. Union of India*, which held that retracted statements could be admissible if corroborated by independent evidence. The Tribunal found that the retracted statements were corroborated by documents seized during the search, making them admissible.4. Legitimacy of Search and Seizure Operations:The appellants questioned the legitimacy of the search and seizure operations, alleging that documents were fabricated. The Tribunal found no merit in these allegations, noting that the operations were conducted in the presence of independent witnesses and the concerned parties. The seized documents were signed for identification and confirmation of recovery, thus validating the operations.5. Adequacy of Evidence Provided to the Appellants:The appellants claimed they were not provided with all the relied-upon documents. The Tribunal found that the documents seized from the business premises were explained in the appellants' statements and were made available for inspection. Therefore, the claim that the adjudicating authority failed to provide necessary details was deemed irrelevant.6. Identity Confusion Regarding One of the Appellants:One appellant, Sh. Liakat Ali, argued that the allegations were against a different individual with the same name. The Tribunal dismissed this claim due to the appellant's failure to cooperate during investigations and adjudication proceedings. The Tribunal held that the appellant's belated participation could not exonerate him without corroborative evidence.7. Delay in Proceedings and Non-Cooperation by Appellants:The respondents contended that the appellants were responsible for delays and non-cooperation during proceedings. The Tribunal observed that the appellants' conduct contributed to the prolonged adjudication process. The Tribunal also noted that the appellants' retractions and claims were addressed and dismissed by the adjudicating authority, which had carefully considered the evidence and circumstances.Conclusion:The Tribunal dismissed the appeals, finding no reason to intervene in the impugned order. The Tribunal held that the adjudicating authority had duly considered the appellants' contentions and provided sufficient opportunities for them to present their case. The principles of natural justice were not violated, and the retracted statements were deemed admissible as they were corroborated by independent evidence. The search and seizure operations were conducted lawfully, and the denial of cross-examination did not prejudice the appellants' interests.