Evidentiary proof of FEMA non-compliance failed where contemporaneous records supported share transfer compliance and no corroboration of forgery emerged

The tribunal's analysis on alleged FEMA contravention turned on evidentiary sufficiency: contemporaneous consent letters, pricing undertakings, valuation material, tax-clearance documents and banking records supported the share transfer's compliance with RBI/FEMA requirements. The appellant relied mainly on a Chartered Accountant's denial but produced no independent corroboration of forgery. On that record, the allegation of forged documents and breach of FEMA was not established, and the respondents' exoneration was sustained.

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Issues: Whether the respondents had contravened FEMA and the RBI guidelines by allegedly submitting forged certificates and whether the share transfer transaction was non-compliant with the pricing, documentation, and reporting requirements.

Analysis: The appeal turned on the evidentiary value of the Chartered Accountant's denial against the documentary record produced by the respondents. The record showed submission of the seller and buyer consent letters, undertaking on pricing compliance, certificate on overseas corporate body status, fair value certificate, tax clearance documents, and banking records through the authorised dealer bank. The adjudicating authority and the appellate tribunal found that the appellant relied only on the statement of the Chartered Accountant and failed to produce corroborative evidence proving forgery. The tribunal also noted the supporting invoice and the parallel valuation certificate obtained from another Chartered Accountant, which reinforced the respondents' version that the transaction was processed in accordance with the RBI circular and FEMA framework. In these circumstances, the allegation of forged documents and resultant contravention of FEMA was held not to be established.

Conclusion: The alleged FEMA violation was not proved, and the exoneration of the respondents was sustained.

Ratio Decidendi: A charge of forgery or FEMA contravention cannot be upheld on a bare denial alone when the transaction is supported by contemporaneous documentary compliance with the RBI framework and no independent corroboration of wrongdoing is produced.

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