Madras High Court
A. Ghouse Basha vs The Assistant Director, Enforcement ... on 10 January, 1986
Equivalent citations: 1986(9)ECC238
ORDER Swamikkannu, J.
1. This is a criminal revision case filed by A. Ghouse Basha accused in CC 11/82 on the file of the court of the learned Additional Chief Metropolitan Magistrate for Economic Offences against the judgment dated 16th February, 1982 in CA 403/82 on the file of the court of the learned Principal Sessions Judge, Madras Division, confirming the conviction of the revision petitioner herein under Section 56(1)(i) read with Section 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act. 1973 as well as the sentence of rigorous imprisonment for six months and fine of Rs. 10 in default to undergo rigorous imprisonment for one week and dismissing the appeal.
2. The case Of the prosecution as seen from the contents of the complaint filed before the the trial court by the Deputy Director of the Enforcement Directorate, Finance Ministry, Government of India, Sashtri Bhavan, Madras, against the accused revision petitioner herein is as follows:--
Information was received by the Enforcement Directorate, Madras, that the accused revision petitioner herein was indulging in receiving and making payments by order or on behalf of person resident outside India without the permission of the Reserve Bank of India, in violation of the provisions of the Foreign Exchange Regulation Act, 1973. Based on the said information, the residential premises of the accused at Nos. 16, 17 and 18, Dhanapal Ghetty Street, West Mambalam, Madras-33, were searched by the Officers of the Enforcement Directorate, Madras, on 29th October, 1979 on the strength of a search warrant issued by the Deputy Director of Enforcement Directorate, in the presence of two independent witnesses. During the search, the accused revision petitioner herein was also present. As a result of the search, certain incriminating documents such as foreign letters, money order receipts, chits, counterfoils numbering 114 and account book containing 176 pages were seized by the Enforcement Officer, Madras, on the reasonable belief that the same would be useful and relevant to the proceedings to be taken under the Foreign Exchange Regulation Act, 1973.
3. The accused revision petitioner herein gave a voluntary statement in his own handwriting before the Enforcement Officer on 29th October, 1979. In the said statement, the accused revision petitioner herein inter alia stated that his brother-in-law one Abdul Wahid is working as Ticket Collector in a cinema theatre in Singapore, that his brother-in-law used to help the passengers going to Singapore to purchase the goods and the passengers on their return would give the amount to him after the sale of the goods; that on certain occassions he used to arrange payments to him, that his brother-in-law used to instruct him in his letters to make payments to the persons mentioned by him with the amounts so arranged by him, that as per instructions he received from his brother-in-law he made payments. The accused further stated that the seized documents in the form of letters and accounts showed the details of the payments received and made by him during the year 1978-79, as instructed by his brother-in-law in Singapore.
4. Scrutiny of the documents and the accounts seized from the accused revision petitioner herein and the statement given by him indicated that the accused had during the years 1978-79, received six payments amounting to Rs. 58,200 and had made 34 payments amounting or Rs. 69,200 by order or on behalf of his brother-in-law residing in Singapore, without the permission of the Reserve Bank of India. Consequently, two show cause notices were issued to the accused for the aforesaid offences on 29th January, 1980. The accused sent his reply to the show cause notices on 13th February, 1980. In the said reply, the accused pleaded guilty to the charges.
5. The accused was granted a preliminary hearing in the matter on 14th . April, 1980 and the Deputy Director of Enforcement, after considering the plea of the accused and the entire evidence on record, passed an order of adjudication on 15th April, 1980. In the said order, the Deputy Director found the accused guilty of both the charges under Sections 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973 and imposed penalties of Rs. 10,000 each in respect of the two offences.
6. It is, therefore, evident from the documents seized from the accused and his voluntary statement that the accused has contravened the provisions of Sections 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973 in having received six payments amounting to Rs. 58,200 and in having made 34 payments amounting to Rs. 69,200 during the years 1978-79, by order or on behalf of his brother-in-law Abdul Wahid, a person resident outside India, without the general or special exemption from the Reserve Bank of India. The accused has, therefore, rendered himself liable to be proceeded against under Section 56(1)(i) of the Foreign Exchange Regulation Act, 1973. Therefore, the complainant prayed that the trial court do take the complaint on file and deal with the accused according to law. The complainant is empowered to file complaint by the virtue of the Government of India notification No. F. 1/72/EC/73-14, dated 1st April, 1974 issued by the Ministry of Finance, Department of Economic Affairs, New Delhi.
7. Before the trial court, on behalf of the complainant P.W. 1 Mukundhan and P.W. 2 Ramasamy were examined. Ex. P. 1 search warrant dated 29th January, 1979, Ex. P-2 series consisting of letters, cheques, envelopes, postal acknowledgements in all 116 documents, Ex. P-3 account book, Ex. P-4 mahazar dated 29th October 1979, Ex. P-5 the statement of the accused revision petitioner herein dated 29th October, 1979, Ex. P-6 series consisting of letters, envelopes and bits of paper, Ex. P-7 copy of the show cause notice dated 29th January, 1980, Ex. P-8 copy of the show cause notice dated 29th January, 1980, Ex. P-9 the reply of the accused revision petitioner herein dated 13th Fabruary, 1980, Ex. P-10, the order of the Deputy Director dated 15th April, 1980 and Ex. P-11 copy of the appellate order dated 16th October, 1981, were filed on behalf of the prosecution before the trial court. No witness was examined on behalf of the accused and no document was filed on behalf of the accused revision petitioner herein.
8. The case of the prosecution in brief is as follows:--P.W. 1 Mukundhan is working now as Inspector in the Income-tax Department. On 21st October, 1979 he was the Executive Officer in the Office of the Enforcement Directorate. During that time, in pursuance of the search warrant that had been issued by the Deputy Director, Enforcement Directorate, viz., Ex. P-1, he searched the premises bearing Nos. 16, 17 and 18, Dhanapal Chetty Street, West Mambalam, in which the accused was living on 29th October, 1979 from 12.30 p.m. to 3.30 p.m. During that time, P.W. 2 Ramaswamy was also present along with P.W. I. The accused was also present during the time of the search. Two independent withnesses (were) also present at the premises during the time of the search. During the search 116 letters, viz., Ex. P-2 series, EX. P-3 an account book were seized. From the contents of the above documents, it was seen that the accused had been indulging in contravening the provisions of the Foreign Exchange Regulation Act, 1973. The documents were seized by P.W. 1 under Ex. P-4 mahazar. The copy of the said mahazar was given to the accused at that time. The accused was examined by P.W. 1 with respect to Ex. P-2 series and P-3. The accused revision petitioner herein had given Ex. P-5 statement, which was written by him and signed by him to P. W. 1 at that time. During that time, the accused gave Ex. P-6 series letters also to P.W. 1. Further steps were taken against the accused by the Deputy Director on 29th January, 1980. The Deputy Director sent two show cause notices to the accused, the Office copies of which are Ex. P-7 and P-8. The accused received them on 13th February, 1980 and pleaded guilty by incorporating his plea of guilty in his reply, which is Ex. P-9. After completing his enquiry on 15th April, 1980, the Deputy Director imposed on the revision petitioner herein a penalty of Rs. 10,000 for each of the two offences and passed an order to that effect. The copy of the said order is Ex. P-10. The revision petitioner herein preferred an appeal as against, the said order of the Deputy Director. On appeal, the penalty imposed by the Deputy Director had been reduced to Rs. 2,500 with respect to each of the offences. The copy of the appellate order is Ex. P-11.
9. Based on the materials on record, the Deputy Director issued the show cause notices on 29th January, 1980. The revision petitioner herein through his letter dated 13th February, 1980 had stated that he did not derive any benefit in the transaction and he just helped his sister and brother-in-law to discharge their debts. He stated that there are six dependents on him. He requested that he may be excused this time. During the time of the hearing also, he prayed before the Deputy Director for a sympathetic view as he has to support a family consisting of six dependents. The Deputy Director has stated in paragraphs 5, 6, 7 and 8 of his order as follows:--
5. I have gone through the records of the case and taken into consideration the written submission and oral submission made at the time of personal hearing. Shri Ghouse Basha has again stated before me that the amounts as detailed in the show cause notices were received and disbursed on the instructions of his brother-in-law Shri S.A. Abdul Wahid of Singapore.
6. The charge under Section 9(1)(b) is in respect of six amounts totalling to Rs. 58,200. Rs. 8,000: This amount was received from his brother Shri Abdul Wahab who came here from Singapore on the instructions of his brother-in-law Abdul Wahid of Singapore and disbursed the same to the persons mentioned against SI. Nos. 1, 2, 3 and 4 in the annexure to show cause notice under Section 9(1)(d). These transactions can be traced to sheets 2 and sheets 4 to 17 of the item 1 of the mahazar.
Rs. 10,000: This amount was received from his sister Halima Beevi on the instructions of his brother-in-law (sheets 31 to 44 of item 1 of the mahazar refers). In sheet No. 37 the author has described how the amount would reach Halima Beevi. The amounts has been denoted in code as "Thus Kellay". Rs. 10,000 and Rs. 15,000: These amounts were received from one Rasheed as per instructions of his brother-in-law. This can be traced to the letter, dated 12th July, 1979 written by Abdul Wahid (refer sheet 48 item 1). In this also the amounts have been denoted as "Thus Kallay" and "Panthrh Kallay". Rs. 12,000: This amount was received from Halima Beevi (sister) and paid to one Babu (uncle's son) as per Abdul Wahid's instructions (sheets 59 to 61 refers).
Rs. 3,200; This amount was received from his sister Halima Beevi on the instructions of his brother-in-law (sheets 49 to 54 of item 1 refers). Thus the charge under Section 9(1)(b) is established on the basis of seized documents coupled with the explanation given by Shri Ghouse Basha as well as that of Halima Beevi. I, therefore, hold him guilty of the said contravention and in exercise of powers conferred on me under Section 50 of the Act, I impose a penalty of Rs. 10,000 (Rupees ten thousand only) on him.
7. The documents connected with receipt of the above amounts and also the other documents as explained by Shri Ghouse Basha and Halima Beevi in their statements go to establish that 34 payments totalling to Rs. 69,200 as detailed in the Annexure to show cause notice Under Section 9(1)(d) were paid by him on the instructions of Abdul Wahid of Singapore. I, therefore, hold him also guilty of the contravention of Section 9(1)(d) of the said Act and impose a penalty of Rs. 10,000 (Rupees ten thousand only) on him under Section 50 of the said Act.
8. The penalties totalling to Rs. 20,000 (Rupees twenty thousand only) imposed on Shri A. Ghouse Basha should be paid at the office of the Deputy Director, Enforcement Directorate, 'Shastri Bhavan', 35, Haddows Road, Madras 600 006, by means of a demand draft in favour of the Deputy Director, Enforcement Directorate, Madras, within 45 days from the date of receipt of this order.
10. On appeal by the revision petitioner herein, as against the above order of the Deputy Director, the Foreign Exchange Regulation Appellate Board, Southern Zone, in Appeal 259/80 dated 16th October, 1981 has observed in its order as follows:--
The contraventions have been admitted by the appellant throughout the stage of adjudication proceedings and also now through his counsel in appeal before this Board. The evidence clearly shows that the appellant has committed the contraventions by way of receipt of a total amount of Rs. 58,200 and disbursed a total amount of Rs. 69,000. The finding of guilty arrived at by the learned Deputy Director is therefore upheld.
4. The only question for consideration hinges on the quantum of penalties. The contention of the learned Counsel is that the appellant is entitled to the maximum leniency, as he co-operated with the department from the very beginning and admitted the contraventions at every stage. The learned Counsel further stated that the appellant did not get any benefit out of these transaction and that he merely helped his own sister and brother-in-law in receiving and disbursing the amounts. The appellant is only a bus conductor and that he runs the risk of losing the job in case he is mulcted with a heavy penalty and forced to go to jail. Already proceedings are pending in the magistrate's court for the recovery of the penalties already imposed by the adjudication officer.
5. The circumstances clearly show that the appellant, whose main work is that of a conductor in the Pallavan Transport Corporation Limited, Madras was a victim of circumstances. He happened to lend his services for receiving and disbursing compensatory payments unauthorisedly at the instance of his own sister and brother-in-law. It does not appear that he has indulged in these transactions with a view to make a profit out of them. The amounts and the number of transactions involved arc, it is true, huge. However having regard to the circumstances of the case I am of the view that the ends of justice in this case would be amply met even if smaller penalties are imposed.
6. In the result, the order of the learned Deputy Director is confirmed and the penalties are reduced from rupees ten thousand each to rupees two thousand and five hundred each.
11. The trial court framed charges under Section 56(1)(i) read with Section 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973 and the accused revision petitioner herein pleaded not guilty before the trial court. At the request of the revision petitioner herein P.W. 1 Mukundhan and P.W. 2 Ramasamy were recalled and further cross-examined on behalf of the revision petitioner herein. When the accused revision petitioner herein was further questioned by the trial court, he stated that he is a government employee in that he is working as a conductor in the Pallavan Transport Corporation and that he had indulged in the activities due to ignorance. As already stated, no witness was examined on behalf of the accused revision petitioner herein. On the question whether the prosecution has proved its case beyond all reasonable doubt, the trial court had come to the conclusion that the revision- petitioner is guilty under Section 56(1)(i) read with Section 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973 and sentenced him to undergo rigorous imprisonment for six months and also a fine of Rs. 10 in default to undergo rigorous imprisonment for one week. Aggreived by the above desion of the trial court, the revision petitioner herein preferred C.A. 403 of 1982 before the lower appellate court, namely, the court of the learned Principal Sessions Judge, Madras Division. The lower appellate court also came to the same conclusion as arrived at by the trial court and confirmed both the conviction as well as the sentence imposed by the trial court on the revision petitioner herein. Aggreieved by the above decision of the lower appellate court, the accused-revision-petitioner herein has come forward with the present revision.
12. Mr. M. Venkataraman, learned Counsel for the revision petitioner herein inter alia contends that both the courts below have not properly appreciated the evidence available on record and as such the conviction of the revision petitioner herein is not correct and in accordance with law. He further submits that the sentence imposed on the revision petitioner is severe and excessive. The point for consideration in this criminal revision case is whether there is any infirmity in the judgment of the lower appellate court ?
13. Section 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973, reads as follows:
Section 9:
(1) Save as may be provided in and in accordance with any general or special exemption from the provisions of this sub-section which may be granted conditionally or unconditionally by the Reserve Bank, no person in, or resident in, India shall--
(a) ....
(b) receive, otherwise than through an authorised dealer, any payment by order or on behalf of any person resident outside India.
(c) ....
(d) make any payment to, or for the credit, of any person by order or on behalf of any person resident outside India;
(1) Without prejudice to any award of penalty by the adjudicating officer under this Act, if any person contravenes any of the provisions of this Act [other than Section 13, Clause (a) of Sub-section (1) of Section 18, Clause (a) of Sub-section (1) of Section 19, Sub-section (2) of Section 44 and Section 57 and 58], or of any rule, direction or order made thereunder, he shall, upon conviction by a court, be punishable,--
(i) in the case of an offence the amount or value involved in which exceeds one lakh of rupees, with imprisonment for a term which shall not be less than six months, but which may extend to seven years and with fine:
Provided that the court may, for any adequate and special reason to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than six months;
(ii) in any other case, with imprisonment for a term which may extend to three years or with fine or with both.
(2) If any person convicted of an offence under this Act [not being an offence under Section 13 or Clause (a) of Sub-section (1) of Section 18 or Clause (a) of Sub-section (1) of Section 19 or Sub-section (2) of Section 44 or Section 57 or Section 58] is again convicted of an offence under this Act [not being an offence under Section 13 or Clause (a) of Sub-section (1) of Section 18 or Clause (a) of Sub-section (1) of Section 19 or Sub-section (2) of Section 44 or Section 57 or Section 58], he shall be punishable for the second and for every subseqnent offence with imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine:
Provided that the court may, for any adequate and special reasons to be mentioned in the judgment, impose a sentence of imprisonment for a term of less than six months.
(3) Where a person having been convicted of an offence under this Act [not being an offence under Section 13 or Clause (a) of Sub-section (1) of Section 18 or Clause (a) of Sub-section (1) of Section 19 or Sub-section (2) of Section 44 or Section 57 or Section 58], is again convicted of an offence under this Act [not being an offence under Section 13 or Clause (a) of Sub-section (1) of Section 18 or Clause (a) of Sub-section (1) of Section 19 or Sub-section (2) of Section 44 or Section 57 or Section 58], the court by which such person is convicted may, in addition to any sentence which may be imposed on him under this section, by order, direct that that person shall not carry on such business as the court may specify, being a business which is likely to facilitate the commission of such offence, for such period not exceeding three years, as may be specified by the court in the order.
(3) For the purposes of Sub-sections (1) and (2), the following shall not be considered as adequate and special reasons for awarding a sentence or imprisonment for a term of less than six months, namely:
(i) the fact that the accused has been convicted for the first time of an offence under this Act;
(ii) the fact that in any proceeding under this Act, other than a prosecution, the accused has been ordered to pay a penalty or the goods in relation to such proceedings have been ordered to be confiscated or any other penal action has been taken against him for the same offence;
(iii) the fact that the accused was not the principal offender and was acting merely as a carrier of goods or otherwise was a secondary party in the commission of the offence;
(iv) the age of the accused.
(4) For the purposes of Sub-sections (1) and (2), the fact that an offence under this Act has caused no substantial harm to the general public or to any individual shall be an adequate and special reason for awarding a sentence of imprisonment for a term of less than six months.
(5) Nothing in the first proviso by Section 188 of the Code of Criminal Procedure, 1898 (5 of 1898), shall apply to any offence punishable under this section.
14. On 29th October, 1979, the house, in which the revision petitioner herein has been residing, was searched and Ex. P-2 series as well as Ex. P-3 account book together with Ex. P-6 series letters were seized. The revision petitioner had also given a voluntary statement under Ex. P-5. It is relevant in this connection to note that Ex. P-5 is in the handwriting of the revision petitioner himself. It is also seen from the evidence available on record, both oral and documentary, that the Deputy Director had found the revision petitioner herein guilty under Section 9(1)(b) in respect of various amounts totalling Rs. 69,200 and in exercise of the powers conferred on him under Section 50 of the Foreign Exchange Regulation Act, 1973 imposed a penalty of Rs. 10,000 on him. The Deputy Director had also observed in his order Ex. P-10 that the revision petitioner herein is guilty of contravention of Section 9(1)(d) also of the Foreign Exchange Regulation Act, 1973 and imposed a penalty of Rs. 10,000 on him under Section 50 of the said Act. The penalties totalling to Rs. 20,000 imposed on the revision petitioner herein was directed to be paid by him by means of a demand draft drawn in favour of the Deputy Director within 45 days from the date of the receipt of the said order. The Foreign Exchange Appellate Board, Southern Zone, also dealt with the case put forward by the revision petitioner herein and had held in the Appellate Order Ex. P-11 that the contravention had been admitted by the revision petitioner herein throughout the stage of adjudication proceedings and also before it and that the evidence clearly showed that the revision petitioner had committed the contraventions by way of receipt of a total amount of Rs. 58,200 and disbursement of a total amount of Rs. 69,200. The Foreign Exchange Regulation Appellate Board upheld the finding of guilty arrived at by the Deputy Director, Enforcement Dirctorate. On a careful perusal of the contents of Ex. P-2 series, Ex. P-3 account book, Ex. P-6 series and Ex. P-5 statement given by the accused revision petitioner herein, it is seen that the revision petitioner herein had received and disbursed money in contravention of the provisions of the Foreign Exchange Regulation Act,-1973. The revision petitioner herein had clearly indulged in the activities contemplated by the provisions of Sections 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973.
15. In the instant case before this Court, the accused revision petitioner had received and disbursed a total amount of Rs. 1,27,400 against the provisions of the Act. Further, it is seen that the revision petitioner had not been granted any general or special exemption by the Reserve Bank of India relating to the transactions indulged in by him. Thus, I find that the offence with which he had been charged by the trial court had been proved by the prosecution beyond all reasonable doubt. The lower appellate court had also carefully examined the evidence available on record and confirmed both the conviction and sentence imposed on the revision petitioner herein by the trial court. Only a minimum sentence of imprisonment had been imposed on the revision petitioner herein by the trial court, which in turn was confirmed by the lower appellate court. The sentence imposed on the revision petitioner herein cannot be said to be either excessive or severe. There is no infirmity in the judgment of the lower appellate court. Hence, the criminal revision case is dimissed.