Madras High Court
R.Suresh vs Deputy Director on 6 August, 2015
Author: V.Ramasubramanian
Bench: V.Ramasubramanian
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATE: 06.08.2015
CORAM
THE HON'BLE MR.JUSTICE V.RAMASUBRAMANIAN
AND
THE HONOURABLE MR.JUSTICE T. MATHIVANAN
C.M.A.No.614 of 2008
and
M.P.No.1 of 2008
R.Suresh ...Appellant
Versus
1.Deputy Director,
Enforcement Directorate,
Sastry Bhavan,
Haddows Road, Chennai-600 006.
2.The Appellate Tribunal for
Foreign Exchange,
Janpath Bhawan, 4th Floor,
'B' Wing, Janpath,
New Delhi 110 001. ... respondents
Prayer: Civil Miscellanies Appeal is filed against the order passed by the Appellate Tribunal for Foreign Exchange, New Delhi and made in Appeal No.71 of 2001, dated 07.12.2007.
***
For Appellant :Mr.B.Sathish Sundar, for
Mr.R.Loganathan
For R1 :Mr.M.Dhandapani
JUDGMENT
(Judgment of the Court delivered by T. MATHIVANAN, J.) The judgment of the Appellate Tribunal for Foreign Exchange, New Delhi dated 07.12.2007 and made in Appeal No.71 of 2001 is under challenge in this memorandum of civil miscellaneous appeal.
2. That on 14.05.1999, the Deputy Director, who is the adjudicating authority of Enforcement Directorate, Foreign Exchange had issued a memorandum to the appellant Mr.R.Suresh, a resident of Anna Nagar, Madurai to show cause in writing within 15 days from the date of receipt of the above said memorandum as to why the adjudication proceedings as contemplated under Section 51 of the Foreign Exchange Regulation Act, 1973(46 of 1973) should not be held for having contravened the provisions of Sections 9 (1) (b) and 9 (1) (d) of the Foreign Exchange Regulation Act, 1973. The appellant had given a detailed reply through his lawyer (dated Nil) refuting all the allegations levelled against him.
3. It is manifested from the records that the appellant had also sent a retraction letter dated 18.09.1998 to the Deputy Director of Enforcement Directorate stating that the enforcement officials had taken him to their office, tortured by beating and compelled him to write a statement to the effect as if he had received and made payments by order of persons in Singapore and Dubai on Commission basis.
4. The Adjudicating Authority (the Deputy Director of Enforcement Directorate) had passed an order of adjudication( order in original) on 20.09.2000 and thereby concluded that the appellant had contravened the Provisions of Sections 9 (1) (b) and 9 (1) (d) of the Foreign Exchange Regulation Act, 1973 to the extent of Rs.43,00,000/- and also found him guilty of the charges as afore stated and imposed a penalty of Rs.2,50,000/- for the contravention of Section 9(1) (b) of the Act and a penalty of Rs.2,00,000/- for the contravention of Section 9 (1) (d) of the Act by virtue of the powers conferred on him under Section 50 of the Act.
5. The correctness of this order was challenged by the appellant before the Appellate Tribunal for Foreign Exchange, New Delhi. After hearing both sides, the Appellate Tribunal had proceeded to confirm the order of the Adjudicating Authority with an observation that the Enforcement Directorate had proved the charges against the appellant beyond all reasonable doubts and that the impugned order withstands judicial scrutiny, which is liable to be confirmed. While dismissing the appeal, the Appellate Authority had also directed the pre-deposit already made by the appellant to be appropriated towards penalty and the appellant was also directed to deposit the balance amount of penalty within 15 days from the date of receipt of a copy of this order. The legality of the order of the Appellate Authority has been challenged in this appeal.
6. Heard Mr.B.Satish Sundar, learned counsel appearing for the appellant and Mr.M.Dhandapani, learned counsel appearing for the first respondent.
7. The above civil miscellaneous appeal came to be admitted before this Court on the following substantial questions of law.
(a) Is not the Appellate Tribunal gravely in error in stating that the retracted statement of the appellant had been corroborated by relying upon seizure of a dairy, when the Tribunal has not kept in view that :
(i) the diary was not a relied upon document in the memorandum of show cause notice issued.
(ii) The contents of the diary have also not been communicated to the appellant at any time.
(iii) Factually also if such a diary has been produced it would indeed have revealed there is no entry or even the names of the sender and the recipients in the said diary.
(b) Has not the Tribunal committed serious mistakes in not even adverting to the question if the proceedings are vitiated by bias in as much as the then Deputy Director of Enforcement Directorate, Chennai, Mr.A.Subramani had participated in the investigation and later issued the show cause notice and adjudicated the case himself.?
8. The specific charge levelled against the appellant by the Directorate of Enforcement is that during August 1998 and September 1998, the appellant Mr.R.Suresh, a person, resident in Anna Nagar, Madurai, without the general or special exemption from the Reserve Bank of India, had received payments of Rs.23,00,000/- and Rs.20,00,000/- respectively( totalling to Rs.43 lakhs) from persons other than authorised dealers in Foreign Exchange by order of one Mohamed Saliq, residing at No.184, Race Course Road, Singapore and one Mr.Ismail, residing at P.Box No.11072, Dubai, respectively, persons resident outside India in contravention of Section 9 (1) (b) of the Act.
9. It is also alleged that the appellant during the said period had made payments of Rs.23,00,000/- and Rs.20,00,000/- respectively( totalling to Rs.43 lakhs) to local persons other than authorised dealers in foreign exchange by order of Mr.Mohamed Saliq, Singapore and Mr.Ismail, Dubai respectively, persons resident outside India in contravention of Section 9 (1) (d) of the Act.
10. Hence, a show cause notice dated 14.05.1999 was issued to the appellant requesting him to show cause in writing within 15 days from the date of receipt of memorandum as to why the adjudication proceedings has contemplated under Section 51 of the Act should not be held against him for the above said contravention.
11. Before the Adjudicating Authority i.e., the Deputy Director of Directorate of Enforcement, the learned counsel who was then appearing on behalf of the appellant had argued that with regard to the allegation of making of payments to persons at Trichy, Madurai and Paramakudi, none of the alleged recipients had been contacted and their statements were recorded. He had contended that the failure to conduct investigation against the persons alleged to have received payments from the appellant would go to show that the receipt and payment theory was fabricated. Rejecting his argument the Adjudicating Authority in its adjudication order dated 20.09.2000, had found that the argument advanced by the learned counsel was untenable in as much as the noticee had not furnished the address of the persons to enable the Department to take follow up action and with this inference the Adjudicating Authority had concluded that the appellant had contravened the Provisions of Sections 9 (1) (b) and 9 (1) (d) of the Act and found him guilty of the charge.
12. The appellate tribunal had also found that there was no force in the contentions raised by the appellant and that the respondent (Directorate of Enforcement) had proved the charges against the appellant beyond reasonable doubt and that the impugned order withstood judicial scrutiny, which was liable to be confirmed.
13. With reference to the finding of both the Adjudicating Authority as well as the Appellate Authority saying that the respondent viz., the Directorate of Enforcement has proved the charges against the appellant beyond all reasonable doubt. We would like to say that it is fundamental principle of criminal jurisprudence that the accused is presumed to be innocent and therefore the burden lies on the prosecution to prove the guilt of the accused beyond all reasonable doubt. The general burden never shifts and it always rests on the prosecution.
14. In Vijayee Singh and Others Vs. State of Uttar Pradesh (1990 AIR 1459, 1990 SCR(2) 573, in this case the Apex Court has observed that:
''the general principles of criminal jurisprudence, namely, that the prosecution has to prove its case beyond reasonable doubt and that the accused is entitled to the benefit of a reasonable doubt, are to be borne in mind. The 'reasonable doubt' is one which occurs to a prudent and reasonable man. Section 3 while explaining the meaning of the words ''proved'', ''disproved'' and ''not proved'' lays down the standard of proof, namely, about the existence or non existence of the circumstances from the point of view of a prudent man. The Section is so worded as to provide for two conditions of mind, first, that in which a man feels absolutely certain of a fact, in other words, ''believe it to exist'' and secondly in which though he may not feel absolutely certain of a fact, he thinks it so extremely probable that a prudent man would under the circumstances act on the assumption of its existence.
The Act while adopting the requirement of the prudent man as an appropriate concrete standard by which to measure proof at the same time contemplates of giving full effect to be given to circumstances or condition of probability or improbability. It is this degree of certainty to be arrived where the circumstances before a fact can be said to be proved. A fact is said to be disproved when the Court believes that it does not exist or considers its non-existence so probable in the view of a prudent man and now we come to the third stage where in the view of a prudent man the fact is not proved i.e., neither proved nor disproved. It is this doubt which occurs to a reasonable man, has legal recognition in the field of criminal disputes. It is something different from moral conviction and it is also different from a suspicion. It is the result of a process of keen examination of the entire material on record by 'a prudent man'.
There is a difference between a flimsy or fantastic plea which is to be rejected altogether. But a reasonable though incompletely proved plea which casts a genuine doubt on the prosecution version indirectly succeeds. The doubt which the law contemplates is certainly not that of a weak or unduly vacillating, capricious, indolent, drowsy or confused mind. It must be the doubt of the prudent man who assumed to possess the capacity to ''separate the chaff from the grain''. It is the doubt of a reasonable, astute and alert mind arrived at after due application of mind to every relevant circumstances of the case appearing from the evidence. It is not a doubt which occurs to a wavering mind.''
15. The Apex Court in the above cited decision has also made reference to the decision in Miller Vs. Minister of Pensions, [(1947) 2 All ER 373].
In this case, while examining the degree of proof required in criminal cases Lord Denning, J has observed as under:
''That degree is well-settled. It need not reach certainty but it must reach a high degree of probability. Proof beyond reasonable doubt does not mean proof beyond the shadow of a doubt. The law would fail to protect the community if it admitted fanciful possibilities to deflect the course of justice. If the evidence is so strong against a man as to leave only a remote possibility in his favour which can be dismissed with the sentence ''of course, it is possible but not in the least probable'', the case is proved beyond reasonable doubt.'' Regarding the concept of benefit of reasonable doubt Lord Du Paraq, in another context observed thus:
''All that the principle enjoins is a reasonable scepticism, not an obdurate persistence in disbelief. It does not demand from the Judge a resolute and impenetrable incredulity. He is never required to close his mind to the truth.''.
16. Substantial question No.1:
Mr.B.Satish Sundar, learned counsel for the appellant in so far as the substantial question of law No.1 is concerned, has argued that the retracted statement of the appellant had not been corroborated either by oral or by documentary evidence. He has also submitted that in the show cause notice dated 14.05.1999, issued by the Deputy Director of Enforcement Directorate had never referred to the diary which was said to have been seized by the officials of the Enforcement Directorate, nor even the contents of the said diary were disclosed or communicated to the appellant at any point of time. He has also argued that if the diary was produced, it would have revealed that there was no entry or even no names of the senders and the recipients were mentioned. On this ground, the learned counsel has urged before this Court that an adverse inference had to be necessarily drawn as against the officials of the Directory of Enforcement.
17. It is the case of the first respondent that on 17.09.1998, when the three residential premises of the appellant were searched by the officials of the Enforcement Directorate, they had seized the diary from one of the residential premises of the appellant bearing Door No.95. While so, a statement was recorded by them on the narration of the appellant.
18. It is alleged that in his statement, he had stated that he had received the payments of Rs.23,00,000/- and Rs.20,00,000/- respectively, totalling to Rs.43,00,000/- from the persons other than authorized dealer in Foreign exchange by order of one Mohamed Saliq of Singapore, a person resident out side India and made payments of Rs.23,00,000/- and Rs.20,00,000/- to a local person by order of one Mohamed Saliq of Singapore, and one Mr.Ismail of Dubai respectively, in contravention of the Provisions of the Foreign Exchange Regulation Act 1973.
19. Admittedly, a retraction letter dated 18.09.98 was sent by the appellant to the Deputy Director of Enforcement Directorate, retracting the alleged statement recorded from him saying that the enforcement officials had taken him to their office and obtained the said statement by submitting him to torture and made him to write such a statement under compulsion. Rejecting his retraction letter, the Deputy Director of Enforcement Directorate had given a reply on 03.03.1999. The records also revealed that the appellant had also issued a notice to the Deputy Director of Enforcement Directorate on 14.05.1999 refuting the contents of the statement said to have been recorded from him.
20. Mr.B.Satish Sundar, learned counsel for the appellant has submitted that the show cause notice itself was vitiated because there was no mention about the notification number. Further, he would submit that the alleged statement said to have been recorded from the appellant was not voluntary and that the involuntary statement required to be corroborated. In the absence of any corroboration and in the existence of inconsistencies, inprobabilities and missing links in his statement said to have been recorded from the appellant, a retracted statement could not be relied upon in a proceeding under the foreign exchange Regulation Act. He has also argued that the names of said Mohamed Saliq of Singapore and Ismail of Dubai respectively were fictitious as they were non existent and hence the provisions under Sections 9 (1) (b) and 9 (1) (d) were not attracted as there was no proof to establish the existence of non residents. He has also argued that despite there were allegations in the show cause notice that the payments were made to the persons at Trichy, Madurai and Paramakudi, none of the alleged recipients had been contacted and their statements were recorded. He has urged that since there was failure to conduct proper investigation against the persons alleged to have received payments from the appellant Mr.Suresh, and this ground would go a long way to show that the allegations with regard to the receipt and payment was only a fabricated theory.
21. Mr.B.Satish Sundar, learned counsel has also stuck on the point that in a quasi criminal proceeding the allegation with regard to the contravention could not be presumed to have taken place and that every receipt and payment have to be proved with evidence.
22. On the other hand Mr.M.Dhandapani, learned counsel appearing for the first respondent has submitted that as observed by the Adjudicating Authority in their order, the Department was not required to prove its case with mathematical precision to a demonstrable degree. What is required is the establishment of such a degree of probability that a prudent man may, or its basis believe in the existence of the fact in issue, the other cardinal principle which has an important bearing on the incidence of burden of proof is the sufficiency and weight of the evidence to be considered. He has also indicated that the important peace of documentary evidence i.e., diary was seized from the custody of the appellant, which was containing address and telephone numbers of his friends and relatives. When he was confronted with that diary, he had stated the names and other details of Mr.Mohamed Saliq and Ismail.
23. We have carefully perused the records and considered the submissions made on behalf of both sides. On perusal of the impugned orders of the Adjudicating Authority as well of the Appellate Tribunal, we find that Madurai address of the appellant has not been given in the alleged statement. Though, Singapore telephone No.2250097 is found place in the statement, no calls were traced by verification.
24. It is significant to note that the retracted statement of the appellant has not been corroborated either by oral or by documentary evidence on the part of the officials of the Enforcement Directorate.
25. As argued by Mr.B.Satish Sundar, learned counsel, all the statements of the recipients of the amounts from the appellant were not recorded by the officials of the Enforcement Directorate. Besides this, we find that there is inefficiency in investigation because the alleged Mohamed Saliq and Ismail were not contacted and their statements were also not recorded. Without proper evidence and with appreciation of the existing facts as has been projected by the officials of Enforcement Directorate, the appellate tribunal has proceeded to confirm the finding of the Adjudicating Authority, which according to our view is perverse in nature and liable to be set aside.
26. In paragraph No.8 of the order, the Appellate Tribunal has observed that Moreover, a diary was seized from the custody of the appellant containing the address and telephone numbers of his friends and relatives when confronted with his diary, he deposed the names and other details of Mohamed Saliq and Ismail''.
27. In this connection, we would like to point out that the diary has not at all been referred to in the show cause notice dated 14.05.1999. When the diary itself is not a relied upon document, how it could be presumed that the contents of the dairy were proved. Further, as argued by Mr.B.Satish Sundar, neither the diary nor it's contents was disclosed to the appellant. When such being the case, it cannot be heard to say that the appellant had contravened the Provisions of Sections 9 (1) (b) and 9 (1) (d) of the Foreign Exchange Regulation Act.
28. It is a general belief that if any statement is recorded during the course of investigation from a person, who has been indicted, the statement requires to be corroborated, at least on general particulars. When there is no corroboration, it cannot be construed that the said statement has been proved in its entirety.
29. Of course, the alleged statement which is said to have been recorded from the appellant seems to be inculpatory in nature, which was subsequently refuted and retracted by the appellant. There is a distinction between the phraseologies viz ''admission'' and ''confession''. A statement or a declaration of an independent fact from which guilt may be inferred is not a confession. It is an admission of a particular fact pertinent to the issue and evidence of that fact, but it is not ''confession''. The distinction drawn between admission and confession in criminal law is substantial one. Confession involves a voluntary acknowledgement of guilt. To make an admission or a declaration, or a confession, it must amount to a clear acknowledgement of guilt.
30. In this connection, we would like to have the reference to the observations made by HOLLOWAY .J in an American case (State Vs. Guie, 56 Mont 485, cited wig Section 821), He explains this decision in the following manner:
''The distinction between a confession and an admission, as applied in criminal law, is not a technical refinement, but based upon substantive differences of the character of the evidence deduced from each. A confession is a direct acknowledgement of guilt on the part of the accused, and , by the very force of the definition, excludes an admission, which, of itself, as applied in criminal law, is a statement by the accused, direct or implied of facts pertinent to the issue, and tending, in connection with proof of other facts, to prove his guilt, but of itself is insufficient to authorise a conviction''.
31. Expressing the view that it is unsafe to maintain the conviction on a retracted confession, the Apex Court in State of Karnataka Vs. A.B.Nagaraj and another (AIR 2003 Supreme Court 666), has observed as under:
it is unsafe to base the conviction on a retracted confession unless it is corroborated by trustworthy evidence. There is no definite law that a retracted confession cannot be the basis of the conviction but it has been laid down as a rule of practice and prudence not to rely on retracted confession unless corroborated''.
32. Mr.B.Satish Sundar, learned counsel appearing for the appellant while advancing his argument has invited our attention to a resent decision of the Apex Court in A.Tajudeen Vs. Union of India 2015 (4) Supreme Court cases 435. His Lordship Jagdish Singh Khehar, while speaking on behalf of the Division Bench of the Apex Court in paragraph No.24 has observed as under:
Para24: In order to contend that the statements made by the appellant A.Tajudeen and his wife T.Sahira Banu could not be relied upon in law, the learned counsel for the appellant, placed reliance on K.T.M.S. Mohd, Vs. Union of India(1992) 3 SCC 178: 1992 SCC (Cri) 572) and invited our attention to the observations made in para 34. The same is extracted hereunder: (SCC pp.195-96) ''34. We think it is not necessary to recapitulate and recite all the decisions on this legal aspect. But suffice it to say that the core of all the decisions of this Court is to the effect that the voluntary nature of any statement made either before the Customs Authorities or the officers of Enforcement under the relevant provisions of the respective Acts is a sine qua non to act on it for any purpose and if the statement appears to have been obtained by any inducement, threat, coercion or by any improper means that statement must be rejected brevi manu. At the same time, it is to be noted that merely because a statement is retracted, it cannot be recorded as involuntary or unlawfully obtained. It is only for the maker of the statement who alleges inducement, threat, promise etc., to establish that such improper means has been adopted. However, even if the maker of the statement fails to establish his allegations of inducement, threat, etc., against the officer who recorded the statement, the authority while acting on the inculpatory statement of the maker is not completely relieved of his obligations in at least subjectively applying its mind to the subsequent retraction to hold that the inculpatory statement was not extorted. It thus boils down that the authority or any court intending to act upon the inculpatory statement as a voluntary one should apply its mind to the retraction and reject the same in writing. It is only on this principle of law, this Court in several decisions has ruled that even in passing a detention order on the basis of an inculpatory statement of a detenu who has violated the provisions of the FERA or the Customs Act, etc., the detaining authority should consider the subsequent retraction and record its opinion before accepting the inculpatory statement lest the order will be vitiated. Reference may be made to a decision of the Full Bench of the Madras High Court in Roshan Beevi Vs. Government of Tamil Nadu(1983) LW(Cri) 289 (Mad), to which one of us ( S.Ratnavel Pandian,J) was a party''.
33. With reference to ''burden of proof of a confession said to have been obtained from a person during investigation, his Lordship in paragraph No.25 has referred the decision of the Apex Court in Vinod Solanki Vs. Union of India in the following manner:
Para 25: In order to supplement the legal position expressed in the above extracted judgment, the learned counsel for the appellant also placed reliance on Vinod Solanki Vs. Union of India (2008) 16 SCC 537: (2010) 4 SCC (Cri)36 by inviting our attention to the following conclusion recorded therein:(SCC pp.551-52, paras 36-41) ''36.A person accused of commission of an offence is not expected to prove to the hilt that confession had been obtained from him by any inducement, threat or promise by a person in authority. The burden is on the prosecution to show that the confession is voluntary in nature and not obtained as an outcome of threat, etc., if the same is to be relied upon solely for the purpose of securing a conviction.
''37.With a view to arrive at a finding as regards the voluntary nature of statement or otherwise of a confession which has since been retracted, the court must bear in mind the attending circumstances which would include the time of retraction, the nature thereof, the manner in which such retraction has been made and other relevant factors. Law does not say that the accused has to prove that retraction of confession made by him was because of threat, coercion, etc., but the requirement is that it may appear to the court as such.
''38. In the instant case, the investigating officers did not examine themselves. The authorities under the Act as also the Tribunal did not arrive at a finding upon application of their mind to the retraction and rejected the same upon assigning cogent and valid reasons therefor. Whereas mere retraction of a confession may not be sufficient to make the confessional statement irrelevant for the purpose of a proceeding in a criminal case or a quasi-criminal case but there cannot be any doubt whatsoever that the court is obligated to take into consideration the pros and cons of both the confession and retraction made by the accused. It is one thing to say that a retracted confession is used as a corroborative piece of evidence to record a finding of guilt but it is another thing to say that such a finding is arrived at only on the basis of such confession although retracted at a later stage.
34. On coming to the instant case on hand, while giving reply dated 03.03.1999, to the retraction letter of the appellant dated 18.09.1998, we find that, the Deputy Director of Enforcement Directorate has not considered the retraction letter of the appellant properly and without applying his mind, he has simply and mechanically given that reply saying that I reject your allegations contained in your above said letter as baseless, afterthought and devoid of any merits.''
35. Keeping in view of the above fact, we find that the Appellate Tribunal has committed a grave error in stating that the retracted statement of the appellant had been corroborated by relying upon the alleged seizure of Diary, which is not even shown to the appellant. The Appellate Tribunal has also not considered the following facts.
(i) the diary was not a relied upon document in the memorandum of show cause notice issued.
(ii) The contents of the diary have also not been communicated to the appellant at any point of time.
(iii) Factually also if such a diary has been produced it would indeed have revealed there is no entry or even the names of the sender as well as the names of the recipients.
Having been considered the visible and tangible discrepancies strewn everywhere in the case of Enforcement Directorate, we are of the considered view that it is unsafe to hold that the case of Enforcement Directorate has been proved as against the appellant. Hence, the first substantial question of law is answered in favour of the appellant.
36. The question of law No.2:
As it is revealed from the records of one Mr.S.Subramanian, the Deputy Director of Enforcement Directorate seems to have issued a reply dated 03.03.1999 in No.T3/64/SZ/MDU/98 to the retraction letter of the appellant dated 18.09.1998. Further, the records reveal that the same officer i.e., Mr.S.Subramanian, the Deputy Director of Enforcement Directorate, who also seems to be the Adjudicating Authority had issued the memorandum of show cause notice in F.No.T.4/21/SZ/MDU/99 dated 14.05.1999. Mr.B.Satish Sundar, learned Counsel appearing for the appellant had also issued a reply to the very same officer in respect of the show cause notice issued by him. The impugned order dated 20.09.2000 has been passed as against the appellant by the very same officer i.e., Mr.S.Subramanian, the Deputy Director of Enforcement Directorate finding him guilty of contravention of the provisions of Sections 9 (1) (b) and 9 (1) (d) of the Foreign Exchange Regulation Act.
37. In this connection Mr.B.Satish Sundar has argued that the Tribunal had committed a serious mistake in not even adverting to the question as to whether the proceedings were vitiated by bias in as much as the then Deputy Director of Enforcement Directorate Mr.S.Subramanian had participated in the investigation, issuance of show cause notice and adjudication of the case himself, which was absolutely in total, negation of the settled principles of natural justice.
38. We endorse this portion of argument advanced by Mr.B.Satish Sundar. It is settled principle that an Officer, who happens to register a case shall not take up the investigation. What is the corollary logic hidden behind is that if the Officer is allowed to take up the investigation and to proceed with the case by filing a final report and if he is also allowed to adjudicate the case as against the person who is placed in dock, then the officer would be having every chance of embellishment and strengthen his own case.''
39. In order to avoid this embarassing position and to allow the prosecution to play fair in an unbiased manner, the process of adjudication should have been handed over to some other Officer. But in this case it is unfortunate to say that the Officer viz., Mr.S.Subramanian, who had an occasion to search the premises of the appellant and to issue the memorandum of show cause notice was entrusted with the task of adjudication of the show cause notice against the appellant and that is why it went on the wrong side and ended with the result as against the appellant.
40. In this connection, we would like to place it on record that the Adjudicating Authority is required to take an independent decision as a quasi-judicial authority and pass appropriate orders. We therefore, find that when the adjudication is to be done by an Independent Officer where no role was played by the Investigating Officer, no prejudice could be caused to the appellant and in that circumstance, we may safely presume that the scheme of the Act sufficiently safeguard the rights of the appellant.
41. On coming to the instant case on hand, the Deputy Director of Enforcement Directorate Mr.S.Subramanian, ought not to have adjudicated the show cause notice for the reasons afore stated. Accordingly, the question of law No.2 is also answered in favour of the appellant.
42. In the result, the appeal filed by the appellant is allowed and the order of the Appellate Tribunal dated 07.12.2007 as well as the Adjudicating Authority dated 20.09.2000 are set aside and the appellant is discharged from all charges levelled against him. The penalty of Rs.4,50,000/- if paid shall be refunded to the appellant. Consequently, connected M.P. is closed. No costs.
(V.R.S.J.) (T.M.J.) 06.08.2015 Index : Yes/No. Internet: Yes/No. dn
1.Deputy Director, Enforcement Directorate, Sastry Bhavan, Haddows Road, Chennai-600 006.
2.The Appellate Tribunal for Foreign Exchange, Janpath Bhawan, 4th Floor, 'B' Wing, Janpath, New Delhi 110 001.
V.RAMASUBRAMANIAN,J.
AND T. MATHIVANAN,J.
dn C.M.A.No.614 of 2008 & MP. No.1 of 2008 06.08.2015