- (1.) We have gone through the draft judgment prepared by our noble and learned Brother Sathasivam, J. and we find ourselves unable to subscribe to the view taken by him.
(2.) Shorn of unnecessary details facts giving rise to the present appeal are that on 22nd May, 1992 various premises in occupation of the appellant Radheshyam Kejriwal besides other persons were searched by the officers of the Enforcement Directorate. The appellant was arrested on 3rd May, 1992 by the officers of the Enforcement Directorate in exercise of the power under Section 35 of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as the 'Act') and enlarged on bail on the same day. Further the appellant was summoned by the officers of the Enforcement Directorate to give evidence in exercise of the power under Section 40 of the Act and in the light thereof his statement was recorded on various dates, viz. 22nd May, 1992, 10th March, 1993, 16th March, 1993, 17th March, 1993 and 22nd March, 1993. On the basis of materials collected during search and from the statement of the appellant it appeared to the Enforcement Directorate that the appellant, a person resident in India, without any general or specific exemption from Reserve Bank of India made payments amounting to Rs.24,75,000/- to one Piyush Kumar Barodia in March/April, 1992 as consideration for or in association with the receipt of payment of U.S. $ 75,000 at the rate of Rs.33/- per U.S. Dollar by the appellant's nominee abroad in Yugoslavia. It further appeared to the Enforcement Directorate that transaction involved conversion of Indian currency into foreign currency at rates of exchange other than the rates for the time being authorised by the Reserve Bank of India. In the opinion of the Enforcement Directorate the act of the appellant in making the aforesaid payment of Rs.24,75,000/- in Indian currency for foreign currency at the rate of Rs.33/- per US Dollar against the official rate of Dollar i.e. Rs.30/- per Dollar (approximately), contravened the provision of Section 8(2) of the Act. Further the Said payment having been made without any general or special exemption from Reserve Bank of India, the appellant had contravened the provisions of Section 9(1)(f)(i) of the Act and accordingly rendered himself liable to imposition of penalty under Section 50 of the Act. Enforcement Directorate was further of the opinion that by abetting in contravening the provisions of Sections 9(1)(f)(i) and 8(2) of the Act read with the provisions of the Section 64(2) of the Act the appellant has rendered himself liable for penalty under Section 50 of the Act.
(3.) Accordingly, a show cause notice dated 7th May, 1993 was issued by the Special Director of the Directorate of Enforcement calling upon the appellant to show cause as to why adjudication proceeding as contemplated under Section 51 of the Act be not held against him for the contraventions pointed above. Show cause notice dated 7th May, 1993 referred to above led to institution of proceeding under Section 51 of the Act (hereinafter referred to as the 'adjudication proceedings'). The adjudication officer came to the conclusion that the allegation made against the appellant of contravention of the provisions of Section 8, 9(1)(f)(i) and Section 8(2) read with Section 64(2) of the Act cannot be sustained. While doing so the Special Director observed as follows: The payment alleged to have been made by Shri Radheshyam Kejriwal amounting to Rs.24,75,000/- has to be examined in the context of Section 9(1)(f)(i) and Section 8(2) r/w Section 64(2) of Foreign Exchange Regulation Act, 1973. The important ingredients for sustaining the conviction under the above provisions would require the proof of payment having been made to the credit of any person @ exchange other than the rate which has been authorized by the Reserve Bank of India. In the case before me, it has not been proved beyond reasonable doubt whether a sum of Rs.24,75,000/- has actually been paid or not. There is no documentary evidence except the statement of Shri Piyush Kumar Barodia and the retracted statement of Shri Radheshyam confirming the fact that Rs.24,75,000/- was exchanged @ of Rs.33/- per dollar. Therefore, it is very relevant to take the above facts and circumstances into consideration before coming to a conclusion as to the correctness of the statements given by S/Shri Radheshyam Kejriwal and Piyush Kumar Barodia. The documentary evidence available and the statements of the other co-accused will definitely throw further light in the matter. After considering all the above facts, I find that the only evidence available against Shri Radheshyam Kejriwal is the fact that his telephone number and name are mentioned in the documents seized from Shri Piyush Kumar Barodia and the fact that some transactions have been noted against his name which do not match the sum of Rs.24,75,000/- which was alleged to have been transferred. Secondly, there is no evidence to show that he was indulging in any foreign exchange transaction to transfer money abroad. In conclusion, the benefit of doubt will have to be given to Shri Radheshyam Kejriwal in the absence of any further evidence and also the fact that both Raju Poddar and Babubhai Umaidmal have denied having taken part in any such transaction. Significantly, on enquiry, it was found that Shri Sirish Kumar Barodia, brother of Shri Piyush Kumar Barodia staying at Bombay, was not available for the past year during which these transactions took place. Shri Piyush Kumar Barodia is absconding, therefore, his case is being decided on merits. However, since the charges against Shri Radheshyam Kejriwal for contravening the provisions of Section 9(1)(f)(i) and Section 8(2) read with Section 64(2) of the Foreign Exchange Regulation Act, 1973 cannot sustained, the charges against Shri Piyush Kumar Barodia can also not be sustained. Therefore, the charges against S/Shri Raju Poddar, Sirish Kumar Barodia and Babubhai Umaidmal Jain @ Babubhai Bhansali, are not sustainable for contravening the provisions of Section 9(1)(f)(i) and 8(2) read with Section 64(2) of the Foreign Exchange Regulation Act, 1973. In view of the foregoing, the proceedings initiated against S/Shri Piyush Kumar Barodia, Radheshyam Kejriwal, Raju Poddar, Sirish Kumar Barodia and Babubhai Umaidmal Jain and Babubhai Bhansali, vide the impugned Memorandum, are hereby dropped." It is common ground that the Enforcement Directorate has not challenged this order and it has attained finality.;