TaxTMI 
TaxTMI 
2007 (4) TMI 693
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....the complaint was filed against accused persons under Foreign Exchange Regulation Act, 1973, (FERA in brief). The present applicant moved an application before the Chief Judicial Magistrate to recall the process, but that application was rejected. Thereafter, he filed revision application dtd. 2/7/1996, which also came to be dismissed by the learned Additional Sessions Judge, Pune. Thereafter the applicant filed the present application under Section 482 of Cr.P.C. seeking to quash the order passed by the learned Judge. Petitioner contends that there is no material to establish that he had received amount of Rs. 30 Lacs for transferring amount of 2 Lac Pounds to P.M. Engines Ltd., London on behalf of M/s Kirloskar Brothers. According to him, there was nothing to show that the present applicant had violated any provisions of Foreign Exchange Regulation Act, 1973 and particularly Section 9(a) read with Section 56 of the said Act. 3. Heard Mr. Amit Desai, learned Counsel for the applicant and Mr. Nalawade, learned Special Public Prosecutor for respondent No. 1. 4. Mr. Desai, learned Counsel for the applicant vehemently contended that there is no documentary evidence to prove that the....
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....ver India against M/s Kirloskar Brothers Limited and various other sister concerns/subsidiaries as well as residence and office premises of their Directors and their employees, as many as 15 show cause notices were issued to M/s Kirloskar Brothers, its Directors and various Officers. Show cause Notice VIII was under Section 9(1)(f)(1) of the FERA on the allegation that the Company had made payment of Rs. 30 Lacs to H.M. Kothari of M/S DSP Financial Consultants Limited, Mumbai for transferring the amount of 2 Lac Pounds to M/s P.M. Engines, Ltd. London. During the search and other proceedings, the Officers of the Enforcement Directorate recorded statements of some persons. Relevant statements were of M.M. Vaidya, Bhadkamkar and R.D. Harshe of M/s A.T.C.. Their statements revealed that the amount was paid to the present applicant on behalf of M/s Kirloskar Brothers for transfer of amount of 2 Lac Pounds to P.M. Engines, London. In response to the notice, the applicant had denied all the contentions made against him. According to him, he was only non -Executive Director of M/s Kirloskar and had nothing to do with the transfer money or the transaction. The adjudicating authority came t....
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....or the transfer of 2 Lac Pounds to P.M. Engines, London, merely the retracted statement of Mr. Vaidya was not sufficient to hold the applicant guilty. He held that the charge pertaining the transfer of 2 Lacs Pounds to P.M. Engines Limited by Kirloskar Brothers was established, but there was nothing on the basis of which the responsibility could be fastened against Mr. H.M. Kothari. In view of these circumstances, the adjudicating authority held that the charges against Mr. H.M. Kothari were not proved. 6. It is true that when the Additional Sessions Judge heard and disposed of the revision application filed by the applicant, the findings of adjudicating authority were not on record and they could not be considered because the adjudication proceedings were still pending and the order came to be passed only on 21st July 2004. However, now the material, which is available before this Court, cannot be simply ignored. 7. Mr. Desai vehemently contended that it is settled position in law that whilst the pendency of adjudication proceeding is not a bar to the initiation or maintainability of a prosecution in respect of the same set of facts / transactions, in the event the departmental ....
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....n in issue and in a appropriate case it may drop the proceedings in the light of an order passed under the Act. It does not, however, mean that the result of a proceeding under the Act would be binding on the criminal court. The criminal court has to judge the case independently on the evidence placed before it. 48. The above principle of law laid down by this court gives an indication that the result of the proceedings under the IT Act is one of the major factors to be considered and the resultant finding in the said proceeding will have some bearing in deciding the Criminal Prosecution in appropriate cases. 49. It may not be out of place to refer to an observation of this Court in Uttam Chand v. I.T.O. it was observed that the prosecution once initiated may be quashed in the light of a finding favourable to the assessee recorded by an authority under the Act subsequently in respect of the relevant assessment proceedings. But in Jayappan's case, it has been held that the decision in Uttam Chand's case is not an authority for the proposition that no proceedings can be initiated at all under Section 276(c) and Section 277 as long as some proceeding under the Act in which t....
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....e aforesaid orders, we are of the opinion that no useful purpose would be served by the trial of the accused-respondents in the criminal court at this stage. The proceedings of the criminal cases instituted against the accused-respondents on the basis of the complaints filed by Deputy Chief Controller of Imports and exports are, therefore, quashed. 13. In K.C. Builders and Anr. v. The Assistant Commissioner of Income Tax , the Supreme Court quashed the criminal proceedings on the ground that the Income Tax Tribunal had given conclusive findings that there was no concealment of income. Their Lordship observed in para 25, as follows: 25. In our opinion, the appellants cannot be made to suffer and face the rigours of criminal trial when the same cannot be sustained in the eyes of law because the entire prosecution in view of a conclusive finding of the Income Tax Tribunal that there is no concealment of income becomes devoid of jurisdiction and under Section 254 of the Act, a finding of the Appellate Tribunal supersedes the order of the Assessing Officer under Section 143(3) more so when the Assessing Officer cancelled the penalty levied. 14. Mr. Nalawade, learned Counsel for the r....
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....on here. 15. Mr. Desai, however, vehemently contended that in the above passage from the Standard Chartered Bank, the Supreme Court had only expressed that the view taken in K.C. Builders may require the reconsideration as the reasoning appears to run counter to the one adopted by the Constitution Bench in Assistant Collector of Customs Bombay v. L.R. Melwani and Anr. However, their Lordship did not pursue the matter further and held that the said ratio in K.C. Builders had no application to the Standard Chartered Bank. 16. According to Mr. Desai merely because the Supreme Court had expressed that K.C. Builders needs to be reconsidered, it cannot be said that the view taken in K.C. Builders has been reversed. In support of his contention, he placed reliance on numbers of authorities including Municipal Corporation of Delhi v. Gurnam Kaur , Krishena Kumar v. Balbir Singh and State of UP v. Synthetics and Chemicals Ltd. . In Municipal Corporation of Delhi v. Gurnam Kaur, the Supreme Court observed in para 10, as follows: 10. It is axiomatic that when a direction or order is made by consent of the parties, the Court does not adjudicate upon the rights of the parties nor lay down an....
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....and therefore in the inherent power under Section 482 Cr.P.C., the criminal proceeding should be quashed. 20. In Ushanes Nrupendra Mehta v. State of Maharashtra and Anr. 2004 ALL MR (Cri) 2129 which was also a case under FERA, in the appeal before Customs, Excise & Gold (Control) (Appellate Tribunal), Constituted under the Customs Act, was allowed and the petitioner was fully exonerated in adjudication proceeding and the order exonerating petitioner was not challenged by the revenue. It was held that in such circumstances, prosecution based on the same evidence and charges was liable to be quashed. 21. It may be noted that in the present case the applicant was exonerated by the Dy. Director of Enforcement, who was adjudicating authority, in the adjudication proceedings. Admittedly that order was not challenged in appeal by the respondent and thus that order has become final. I have already noted the facts and findings of the adjudicating authority in detail. The adjudicating authority had clearly come to the conclusion that there was no material to hold the present applicant guilty for contravention of the provisions of FERA and he was completely exonerated. When in the departmen....
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....ion. 25. In Haricharan Kurmi and Anr. v. State of Bihar , Supreme Court in para 16, observed as follows: 16. ...As we have already indicated, it has been a recognised principle of the administration of criminal law in this country for over half a century that the confession of a co-accused person cannot be treated as substantive evidence and can be pressed into service only when the court is inclined to accept other evidence and feels the necessity of seeking for an assurance in support of its conclusions deducible from the said evidence. In criminal trials, there is no scope for applying the principle of moral conviction or grave suspicion. In criminal cases where the other evidence adduced against an accused person is wholly unsatisfactory and the prosecution seeks to rely on the confession of a co-accused person, the presumption of innocence which is the basis of criminal jurisprudence assists the accused person and compels the court to render the verdict that the charges are not proved against him, and so, he is entitled to the benefit of doubt. 26. In Kashmira Singh v. The State of Madhya Pradesh , the Supreme Court dealt with a question of corroboration of accomplices and ....