Syed Noorishah vs Director of Enforcement, New Delhi and Another

The appellant is assailing the order of confiscation of four drafts worth Rs. 20,000/- sent to him from Bombay on 30-3-1974.

The facts in a nutshell are; that the appellant is a resident of Hyderabad. He received four registered covers containing four drafts. These drafts were sent to the Post Office Kesogiri at Hyderabad. The Enforcement Authorities intercepted it and when the appellant was asked to disclose the source from which he received the drafts, he disclaimed the covers and, therefore, they were seized. Subsequently proceedings were initiated under S. 51 of the Foreign Exchange Regulation Act (Act No. XLVI of 1973), hereinafter referred to as the "Act" and an opportunity was given to the appellant. In the enquiry, the Department has relied upon a statement of one Sri M. M. Mohd. Mansoor s/o Sri M. M. Ibrahim Sahib, the alleged sender who stated that the money was sent from a foreign country in contravention of Ss. 9(1)(b) and 9(1)(d) of the Act and it has not been satisfactorily explained and, therefore, the drafts were confiscated. As against it, an appeal has been filed and in the appeal the finding of confiscation was confirmed. Hence, this second appeal under S. 54 of the Act.

The contention of the learned counsel, Sri M. A. Majid, is that a reading of the order does not disclose a contravention having been committed under S. 9(1)(b) or 9(1)(d) of the Act. He contended that Mohd. Mansoor, whose statement had been relied upon, was not produced before the authorities for cross-examination by the appellant; that the statement does not disclose that any cause of contravention has been made out. In an earlier proceedings, in appeal No. 730/76, it was found that the Department had not established the foreign source and, therefore, the amount of Rs. 10,000/- and odd was ordered to be refunded. The learned counsel says that for the same contravention the matter was split up and, therefore, it must be held that the contravention has not been proved and the confiscation is illegal. I am unable to agree with the learned counsel. S. 2(f) of the Act defines currency as under :

"currency" includes all coins, currency notes bank notes, postal notes, postal orders, money orders, cheques, drafts, traveller''s cheques, letters of credit, bills of exchange and promissory notes.

Section 8(1) of the Act reads as under :

Restrictions on dealing in Foreign Exchange :-

(1) Except with the previous general or special permission of the Reserve Bank, no person other than an authorised dealer shall in India, and no person resident in India other than an authorised dealer shall outside India, purchase or otherwise acquire or borrow from, or sell, or otherwise transfer or lend to or exchange with, any person not being an authorised dealer, any foreign exchange ............

Section 9(1) (b) and (d) reads as follows :-

Restrictions on payment. - (1) Save as may be provided in and in accordance with any general or special exemption from the provisions of this sub-section which may be granted conditionally or unconditionally by the Reserve Bank, no person in, or resident in India shall -

b) receive, otherwise than through an authorised dealer, any payment by order or on behalf of any person resident outside India.

d) make any payment to, or for the credit of, any person by order or on behalf of any person resident outside India.

A reading of these provisions would manifest that a person, other than the authorised dealer, has no right to deal in foreign exchange, or receive, otherwise than an authorised dealer, any payment by order or on behalf of any person resident outside India and make any payment to, or for the credit of any person by order or on behalf of any person resident outside India. Therefore, the essential fact which has got to be established by the respondent is that this is a payment made on behalf of any person residing outside India or any person not authorised to deal with the foreign exchange. The Department has relied upon the Statement of Sri M. M. Mohammad Mansoor in which he stated that "many a time he has gone to Post Office for sending M.Os. and insured covers containing bank drafts taken as per foreign instructions as stated earlier". He does not remember to whom they were sent. He also does not remember from what source they were received. This statement thus discloses that the amounts sent emanate from a foreign source, Obviously in foreign exchange received in India and it was exchanged without any authorisation from the Reserve Bank and after exchange into Indian currency and taking the Bank Drafts they were sent through Null Bazar Post Office, Bombay by registered Post. Admittedly this was addressed to the appellant, but the appellant disclaimed at the time when he was intercepted. In these circumstances, the necessary conclusion is that the contraventions under Ss. 9(1)(b) and 9(1)(d) of the Act have been established. The next question is, whether they have been properly proved as contended by the appellant. It is now well-settled that this is a quasi-judicial enquiry and the order must be based on some evidence and the provisions of Evidence Act have no application and, therefore, it is needless to prove as a fact like a fact in a civil proceeding or criminal proceeding. Therefore, the statement made by Mohammed Mansoor is the evidence on record and the finding recorded is based on evidence.

The next contention of the learned counsel for the appellant is that the said Mohammad Mansoor was not produced before the authorities for cross-examination. A reading of the order of both the Tribunals does disclose that no attempt has been made by the appellant in this regard before those authorities in this behalf. Therefore, for the first time he cannot make grievance in this appeal. It is held in Naseeruddin and Brothers Dosth Beedi Factory, Warangal Vs. Union of India and Others, , that if no attempt has been made at initial stage, the same cannot be made for the first time in a second appeal. The same principle a applies to the facts in this case. Therefore, it is too late in the day to raise this dispute for the first time in the second appeal. The further contention of the learned counsel is that on a reading of the statement given by Mohammad Mansoor it cannot be said that any offence or a case of contravention has been made out. I am unable agree. The learned counsel has read out in extenso the entire statement and I also considered the same. A reading thereof clearly discloses that a case of contravention of S. 9(1)(b) and 9(1)(d) of the Act has been made out.

The next contention raised by the learned counsel for the appellant is that on an earlier occasion on similar allegation, in an enquiry, it was found that the source of foreign exchange has not been established and the amount of Rs. 10,000/- was ordered to be refunded to the appellant and that order operates as res judicata and, therefore, the contravention has not been proved. I am unable to agree with the learned counsel. In the earlier case the statement was not available to the Tribunal below. As such the question of res judicata does not arise. The further contention is that if there is prosecution and the contravention is proved, then and then only the confiscation can be made and for this purpose he relied upon S. 63 of the Act. A reading of S. 63 does disclose that in addition to any sentence or penalty, the confiscation can be ordered. Therefore, it is not obligatory to launch prosecution or impose penalty to order confiscation of the drafts in question. Therefore, I do not find any substance in any of the conditions raised by the appellant.

Accordingly the appeal fails and the same is dismissed. No costs.

Appeal dismissed.