Madras High Court
Deputy Director Of Enforcement vs A.M. Ceaser on 10 March, 1998
Equivalent citations: 1999(113)ELT804(MAD)
JUDGMENT V. Rengasamy, J.
1. This appeal is against the reversing judgment of acquittal passed by the learned Principal Sessions Judge, Madras, in C.A. No. 564 of 1987 for the offences under Sections 8(1) read with Section 56(1)(i) and 9(1)(f)(i) of Foreign Exchange Regulation Act, 1973, hereinafter to be referred to as FERA.
2. The respondent/accused was prosecuted for the above-said offences that came to be known from the search made in his business premises on 22-6-1981 and also from the statement made by him under Ex. P. 7 in the presence of P.W. 2 on the same day.
3. The learned Additional Chief Metropolitan Magistrate (Economic Offences I), Chennai, who tried this case, has found the accused/respondent guilty of the offences and has convicted him to undergo rigorous imprisonment for one year and also to pay a fine of Rs. 2,000/- to each of these offences. On appeal before the learned Principal Sessions Judge, Chennai, the finding of the trial court has been reversed and the respondent/accused has been acquitted. It is against this judgment, the Enforcement Directorate has come forward with this appeal.
4. P.W. 1 who is the Enforcement Officer, has spoken about the search conducted in the business premises of the respondent/accused viz. Economic Air and Auto Travels, Parsn Complex, Chennai-6 on 22-6-1981 between 2.20 p.m. and 4.45 p.m. and seizure of certain documents including Exs. P. 1 to P. 4. Thereafter, on the memo served on the respondent/accused, he appeared before the Enforcement Officer P.W. 2, in Shashtri Bhavan, Chennai, where, it is stated that he gave the statement Ex. P. 7 attested by two witnesses. In this statement Ex. P. 7, he has narrated the manner in which the offences under the above provisions viz. Sections 8 and 9 of FERA, were committed for which, the appellant prosecuted the respondent.
5. Mr. K. Kumar, Special Public Prosecutor appearing for the respondent, submitted that the trial court has analysed the entire evidence and the documents, which are proving the commission of the offence, and therefore, it has rightly found the accused guilty of the offences, but the appellate Court has not properly applied the provisions of law and has held that the offences against the respondent accused have not been proved on two grounds namely that the respondent had no assistance of an advocate, when he gave the statement Ex. P. 7 and secondly, the statement Ex. P. 7, which amounts to confession, has not been corroborated by material particulars and therefore, the conviction is bad. The learned Special Public Prosecutor referred to the observation of the Lower Appellate Court, which relied upon decision of the Apex Court in State of U.P. v. Boota Singh, 1979 (1) S.C.J. 354 : 1979 S.C.C. 115 to observe, that when there is no substantial corroboration for the retracted confession, the court is not bound to rely upon the confession and the finding ultimately by the learned judge is that, "since the retracted confession of the accused has not at all been corroborated in any of the material particulars, it is not lawful to rely upon the said confession." Therefore, the Lower Appellate Court mainly relying upon the decision in State of U.P. v. Boota Singh, has found that the prosecution has not placed the materials to corroborate the statement of the accused/respondent and therefore, there cannot be a conviction on the respondent/accused.
6. Unfortunately, the learned Principal Sessions Judge has not understood the difference between the confession under Section 164 Code of Criminal Procedure and the statement under Section 40(3) of FERA and because of this lack of understanding of the difference between these two provisions, the learned Principal Sessions Judge has applied the dictum in State of U.P. v. Boota Singh to hold that the prosecution has not established the guilt of the accused in the case. In the case relied upon by the lower Appellate Court, the accused, who made a judicial confession, under Section 164 Code of Criminal Procedure, later on retracted the statement. It should be borne in mind that no accused is expected to make a statement and if he makes such a confession statement, which brings out the offence, he is liable to be punished and therefore, a person, who is not bound to make confession with regard to the commission of the offence, if still admits the commission of the offence, unless there are strong circumstances which made him to confess, and also material particulars corroborating that what he had stated is true, such retracted confession would not be acted upon. But under Section 40 of FERA, the Enforcement Directorate have powers to issue summons to any person for the purpose of any violation under the said Act and Sub-section 3 reads, "All persons so summoned shall be bound to attend either in person or by authorised agents, as such officer may direct; and all persons so summoned shall be bound to state the truth upon any subject respecting which they are examined or make statements and produce such documents as may be required."
Sub-section 4 reads.
"Every such investigation or proceeding as aforesaid shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the Indian Penal Code, 1860 (45 of 1860)."
Therefore, as rightly argued by the learned Special Public prosecutor, there is a compulsion by the statute to a person, when summoned by the authorities under the Act, to speak the truth, otherwise, he is liable to be punished for pernury, this provision cannot be compared with Section 164 Code of Criminal Procedure, which is only optional. This difference has not been understood by the learned Principal Sessions Judge, when he relied upon the decision cited above.
7. Now, coming to the facts in this case, it is not in dispute that the business premises of the respondent accused was searched on 22-6-1981 and the documents have been seized. The prosecution very much relies upon two documents seized from the custody of the respondent/accused and they are Ex. P. 3, a visiting card, and Ex. P. 4, a diary of the second accused. These two documents connect the facts mentioned by respondent accused with regard to the commission of the offences under Sections 8 and 9 of the Act. In the statement Ex. P. 7, the respondent would say that he wanted to have contract with one M/s. Toko Devi Construction Co. Pvt. Ltd., 16 Tanjong Pinang (Riau), Indonesia, for the purpose of supplying workers to Indonesia and the contract also was finalised to supply 700 workers from India for employment in Indonesia. It is also stated therein that as there was keen competition in supplying the labour to foreign countries, he wanted to pay 50,000 Singapore Dollars to the Director of the Said Toko Devi construction Company as a goodwill and for the purpose of getting the 50,000 Singapore Dollars, he paid Rs. 2 lakhs to One Hassan at Madras, who arranged for the payment of 50,000 Singapore Dollars in Singapore and for the purpose of payment to the Director of the above Toko Devi Construction Company, he had transaction with the said Hassan. He has also stated in the statement that on 12-6-1981, he paid Rs. 2 lakhs in cash to Hassan at Chennai and thereafter, he went to Singapore on 14-6-1981 and as per the direction of Hassan, he met one Dheen having the address High Street Centre, Fathima Jewellers, where he received 50,000 Singapore Dollars, which was later on paid to the Director of M/s. Toko Devi Construction, Mr. Peter, on 26-9-1981 and thus he completed the transaction. This statement, if true, will certainly amount to the offence under the provisions of FERA mentioned above.
8. Now, the question is, whether the statement has to be accepted when especially, it has been retracted by the maker himself viz. the respondent, by his reply letter Ex.D-3, dated 29-6-1981, within one week and the accused has denied his statement when questioned under Section 313 Code of Criminal Procedure.
9. At this stage, it is proper to refer to the decision of the Apex Court in K.I. Pavunny v. Asst. Collector (HQ) Central Excise Collectorate - 1997 S.C.C. (Crl.) 444, wherein it is held that if a confession is proved by evidence and if it is of voluntary nature, when retracted, is entitled to high degree of value as its maker is likely to face the consequences of confession in a statement affecting his life, liberty or property and burden is on the accused to prove that the statement was obtained by threat, duress of promise like any other person as was held in Bagwan Singh v. State of Punjab, . The Apex Court in paragraph 25 of the judgment, has held as follows :
"It would thus be seen that there is no prohibition under the Evidence Act to rely upon the retracted confession to prove the prosecution case or to make the same basis for conviction of the accused. Practice and prudence require that the Court could examine the evidence adduced by the prosecution to find out whether there are any other facts and circumstances to corroborate the retracted confession. It is not necessary that there should be corroboration from the independent evidence adduced by the prosecution to corroborate each detail contained in the confessional statement. The Court if required to examine whether the confessional statement is voluntary; in other words, whether it was not obtained by threat, duress or promise. If the court is satisfied from the evidence that it was voluntary, then it is required to examine whether the statement is true. If the court on examination of the evidence, finds that the retracted confession is true, that part of the inculpatory portion could be relied upon to base the conviction. However, prudence and practice require that Court would seek assurance getting corroboration from other evidence adduced by the prosecution."
As mentioned above, under Section 40 of FERA, any person, who was called upon to appear before the Authorities concerned, is bound to give a statement of true facts and later on if he retracts that statement he is bound to explain the circumstances under which such a statement was given by him. In this case, the petitioner would simply say that he was taken to the Enforcement Directorate where he was compelled to give the statement and the same also was written as desired by them and he had to sign on account of the threat that he would be hand-cuffed. For the simple reason that the accused person expresses threat and coercion, from the officers of the Enforcement Directorate, unless this threat and coercion appears to be true, the Courts are not bound to accept that explanation offered by the accused. If the statement of the accused is accepted to be voluntary as held above, there is no provision in the Act that such statements shall not be accepted unless corroborated by any independent evidence. The corroboration is looked for, only to reach the subjective satisfaction.
10. The economic offences, especially the white collar crimes, are committed secretly so that the offences could be completely screened unnoticed by the authorities concerned to escape the punishment. Therefore, we cannot except direct evidence for the commission of such offences but the materials left may connect the accused persons with the crime. As a matter of fact, it is the contention of the learned counsel for the respondent that accused the prosecution party had not seized the account books of the accused to show the payment of Rs. 2 lakhs to Hassan. When the offence is committed, it is certain that the accused party will not make it patent from the records especially for the payment of Rs. 2 Lakhs to Hassan, which could be easily detectable by perusal of the accounts. Therefore, we cannot expect such evidence so conspicuous for the commission of the offence. But some times, certain materials are unconsciously left by the offenders and in this case, some such materials are available, especially, the visiting card Ex. P. 3 and the address of the person, who supplied the foreign exchange, namely Dheen. Ex. P. 3 the visiting card, contains the name of Hassan on the reverse side along with his phone number and the petitioner has not given the reason for taking down the name of Hassan in this visiting card along with his phone number. Similarly, the diary Ex. p. 4, seized from the premises of the respondent accused contains several addresses including that of the Toko Devi Construction Co. Pvt. Ltd., and Dheen. It is pertinent to mention that below the name Dheen, High Street Centre, it is also mentioned 'for exchange'. The trial court has very much stressed upon this word for exchange as the connecting link for the transaction by way of foreign exchange with the said Dheen in Singapore. When such a word, "for exchange' is found under the name of the above said person in the diary of the respondent/accused and the seizure of the diary also is not denied or disputed by the accused/respondent he might have explained in his statement under Section 313 Code of Criminal Procedure as to what for the name of the said Dheen with the word 'for exchange' is mentioned in his diary. Therefore, the statement in Ex. P. 7 for the payment of Rs. 2 Lakhs to Hassan and the acquisition of 50,000 Singapore Dollars from Dheen has been corroborated by the particulars furnished in Exs. P. 3 and P. 4 documents. Otherwise, the respondent could have explained the purpose for which these names have been mentioned in the documents, which were in his custody.
11. Mr. S. Arunachalam, learned counsel for the respondent/accused, contended that the statement Ex. P. 7 reads that one Jacob Sigamani also accompanied the respondent/accused for payment to Hassan and also on the way to Singapore but he has not been examined and that no evidence has come forth from Peter, the Director of Toko Devi Construction and therefore, without the evidence of those witnesses, it cannot be taken that the statement Ex. P. 7 has been corroborated. The question is whether the particulars mentioned above, viz. the name of Hassan, who received Rs. 2 Lakhs for the purpose of providing foreign exchange and the description of Dheen and the word 'for exchange' are sufficient to corroborate the statement Ex. P. 7. Only, if it is found that these materials are inadequate or insufficient to corroborate the statement Ex. P.7, necessarily the Court has to look forward for some other corroboration. But I feel that these two materials, added to the visit of the respondent to Singapore during the relevant point of time, which has not been denied by him, are important circumstances providing sufficient corroboration for the commission of the offences. Therefore, I feel that the trial Court has rightly appreciated the evidence and materials on record to arrive at the right conclusion, whereas the Lower Appellate Court was wrongly misled by the decision, which is for the judicial confession under Section 164 Code of Criminal Procedure.
12. With regard to the observation of the Lower Appellate Court for the handicap faced by the accused in the absence of an Advocate, the supreme court in Poolpandi v. Superintendent, Central Excise, has considered that when a person was summoned to appear before the officers under FERA, he cannot be treated as an accused and under such circumstances, he is not entitled to the presence of his lawyer when he was examined by the officers. Therefore, refusal to allow the presence of lawyer in such cases, would not be violative of protection under Article 20(3) of the Constitution. When the Apex Court itself has held so clearly that a person, who was summoned to appear before the Enforcement Directorate for interrogation, is not entitled to seek the presence of the Advocate, the Lower Appellate Court cannot make use of this as a circumstances in favour of the accused to arrive at the conclusion that his statement could not be voluntary.
13. Therefore, taking into consideration of the reasons given by the court below, I find that the lower Appellate Court has erred in coming to a wrong conclusion that the statement Ex. P. 7 has not been corroborated. Hence, the order of acquittal passed by the learned Principal Sessions Judge Madras, is not sustainable and the same is liable to be set aside and the order of the trial Court has to be restored.
14. Then coming to the sentence, the trial Court has imposed the punishment of one year rigorous imprisonment for each offences, in addition to the fine of Rs. 2,000/- respectively. As the offence was committed in the year 1981 and more than sixteen years have lapsed, I feel that the minimum sentence prescribed under FERA is sufficient to meet the ends of justice in this case.
15. In the result, the appeal is allowed. However, the respondent/accused is sentenced to undergo rigorous imprisonment for six months for each of the offences, in addition to the fine of Rs. 2,000/- as imposed by the trial Court. The sentences are to run concurrently. The trial Court is directed to issue arrest warrant forthwith and see to it that the accused is arrested and sent to prison.