w w w . L a w y e r S e r v i c e s . i n



Union of India rep. By its Enforcement Officer Enforcement Directorate Chennai v/s M/s. Raiments & Garments International, Chennai & Others


Company & Directors' Information:- GARMENTS INTERNATIONAL PRIVATE LIMITED [Active] CIN = U18101KA1979PTC003476

Company & Directors' Information:- INDIA INTERNATIONAL COMPANY PRIVATE LIMITED [Active] CIN = U51228MH1955PTC009483

Company & Directors' Information:- CHENNAI GARMENTS (INDIA) PRIVATE LIMITED [Active] CIN = U18101TN2005PTC058277

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

Company & Directors' Information:- GARMENTS INDIA PVT LTD [Strike Off] CIN = U51909GJ1979PTC003310

Company & Directors' Information:- R A GARMENTS PRIVATE LIMITED [Converted to LLP and Dissolved] CIN = U18101DL2003PTC123385

Company & Directors' Information:- A G GARMENTS PRIVATE LIMITED [Active] CIN = U51300DL2013PTC257609

Company & Directors' Information:- UNION COMPANY PRIVATE LIMITED [Dissolved] CIN = U99999KA1942PTC000292

    CRL. A. No. 180 of 2009

    Decided On, 13 January 2020

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE M. DHANDAPANI

    For the Appellant: Ms. G. Hema, Spl. PP (ED Cases). For the Respondents: R1 to R3, C.V. Kumar, R4 to R6, G. Krishnakumar, Advocates.



Judgment Text


(Prayer: Criminal Appeal filed u/s 378 of the Code of Criminal Procedure, against the judgment dated 5.1.09, passed by the learned Addl. Chief Metropolitan Magistrate, E.O.II, Egmore, Chennai, in E.O.C.C. No.181/2001.)

1. The accused/respondents herein, who were arrayed as A-1 to A-6, were charged and tried before the learned Addl. Chief Metropolitan Magistrate, Egmore, Chennai, in E.O.C.C. No.181/01 for the offences u/s 18 (2) r/w 18 (3) of Foreign Exchange Regulation Act (for short 'FERA') punishable u/s 56 (1) (i) of FERA r/w Section 49 (3) & (4) of Foreign Exchange Management Act and the trial court found that the prosecution, having not proved the case as against the accused beyond reasonable doubt, acquitted all the accused. The Union of India, aggrieved by the said order of acquittal has preferred the present appeal. For the sake of convenience, the accused/respondents herein will be referred to as the accused.

2. The case of the prosecution could be briefly summarised as under :-

Pursuant to information received, the officials of the Enforcement Directorate conducted search on the factory and residential premises of A-1 and A-2 in which documents and related correspondence were seized. The said documents and correspondence related to non-realisation of export proceeds to the tune of Rs.1,52,20,008/- out of the total amount of Rs.2,16,24,676/- of which only Rs.64,04,688, covering 119 GRs alone were realised. Scrutiny of the documents further revealed that substantial amounts to the tune of US$ 2,54,274.43 and US$ 69,917.22 were pending realisation from two buyers of US origin. It was further unearthed that out of the 119 GRs, A-1 was involved in the direct export in respect of 43 GRs in which A-1 was the original declarant and in respect of the other 76 GRs, quotas of several other manufacturers-cum-exporters were utilised by A-1 for effecting those exports. Further investigation of the case revealed the complicity of A-7 to A-9 (cases against them were separated) who had also signed the forms for being utilised by A-1 for varying amounts. Necessary directives were issued by the office of the Enforcement Directorate to various Banks and individuals relating to the transaction conducted by A-1 in the above clandestine manner. Pursuant to the above search operation, show cause notice was issued on 13.10.98 to A-1 to A-9 by the Special Director, Enforcement Directorate, for contravention of Section 18 (2) r/w 18 (3) and Central Government Notification No.F.1/67/EC/73-1&2, both dated 1.1.74 and Section 68 (1) of FERA for their failure to realize the respective full export proceeds of the goods within the stipulated period. The case against A-1 to A-9 was adjudicated by the Special Director of Enforcement, New Delhi, who held all of them guilty and imposed penalties on them. Opportunity Notices dated 6.2.01 were issued to all the accused by the complainant and, thereafter, the complaint was laid against A-1 to A-9.

3. The accused/respondents herein were furnished with the relied upon documents u/s 207 Cr.P.C. and the case was committed to the Economic exclusively dealing with Economic Offence cases after framing charges viz., 18 (2) r/w 18 (3) of Foreign Exchange Regulation Act (for short 'FERA') punishable u/s 56 (1) (i) of FERA r/w Section 49 (3) & (4) of Foreign Exchange Management Act . When questioned, the accused pleaded not guilty.

4. To prove the case, the prosecution examined P.W.s 1 to 4 and marked Exs.P-1 to P-44. When the accused/respondents herein were questioned u/s 313 Cr.P.C. about the incriminating circumstances appearing against them, they denied the same as false. On the side of the defence, A-2 was examined as D.W.1 and A-3 was examined as D.W.2 and Ex.D-1, the copy of passport of A-3 was marked. The trial court, after hearing either side and after considering the materials, both oral and documentary, on record, acquitted the accused/respondents as aforesaid, aggrieved by which the appellant has filed the present appeal.

5. Mrs.Hema, learned Special Public Prosecutor appearing for the appellant submitted that though the entire export proceeds were covered by GR Form 32, in which all the accused persons signed and have given declaration to the bankers and, thereafter, the export proceeds were not realised by the respondents, which is a gross violation of the provisions of the Act and the Rules. It is the further submission of the learned Special Public prosecutor that the adjudication proceedings initiated against the persons also ended in penalty being imposed against which appeals have been filed before the appellate authority and that no penalty, as imposed, has been paid and that the appellate proceedings is pending. It is the submission of the learned Special Public Prosecutor that only after issuing opportunity notice as contemplated u/s 61 (2) of FERA, the present complaint was filed. Therefore, the view arrived at by the trial court is per se unsustainable.

6. It is the further submission of the learned Special Public Prosecutor that the trial court has acquitted A-4 to A-6 holding that presumption cannot be drawn against those accused that they committed the offence. It is the further submission of the learned Special Public Prosecutor that the acquittal of A-1 to A-3 by the trial court holding that opportunity notice was not given to them and, therefore, the same vitiates the prosecution is not sustainable. In this regard, attention of this Court was drawn to the decision of this Court in The Assistant Director – Vs – Khader Sulaiman (2005 126 Comp. Cas. 83 (Mad)).

7. It is further contended by the learned Special Public Prosecutor that no prior permission as mandated u/s 18 (2) of FERA has been obtained from Reserve Bank of India and, therefore, there is clear violation of Section 18 (3) of FERA by the accused. It is the contention of the learned Special Public Prosecutor that the payment having not been realised from the overseas buyer by P.W.1 and further the fact that the quota of A-4 to A-6 having been used by A-1 to A-3, there is clear infringement of the provisions of Sections 18 (2) and (3) of FERA and in the absence of proof thereof as to payment having been received and permission having been obtained from the competent authority of the Reserve Bank of India, it cannot be presumed that payment has been received unless the contrary is proved.

8. It is further contended by the learned Special Public Prosecutor that A-4 to A-6 were fully aware of the utilisation of their quota by A-1 to A-3 and the further fact that amounts have not been realised from the buyers by A-1 to A-3. However, the trial court has erroneously held that A-4 to A-6 were not aware of the transaction and, therefore, it cannot be presumed that they have contravened the provisions of Section 18 (2) of FERA cannot be sustained and is against the materials available on record.

9. In fine, it is the submission of the learned Special Public Prosecutor that A-1 to A-3 having not obtained prior permission from the Reserve Bank of India as mandated yu/s 18 (2) of FERA and the further fact that A-3 to A-4 being fully aware of the utilisation of their quota by A-1 to A-3 and the non-realisation of the payment from the buyer, have definitely contravened the provisions of FERA. However, the trial court has not properly appreciated the materials on record and has come to an erroneous conclusion, which warrants interference at the hands of this Court.

10. Per contra, the respective learned counsel appearing for the accused vehemently countered the submissions advanced on behalf of the appellant by submitting that the accused have not contravened Sections 18 (2) and (3) of FERA and the trial court has appreciated the materials placed by the prosecution and has rightly held that there is no contravention of Section 18 (2) of FERA by A-4 to A-6 and that the trial court has further held that no opportunity notice was served on A-1 to A-3 as contemplated under the proviso to Section 61 (2) (ii) of FERA and, therefore, the non-issuance of opportunity notice to A-1 to A-3 coupled with A-4 to A-6 having not contravened the provisions of FERA, the prosecution deserves to fail and has rightly acquitted the accused and, therefore, no interference is called for with the order passed by the court below.

11. In dealing with matters, where the acquittal rendered by the court below is put to test, it is trite that unless the order of the court below suffers from the vice of perversity, the High Court ought not to interfere with the said order. In Shailendra Pratap & Anr. - Vs – State of U.P. (2003 (1) SCC 761), the Supreme Court has categorically held that the appellate court would not be justified in interfering with the order of acquittal unless the same is found to be perverse. The relevant portion of the order is extracted hereunder for better clarity:

“8. Having heard learned counsel appearing on behalf of the parties, we are of the opinion that the trial court was quite justified in acquitting the appellants of the charges as the view taken by it was a reasonable one and the order of acquittal cannot be said to be perverse. It is well settled that the appellate court would not be justified in interfering with the order of acquittal unless the same is found to be perverse. In the present case, the High Court has committed an error in interfering with the order of acquittal of the appellants recorded by the trial court as the same did not suffer from the vice of perversity.”

12. Yet again, in Ram Kumar – Vs – State of Haryana (1995 Supp. (1) SCC 248), the Hon'ble Supreme Court has once again highlighted the need for the High Court to give proper weight and consideration to the view of the court below and has further held that if the view taken by the court below is reasonable and plausible, order of acquittal should not be disturbed. In the above context, the Supreme Court held as under :-

“15. Learned counsel for the appellant contended that the trial court had recorded the order of acquittal of all the accused persons including the appellant giving sound and cogent reasons for disbelieving the prosecution case and, therefore, the High Court should not have interfered with the order of acquittal merely because another view on an appraisal of the evidence on record was possible. In this connection it may be pointed out that the powers of the High Court in an appeal from order of acquittal to reassess the evidence and reach its own conclusions under Sections 378 and 379 (sic 378) CrPC are as extensive as in any appeal against the order of conviction. But as a rule of prudence, it is desirable that the High Court should give proper weight and consideration to the view of the trial court with regard to the credibility of the witness, the presumption of innocence in favour of the accused, the right of accused to the benefit of any doubt and the slowness of appellate court in justifying a finding of fact arrived at by a judge who had the advantage of seeing the witness. No doubt it is settled law that if the main grounds on which the court below has based its order acquitting the accused, are reasonable and plausible, and the same cannot entirely and effectively be dislodged or demolished, the High Court should not disturb the order of acquittal. ......”

13. The Hon'ble Apex Court, in V.Sejappa – Vs – State by Police Inspector, Lokayukta, Chitradurga (2016 (12) SCC 150) reiterating the principles to be followed in an appeal against acquittal, as has been laid down in a catena of judgments, held as under :-

“22. If the evaluation of the evidence and the findings recorded by the trial court do not suffer from any illegality or perversity and the grounds on which the trial court has based its conclusion are reasonable and plausible, the High Court should not disturb the order of acquittal if another view is possible. Merely because the appellate court on reappreciation and re-evaluation of the evidence is inclined to take a different view, interference with the judgment of acquittal is not justified if the view taken by the trial court is a possible view. In State v. K.Narasimhachary [State v. K. Narasimhachary, (2005) 8 SCC 364 : (2006) 1 SCC (Cri) 41] , this Court reiterated the well-settled principle that if two views are possible, the appellate court should not interfere with the acquittal by the lower court and that only where the material on record leads to an inescapable conclusion of guilt of the accused, the judgment of acquittal will call for interference by the appellate court. The same view was reiterated in T. Subramanian v. State of T.N. [T.Subramanian v. State of T.N., (2006) 1 SCC 401 : (2006) 1 SCC (Cri) 401]

23. In Muralidhar v. State of Karnataka [Muralidhar v. State of Karnataka, (2014) 5 SCC 730 : (2014) 2 SCC (Cri) 690] , this Court noted the principles which are required to be followed by the appellate court in case of appeal against order of acquittal and in para 12 held as under: (SCC pp. 735-36)

“12. The approach of the appellate court in the appeal against acquittal has been dealt with by this Court in Tulsiram Kanu [Tulsiram Kanu v. State, AIR 1954 SC 1 : 1954 Cri LJ 225], Madan Mohan Singh [Madan Mohan Singh v. State of U.P., AIR 1954 SC 637 : 1954 Cri LJ 1656], Atley [Atley v. State of U.P., AIR 1955 SC 807 : 1955 Cri LJ 1653] , Aher Raja Khima [Aher Raja Khima v. State of Saurashtra, AIR 1956 SC 217 : 1956 Cri LJ 426], Balbir Singh [Balbir Singh v. State of Punjab, AIR 1957 SC 216 : 1957 Cri LJ 481], M.G. Agarwal [M.G. Agarwal v. State of Maharashtra, AIR 1963 SC 200 : (1963) 1 Cri LJ 235], Noor Khan [Noor Khan v. State of Rajasthan, AIR 1964 SC 286 : (1964) 1 Cri LJ 167], Khedu Mohton [Khedu Mohton v. State of Bihar, (1970) 2 SCC 450 : 1970 SCC (Cri) 479], Shivaji Sahabrao Bobade [Shivaji Sahabrao Bobade v. State of Maharashtra, (1973) 2 SCC 793 : 1973 SCC (Cri) 1033], Lekha Yadav [Lekha Yadav v. State of Bihar, (1973) 2 SCC 424 : 1973 SCC (Cri) 820], Khem Karan [Khem Karanv.State of U.P., (1974) 4 SCC 603 : 1974 SCC (Cri) 639], Bishan Singh [Bishan Singhv.State of Punjab, (1974) 3 SCC 288 : 1973 SCC (Cri) 914], Umedbhai Jadavbhai [Umedbhai Jadavbhai v. State of Gujarat, (1978) 1 SCC 228 : 1978 SCC (Cri) 108], K. Gopal Reddy [K. Gopal Reddy v. State of A.P., (1979) 1 SCC 355 : 1979 SCC (Cri) 305], Tota Singh [Tota Singhv.State of Punjab, (1987) 2 SCC 529 : 1987 SCC (Cri) 381], Ram Kumar [Ram Kumar v. State of Haryana, 1995 Supp (1) SCC 248 : 1995 SCC (Cri) 355], Madan Lal [Madan Lal v. State of J&K, (1997) 7 SCC 677 : 1997 SCC (Cri) 1151], Sambasivan [Sambasivan v. State of Kerala, (1998) 5 SCC 412 : 1998 SCC (Cri) 1320], Bhagwan Singh [Bhagwan Singh v. State of M.P., (2002) 4 SCC 85 : 2002 SCC (Cri) 736], Harijana Thirupala [Harijana Thirupala v. Public Prosecutor, (2002) 6 SCC 470 : 2002 SCC (Cri) 1370], C.Antony [C. Antony v. K.G. Raghavan Nair, (2003) 1 SCC 1 : 2003 SCC (Cri) 161], K. Gopalakrishna [State of Karnataka v. K.Gopalakrishna, (2005) 9 SCC 291 : 2005 SCC (Cri) 1237], Sanjay Thakran [State of Goav.Sanjay Thakran, (2007) 3 SCC 755 : (2007) 2 SCC (Cri) 162] and Chandrappa [Chandrappa v. State of Karnataka, (2007) 4 SCC 415 : (2007) 2 SCC (Cri) 325]. It is not necessary to deal with these cases individually. Suffice it to say that this Court has consistently held that in dealing with appeals against acquittal, the appellate court must bear in mind the following:

(i) There is presumption of innocence in favour of an accused person and such presumption is strengthened by the order of acquittal passed in his favour by the trial court;

(ii) The accused person is entitled to the benefit of reasonable doubt when it deals with the merit of the appeal against acquittal;

(iii) Though, the powers of the appellate court in considering the appeals against acquittal are as extensive as its powers in appeals against convictions but the appellate court is generally loath in disturbing the finding of fact recorded by the trial court. It is so because the trial court had an advantage of seeing the demeanour of the witnesses. If the trial court takes a reasonable view of the facts of the case, interference by the appellate court with the judgment of acquittal is not justified. Unless the conclusions reached by the trial court are palpably wrong or based on erroneous view of the law or if such conclusions are allowed to stand, they are likely to result in grave injustice, the reluctance on the part of the appellate court in interfering with such conclusions is fully justified; and

(iv) Merely because the appellate court on reappreciation and re-evaluation of the evidence is inclined to take a different view, interference with the judgment of acquittal is not justified if the view taken by the trial court is a possible view. The evenly balanced views of the evidence must not result in the interference by the appellate court in the judgment of the trial court.”

14. Keeping the above principles of law laid down by the Apex Court in mind, this Court will now proceed to examine the evidence and the materials on record to see whether the conclusions recorded by the court below for acquitting the accused/respondents herein are reasonable and plausible or the same stands vitiated by manifest illegality or the conclusions recorded by the appellate court are such which could not have been possibly be arrived at by any court acting reasonably and judiciously, which could in turn be said to be perverse.

15. The issues that arise for consideration in the present appeal are:

i) Whether opportunity notice as contemplated under the proviso to Section 61 (2) (ii) of FERA has been issued to A-1 to A-3;

ii) Whether prior permission as mandated u/s 18 (2) of FERA has been obtained by A-1 to A-3 from the Reserve Bank of India;

iii) Whether A-4 to A-6 have contravened the provisions of Section 18 (3) of FERA; and

iv) Whether the judgment of acquittal recorded by the trial court requires any interference.

16. The entire case of the prosecution revolves around P.W.1, the investigating officer. The search conducted by A-1, the seizure of documents in pursuance to the search and the investigation leading to the adjudication by the Special Director of Enforcement, New Delhi, holding the accused guilty and the penalties imposed penalties on them and the opportunity notices dated 6.2.01 issued to all the accused by the complainant leading to the laying of the complaint A-1 to A-9 have been clearly and elaborately spoken to by P.W.1 in his chief examination. In cross examination, P.W.1 has categorically deposed that for realising the export proceeds beyond the time prescribed, extension of time has to be sought for from Reserve Bank of India and that Reserve Bank of India is alone vested with the power to grant extension of time to realise the amount. It is the further deposition of P.W.1 in cross examination that in response to the query from the Enforcement Directorate, Reserve Bank of India have stated that they have not granted any extension of time to A-1 to A-3 to realise the export proceeds. Though P.W.1 has deposed that no written communication was received from the Reserve Bank of India with regard to non-grant of time extension, however, to refute the stand of P.W.1, no document has been marked by the defence to show that time extension was sought for from the Reserve Bank of India. In the absence of any defence as to seeking time extension from Reserve Bank of India, it cannot be held that non-filing of any written communication from the Reserve Bank of India would jeopradize the case of the appellant. On the materials noted above, this Court has no hesitation to hold that A-1 to A-3 have not obtained any permission from the Reserve Bank of India as mandated u/s 18 (2) of FERA.

17. Insofar as the opportunity notice as contemplated u/s 61 (2) (ii) of FERA is concerned, a perusal of the materials available on record reveals that Ex.P-41 is the opportunity notice issued by the appellant to the accused. Though the said material is available on record, however, the trial court has recorded a finding that no opportunity notice has been issued to the petitioner, which is factually incorrect. Further, Khader Sulaiman's case (supra), relied on by the learned Special Public Prosecutor for the appellant, squarely applies to the case on hand, wherein this Court has already considered the necessity of issuance of opportunity notice and in that context, held as under:

“12.8. Similarly, ARUNACHALAM,J., in ISMAIL Vs. ASSISTANT DIRECTOR, ENFORCEMENT, MADRAS reported in 1990 LW (Crl.) 376, on an identical question whether the opportunity notice contemplated under proviso to Section 61(2)(ii) is mandatory of obligatory, following the decisions in (i) NEW INDIA CORPN. case; and (ii) JOTHIMANI NADAR, A.S.G. case, referred supra, held that: "... The learned counsel for the petitioner would contend that Natarajan, J., had not considered in the said decision, the words " the person accused of the offence" found in the proviso to Section 61(2)(ii) of the Act, which words, in the view of the Supreme Court, can arise only when a complaint is made, relating to the commission of an offence, before a Magistrate. A formal accusation can only be deemed to be made when a complaint is made before the Magistrate, competent to try the person guilty of the infraction under various section of the Act. In reply to this specific issue, the learned counsel for the respondent would urge, that the Supreme Court was considering the scope of a statement made under Section 107 and 108 of the Customs Act, by a person against whom an enquiry was made, vis-a-vis the provisions of Article 20(3) of the Constitution of India and also with reference to Sections 24 and 25 of the Indian Evidence Act, to hold that at that stage any statement made by a person against whom an enquiry was made, was not a statement made by a person accused of an offence. He would further add that adjudication proceedings were quasi-criminal in nature and while show cause notices were issued, there was already an accusation by the Deputy Director of Enforcement against the petitioner. The words "the person accused of an offence" in the proviso, will have to be read, keeping in view the context in which it had been used and the effect of the words in the same proviso has been given an opportunity of showing".

10. In the Repealed 1947 Act, Section 23-D(1) contemplated an initial adjudication and a prosecution only in the event of the Director of Enforcement arriving at an opinion that having regard to the circumstances of the case, the penalty which he was empowered to impose would not be adequate, when instead of imposing any penalty himself, he shall made a complaint in writing to the Court.

11. Under the Foreign Exchange Regulation Act, 1973, adjudication as well as prosecution, can ever be initiated simultaneously. This is very clear from the provisions engrafted in Section 50, 51 and 56 of the Act. Hence, when a prosecution is possible even before adjudication, the provisions contained in the Proviso to Section 61(2 )(ii) of the Act will have to be interpreted, in that context. Looked from that angle, it is apparent that before a prosecution is launched, the person accused of an offence must be given an opportunity of showing cause that he had such permission when the Act prohibits doing of an act without such permission. The proviso, to my mind, does not contemplate a second opportunity being furnished to the person accused of an offence, who had such an opportunity, when show cause notices were issued in cases where the adjudication had proceeding the prosecution.

12. The law laid down by the Supreme court in L.I.C. Of India Vs. Escorts Ltd., reported in AIR 1986 SC 1370, that action under Sections 50 or 56 was not obligatory and in the case of a prosecution under Section 56, the delinquent was further protected by the requirement that the complaint has to be made by one or other of the officers specified by Section 61(2)(ii) only and even then only after giving an opportunity to the person accused of the offence of showing that he had the necessary permission does not appear to contemplate a second opportunity before prosecution. In that case the Supreme Court was concerned with Section 29 of the Act which dealt with contravention without the general or special permission of the Reserve Bank of India. The Apex Court did not see a true foundation for the argument that the word "permission" in Section 29 of the Act contemplated previous permission only. In that context it was observed that the person accused of the offence could satisfy the office concerned that he had applied for permission and that there was reasonable prospect of his obtaining the permission when called upon to show that he had the necessary permission. In these cases we are concerned with Section 8(1) and (2 ) and Section 9(1)(d) of the Act. Both Sections 8(1) and (2) specifically refer to the previous general or special permission of the Reserve Bank of India under Section 29 of the Act which uses the word " permission". In the former case only the person accused of an offence, must have been given an opportunity, for showing cause that he had such permission.

13. It is, therefore, apparent that if a prosecution is initiated even before the adjudication proceedings, the person accused of an offence must have had an opportunity of showing cause that he had permission. However, if the adjudication proceedings had been initiated earlier in which show cause notice had been given, especially with reference to Section 8(1) and (2) of the Act, a second opportunity does not appear to be intendment of the proviso. All that the proviso contemplates is that before a prosecution is instituted, the person accused of an offence should have been given an opportunity. The words "had been" used in the Section also gives an insight to the object behind the provision. In my view, the words "has been given" denote the furnishing of an opportunity to the person accused of an offence, but does not contemplate issue of a second show cause notice before the launching of the prosecution. Therefore, the decision of the Supreme Court in Ramesh Chandra Vs. State of West Bengal reported in AIR 1970 SC 940 holding that under the Customs Act, 1962, a formal accusation can only be deemed to be made when a complaint is made before a Magistrate competent to try the person guilty of the infraction under the provisions of the Customs Act does not affect the interpretation of the proviso to Section 61(2)(ii) of the Act, given above. The context in which the words have been used as well as the usage of the words "has been" must be given the full meaning in the background of the object of the Act and the importance of this provision for efficacious implementation of the general scheme of the notice before the prosecution is initiated. To hold that second action is imperative in all cases irrespective of the prosecution being earlier or later to adjudication, even after proof of a show cause notice having been given before an adjudication would certainly frustrate the purpose behind the provision.

14. The observation of Natarajan,J., in Crl.M.P.No.2288 of 1980 with which I agree are extracted here under:

"Even if it is to be held that the proviso contains a mandate, the questions for consideration is whether a second show cause notice should be given to a person before a criminal prosecution is launched against him under Section 56 of the Act. I find no basis in the proviso for holding that such a notice should be given. All that the proviso states is that before a Court takes cognizance of an offence which relates to the contravention of any provision of the Act which prohibits the doing of an act without permission, complainant must have been given an opportunity to the accused to show cause that he has such permission. What follows from this is that at same point of time prior to the filing of the complaint the accused must have been given an opportunity to show that he had obtained the requisite permission and he had not contravened the provisions of the Act in any manner. It is, however, not necessary that the show cause notice must have been issued immediately before the filing of the complaint. If a show cause notice had been issued before adjudication proceedings were started, it would undoubtedly constitute a valid notice under the proviso toSection 61(2)"

Further in New India Corporation Vs. Director Enforcement Directorate, Government of India, reported in 1970 Cri.L.J. 295, a Division Bench of Mysore High Court while considering a similar provision in the repealed Foreign Exchange Regulation Act, 1947 observed:

"Indeed, the opportunity contemplated by the proviso to Section 23(3) need not necessarily be afforded by means of the issue of a notice, but can also be afforded in the course of an adjudication under Section 23-D(1)."

15. Under the old Act the Director of Enforcement was empowered to make a complaint only if he considered that his own powers of punishment were inadequate to meet the situation or the gravity of the offence, while the first step of instituting adjudication proceedings had already been taken. I am in respectful agreement with the view expressed by the Mysore High Court, which found favour with Natarajan,J. while deciding Crl.M.P.No.2288 of 1980.

16. The decisions in P.Joseph John Vs. The State of Travancore, Cochin reported in AIR 1955 SC 160 and Chintapalli Agency of Taulk Arrack Sales Co-operative Society Ltd., Vs. Secretary (Food and Agriculture) Government of Andhra Pradesh reported in Air 1977 SC 2313, can have no bearing to the issue involved in these petitions. In the earlier case the Supreme Court held that under Article 311 of the Constitution a civil servant was entitled to have a reasonable opportunity to defend himself and show cause, both at the time of enquiry into the charges brought against him and at the stage when definite conclusions have been come to, on the charges and the actual punishment to follow was provisionally determined upon. In the latter case it was held that the minimum requirement under Section 77(2) of the Andhra Pradesh Cooperative Societies Act, 1964, which was a mandatory provision was a notice informing the opponent about the application and affording him an opportunity to make his representation against whatever had been alleged in the petition. The principles of natural justice were also considered. The provisions of the Section will have to be interpreted, taking note of the context and the principles of natural justice that a person shall not be condemned unheard (Audi alteram partem). The expression "a person accused of any offence" was considered by the Supreme Court in Ramesh Chandra Metha's case reported in AIR 1970 SC 940 in the context of Article 26(3) of the Constitution taken in conjunction with Sections 24 and 225 of the Indian Evidence Act at the stage of enquiry contemplated under Sections 107 and 108 of the Customs Act.

17. In the Deputy Director, Enforcement Directorate, Madras Vs.P. Manapper Mohamed Ali Jinnah and other reported in 1989 L.W. (Crl.) 33 7, Ratravel Pandian., O.C.J., as he then was, speaking on behalf of the Division Bench held following the law laid down in State of U.P. Vs.Dgoman reported in AIR 1960 SC 1125 that the expression "accused person" in Section 24 of the Evidence Act and the expression "a person accused of any offence" in Section 25 of the said Act have the same connotation and describe the person against whom evidence is sought to be led in a criminal proceeding. Hence, all that the proviso to Section 61 (2) (ii) requires is that no such complaint shall be made unless the person accused of the offence 'has been given' an opportunity of showing cause that he had such permission. On fact the petitioner has sufficient opportunity to show cause and there is no violation of the provisions of the Proviso aforementioned. Therefore, the first contention is rejected."

12.9. In view of the above settled law and admitted fact that the respondents/accused had been given an opportunity by the Enforcement authority, of being heard during the adjudication contemplated under Section 51 of the Act, non-issuance of the opportunity notice as contemplated under the proviso to Section 61(2)(ii) of the FERA,1973 shall not vitiate the case of the prosecution 12.10. Question No.(i) is answered accordingly.”

18. In view of the above categorical pronouncement of this Court following the law laid down in a catena of cases, which have attained finality, this Court has no hesitation in holding that even non-issuance of opportunity notice as contemplated u/s 61 (2) (ii) of FERA will not vitiate the case. However, in the case on hand, Ex.P-41, opportunity notice as contemplated u/s 61 (2) (ii) of FERA has been issued to the accused. In such circumstances, the finding of the trial court that no opportunity notice has been issued to the accused is not only against the materials available on record, but also not in line with the law laid down by this Court and, accordingly, the said finding of the trial court is liable to be interfered with.

19. Insofar as the issue relating to contravention of Section 18 (3) of FERA by A-4 to A-6 is concerned, the trial court has rendered a finding that A-4 and A-5 have given their quotas to A-1 to A-3 for use of exporting their product. This fact has also been admitted by A-6. However, the trial court has misdirected itself in holding that the presumption u/s 18 (3) of FERA that A-4 to A-6 have contravened the provisions of Section 18 (2) of FERA has not been proved. It is the uncontroverted case of the prosecution that the quota relating to A-4 to A-6 have been given to A-1 to A-3 for their use. P.W.1, in cross examination has deposed that A-4 and A-5 have given letter to the authorised dealers/bankers of A-1 to have the export proceeds realised to the account of A-1. It not only transpires from the deposition of P.W.1 but it is also the statement of A-3, Ex.P-6, which reveals that the GR forms were signed by A-6 as a joint declarant. The above evidence has been elicited in cross examination.

20. From the above, it is clearly evident that A-4 to A-6 not only gave their quotas to A-1 to A-3 for being used, but have also jointly signed the declaration and that A-4 and A-5 have also given letter to their bankers to credit the realisation of the export proceeds in the account of A-1. That being the undisputed case, it is not now open to A-4 to A-6 to contend that they have not contravened the provisions of Section 18 (3) of FERA. Though it is not A-4 to A-6, who have sold the goods, but have only given their quotas to A-1 to A-3, however, A-6 being a joint declarant, a duty is cast upon A-4 to A-6 to see that all reasonable steps have been taken to receive or recover the payment for the goods sold and i

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n the absence of following the provisions by taking the necessary steps to recover the export proceeds, it is to be presumed that A-4 to A-6 have contravened the provisions of Sections 18 (2) and (3) of the Act. The quota used by A-1 to A-3 is that of A-4 to A-6 and it is the imperative duty of A-4 to A-6 to see that the provisions of FERA are complied with in letter and spirit. By just giving the quota to A-1 to A-3, A-4 to A-6 cannot shirk their responsibility and take a turn and say that since they are not the exporters and that the sale proceeds does not pertain to them, they have not contravened the provisions of Section 18 (3) more so, when A-6 is the joint declarant in the GR Forms along with A-1. Losing sight of the above materials, the finding recorded by the trial court is not only illegal, but is also perverse, which requires interference. 21. Once this Court comes to the conclusion that the findings recorded by the trial court are illegal and perverse, then there is no legal bar for this Court to interfere with the said acquittal, in the light of the decisions aforesaid. Accordingly, this Court is of the considered view that the findings recorded by the trial court are illegal and perverse and is against the materials available on record and in the above circumstances, this Court is left with no other option, than to overturn the verdict of acquittal recorded by the trial court and convict the accused. 22. At this juncture, learned counsel appearing for the accused/respondents herein pray that after acquittal having been recorded, a decade has passed since then, this Court, may consider imposing a lesser sentence in lieu of imposition of some fine, considering the age and other ailments suffered by the accused. 23. Though minimum sentence has been prescribed for the offence under Section 18, however, this Court, after taking into consideration the submissions advanced on behalf of the accused, and also considering their age and also the fact that the offence was committed during the period 2008-2009, and that almost a decade has passed since the commission of the offence, is of the considered view that the accused could be sentenced to a period of one day to be undergone from the time of sitting of this Court till the raising of this Court along with imposition of fine. 24. Accordingly, this appeal is allowed setting aside the acquittal recorded by the trial court and instead the accused/respondents herein are found guilty of the charges framed against them and they are hereby convicted and sentenced to undergo simple imprisonment for a period of one day before this Court, which is to be undergone on 12.02.2020 from the time of the sitting of this Court till the raising of this Court on the said day. Further, each of the accused is directed to pay a fine of Rs.1,00,000/- (Rupees One Lakh only) by way of demand draft in favour of the Enforcement Directorate before 12/02/2020, the date on which they shall undergo the sentence and produce proof of payment of the same to the Registrar (Judicial), in default of payment, to undergo simple imprisonment for a period of six months. In default The accused/respondents, viz., respondents 2, 3 and 6, shall appear before the Registrar (Judicial) at 09.45 a.m. on 12.02.2020 to mark their presence and produce the proof of payment of the fine noted above and, thereafter, appear before the Court to undergo the sentence imposed on them. If the accused/respondents 2, 3 and 6 fail to appear before the Registrar (Judicial) on 12.02.2020 at 9.45 a.m., along with the above proof, their absence shall be marked and necessary steps shall be taken to secure the presence of the accused/respondents 2, 3 and 6 to serve the sentence imposed upon them. On the accused/respondents 2, 3 and 6 paying the fine and serving their sentence on 12.02.2020, bail bonds, if any, executed by them, shall stand cancelled.
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