Delhi High Court
Vinod Kumar Sahadev vs Union Of India & Ors. on 17 August, 2009
Author: Mool Chand Garg
Bench: Mool Chand Garg
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ Crl.A. 315/2007
Date of Reserve: 22.07.2009.
Date of Decision: 17.08.2009.
VINOD KUMAR SAHADEV. ...Appellant
Through: Ms. Sangita Bhayana, adv.
Versus
UNION OF INDIA & ORS. ...RESPONDENTS
Through: Mr. Deepak Anand, adv. with Ms.
Rajdipa Behura, adv.
CORAM:
HON'BLE MR. JUSTICE MOOL CHAND GARG
1. Whether the Reporters of local papers
may be allowed to see the judgment? Yes
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be Yes
reported in the Digest?
: MOOL CHAND GARG
1. The appellant had filed a writ petition impugning the order dated
23.3.2007 passed by the Appellate Tribunal for Foreign Exchange
(hereinafter referred to as "respondent No.2") which writ petition was
converted as an appeal under Section 35 of the Foreign Exchange
Regulation Act, 1973 (hereinafter referred to as "the FERA, 1973"). By
the impugned order, the respondent No.2 modified the order dated
10.4.1991 passed by the Special Director, Enforcement Directorate
(hereinafter referred to as "respondent No.3") to the extent that the
penalty of Rs. 8,50,000/- imposed upon the appellant was reduced to
Rs.5,00,000/- in respect of three show cause notices for the alleged
contravention of the provisions of Section 8(1) and 8 (2) of the FERA,
1973.
2. The respondent initiated the proceedings against the appellant
Criminal Appeal No.315/2007 Page 1 of 11
relying upon the statement made by one Surinder Kumar Dhawan,
who, as alleged, was arrested by the Customs Authorities at Palam
Airport on 13.9.1985 and was found in possession of Saudi Riyals
43,500, DM 12,500 and DHs 2000 while he was moving towards
security check at the airport for going to Singapore by KLM Flight and
stated that the foreign exchange was received by him from Vinod
Kumar Sahadev, the present appellant.
3. As a follow up action, the respondent conducted a search at the
residential and business premises of the appellant, Surinder Kumar
Dhawan and B.S. Malik. It is the case of the respondents that during
the aforesaid search some loose sheets were recovered from the house
of Vinod Kumar, which had some calculations and which were
described as calculations of dealing in foreign exchange by the
petitioner with one Kasturi Lal.
4. The respondent claims to have recorded the statement of the
present appellant under Section 40 of the FERA, 1973 on 13.9.1985
alleging that the appellant accepted having handed over foreign
exchange in question to Surinder Kumar Dhawan and to Kasturi Lal and
his involvement in similar transactions between September 1984 till
12.9.1985 to the tune of Rs.30 lakhs.
5. It is also the case of the respondents that the statement of
Kasturil Lal was also recorded where he has denied his involvement in
any such transaction, yet three show cause notices were issued to all,
besides launching of prosecution against the present appellant.
6. The criminal complaints were also filed by the respondent in
respect of the same facts. However, the appellant and Kasturi Lal were
Criminal Appeal No.315/2007 Page 2 of 11
discharged in one of the complaint case by the learned ACMM, New
Delhi on 3.12.1998. In the second complaint, the appellant, B.S.Malik
and Kasturi Lal were also discharged by the learned ACMM, New Delhi
on 8.3.1999.
7. According to the appellant, he had retracted his alleged
voluntary statement recorded by the respondent, on 14.9.1984 itself.
According to him the said statement was not given by him voluntarily
but was given under duress and that the same was obtained by using
force by the officers of the respondent. It is in these circumstances, the
appellant has assailed the order of the Tribunal dated 23.3.2007 on the
following grounds:-
(i) There is no evidence against the appellant that he
contravened the provisions of Section 8(1) and 8(2) of the
FERA, 1973.
(ii) The statements which the respondents rely upon and
states was voluntary statements made by the appellant,
Surinder Kumar Dhawan, B.S. Malik, stand retracted and
was obtained under duress and fraud and there is no
corroboration of those statements by any independent
witness.
(iii) The stand of the respondent that the recovery of
foreign currency is corroborated by the voluntary
statements of appellant, Surinder Kumar Dhawan and B.S.
Malik is not correct.
(iv) No corroborative evidence has been led by the
respondent to prove the retracted confessional statement
inasmuch as no opportunity was granted to cross-examine
Criminal Appeal No.315/2007 Page 3 of 11
the officials who recorded the statement of Surinder Kumar
Dhawan, B.S.Malik, Kasturi Lal and the appellant. Even the
punch witnesses who were the witnesses to the alleged
recovery of foreign exchange from Surinder Kumar Dhawan
were also not produced during the course of adjudicatory
proceedings and they were also not permitted to be cross-
examined. It is also stated that even the allegations made
by the appellant in his retracted confession sent by the
registered post on 14.9.1985 itself, receipt of which is not
disputed by the respondent, has not been refuted by the
respondent inasmuch as none of the officers who recorded
the statement of the petitioner has come in the witness
box to corroborate the version of the respondent. Even the
annexure to the panchnama containing the details of the
documents recovered allegedly was also not produced by
the department, which makes the recovery of the
documents from the residence of the petitioner doubtful.
The witnesses who witnessed the alleged recovery of the
incriminating documents from the appellant have been
examined by the respondent in the course of adjudicating
proceedings. In fact, no reply has been filed to the
allegation made by the appellant about the exercise of
duress and force upon him while recording his alleged
statement on 13.9.1985.
8. It is thus submitted that once the recovery of foreign currency
has not been proved in accordance with law and there is no
corroboration of the documents seized or the statements made by
Criminal Appeal No.315/2007 Page 4 of 11
other accused persons, the imposition of penalty on the appellant who
is even otherwise not in a position to pay the same cannot be
sustained.
9. It would be appropriate to take note of the judgment of the
Supreme Court in K.I. Pavunny v. Asstt. Collector (HQ), Central
Excise Collectorate, (1997) 3 SCC 721, wherein it is held:
20. The question then is whether the retracted confessional statement
requires corroboration from any other independent evidence. It is seen
that the evidence in this case consists of the confessional statement,
the recovery panchnama and the testimony of PWs 2, 3 and 5. It is true
that in a trial and proprio vigore in a criminal trial, courts are required
to marshal the evidence. It is the duty of the prosecution to prove the
case beyond reasonable doubt. The evidence may consist of direct
evidence, confession or circumstantial evidence. In a criminal trial
punishable under the provisions of the IPC it is now well-settled legal
position that confession can form the sole basis for conviction. If it is
retracted, it must first be tested whether confession is voluntary and
truthful inculpating the accused in the commission of the crime.
Confession is one of the species of admission dealt with under Sections
24 to 30 of the Evidence Act and Section 164 of the Code. It is an
admission against the maker of it, unless its admissibility is excluded
by some of those provisions. If a confession is proved by
unimpeachable evidence and if it is of voluntary nature, it when
retracted, is entitled to high degree of value as its maker is likely to
face the consequences of confession by a statement affecting his life,
liberty or property. Burden is on the accused to prove that the
statement was obtained by threat, duress or promise like any other
person as was held in Bhagwan Singh v. State of Punjab (I)16 (AIR para
30). If it is established from the record or circumstances that the
confession is shrouded with suspicious features, then it falls in the
realm of doubt. The burden of proof on the accused is not as high as on
the prosecution. If the accused is able to prove the facts creating
reasonable doubt that the confession was not voluntary or it was
obtained by threat, coercion or inducement etc., the burden would be
on the prosecution to prove that the confession was made by the
accused voluntarily. If the court believes that the confession was
voluntary and believes it to be true, then there is no legal bar on the
court for ordering conviction. However, the rule of prudence and
practice does require that the court seeks corroboration of the
retracted confession from other evidence. The confession must be one
inculpating the accused in the crime. It is not necessary that each fact
or circumstance contained in the confession is separately or
independently corroborated. It is enough if it receives general
corroboration. The burden is not as high as in the case of an approver
or an accomplice in which case corroboration is required on material
particulars of the prosecution case. Each case would, therefore, require
to be examined in the light of the facts and circumstances in which the
confession came to be made and whether or not it was voluntary and
true. These require to be tested in the light of a given set of facts. The
high degree of proof and probative value is insisted in capital offences.
25. It would thus be seen that there is no prohibition under the
Evidence Act to rely upon the retracted confession to prove the
Criminal Appeal No.315/2007 Page 5 of 11
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
independent evidence adduced by the prosecution to corroborate each
detail contained in the confessional statement. The court is 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.
10. Reliance has also been placed on a judgment delivered in the
case of Vinod Kumar Solanki Vs. Union of India and Anr. [2009
(233) ELT 157 : 2009 JT (1) SC 1 : 2008 (16) SCALE 31], wherein
the Apex Court has discussed the effect of the retracted confession for
the purpose of levy of penalty under the FERA, 1973. The relevant
portion of the judgment is quoted below:-
14. As indicated heretobefore, the courts below proceeded on the
premise that a confession was made by appellant, although retracted
later, that he had acquired foreign exchange during the period 1993-94
on the basis of forged import documents where after he got the same
transferred to his bank account Nos. 564-000-4888-5 and No. 96300-
1254-9 in Standard Chartered Bank, Asian House VI Branch and
American E, Bank, Central Branch, at Hongkong and misutilized the
said foreign exchange and failed to import any rough diamonds for
which purpose the same was acquired.
15. The questions which would arise for our consideration are: (1)
whether the appellant had made bald statement at the time of
retraction alleging threat and coercion so as to shift the burden of
proof from him to the Enforcement Directorate; and (2) whether
consolidated penalty could have been imposed only on the basis of
such retracted confession.
16. Indisputably, a confession made by an accused would come within
the purview of Section 24 of the Indian Evidence Act, 1872, which
reads as under:
24. Confession caused by inducement, threat or
promise, when irrelevant in criminal proceeding.-
A confession made by an accused person is irrelevant in
a criminal proceeding, if the making of the confession
appears to the Court to have been caused by any
inducement, threat or promise, having reference to the
charge against the accused person, proceeding from a
person in authority and sufficient in the opinion of the
Court, to give the accused person grounds, which would
Criminal Appeal No.315/2007 Page 6 of 11
appear to him reasonable, for supposing that by making
it he would gain any advantage or avoid any evil of a
temporal nature in reference to the proceedings against
him.
17. The proceeding under the Act is quasi criminal in nature. Section
50 of the Act is a penal provision prescribing that in the event of
contravention of any of the provisions of the Act or of any rule,
direction or order made there under, a penalty not exceeding five
times the amount or value involved in any such contravention may be
imposed.
18. Section 71 of the Act provides for burden of proof in certain cases.
Sub-section (2) of Section 71 provides that the burden of proving that
the foreign exchange acquired by such person has been used for the
purpose for which permission to acquire it was granted shall be on
such person.
19. The Act is a special Act, which confers various powers upon the
authorities prescribed therein. Even the salutory principles of mens rea
and actus reus in a proceeding under the Act may not be held to be
applicable. It is now a well settled principle that presumption of
innocence as contained in Article 14 of the International Covenant on
Civil and Political Rights is a human right although per se it may not be
treated to be a fundamental right within the meaning of Article 21 of
the Constitution of India.
[See Article 11(1) of the Universal Declaration of Human Rights (1948)
and Article 6.2 of the European Convention for the protection of Human
Rights and Fundamental Freedoms (1950) and Article 14.2 of the
International Covenant on Civil and Political Rights (1966)]
20. Sub-section (2) of Section 71 places the burden of proof upon an
accused or a proceedee only when the foreign exchange acquired has
been used for the purpose for which permission to acquire it was
granted and not for mere possession thereof. The Parliament,
therefore, advisedly did not make any provision placing the burden of
proof on the accused/proceedee.
21. The Act, thus, does not provide for a 'reverse burden'. No
presumption of commission of an offence is raised under the Act. Even
in a case where the law provides for a burden on the accused having
regard to the aforementioned presumption of innocence as a human
right, this Court in Noor Aga v. State of Punjab and Anr. 2008 (9) SCALE
681 held as under:
114. Only when these things are established, a
statement made by an accused would become relevant
in a prosecution under the Act. Only then, it can be used
for the purpose of proving the truth of the facts
contained therein. It deals with another category of case
which provides for a further clarification. Clause (a) of
Sub-section (1) of Section 138B deals with one type of
persons and Clause (b) deals with another. The
Legislature might have in mind its experience that
sometimes witnesses do not support the prosecution
case as for example panch witnesses and only in such an
event an additional opportunity is afforded to the
prosecution to criticize the said witness and to invite a
finding from the court not to rely on the assurance of the
court on the basis of the statement recorded by the
Customs Department and for that purpose it is
Criminal Appeal No.315/2007 Page 7 of 11
envisaged that a person may be such whose statement
was recorded but while he was examined before the
court, it arrived at an opinion that is statement should be
admitted in evidence in the interest of justice which was
evidently to make that situation and to confirm the
witness who is the author of such statement but does
not support the prosecution although he made a
statement in terms of Section 108 of the Customs Act.
We are not concerned with such category of witnesses.
Confessional statement of an accused, therefore, cannot
be made use of in any manner under Section 138B of the
Customs Act. Even otherwise such an evidence is
considered to be of weak nature.
11. After making the aforesaid observation, taking into consideration
the stand of the appellant that he had retracted the confession
allegedly relied upon by the Enforcement Directorate, the Apex Court
further observed:-
33. In Gulam Hussain Shaikh Chougule v. S. Reynolds, Supdt. of
Customs, Marmgoa MANU/SC/0670/2001, this Court refused to exercise
its discretionary jurisdiction under Article 136 of the Constitution of
India opining that the confession was rightly held by the High Court to
be voluntary in nature.
34. 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. 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.
35. 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 there for.
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.
36. Appellant is said to have been arrested on 27.10.1994; he was
produced before the learned Chief Metropolitan Magistrate on
Criminal Appeal No.315/2007 Page 8 of 11
28.10.1994. He retracted his confession and categorically stated the
manner in which such confession was purported to have been
obtained. According to him, he had no connection with any alleged
import transactions, opening of bank accounts, or floating of company
by name of M/s Sun Enterprises, export control, Bill of Entry and other
documents or alleged remittances. He stated that confessions were not
only untrue but also involuntary.
37. The allegation that he was detained in the Office of Enforcement
Department for two days and two nights had not been refuted. No
attempt has been made to controvert the statements made by
appellant in his application filed on 28.10.1994 before the learned
Chief Metropolitan Magistrate. Furthermore, the Tribunal as also the
Authorities misdirected themselves in law insofar as they failed to pose
unto themselves a correct question. The Tribunal proceeded on the
basis that issuance and services of a show cause notice subserves the
requirements of law only because by reason thereof an opportunity
was afforded to the proceedee to submit its explanation. The Tribunal
ought to have based its decision on applying the correct principles of
law. The statement made by the appellant before the learned Chief
Metropolitan Magistrate was not a bald statement. The inference that
burden of proof that he had made those statements under threat and
coercion was solely on the proceedee does not rest on any legal
principle. The question of the appellant's failure to discharge the
burden would arise only when the burden was on him. If the burden
was on the revenue, it was for it to prove the said fact. The Tribunal on
its independent examination of the factual matrix placed before it did
not arrive at any finding that the confession being free from any
threat, inducement or force could not attract the provisions of Section
24 of the Indian Evidence Act.
12. Referring to the show cause notices issued in that case based
upon the confessional statement, the Court further observed:-
40. In Commissioner of Central Excise. Bangalore v. Brindavan
Beverages (P) Ltd. and Ors. MANU/SC/2645/2007, this Court held as
under:
12. Per contra, learned Counsel for the respondents
submitted that there is no material that the respondents
had ever been parties to the so called arrangement,
even if it is accepted for the sake of arguments but not
conceded, that such arrangement was in reality made.
There was no material brought on record to show that
the respondents had any role to play in such matters as
alleged. Even the show cause notice did not refer to any
particular material to come to such a conclusion.
Therefore, the Commissioner and the CEGAT were
justified in holding that the respondents were entitled to
the benefits.
13. We find that in the show cause notice there was
nothing specific as to the role of the respondents, if any.
The arrangements as alleged have not been shown to be
within the knowledge or at the behest or with the
connivance of the respondents. Independent
arrangements were entered into by the respondents with
the franchise holder (sic franchiser). On a perusal of the
show cause notice the stand of the respondents clearly
gets established.
Criminal Appeal No.315/2007 Page 9 of 11
14. There is no allegation of the respondents being
parties to any arrangement. In any event, no material in
that regard was placed on record. The show cause notice
is the foundation on which the department has to build
up its case. If the allegations in the show cause notice
are not specific and are on the contrary vague, lack
details and/or unintelligible that is sufficient to hold that
the noticee was not given proper opportunity to meet
the allegations indicated in the show cause notice. In the
instant case, what the appellant has tried to highlight is
the alleged connection between the various concerns.
That is not sufficient to proceed against the respondents
unless it is shown that they were parties to the
arrangements, if any. As no sufficient material much less
any material has been placed on record to substantiate
the stand of the appellant, the conclusions of the
Commissioner as affirmed by the CEGAT cannot be
faulted.
41. For the reasons aforementioned, the order of the Tribunal and
consequently the impugned judgment and order cannot be sustained.
They are set aside accordingly. This appeal is allowed. The amount of
Rs. 2,65,000/- which is with the Department shall be refunded to the
appellant within four weeks from date. In the facts and circumstances
of the case, there shall be no order as to costs.
13. In view of the aforesaid, it is apparent that once the alleged
statement made by the appellant on 13.9.1985 was retracted on
14.9.1985 itself with allegations of force and duress upon the
appellant, the onus to prove that the said statement was voluntary
shifted upon the respondent, which onus has not been discharged by
them and it is on that basis even the criminal prosecution resulted in
the discharge of the appellant and other accused persons.
14. The learned counsel appearing on behalf of the respondent
though submitted a written note opposing the case of the appellant but
has not been able to substantiate the proof of alleged statement of
Surinder Kumar Dhawan, which is the basis of the involvement of the
present appellant in this case. The voluntariness of the statement of
the present appellant has also not been proved. No copy of the
statement dated 2.7.1986 has been placed on record. Thus, there is no
evidence which may prove the role of the appellant in this case.
Further, as stated above, in this case the enquiry is not fair inasmuch
Criminal Appeal No.315/2007 Page 10 of 11
as no opportunity has been granted to the appellant to cross-examine
the witnesses who recorded the statement of the appellant and of
other accused persons or the witnesses to the recovery of the
incriminating documents or the witnesses to the recovery of the
alleged foreign exchange from Surinder Kumar Dhawan and as such
even the lighter burden to prove their case by preponderance of
probability has not been discharged by the respondent. More so, they
have also not been able to lead evidence before the adjudicating
authority that the alleged confessional statement, on which reliance
has been placed by the respondents, was made voluntarily and was
not recorded by using any force upon him as alleged by the appellant
in his written communication sent on 14.9.1985.
15. In view of the aforesaid, I find no ground for imposition of penalty
upon the appellant in this case and consequently, the penalty imposed
by respondent No.3 vide order dated 10.4.1991, upheld by respondent
No.2 though by reducing the penalty amount, is not sustained.
Accordingly, the appeal filed by the appellant is allowed. In case any
amount has been deposited by the appellant, the same shall be
returned to him within three months from today.
16. Trial Court record be sent back.
Crl.M.A.6780/2007(stay)
In view of the orders passed above, the application is disposed of
as having become infructuous.
MOOL CHAND GARG, J.
AUGUST 17, 2009 anb Criminal Appeal No.315/2007 Page 11 of 11