MADAN SINGH S/O BHANWAR SINGH Vs. K.L. VERMA

JUDGEMENT

(1.) HEARD all the learned counsel.

(2.) THIS is a petition by Madan Singh son of Bhanwar Singh, claiming to be the next friend and employee of the detenu Dhirubhai Nanji Visharia who has been detained under the order issued on 3rd September, 1996 by the Joint Secretary to the Govt. of India, Ministry of Finance, Department of Revenue, in exercise of his powers under sec.3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (for short COFEPOSA). The detenu has been detained with a view to preventing him in future from acting in any manner prejudicial to the augmentation of foreign exchange. The detenu surrendered on 30th October, 1996.

(3.) SPECIFIC information was received by the Enforcement Directorate, Mumbai that M/s Travel Fuel Exchange Bureau, Mumbai (for short T.F.E.R.), a full fledged licenced money changer was purchasing bulk foreign exchange under the Basic Travel Quota (B.T.Q.), Business Promotion Quota and Basic Quota from authorised dealers and selling the same against fabricated BTQ forms illegally. The information received was to the effect that foreign exchange was purchased at the official rate from the dealers authorised by the Reserve Bank of India under sec.6 of the Foreign Exchange Regulation Act, 1973 (for short FERA) and the same was being sold in the market at a much higher rate. Further specific information was received on 27th November, 1995 that some one from T.F.E.B. was likely to deliver illegally acquired foreign exchange to the detenu at his business premises in Kamathipura, Central Mumbai. Based on the above information, the detenu's premises were searched on 27th November, 1995 by the officers of the Enforcement Directorate, Mumbai which is the Sponsoring Authority. As a result thereof, Indian Currency worth Rs.2,70,000/-, Foreign Currency namely U.S.$ 56, UAE Dirhams 1000/-, Korun 1170/-, Saudi Riyals 100/- and UK Sterling Pounds 795/- alongwith documents were recovered. Personal search of Rehan Akhtar Khan, who was present in the shop of the detenu was taken which resulted in the seizure of foreign exchange, namely, Omani Riyals 51.5, Singapore Pounds 36/-, U.K. Sterling Pounds 40 and Indian currency worth Rs,30,000/-. Ishaque Jaorawala, an employee of T.F.E.B., who came to the shop premises of the detenu, was also subjected to the personal search which resulted in the seizure of U.S. Dollars 10,000/- and certain documents. Statements of Imtiaz Dholkawala, who is the detenu in Crim.Writ Petition No.134 of 1997 and is a partner of T.F.E.N. was recorded on 27th November, 28th November, 13th December and 19th December, 1995. The said statements revealed that T.F.E.B. had purchased 40,000 U.S.dollars from M/s Thomas Cook and Co. and out of the same 40,000/- US dollars, 10,000/- US dollars were sold in the detenu Dhirajlal at the rate of Rs.35.60 per U.S.dollar. Admittedly, the detenu is not a dealer in foreign exchange authorisad by the Reserve Bank of India under sec.6 of the FERA nor is he a money changer licenced under sec.7 of the FERA by the Reserve Bank of India. He is indulging in illegal purchase and sale of foreign currency in large quantity.