Delhi District Court
Enforcement vs . M/S. Next One & Ors. on 21 April, 2007
IN THE COURT OF Dr. KAMINI LAU: ACMM:
NEW DELHI
Enforcement Vs. M/s. Next One & Ors.
CC No. 130/1/1999
: J U D G M E N T :
1. Sr. No. of the case: 130/1
2. Name of the complainant: J.P. Mishra
3. Date of offence: 1997
4. Name of the accused: M/s. Next One, L5, Mayfair
Garden, New Delhi - 16
Ajay Nayyar
R/o R14/17, Vasant Vihar,
New Delhi
Also at
401, East Cross N, 12 J 34 MST,
NY 11016 USA
(Proclaimed Offender)
Romesh Sharma
S/o Sh. Satnarayan
R/o C30, Mayfair Garden,
New Delhi
5. Offence complained off: U/s. 56 of FERA
6. Plea of the accused: Pleaded not guilty
7. Final order: Convicted
8. Date of such order: 21.4.2007
9. Brief reasons for the said decision:
: 1 : The case of the prosecution is that during the year 1997 M/S Next One, L5, Connaught Place, New Delhi effected shipments of goods valued at US $ 3,45,195/90 under the cover of GR Forms as per details mentioned in the complaint. The said M/S Next One, New Delhi without any permission from the Reserve Bank of India took or refrained from taking action which had the effect of securing the export value to the tune of US $ 3,45,195.90 in respect of aforesaid goods has not so far been received in India by the said M/S Next One, New Delhi within the prescribed period or the time extended by the Reserve Bank of India in prescribed manner.
It is alleged that by taking or refraining from taking action which has the effect of securing that the receipt of the full export value of the goods exported from the country of final destination of the goods has been delayed beyond the prescribed period or the time extended by the Reserve Bank of India, in the prescribed manner without any permission of the RBI. It is also alleged that the accused Ajay Nayyar and Romesh Sharma partners of M/s. Next One, New Delhi during : 2 : the relevant period were incharge of and responsible to the said company for the conduct of the day today business of the company and hence by taking action/refraining from taking action without any permission of the Reserve Bank of India had the effect of securing the payment for the goods (receipt of the export value of the goods) exported to the tune of US $ 3,45,195.90 which had been delayed/not received within the prescribed period or the period extended by the Reserve Bank of India, the said M/S Next One, New Delhi and its aforesaid partners. An opportunity notice as prescribed under section 61 (2) of FERA 1973 was issued and duly served in accordance with law on M/S Next One and its partners i.e. Ajay Nayyar and Romesh Sharma to show within fifteen days of the receipt of that Memorandum if they had obtained any permission of the Reserve Bank of India for not realising the said Export Proceeds of US $ 3,45,195.90 within the stipulated period. The accused have failed to furnish the requisite information within the specified period.
: 3 : The record reveals that vide order dated 3.8.2001 the Ld. Predecessor of this court had directed the framing of charge against the accused and accordingly on 8.8.2001 charge u/s. 56 of FERA was framed against the accused to which he has pleaded not guilty and has claimed trial.
In order to prove its case the prosecution has examined as many as 10 witnesses. PW1 Sh. B.K. Ahuja is the Clerk from Canara Bank has produced the relevant file relating to the account holder M/S Next One which contains 27 sheets/ documents including 9 specimen signatures ExPW1/A1 to ExPW1/A9. Further ExPW1/A5 contains the photographs of Ramesh Sharma and specimen signature which are Ex.PW1/A7 and also the specimen signatures of Ramesh Sharma dated 20/2/97 which is ExPW1/A6 and the signatures of the accused Ajay Nayyar which is ExPW1/A8. He has also produced the letter of authority to operate the account which is Ex.PW1/A10 and ExPW1/A11 is a letter addressed to Canara Bank. Further, he has also produced the partnership documents and ExPW1/A12 is a NF111 partnership letter, : 4 : ExPW1/A13 is the partnership deed and ExPW1/A14 is the receipt. The witness has placed on record the NF111 partnership letter which is Ex.PW1/A15 and bears the signature of accused Romesh Sharma and Ajay Nayar. The account opening form dated 26/2/97 is ExPW1/A16; the authority letter to operate account/locker in favor of Romesh Sharma in respect of account locker no. CA6371 is Ex.PW1/A17; the authority letter authorizing Romesh Sharma to operate locker CA6371 dated 26/2/97 bears the signature of Romesh Sharma and signature of account holder on behalf of Next One is ExPW1/A18; deed of dissolution is ExPW1/A19 and ExPW1/A20 is a partnership deed, ExPW1/A21 is a letter NF103 partnership account opening form.
In his cross examination PW1 has stated that none of the documents were prepared in his presence nor he has any personal knowledge of these documents. According to him, the specimen signature are taken in the bank by the Manger or officer concern. He does not know who was the manager at the time of taking the specimen signature ExPW1/A1 to A9. The : 5 : witness has stated that Ex.PW1/A5 only contains the photograph of Romesh Sharma and he had not seen Romesh Sharma earlier. He has testified that he has only stated the fact regarding the identity of Romesh Sharma on the basis of the record of the bank. The witness has admitted that on the specimen signature form card the photo is stapled and can be removed and that the photograph does not bear the signature of Romesh Sharma. He has also admitted that he had not seen the accused Ajay Nayyar earlier but he is unable to tell whose signature appear in ExPW1/A10. He is also unable to tell in whose presence the ExPW1/A15 was written nor he can state the name of the manager at that time.
PW2 Sh. J.D. Ahuja Asst. Manager RBI of India has brought the statement of exports outstanding proceeds in respect of M/S Next One and has proved the I.E.C. Number 0594063001 which is ExPW2/A. He has further stated that as per record party has not applied for extension for relisation of export proceeds. According to him, the statement prepared on the basis of the floppy supplied by the exporters banker i.e. : 6 : authorised foreign exchange dealer is ExPW2/A .
In his cross examination the witness is unable to tell the details of the partners of Next One. He is also unable to tell if all the dealings were made by Ajay Nayar with the Bank and the RBI and he does not have any personal knowledge about the present case. According to him, the exporter banker had supplied the floppy but the same had not been received by him. He has deposed that the floppy received in the RBI from the exporter bank is duly entered but he is unable to tell what was the outstanding as on 31.12.1999 but submits that a notice dated 16.10.2000 was issued to the accused in this regard. He has admitted that there were outstanding as on 30.6.1998 but he is unable to tell whether there were any outstanding as on 30.6.1997. The witness has deposed that as per the record available with him M/s. Next one did not apply for extension. According to him, the letter dated 16.10.2000 was not written by him and was issued by Sh. S.C. Khurana.
PW3 Sh. Manohar Lal is the UDC in Enforcement Directorate who has in his examination in chief : 7 : testified that In July 1999 Sh. J.P. Mishra Enforcement Officer handed over to him an opportunity notice ExPW3/A for service. According to him, he visited the premises M/S Next One, L5 Cannaught Place New Delhi where Mr. Arun Gupta met him who was running his firm named Senson Continental and handed over him a letter ExPW3/B. Mr. Arun Gupta informed him the address of M/S Next One was C28 Maifair Garden New Delhi after which he submitted a report ExPW3/C to Sh. J.P Mishra. According to the witness he served the opportunity notice under rule 3C of FERA 1974 on M/S Next One C28 Maifair Garden New Delhi vide punchnama ExPW3/D. He also served the opportunity notice on Ajay Nayyar partner of M/S Next One at E14/17 Vasant vihar vide punchnama ExPW3/E. He has proved having submitted his report regarding service of opportunity notice ExPW3/A vide report ExPW3/F. In his cross examination the witness has stated that he does not have any personal knowledge regarding ExPW3/A nor he has dealt with this except effecting service. He has : 8 : further stated that no register is maintained by him for the service conducted by him. He has admitted the panchnama ExPW3/D where he had mentioned the service of order no. T 3/105DD/98/IDG/Head Quarter/ OPN dated 23.7.1999 conveys the service of opportunity memo/notice ExPW3/A. He did not affix the notice/opportunity memo at the premises as the address of Next One was C28 Mayfair Garden New Delhi. The witness has testified that he conveyed the message to Sh. J.P. Mishra regarding address of M/S Next One as C28 Mayfair Garden New Delhi and has admitted that no written directions were given by Sh. J.P. Mishra. He has stated that he does not find any person at C28 Mayfair Garden New Delhi. He does not know who were the partners or owners of the said firm and states that he had not recorded the statement of any witness.
Sh. A.K. Tyagi Officer from Canara Bank has been examined as PW4. He has deposed in his examination in chief that he has brought XOS report regarding outstanding export proceeds in respect of firm M/ S Next One. The report : 9 : is ExPW4/A. He also brought GR1 forms ExPW4/B1 to B74 export proceeds. According to him, the GR1 forms are deposited in RBI Bank generally after receiving the outstanding exports proceeds.
In his cross examination the witness has stated that he has no knowledge relating to the GR forms submitted by the party in ExPW4/B1 to B74. He has admitted that these forms relates to Next One and not to any personal/individual. He has further stated that Ex.PW4/A i.e. GSR report is on the basis of the computer but he did not personally feed the said report in the computer. The witness is not aware whether any inquiry was made regarding the report Ex.PW4/A but has stated that the manager directed him to collect the report from foreign exchange department. He does not remember the name of the person from whom he had brought the report Ex.PW4/A and has stated that he personally did not give anything in writing requesting the bank to give him the report.
PW5 Sh. J.P. Mishra is the Enforcement Officer who has deposed that on 10/7/99 he had issued a letter : 10 : ExPW5/A to Manager Canara Bank New Delhi pursuant to which he received a communication dated 23/2/1999 along with enclosure, which is ExPW5/B and enclosure are Ex.PW5/C1 to C88. He has proved the letter of Canara Bank dated 4.3.1999 which is ExPW5/D informing them about the name of partners during the relevant period. The witness has further proved the letter dated 31/3/99 ExPW5/E which was written/issued by RBI and its enclosures which are ExPW5/F1 to F4. According to the witness after obtaining permission from court on 11/3/99 vide application Ex.PW5/G he visited the jail and the accused tendered his statement ExPW5/H. He has proved the Memorandum/show cause notice ExPW5/J dated 16/4/99 which was issued along with annexures ExPW5/K1 to K4 and the Opportunity notice was ExPW3/A; the service report of which is ExPW3/C and also ExPW3/F which is the report submitted by Manoharlal. The witness has further proved the letter addressed to jail authority ExPW5/L. According to him, the Jail Superintendent had sent the acknowledgment vide communication dated 28.7.1999 which : 11 : is ExPW5/N along with enclosures ExPW5/O. He has also proved having filed the complaint ExPW5/P and the authorization to file the same vide notification Ex. PW5/M. In his crossexamination the witness has admitted that there is no notification in his name for filing of the complaint and states that the same is not necessary. He has further admitted that all the consignments were sent by M/s. Next One from 5.6.1997 to 3.9.1997 and has stated that he made the investigations regarding these consignments from Canara Bank but he did not check the GR form of these consignments in original from the bank. He is unable to tell who had signed in the GR form of Next One and has stated that he had not taken any partnership deed of M/s. Next One during his investigations. He has deposed that he relied upon the information submitted by the Canara Bank regarding the name of partner of M/s. Next One during the relevant period which letter is Ex.PW5/B. The witness has stated that he did not take any dissolution deed of the partnership mentioned in the letter Ex.PW5/D nor did he take in possession the reconstituted : 12 : partnership deed dated 26.2.1997 mentioned in the letter Ex.PW5/D and he might have heard that as per information submitted by Canara Bank Sh. Romesh Sharma is the partner of M/s. Next One w.e.f. 26.2.1997 According to him, he did not make any investigations to the effect if the reconstituted partnership dated 26.2.1997 was an oral partnership or a written deed. He has further testified that he considered the accused Romesh Sharma being a partner of M/s. Next One on the basis of letter received from the Canara Bank and the interrogation made from the accused but he had not seen the original partnership deed though the accused did not give any statement with regard to his being a partner of the firm.
In his further crossexamination the witness has stated that he had not taken any statement of accused Ajay Nayyar because he was reportedly in USA and he had sent a directive to M/s. Next One and to its partners. He has further deposed that he did not sent any summons to the accused Ajay Nayyar at USA as his complete address was not available with him. He admits that he did not take any steps for recording the : 13 : statement of accused Ajay Nayyar in USA and also admits that he did not make any inquires whether M/s. Ajay Nayyar corporation which was owned by the accused Ajay Nayyar was still subsisting or had become insolvent. According to the witness, vide adjudication order no. SDE/KRB/III/3637/2000 dated 21.11.2000 passed by Sh. K.R. Bhargava the accused Ajay Nayyar had been directed to repatriate the foreign exchange holding to the tune of US $ 3,45,195.90/ into India within three months from the date of order in terms of Section 63 of FERA which order has been served upon the accused Ajay Nayyar in USA. The witness is not aware if any appeal against the adjudication order had been filed and he had not investigated if M/s. Ajay Nayyar Corporation was a sole proprietor concern of a partnership company or an incorporate company. According to him in September 1999 their source at New York had informed them that M/s. Ajay Nayyar Corporation USA was owned by the accused Ajay Nayyar who is also the partner of M/s. Next One India pursuant to which a show cause notice was also issued against M/s. Next One and : 14 : their partners.
The said witness has testified that in subsequent investigations department came to know that M/s. Ajay Nayyar Corporation USA i.e. the importer in the present case is also owned by one of the partner of M/s. Next one and hence the exporter and importer in the present case were the same. He has admitted that he did not give any summons to the accused Romesh Sharma after 25.4.1999 and that the accused Romesh Sharma did not cooperate with the investigations at any stage despite three opportunities given to him to explain the reasons for nonrealization of export proceeds but he did not give any reply. He is unable to admit or deny whether all the bills and bill of entries and GR forms were filled up by the accused Ajay Nayyar. He has denied the suggestion that the accused was a sleeping partner but admits that all the GR forms which have been filed does not bear the signatures of accused Romesh Sharma.
PW6 is Sh. Ved Singh. He has placed before this court the despatch registers showing relevant entries in respect : 15 : of the notices etc. to the accused Romesh Sharma, M/s. Next one and the accused Ajay Nayyar, the relevant pages of which register showing entries dated 16.4.1999 is Ex.PW6/A. The witness has also proved the postal receipt which are Ex.PW6/B1 to B4 (colly.) and copy of the despatch register showing the relevant entries dated 26.7.1999 is Ex.PW6/C. He has testified that the notices as mentioned in the despatch register were duly despatched vide postal register receipt Ex.PW6/D1 to D5. He has further placed on record the register showing relevant entries dated 21.6.2000 which is Ex.PW6/E and according to him the notices mentioned in the dispatch register Ex.PW6/E were duly dispatched vide registered postal receipt Ex.PW6/F1 to F5. He has also placed on record the dispatch register showing relevant entries which which is Ex.PW6/G and the notice mentioned in the same were duly dispatched vide postal receipt Ex.PW6/H1 to H5.
In his crossexamination the witness is unable to tell whether the accused Romesh Sharma was in jail on : 16 : 16.4.1999. He has admitted that notices on 16.4.1999 were sent by acknowledgment AD but he is not aware if the registered acknowledgment was returned back or not on 16.4.1999.
PW7 is Sh. Ramesh Kumar who has brought Letter Ex.PW7/A dated 7/7/99 and Ex.PW7/B dated 23/7/99 addressed to Suptd. Central Jail which was received in Central Jail.
In his cross examination PW7 has admitted that whenever any document sent for service on the convict or under trial a copy of the document is kept in the file. It is correct that except for the letter ExPW7/A and ExPW7/B there is no other enclosure in the file.
PW8 is Sh. Guru Parshad. He has testified before the court that ExPW5/B was written by him in response to the communication received from Enforcement Directorate. ExPW5/C annexures was also with it. He also issued a letter dated 4/3/99 ExPW5/D. He has brought the some of the cheques issued issued by Romesh Sharma as partner of M/S : 17 : Next One ExPW8/A1 to A8. Some other cheques which were also issued by the accused Romesh Sharma as partner of M/S Next one and they have been seized by CBI. He has corroborated the version of PW5.
In his crossexamination the witness has stated that the cheques had been seized from the Canara Bank and the seizure memo is available in the bank. He has testified that many of the cheques out of 341 cheques seized had been signed by the accused Romesh Sharma but he is unable to give the details of those cheques purported to be signed by the accused Romesh Sharma and in whose name the said cheques had been issued. According to him, his statement was not recorded u/s. 39 or 40 of FERA and has denied that the letter was not sent by him. According to him all the details have been extracted from the original file containing current account application form in serial order or their account number. He has further admitted that Ex.PW1/A15 was not given in his presence.
: 18 : PW9 Daljit Singh was the Dy. Superintendent Jail no. 5 at the relevant point of time who has deposed before court that he received communication dated 23/7/99 which is ExPW5/O along with opportunity notice for the service of the same to the accused. The communication was received on 28/7/99 and served upon accused. After service of opportunity notice he has submitted his report along with acknowledgment to Sh. J.P. Mishra vide communication dated 28/7/99 which is ExPW5/N and its annexures are ExPW7/B. In his crossexamination the witness has stated that a file was maintained in the office of Superintendent of Jail relating to the document received for the accused Romesh Sharma. He has admitted that all the documents received for the accused persons had to be served upon them and are kept on the file but stated that only covering letter and receipt thereof is kept in the file. The witness has testified that the accused Romesh Sharma received the opportunity notice on the original letter of Enforcement Directorate showing that he had received the opportunity notice and not the covering letter : 19 : of Enforcement Directorate. According to PW9 he was not present at the time when the acknowledgment was obtained on the opportunity notice but states that the acknowledgment was taken by Sh. Subhash Batra. He has admitted that in the letter Ex.PW7/B there is no mention about the receipt of opportunity notice and that he has not endorsed on the opportunity notice that it was served on the accused.
PW10 Subhash Batra has deposed before the court that on 28/7/99 he personally served and delivered the notice to accused Ramesh Sharma in token of receipt of notice put his dated signature in his presence on ExPW7/B. According to the witness, on 28.7.1999 he personally served and delivered the notice to the accused Romesh Sharma in token of receipt of notice.
PW10 has in his cross examination stated that he did not maintain file of the paper received and acknowledged by the person in jail. According to him he had not obtained any signature of the accused Romesh Sharma on the enclosed opportunity notice issued u/s 61(2) (II) of FERA 1973 as the : 20 : original was handed over to the accused. He also does not know whether any reply was given by Sh. Romesh Sharma to the letter ExPW7/B. Thereafter the statement of the accused was recorded u/s. 313 Cr.P.C. wherein he has denied all the allegations against him. He has stated that his only role was of making investment in the firm and he was not concerned with the day to day affairs of the firm. The accused Romesh Sharma has examined himself as his defence witness as DW1 u/s. 315 Cr.P.C. wherein he has stated that a false complaint has been filed against him to cause a political vendetta on the behest of vested interested people. According to him he did not have any active role in the firm M/s. Next One and the entire management and control of the business was looked after by the accused no. 3 Ajay Nayyar. He has stated that he never visited the Next One office or the garment factory where the garments were manufactured and all the procedure with regard to export were looked after by the accused Ajay Nayyar. He has deposed that all the GR forms have been : 21 : signed by Ajay Nayyar or his representative. According to him, he is in jail since 20.10.1998 and he even tried to get the remittance bank to India and he had also filed a civil suit and criminal case u/s. 409/420 read with 120B IPC against the accused Ajay Nayyar, certified copy of which are Ex.DW1/A and DW1/B respectively. The accused has alleged that the co accused Ajay Nayyar had committed fraud with him by inducing him for parting the money and putting the finance with the firm Next One for which he has suffered huge loss.
In his crossexamination the DW1 has stated that the accused Ajay Nayyar brought an account opening form stating that a joint bank account was to be opened and for security of his money it is necessary to open the bank account due to which reason he agreed and signed the account opening form. He does not remember as to how much amount was financed by him at the time when the account was opened but the finance amount was about one crore which was financed from time to time. Certain cheques have also been produced and put to the accused to which he has stated that the accused : 22 : Ajay Nayyar used to remain abroad and hence got blank cheques signed from him and he used to sign the blank cheques due to his inability on account of his political tours. He has denied that he was a regular partner with Ajay Nayyar in the firm M/s. Next One and had executed a regular partnership deed.
I have heard the submissions made before me and have gone through the material on record. As many as 10 witnesses have been examined by the prosecution to discharge the onus upon them. PW1 B.K. Ahuja has produced the file relating to the account holder M/s. Next One which containing 27 sheets including 9 specimen signature cards which have been placed on record. He has also placed on record the partnership letter Ex.PW1/A15 which bear the signatures of both the accused Ajay Nayyar (PO) and Romesh Sharma. PW1/A16 is the account opening form dated 26.2.1997, Ex.PW1/17A is the authority letter to operate the account/locker in favour of the accused Romesh Sharma in respect of the locker no. CA6371; Ex.PW1/A18 is the : 23 : authority letter authorizing Romesh Sharma to operate the locker bearing dated 26.2.1997 bearing the signatures of accused Romesh Sharma at point A and signatures of the account holder on behalf of the M/s. Next One is at point B; Ex.PW1/A19 is dissolution deed and Ex.PW1/A20 is a partnership deed and Ex.PW1/A21 is a letter NF 103 partnership account opening form. In his crossexamination the witness has stated that he has deposed before this court only on the basis of official record. He has further stated that PW1/A5 is containing the photograph of the accused Romesh Sharma though he has not seen the accused Romesh Sharma earlier. According to him he had given the identity of the accused Romesh Sharma only on the basis of records of the bank the original of which is Ex.PW1/A5 though a suggestion has been put to the said witness that the photo is stapled and can be removed yet in his defence the accused has not produced any witness to show that the photograph had been replaced nor it is the case of the accused.
: 24 : PW2 J.D. Ahuja is the Assistant Manager, RBI who has placed before this court the statement of export proceeds outstanding in respect of the firm M/s. Next One the IEC number of which is 0594063001 is Ex.PW2/A and is running into three computer sheets bearing the signatures of Assistant General Manager at point A1 and A2. He has identified the signatures of Assistant General Manager in his official capacity having seen her writing and signing. According to him, as per the record the party had not applied to extension for realization of export proceeds which statement is Ex.PW2/A and was prepared on the basis of the floppy supplied by the exporters banker i.e. authorized foreign exchange dealer. In his crossexamination a suggestion has been made by the counsel for the accused that the accused no.2 Romesh Sharma was in jail for the last 2 years due to which reason he could not apply for extension to which the witness has claimed that it is not necessary that the person should apply personally and it can be applied by anyone. The said witness is unable to tell who were the partners of the firm and : 25 : has stated that he has no personal knowledge of the case and has made statement only on the basis of official record. The floppy in question has also been produced in the court on the basis of which the statement Ex.PW2/A was prepared after pre charge evidence and according to the witness the floppy was supplied by the Canera Bank i.e. the exporter bank which was received twice in a year regarding the outstanding exports. He has further testified that a notice had been issued with regard to the outstanding export proceeds as on 31.12.99 which notice was issued on 16.10.2000. According to the witness, the outstanding amount was Rs. 1,22,94,779/ but he is unable to tell the outstanding as on 31.12.99 since the record has not been called to the court with regard to the same though he admits that there was an outstanding as on 30.6.98 but he is unable to give the details of the same for want of relevant records. He is also unable to tell if there was any outstanding as on 30.6.1997 as the relevant record was not called to the court and he has specifically clarified that the relevant records which have been produced are only those which have been : 26 : summoned by the court. He has very specifically stated that as per the available record with him the firm M/s. Next One did not apply for extension which fact is apparent from the record in relation to 31.3.99. According to him they have not sent any letters for the partners of the firm but the letter had been sent only to the firm though the witness in his crossexamination is unable to whether the receipt and dispatch register is still in the RBI and who was the concerned officer for dispatch yet the record reveals that no evidence in rebuttal has been lead by the accused. The witness PW2 has admitted that the latter dated 16.10.2000 has not been written by him and has stated that it had been issued by one S.C. Khurana. He has denied the suggestion that the documents can be changed.
PW3 Manohar Lal is the UDC of the Enforcement Directorate who has proved the OPN running into 3 pages issued by Sh. J.P. Mishra which is Ex.PW3/A. He has identified the signatures of Sh. J.P. Mishra in his official capacity having worked with him. According to him, he had visited the premises bearing no. L5, Connaught Place the last : 27 : known address of M/s. Next One where one Mr. Arun Gupta met him who was running his firm M/s. Senson Continental and handed over him a letter Ex.PW3/B bearing the signatures of said Arun Gupta informing him that the fresh address of M/s. Next One was C28, Mayfair Garden which report is Ex.PW3/C. Thereafter accordingly the said OPN was served under Rule 3 (c) of FERA on M/s. Next One C28, Mayfair Garden vide panchnama Ex.PW3/D in the presence of the independent witnesses whose signatures have also been identified by the witness. He has also proved the service of OPN on the other partners namely Ajay Nayar at E14/17, Vasant Vihar, New Delhi vide panchnama Ex.PW3/E bearing his signatures at point X1 and that of two independent witnesses at point X2 and X3. According to him PW3/E was drawn at the spot regarding service of the OPN under rule 3 (c) of FERA after which he has proved his report on the service of OPN in accordance with law.
In his crossexamination the said witness has admitted that in the panchnama Ex.PW3/D he had mentioned : 28 : the service of order no. T3, 105/DD/98/IDG/ Head Quarter/ OPN dated 23.7.1997 which conveys the service of OPN Ex.PW3/A on the address of L5, Connaught Place, New Delhi but according to the witness he did not affix the OPN at the premises of M/s. Sensons Continental since he was told by Arun Gupta that the new address of the firm M/s. Next One is C28, Mayfair Garden vide letter Ex.PW3/B. He has admitted that the said letter did not bear any date but in view of this court this will not be fatal to the case of the prosecution. The witness has further admitted that the letter Ex.PW3/B does bear any date and further that there were no written directions by J.P. Mishra to serve the OPN at C28 Mayfair Garden. Further he did not ask any person from the neighbourhood as to why the premises was locked nor he did not know who were the partners of M/s. Next One at that time.
PW4 A.K. Tyagi is the officer from Canara Bank and has proved the XOS report regarding export proceeds in respect of the firm M/s. Next One which report is Ex.PW4/A running into 3 pages. He has also placed on record the GR : 29 : form export proceeds and export proceeds in respect of these GR forms are outstanding and are in custody of the bank which are Ex.PW4/B1 to B74. In his crossexamination the witness has admitted that the outstanding GR report is on the basis of computer record and he did not feed the same into it. He is not aware if any inquiry had been made regarding the report Ex.PW4/A and he had collected the same as per the directions of the Manager.
PW5 J.P. Mishra is the Enforcement Officer who had conducted the relevant inquiries. He is the complainant in the present case and has proved the complaint in accordance with law and the various communication. He has corroborated the testimony of Manohar Lal and proved his service reports. He has further proved that vide letter dated 23.7.99 he forwarded the OPN which is Ex.PW3/A to the jail authorities which letter is Ex.PW5/L. According to him he had made inquiries regarding Ajay Nayyar who was reported to be in USA but he did not sent any summons to him at USA as his complete address was not available with him. He has further stated that : 30 : Sh. K.R. Bhargav had vide adjudication order bearing no. SDE/KRB/III/3637/2000 dated 21.11.2000 directed the accused no. 2 Ajay Nayyar to repatriate the foreign exchange holding to the tune of US $ 3,45,195.90/ into India within three months from the date of order which order had been served upon him in USA. According to the witness the accused Romesh Sharma did not reply to the OPN so served upon him in the Central Jail Tihar. He is not aware if any appeal against the adjudication order has been filed or not. He has denied the suggestion that the accused Romesh Sharma was only a sleeping partner and has been implicated only because the accused Ajay Nayyar (PO) has not repatriated the entire amount. The said witness has been crossexamined at length both at the pre charge stage and after charge state and he has very specifically in his crossexamination stated that as per the information submitted by the Canara bank vide their letter dated 23.2.99 and 4.5.1999 accused Romesh Sharma was the partner of the firm w.e.f. 26.2.1997. He is unable to tell the terms of the dissolution deed and the reconstituted partnership : 31 : dated 26.2.1997 nor he conducted any investigation if the reconstituted partnership deed dated 26.2.1997 was on oral partnership or a written deed. The witness has in his cross examination stated that the accused Romesh Sharma did not cooperate with the investigations though he had been given three opportunities to explain reasons for non realization of export proceeds but he did not give any such reason.
Sh. Ved Singh dispatch clerk has been examined as PW6 who has proved the communication which had been sent to the accused Romesh Sharma and were sent by registered AD. PW7 Ramesh Kumar has produced the relevant record from the Central Jail Tihar containing the details of the correspondence relating to inmate Romesh Sharma. He has proved the letter dated 7.7.1999 received by the Superintendent Central Jail which letter is Ex.PW7/B. In his crossexamination he has admitted that whatever documents were sent for service on the convict or under trial a copy of those documents are kept on the file but the file produced by him does not contain any other letter. PW8 Guru Prashad, : 32 : Retired Chief Manager, Canara Bank, Connaught Place has proved the various communications. He proved having replied to the Enforcement Directorate vide letter dated 4.3.1999 which is Ex.PW5/D. According to him, the accused Romesh Sharma has been shown as a partner of M/s. Next One, L5, Connaught Place in the official record. He has also produced some cheques issued by the accused Romesh Sharma as partner of M/s. Next One which had been seized by the CBI. He has proved the specimen signature cards containing the photograph of Romesh Sharma and the authority letter to operate the account. According to him, out of the 341 cheques seized some of the said cheques have been issued by the accused Romesh Sharma but he is unable to produce the seizure memo and also unable to give the details of the cheques which were signed by the accused Romesh Sharma. He has proved the various letter issued to the Enforcement Directorate to his bank in the official course of business. PW9 Daljit Singh SDM Karol Bagh who was working as Dy. Superintendent, Central Jail no. 5 at the relevant point of time : 33 : has correctly identified the accused Romesh Sharma and has proved the communication dated 23.7.1999 Ex.PW5/O. He has proved the service of OPN upon the accused Romesh Sharma and has identified the signatures there on. He has further proved his report alongwith the acknowledgment to the complainant J.P. Mishra who has been examined as PW5. PW10 Subhash Batra Assistant Superintendent Jail, Tihar who was the Incharge of jail no. 5 has identified the accused Romesh Sharma and proved the service of the OPN upon the accused Romesh Sharma whose signatures he has identified.
In his statement the accused has denied that he was not a partner to the accused no. 1 firm M/s. Next One. He has stated that neither the complainant nor the bank has proved the partnership deed and his role was only making investments in the firm. Further he has stated that he is not aware of the export proceeds which have not realized by the accused no. 2 Ajay Nayar and in fact it is Ajay Nayar who had played a fraud upon him for which he has already filed a separate criminal case as well as a civil suit. He has denied having visited the : 34 : bank and according to him Ajay Nayar had asked him to sign the specimen signatures cards but he did not inform him that he was signing as a partner of the firm M/s. Next One. Further he has contradicted himself in his statement and states that he was a sleeping partner having made investments. Also his own statement Ex.PW1/H has been put to him on which he has stated that he was not keeping well due to which reason he informed the investigating officer that he would be giving the statement after consulting his advocate. He has denied that he had been authorized to operate the bank account and has stated that Ajay Nayyar had taken his signatures on the blank cheques. 8 cheques signed by him between 6.8.97 to 12.9.97 in his capacity as the partner has also been put to the accused and according to him the cheques had been got signed by the accused Ajay Nayyar for being paid to the firms from whom fabrics yarn etc. was purchased. He is not aware if CBI had made a sweeping search and taken into possession all the documents which includes the cheque books. The accused has stated that he is a victim of the accused Ajay Nayyar and : 35 : according to him the entire responsibility for obtaining the extension of time was upon Ajay Nayyar as he was confined to jail. It has also been put to the accused that he has not been cooperating with the investigating officer and had refused to make a statement which fact has been denied by him. The accused has stated that it was Ajay Nayyar who was the incharge and responsible for day to day affairs of the firm and according to him, he was not responsible for any work of the firm. He has only examined himself as his own defence witness.
Before proceeding further with the case it is necessary to this court to revert back to the objects and reasons of the Act which are reproduced as under:
Objects and Reasons of the 1957 Amendment Act expressly stated, "India still continues to be short of foreign exchange and it is necessary to ensure that our foreign exchange resources are conserved in the national interest". In 1973, the old Act was repealed and replace by the Foreign Exchange Regulation Act, 1973, the long title of which reads:
: 36 : "An Act to consolidate and amend the law regulating certain payments, dealings in foreign exchange and securities, transactions indirectly affecting foreign exchange and the import and export of currency and bullion, for the conservation of foreign exchange resources of the country and the proper utilization thereof in the interest of development of the country."
That fulfillment of the object of the legislation and securing punishment of the offenders, some special rules of evidence have been incorportated in the Act, which are different from normal rules of evidence in criminal jurisprudence. Specific mention in this regard may be made to Section 59, 71, 72 FERA, 1973. The presumption has to be rebutted by "proof" and not by a bare explanation which is nearly plausible.
: 37 : It is a settled law that the statement as recorded u/s 40 of FERA are admissible in evidence whereas it is not the case when the statement is recorded by the police and Section 59 of FERA speaks about presumption of culpable mental state on the part of the accused and the court shall presume the existence of such mental state. Section 72 refers to presumption as to the documents, the contents of truth of the documents will have to be presumed unless contrary is proved.
Also Section 71 of the FERA, 1973 imposes the burden of proving that the accused has not acted in contravention of any of the provisions of the Act on the accused himself.
Applying the well settled preposition of law to the facts and evidence brought on record, it is apparent that the complaint and the documents placed before this court unless the accused rebuts the presumption of the offence being strict and absolute, he is deemed to have committed the offence. The provisions of Section 18 (3) of FERA also provides for statutory presumption in relation to the offences which fall under Section 18(2) of the Act.
: 38 : Ld. Counsel for the accused has vehemently argued that the department had failed to place on record any partnership deed. It is contended that the dissolution deed dated 1.4.1995 between Ravi Gupta, Arun Gupta, Ajay Nayyar and Anil Kumar Thaparbut no partnership deed has been proved by the prosecution relating to the accused Romesh Sharma. Further he has pointed out that PW1 B.K. Ahuja has stated that he has no personal knowledge of the present case and his testimony cannot be relied upon being a hearsay witness. According to the Ld. Counsel PW2 J.D. Ahuja has merely stated about the outstanding proceeds in respect of the firm M/s. Next One but is unable to say if all the dealing had been made by Ajay Nayyar. It is stated that he is also a hearsay witness and cannot be relied upon. The Ld. counsel has also contended that PW3 Manohar Lal does not say about the service of OPN on the accused Romesh Sharma and has merely stated that he had served the accused Ajay Nayyar at E 14/17, Vasant Vihar and on information of Arun Gupta he had gone to C28 Mayfair Garden. According to the Ld. Counsel : 39 : PW4 A.K. Tyagi also has no personal knowledge of the present case and even the investigating officer PW5 on specific question has stated in his crossexamination that he had not seen any partnership deed and has based his knowledge only on the letters of Canara Bank dated 23.2.1995 and 4.3.1995. According to the Ld. Counsel, the evidence placed before this court does not make out any case for contravention of Section 18 of the FERA. He has placed his reliance on the authority in the case of G.L. Gupta Vs. D.N. Mehta reported in AIR 1971 SC 2162 wherein it has been held that Section 18 of FERA should be construed strictly and its test must apply to the director-in-charge of the business. According to the counsel for the accused the person incharge must mean that the person should be in over all control of the day to day business of the company or firm and merely because a person is a partner or Director, a person would not become vicariously liable. In this regard he has also placed his reliance on the following authorities:
: 40 :
1. Delhi Municipality Vs. Ram Kishan reported in AIR1983 SC 67.
2. A.T. Corpn. Vs. Assistant Collector Customs reported in AIR 1972 SC 648.
3. J.R. Grover Vs. Assistant Director reported in 1987 (31) ELT 682 (P&H).
4. SMS Pharmaceuticals Lts. Vs. Neeta Bhalla & Anr.
reported in 2005 (3) JCC (NI) 203.
5. Sham Sunder Vs. State of Haryana reported in AIR 1989 SC 1982.
Ld. Counsel has submitted that it was necessary for the prosecution to show that the accused Romesh Sharma was the incharge and responsible for day to day work of the company and even out of 341 cheques only a few had been signed by the present accused. Further the accused has given a valid explanation for the said cheques had been got signed from him when Ajay Nayyar was out of Delhi and apart from the above there is noting on record to show that the accused : 41 : Romesh Sharma was the incharge for day to day affairs of the company.
After having gone through the material on record it is apparent that during the year 1997 the firm M/s. Next One exported goods valued at US $ 3,45,195.90 under the cover of 71 GRs as detailed in the complaint, on which the accused Ajay Nayyar and Romesh Sharma were incharge and responsible for conducting its business which fact is apparent from the account opening form of M/s. Next One bearing the specimen signatures of the accused Romesh Sharma and Ajay Nayyar which are Ex.PW1/A7 and Ex.PW1/A8. Further the documents pertaining to the firm including the partnership deed Ex.PW1/A15 bear the signatures of both the accused. The defence of the accused Romesh Sharma that he was only the sleeping partner and was not responsible for the day to day affairs of the company is devoid of merits since in his statement made to this court he admits that some of the cheques placed before this court by the officer of Canara bank which cheques had been seized by the CBI during the raid, : 42 : bear his signatures and the only explanation which he gave is that the coaccused Ajay Nayyar had got the same signed from the him on the bonafide belief that he would be out of station and the said cheques would be required for conduct of the business of the firm. In the opinion of the court this is a specific admission made by the accused himself. The accused Romesh Sharma has in his statement made in the court admitted the signatures on the 8 cheques issued between 6.8.1997 - 12.9.1997 in Capacity as a Partner which according to him were got signed from him by Ajay Nayyar to be paid to the firms from whom the fabric yarn was purchased. This is not only a specific admission on the part of the accused to the extent that he was a partner of the firms "Next One" but also proves that he was aware of the fact that the cheques were for payment to the parties from whom fabric yarn was purchased meaning thereby that he was aware of the functioning and affairs of the company. Further merely stating that he had done so under a bonafide belief is not sufficient and it was necessary for the accused to prove the same which he has not : 43 : done, hence, the defence raised by the accused is highly unsatisfactory and does not inspire confidence of this court. Mere filing the legal proceedings by the accused Romesh Sharma against his coaccused Ajay Nayyar will not help him in any manner, since all legal proceedings have initiated by him only after the initiation of present proceedings against him and are in the nature of an after thought. On the contrary the prosecution has been able to prove beyond reasonable doubt that the accused Romesh Sharma was a partner of the firm i.e. accused no. 1 M/s. Next One alongwith coaccused Ajay Nayyar and was awarded day to day affairs of the same and even participating in the same.
The material on record also reveals that the accused without any prior permission of Reserve Bank of India took or refrained from taking action for realization of export value to the tune of US $ 3,45,196.50 in respect of the aforesaid goods and the money which was required to be brought in foreign exchange has not been received in India within the prescribed period or the time so extended by the : 44 : RBI in the prescribed manner. The witness from the bank has proved the various documents with regard to the firm M/s. Next One which includes the account opening form Ex.PW1/A9 containing 27 sheets/ documents including nine specimen signature cards; the photograph of the accused Romesh Sharma and his specimen signatures which are Ex.PW1/A5 and PW1/A7; the letter of authority in favour of the accused Romesh Sharma issued by the coaccused Ajay Nayyar and letter of address which are Ex.PW1/A6, PW1/A8, PW1/A10 and PW1/A11.
PW1 has also proved the partnership letter and the partnership deed and also the signatures of Romesh Sharma and Ajay Nayyar on the partnership deed which documents are Ex.PW1/A12, PW1/A13, PW1/A14 and PW1/A15 respectively. The account opening form is Ex.PW1/17 and letter of authority in favour of the present accused in respect of the account/ locker CA6317 and signatures of accused Romesh Sharma on behalf of the firm M/s. Next One has also been proved by PW1 vide PW1/18. The earlier deed of : 45 : dissolution has also been placed on record. The partnership deed and letter NG 103 which is the account opening form has been proved by PW1. The witness from the RBI i.e. PW2 has proved the statement of export outstanding proceeds in respect of the firm which is Ex.PW2/A and has specifically stated that the party did not apply for extension of the realization of the export proceeds. He has also proved the statement on the basis of the floppy. Further PW4 A.K. Tyagi has proved the XOS report regarding the outstanding proceeds in respect of the firm which is Ex.PW4/A alongwith the GR1 forms which are Ex.PW4/B1 to PW4/B4. There is a presumption of the correctness of this record being regularly maintained in the official course of business which presumption the accused has not been able to rebut. Hence, I hereby hold that the prosecution has been able to prove beyond doubt the outstanding export proceeds in respect of the firm M/s. Next One of which accused Romesh Sharma was a partner.
The opportunity notice executed issued by PW5 J.P. Mishra has been duly proved by him in accordance with law : 46 : which according to PW3 Manohar Lal he had taken to the address of the firm at L5, Connaught Place from where he was informed by one Arun Gupta that the company had shifted to D25 Mayfair Garden. It is apparent from the complaint Ex.PW5/P that the address of the accused Romesh Sharma is mentioned as C28, Mayfair Garden. The service of the opportunity notice on the accused Romesh Sharma through the jail authorities in Central Jail, Tihar has been duly proved by the Dy. Superintendent and Assistant Superintendent concerned who have come to the court and deposed as PW9 and PW10 on which there is no rebuttal. Despite have been served with the OPN no reply had been given by the accused Romesh Sharma to the various grounds raised there in.
The witnesses of the department have proved that the accused Romesh Sharma has not been cooperating during the investigations and when a specific query was to the accused Romesh Sharma when he had examined himself as is own witness u/s. 315 Cr.P.C. he had admitted that the officers of the Enforcement Directorate had come to him for investigation : 47 : purposes but according to him, he was unwell and had asked for grant of time in order to enable him to consult his advocate.
Hence I hereby hold that the complainant/ prosecution has been able to prove beyond doubt that M/s. Next One of which the accused Romesh Sharma was one of the partner, responsible for its functioning and day to day affairs had effected shipments of goods to M/s. Ajay Nayar Corporation, USA during the period June 1997 - August 1997 to the tune of US$ 3,45,195.90 and did not take any action for securing the receipt of full export value of the goods exported to the tune of US$ 3,45,195.90 and thereby contravened the provisions of Section 18 (2) of FERA for which the accused no. 3 Romesh Sharma is held guilty for the offence u/s. 56 of FERA and is convicted accordingly.
Case be listed for arguments on the point of sentence for 5.5.2007.
Announce d in the open court (Dr. KAMINI LAU)
Dated: 21.4.2007 ACMM: New Delhi
: 48 :
21.4.2007
Present: Sh. Naveen Matta, SPP.
Accused No. 1 is a company.
Accused no. 2 Ajay Nayyar is PO.
Accused no. 3 Romesh Sharma is produced from JC.
Vide my separate detailed order dictated and announced in the open court, but not yet typed, I hereby hold the accused guilty for the offence u/s. 56 of FERA and convict him accordingly.
Since the counsel for the accused is not available, on request of the accused case be listed for arguments on sentence for 5.5.2007.
ACMM: 21.4.2007 : 49 :