2024 (10) TMI 391 - AT - FEMA

SAFEMA Tribunal reduces penalty to Rs. 10 lakh considering appellant's death and 19-year delay under Section 9(1)(f)(i) FERA 1973

Arun Kumar Bajoria Versus Director, Directorate of Enforcement, Delhi

The Appellate Tribunal SAFEMA upheld the Adjudicating Authority's finding that the Appellant violated Section 9(1)(f)(i) of FERA 1973 based on seized ... Validity of proceedings under FERA - Violation of Section 9(1)(f)(i) of FERA 1973 - failure to permit the Appellant to cross-examine - HELD THAT:- Suffice it to say that there is sufficient evidence on record for the Ld. Adjudicating Authority to hold that the Appellant was indeed guilty of violating Section 9(1)(f)(i) of FERA 1973 that called for imposition of penalty on him. Adjudicating Authority has recorded a finding that clinching evidence is there to impose penalty on Shri Keshav Bangur and the Appellant. He observed that corroboratory statements of the version of Shri Keshav Bangur were available in the depositions of the Appellant and of Shri Prakash Khaitan. Ld. Adjudicating Authority has further observed that while the Appellant stayed away from giving a clean statement he did admit making payment to Shri Keshav Bangur for payment of duties in his statements dated 19.02.1998 and 20.02.1998. Hence, Ld. Adjudicating Authority could not absolve the Appellant on the basis of his denial about the fact of arranging foreign exchange transaction overseas yet having admitted other transactions. He found that the whole case was based on seized documents and its explanation offered by the concerned persons and contemporaneous evidences. The plea of the Appellant that in his statement u/s 40 of FERA 1973, he did not admit arranging for foreign exchange transaction on payment of Indian Rupees by Shri Keshav Bangur does not cut much ice in face of seizure of crucial documents from the residence of Shri Bangur and his explanation thereof which have been corroborated by the statements of Shri Prakash Khaitan and Shri AK Jain on certain material facts. The findings of the Ld. Adjudicating Authority in the impugned Order cannot be disturbed. Appellant expired on 28.03.2008 and his widow has substituted the Appellant as legal heir. We further note that 20% of the amount of penalty has been pre-deposited. The Appeal was filed on 28.01.2005 and has remained pending for almost 19 years even though having been reserved for orders thrice on 08.10.2014, 13.08.2015 and 21.04.2016. In view of these attenuating factors and in the interest of justice the penalty amount is reduced to Rs. 10,00,000/- which is the pre-deposit already made by the Appellant. Issues:1. Violation of Section 9(1)(f)(i) of FERA 19732. Denial of cross-examination and violation of principles of natural justiceDetailed Analysis:Issue 1: Violation of Section 9(1)(f)(i) of FERA 1973The judgment pertains to an appeal filed against an order imposing a penalty on the Appellant for contravening Section 9(1)(f)(i) of FERA 1973. The Appellant, along with other individuals, was alleged to be involved in a transaction related to the purchase of shares and transfer of funds overseas. The Adjudicating Authority based its decision on seized documents, statements of involved parties, and corroborating evidence. Despite the Appellant denying arranging any foreign exchange transaction, the Authority found sufficient evidence to uphold the penalty. The Tribunal noted the Authority's findings and upheld the penalty, considering the evidence presented.Issue 2: Denial of cross-examination and violation of principles of natural justiceThe Appellant contended that the denial of cross-examination violated the principles of natural justice. The Adjudicating Authority had not allowed cross-examination during the proceedings, citing that the accused cannot claim it as a right under FERA 1973. The Authority provided the Appellant with relevant statements and documents but denied cross-examination. The Tribunal referred to previous judgments emphasizing that the disclosure of documents and the opportunity to explain them constituted substantial compliance with natural justice. The Tribunal found that the denial of cross-examination did not prejudice the Appellant's case, as there was enough evidence to support the penalty. The Tribunal upheld the Authority's decision but reduced the penalty amount due to mitigating circumstances and the Appellant's demise.In conclusion, the Tribunal partially allowed the appeal, reducing the penalty amount to the pre-deposit made by the Appellant. The judgment highlighted the importance of evidence, compliance with legal procedures, and the discretion of the Adjudicating Authority in allowing cross-examination.