SHAILENDRA SWARUP Vs. DEPUTY DIRECTOR, ENFORCEMENT DIRECTORATE
LAWS(SC)-2020-7-14
SUPREME COURT OF INDIA
Decided on July 27,2020

SHAILENDRA SWARUP Appellant
VERSUS
DEPUTY DIRECTOR, ENFORCEMENT DIRECTORATE Respondents





Cited Judgements :-

DAYLE DE SOUZA VS. GOVERNMENT OF INDIA [LAWS(SC)-2021-10-96] [REFERRED TO]
STAR TRADING VS. STATE OF GUJARAT [LAWS(GJH)-2022-4-1544] [REFERRED TO]
HOTHUR SHADAB WAHAB VS. ASHA PARASRAMPURIA [LAWS(KAR)-2021-3-195] [REFERRED TO]


JUDGEMENT

ASHOK BHUSHAN, J. - (1.)This appeal has been filed against the judgment of Delhi High Court dated 18.11.2009 dismissing the Criminal Appeal filed by the appellant by which appeal the judgment dated 26.03.2008 of the Appellate Tribunal for Foreign Exchange in Appeal No.622 of 2004 filed by the appellant was challenged.
(2.)Brief facts of the case giving rise to this appeal are:
2.1 Modi Xerox Ltd.(MXL) was a Company registered under the Companies Act 1956 in the year 1983. Between the period 12.06.1985-21.11.1985, 20 remittances were made by the Company-MXL through its banker Standard Chartered Bank. The Reserve Bank of India issued a letter stating that despite reminder issued by the Authorised Dealer, MXL had not submitted the Exchange Control copy of the custom bills of Entry/Postal Wrappers as evidence of import of goods into India. Enforcement Directorate wrote to MXL in the year 1991-1993 for supplying invoices as well as purchase orders. MXL on 09.07.1993 provided for four transactions and Chartered Accountant's Certificates for balance 16 amounts for which MXL's Bankers were unable to trace old records dating back to 1985. MXL amalgamated and merged into Xerox Modicorp Ltd. (hereinafter referred to as "XMC") on 10.01.2000. A show cause notice dated 19.02.2001 was issued by the Deputy Director, Enforcement Directorate to MXL and its Directors, including the appellant. The show cause notice required to show cause in writing as to why adjudication proceedings as contemplated in Section 51 of Foreign Exchange Regulation Act, 1973 (hereinafter referred to as "FERA, 1973") should not be held for contravention. Xerox Modi Corporation Ltd. (successor of MXL) replied the show cause notice dated 19.02.2001 vide its letter dated 26.03.2001. The Directorate of Enforcement decided to hold proceedings as contemplated in Section 51 of the FERA, 1973 read with Section 3 and 4 of Section 49 of FEMA and fixed 22.10.2003 for personal hearing. Notice dated 08.10.2003 was sent to MXL and its Directors. Notice dated 08.10.2003 was replied by the appellant vide its detailed reply dated 29.10.2003. In the reply the appellant stated that he is a practicing Advocate of the Supreme Court and was only a part-time, non-executive Director of MXL and he was never in the employment of the Company nor had executive role in the functions of the Company. It was further stated that the appellant was never in charge of nor ever responsible for the conduct of business of the Company. Along with the reply an affidavit of the Company Secretary dated 04.07.2003 that the appellant who was the Director of erstwhile Company-XML was only a part-time, Director of the said Company and never in charge of day to day business of the Company was also filed. The MXL has also submitted a reply dated 29.10.2003. The Deputy Director, Enforcement Directorate after hearing the appellant, other Directors of the Company passed an order dated 31.03.2004 imposing a penalty of Rs.1,00,000/- on the appellant for contravention of Section 8(3) read with 8(4) and Section 68 of FERA, 1973.

2.2 Aggrieved by the order dated 31.03.2004 imposing penalty of Rs.1,00,000/- on the appellant, Appeal No.622 of 2004 was filed by the appellant before the Appellate Tribunal for Foreign Exchange which appeal came to be dismissed by the Appellate Tribunal on 26.03.2008. Against the order of the Appellate Tribunal dated 26.03.2008, Criminal Appeal No.575 of 2008 was filed by the appellant in Delhi High. The Delhi High Court by the impugned judgment dated 18.11.2009 has dismissed the appeal of the appellant, questioning which judgment this appeal has been filed.

(3.)The High Court, in Criminal Appeal, during pendency of the appeal has stayed the order of penalty. This Court while issuing notice on 19.02.2010 in the present appeal had also stayed the order of penalty imposed on the appellant.
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