UNION OF INDIA Vs. M SHAH JEHAN

JUDGEMENT

(1.) THIS civil miscellaneous appeal under Section 54 of the foreign Exchange Regulation Act, 1973 (hereinafter referred to the as'the act') is against the order dated 5-11-1984 of the Appellate Board under the said Act, modifying the order dated 9-8-1982 of the first Authority viz. , the deputy Director, Enforcement Directorate Madras 6

(2.) THERE were three contraventions under the Act, one under Section 9 (1) (b), another under Section 9 (1) (d) and yet another under section 9 (1) (e) of the Act. But even according to learned Counsel for the appellant, in this appeal we are concerned only with the contravention under section 9 (1) (b) by the respondent. Regarding the same, the first Authority levied penalty of Rs. 5, 000/- under Section 50 of the Act and also confiscated under Section 63 of the Act, the sum of Rs. 50, 000/- involved in the contravention, which was actually seized on 15-2-1982. But, the abovesaid modification made by the Appellate Board in the appeal preferred before it by the respondent is that while it increased the abovesaid penalty from Rs. 5, 000/- to Rs. 20, 000/- adopting the procedure prescribed under Section 52 (5) of the Act, it set aside the order of the abovesaid confiscation made by the first authority. Hence this appeal

(3.) TAKING all these into account, learned counsel for the appellant submits that the Appellate Board should not have set aside the confiscation. As already stated, in this connection he relies on 1987 11 ECC 242 Madras (supra ). The relevant passage in the said judgment is as follows :- Once it is established that by way of compensatory payment, the sum of Rs. 30, 000/- had been received by the appellant, it having been done in contravention of the provisions of the Act and which had prevented the Government from getting the foreign exchange under the said transaction, the entire amount being confiscated cannot be characterised as unjust. If the said amount, admittedly received unauthorisedly, is allowed to be retained in full or a portion of it is allowed to be used by appellant, it would result in only a nominal penalty being paid and the balance utilised in spite of the illegality committed by the appellant. It is to avoid such contravention, being indulged, in provision having been made for confiscation, and in a matter of this nature, by taking into account factors which are now pleaded, if the appellant is allowed to retain any portion, it would result in the Court permitting him to retain illegally received amount. This would be against the intention of the Act. For this reason, this Court considers that the authorities, bearing in mind the circumstances under which the amount had been received by the appellant, and as it had resulted in the contravention of section 5 (1) (aa) of the Act, had no chosen to permit the appellant to retain any portion of the said amount. "