S.Dhanapalan v. The Chief Enforcement OfficerEnforcement DirectorateShastrii BhavanChennai-6

Crl.Rc.No.997/03 The Accused S.Dhanapalan was directed to be released on bail by theorder of this Court dated 9.7.2003 and made in Crl.Mp.No.6106/03 inCrl.Rc.997/03.IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 10.04.2007CORAM:THE HONOURABLE MR.JUSTICE A.C.ARUMUGAPERUMAL ADITYANCRL.R.C.NO.997 OF 2003S.Dhanapalan .. Petitioner/accused-vs-The Chief Enforcement OfficerEnforcement DirectorateShastrii BhavanChennai-6 .. Respondent/complainant This Revision is filed against the Judgement dated 7.7.2003 inC.A.No.193 of 1998 on the file of the learned Principal SessionsJudge,Chennai confirming the Judgment passed by the Additional ChiefMetropolitan Magistrate, E.O.I.Egmore, Chennai in C.O.C.C.NO.795 of 1993dated 25.8.1998.For petitioner : : Mr.K.Ashokan Senior Counsel for M/s.M.ShahjahanFor respondent : : Mr.K.Ramasamy Special Public Prosecutor for Enforcement Directorate. https://hcservices.ecourts.gov.in/hcservices/ O R D E RThis revision has been preferred against the Judgment in C.A.No.193of 1998 on the file of the Principal Sessions Judge, Chennai. The ChiefEnforcement Officer, Enforcement Directorate, Madras-6 has filed acomplaint againsnt the accused for contravening the provisions of Section8(1) r/w 56(1)(i) of FERA,1973.2. The short facts in the complaint relevant for the purpose ofdeciding this revision are as follows:On intelligence received by the Enforcement Directorate against theaccused that he had unauthorisedly opened a firm by name M/s GrossMachinery and Equipment at No.14, Garden Street, Darfield, Barnslay, U.Kand agreed to supply printing machinery to M/s Deccan Security Press,Coimbatore at Door No.100,4th Street, Abhirampuram, Madras-18. When asearch was conducted by the Officer of Enforcement Directorate onvigilance on 6.11.1987 nothing incriminating was seized. The accused wasexamined by Enforcement Officer, Madras on 6.11.1987 and 9.11.1987. In hisstatement, he would depose that he was a Diploma Holder in PrintingTechnology and that one Mr.James Dennis D'saa, a specialised in the saleequipment was functioning from his house that M/s Deccan Security PressNo.120, West Ponnurangam Road, R.S.Puram, Coimbatore-2 wanted to importcertain printing machinery from London but they wanted his help inprocurement of these machines, that the matter was discussed with the saidMr.James Dannis D'sa and M/s Deccan Security Press. In pursuance of thediscussion with said James Dannis D'saa and M/s Deccan Security Press, theaccused left for London on 12.3.1985 to clinch the deal for M/s DeccanSecurity Press and that during April 1985, he was not released anyforeign exchange and his expenses was borne out by Mr.James Dannis D'sathrough the office of M/s Gross Machinery and Equipment(GME). The saidoffice was opened at London and the proforma invoice for import ofmachineries to M/s Deccan Security Press were printed in his office atMadras as requested by Mr.James Dannis D'sa. He signed the papersrelating to GME as its Proprietor, that letter of credit was openedthrough Canara Bank,Madras by M/s Deccan Security Press in favour of GME,London. There were seven machineries were selected but when the letter ofcredit was opened, there were no machinery available with GME, London andit was opened with a hope to procure machinery worth 2,90,000 pounds. M/sDeccan Security Press had requested Canara Bank, Madras to open theletter of credit for 2,80,085 pounds in favour of GME,London for theimport of reconditioned printing machines and Canara Bank, had openedLetter of credit No.905/229/85 dated 28.2.1985 on GME,London throughGrindlays Bank, London for the said amount. M/s Deccan Security Press,Coimbatore had rejected the goods as the machineries arrived at MadrasPort were not as per the specification in the letter of credit and thegoods were reshipped with the permission of the Reserve Bank of India.M/s Grindlays Bank, London had advised M/s GME, London about the openingof letter of credit favouring them for 2,80,805 pounds which was a https://hcservices.ecourts.gov.in/hcservices/ transferable letter of credit. The accused had advised M/s GrindlaysBank London by letter dated 4.4.1985 to transfer UK 2,50,000 pounds to M/sLawrance martin Press Service Limited, London and M/s Grindlays Bank,London had transferred 2,50,000 pounds to M/s Lawrance Martin PressService Ltd., and 29,789 pounds to M/s GME on 22.5.1985. M.s GrindlaysBank had filed a suit in the London Court against M/s GME and LawranceMartin Press Service Ltd., for the recovery of the amounts paid. Sincethe machineries supplied were not inconformity with the letter of creditconditions.M/s Lawrance Martin Press Service Limited, London in hisaffidavit filed in the suit had interalia stated that 2,49,980 pounds paidby M/s Grindlays Bank, London to M/s Lawrance Martin Press Service Limitedunder the letter of credit referred in the affidavit of M/s JohnJamesScullian of M/s Grindlays Bank, London. The bank statements of M/sLawrance Martin Press Service Limited account maintained with MidlandBank showed that they have received 2,49,980 pounds from M/s GrindlaysBank, London on 22/23rd May 1985 and also there was a debit of 1,00,000pounds on 28.5.1985, M/s Lawrance Martin Press service had in theircertificate date 3.6.1986 about the distribution of 2,49,990 poundsreceived from Grindlays Bank stated that " amount paid to GME 1,00,000pounds ie., an amount debited in their account with Midland Bank as above.A directive under Section 33(2) of FERA,1973 was issued by the AssistantDirector of Enforcement Directorate on 20.6.1993 to the Chief Manager,Grindlays Bank, Madras-1 to produce the necessary documents, affidavitbefore the Queen's bench Division, London in the matter of suit filed byM/s Grindlays Bank,London against the accused and M/s Lawrance MartinPress Service. A show cause under Section 8(1) of the FERA, 1973 wasissued to the accused on 10.7.1992 requesting him to show cause as towhy adjudication proceedings as contemplated under Section 51 of theFERA 1973 should not be held against him for the said contravention. Sincethere was no reply received from the accused for the call notice forpersonal hearing of the case, the case was adjudicated by the SpecialDirector, New Delhi finding the acused guilty imposing a total penalty ofRs.10,00,000/- vide Adjudication order No.SDE(R)IV/34/93 dated 7.7.1993.The accused, a person resident in India acquired 29,789.91 pounds on22.5.1985 from M/s Grindlays Bank, London and 1,00,000 pounds from M/sLawrance Martin Press Service Ltd., London on 28.5.1985 totalling1,29,789,91 pounds without the previous general or special permissionfrom the Reserve Bank of India in contravention of Section 8(1) of FERA1973 which is punishable under Section 56(1)(i) of the FERA 1973.3. On appearance of the accused on summons, copies under Section 207Cr.P.C were furnished to the accused. On the side of the prosecution,P.Ws 1 to 5 were examined and Exs P1 to P16 were marked. 3a)P.W.1 would depose that on the basis of intelligence received, hesearched the premises of the accused at door No.100,4th Street,Abiramapuram, Madras on 6.11.1987 relating to import of press machinerisfrom abroad with one James to Comibatore and for the import of printingmachinery the proforma invoice were printed at the own press of theaccused and for the import of press machineries letter of credit was https://hcservices.ecourts.gov.in/hcservices/ opened at Canara Bank and for opening of the said letter of credit, theaccused had given power to the said James and since the importedmachineries were not in condition as it should be , they were returnedback to London by Deccan Security Press , Coimbatore and in this regard,a Civil Suit has been registered at London Court against the accused andthe Proprietor of GME company which is owned by the accused and inpursuance of the summons issued to him, the accused had given anotherstatement on 9.11.1987 in his own hand writing affixing his signature inall the pages of the statements.3b) P.W.2 another Enforcement Officer has deposed to the fact that hehad authorised that he has been to investigate under Section 40 of FERA1973 in the capacity of Gazetted Officer, that on 4.5.1989 he hadrecorded a statement of one Ponpandian who is the Partner of DeccanSecurity Press, Coimbatore who in his statement would admit that duringFebruary 1985, he had obtained a letter of credit to the tune of 2,89,000pounds on 10.4.1985 and that he went to London to see the printingmachineries and that he saw the machineries at London and since they weredifferent from the machinery ordered , he did not take delivery of themachinery and returned the same to London and in pursuance of Ex P3summons, he gave a statement on 12./6.1989 wherein he has admitted abouthis visit to London to see the machineries. Ex P5 is the statement of theaccused .Ex P6 is the show cause notice issued by the Special Director on15.1.1990 Ex P7 is the acknowledgment .Ex P8 is the order under which theSpecial Director had imposed a penalty of Rs.10,00,000/- to the accused.He had filed a complaint on 24.9.1993.3c) P.W.3 Thiru Ponpandian, has deposed that he is having a printingpress at Coimbatore and that the accused is one of the Directors of GrossMachineries and Equipments Limited, London and that the letter of creditfor import of printing machinery on 28.2.1985 was opened to CanaraBank,Madras and that the accused had met him for booking orders for hiscompany and as per the contract he went to London to inspect themachineries as per their order and after inspection he came back to Indiaand that the company despatched the printing machine during May 1985.According to P.W.3, since the machineries imported were not as per theorders placed by them, they requested Canara Bank and Grindlays Bank toappoint Surveyors viz., SGS, Madras to inspect the machineries and ajoint inspection was held by the Bank, surveyors and themselves and oninspection it was found that the machinery was not as per their orders andhence sent back to London and they took up the matter with the Bank andthey received back the money from Canara Bank,Ice House Branch.3d) P.W.4 is an Area Operation Officier at Grindlays Bank, Madraswould admit that he had received a notice under Section 33(2) FERA fromEnforcement Officer, Madras and he had sent a reply on 27.5.1991 alongwith Ex P11 Judgment copy of Queen's Bench ,Loondon. https://hcservices.ecourts.gov.in/hcservices/

4.When incriminating circumstances were put to the accused, he woulddeny his complicity with the crime.5. After going through the oral and documentary evidence availablebefore the trial Court, the learned trial Judge has held that the chargeagainst the accused has been proved beyond any reasonable doubt andaccordingly convicted the accused under Section 8(1) r/w 56(1)(i) of FERA1973 to undergo six months rigorous imprisonment and also slapped a fineof Rs.75,000/- with default sentence. Aggrieved by the findings of thelearned trial Judge, the accused has preferred an appeal in C.A.No.193 of1998 before the Court of Sessions, Chennai. The learned first appellateJudge after giving due deliberation to the argument advanced by both thelearned counsels has held that there is no merit to interfere with thefindings of the learned trial Judge and accordingly dismisised the appealthereby confirming the Judgment of the trial Court which necessitated theaccused to prefer this revision.6. Mr.Ashokan,the learned Senior Counsel apeparing for the revisionpetitioner would focus the attention of this Court to proviso to Section61(2) of the FERA 1973 and contended that without giving an opportunity ofshow cause, a person cannot be proceeded under the provisions for anoffence punishable under Sections 56 and 57 of FERA 1973. The learnedSenior counsel would mainly based his argument on Ex P6 said to have beenissued to the accused by the complainant under Section 27 of FERA 1973 wasnot served on the accused properly and there was no acknowledgment for ExP6 notice being served on the accused ,even as per the evidence of P.W.2.The learned Senior counsel would attract the attention of this Court tothe deposition of P.W.2 in the cross examination in which he (PW2) wouldadmit that Ex P7 acknowledgement is for Ex P6 notice. But Ex P7 is notacknowledgement for Ex P6 notice. But it is an acknowledgment for Exs P15and P16 call letters issued to the accused under Section 8(1) of FERA.The learned Senior counsel would point out that even according to P.W.2 ExP7 is not an acknowledgement for Ex P15 and Ex P16 call letters on whichthe entire edifice of the prosecution case rests.7. The learned Special Public Prosecutor for Enforcement Directorateon the other hand would admit that the mere crumbling evidence of P.W2 inthe cross examination will not derive us to come to the conclusion thatthere was no proper show cause notice given to the accused as contemplatedunder Section 56(1) of the FERA 1973 because Ex P7 acknowledgment is forthe show cause and call letters issued to the accused under Exs P15 andP16 respectively for the violation under Section 8(1) of FERA 1973. Thelearned Special Public Prosecutor would take this court through Ex P7, EXP15 and Ex P16. The learned Special Public Prosecutor would contend thateven in Ex P7 acknowldgment, it has been clearly stated by the accusedthat a notice No.T4/5-M/90/Call dated 31.3.1993 issued by the SpecialDirector of Enforcement was received by him. In Ex P16, call letter ithas been specifically mentioned that call Notice NOT4/5-M/90/call dated31.3.1993 has been enclosed with the call notice. The call noticie https://hcservices.ecourts.gov.in/hcservices/ reference is T4/5-M/90 dated 31.3.1993. Even under Ex P15 the referenceNo.is T4/5-M/90 as in ExP16. Ex P7 cannot be an acknowledgment for Ex P6because that is dated 15.1.1990. Under such circumstances, the findings ofthe courts below that Ex P7 is the acknowledgment for Ex P15 and Ex P16and not for Ex P6 has to be accepted.8. The next point on which the learned Senior Counsel would attackthe findings of the Courts below is that there is no documentary evidenceproduced by the prosecution to show that the accused is the Proprietor ofGME and has violated the provisions of FERA to attract the liability underSection 8(1) of the FERA 1973. The entire case of the prosecution reliesonly on the confession statement of the accused under Exs P5,P13 and P14 .In Ex P13 statement the accused would admit that Mr.James who is thespecialist in sale of importing equipments was functioning from his houseat Abiramapuram, Chennai. At the time when Deccan Security wanted toimport machinery from London and that James had an experience inimporting machineries from London for one Seshan Printers, Coimbatore andalso for Northern India Press, Coimbatore and for the purpose ofpurchasing machinery for Deccan Security Press, he went to London on12.3.1985 and that proforma invoice was for import of machinery for DeccanSecurity Press was also printed in his press at Madras. He would admit incategorical terms that he had signed in the proforma invoice for GME,London as per the understanding , he had with Mr.James and in pursuance ofthe said understanding he had also opened L.C with Canara Bank, Madras inthe name of M/s Deccan Security Press and the L.C. Was opened for thepurchase of a machinery worth 2,90,000 pounds. At the time when themachineries were arrived at Coimbatore it was found that they were not interms of the specification made and hence they returned the machineries toLondon and in this connection, he would admit that there was a Civilsuit .Ex P11 is the copy of the Judgment in the High Court ofJustice,Queen's Bench Division, Commercial Court,London (1985 G.No.2194).The said Civil Suit was between Grindlays Bank Private Limited and thepresent accused as D1, Laurence Martin Press Services Limited as D2,Laurence Martin as D3 Joseph James Dennis D'sa as D4 and J.D.Norman asD5. The said civil suit has been decreed against the second, third andfifth defendants. 9.With regard to the payment of money, the accused in Ex P14statement would admit that he had received from Ponpandian duringApril 1985 that the document has been received and that the amount of2,80,000 pounds have been paid out of this amount 2,90,000 bounds was paidin to the account of GME Yorkshire about 25,000 pounds was transferred toGME yorkshire as per authorisation given by GME and that he has been givenauthorisation to sign in the documents pertaining to GME by James.he alsooperated the bank account . For the specific question " Are you aware ofsuit Grindlays Bank London in the Queens Court against you? Yes, I amaware of it. According to the suit, I as the proprietor of GME,Yoorskhire is assurable to the extent of 1,29,000 pounds . He wouldfurther state that he is aware of the commission on this transaction tothe extent of 29,000 pounds but he would deny that he is not aware of the https://hcservices.ecourts.gov.in/hcservices/ transactions relating to 1,00,000 pounds which is relating to LMPSyorkshire.So from the statement of Ex P13 and ExP14 of the accused it isclear that the accused had dealt with the foreign exchange withoutobtaining necessary permission required under Section 8(1) of FERA 1973.So I do not find any reason to interfere with the findings of the firstappelate Judge inC.A.No.193 of 1998.10. When coming to the question of sentence, the learned Seniorcounsel would represent that some leniency may be shown on the accused .Taking into consideration, the plight of the accused had undergone fornearly 17 years from the date of show cause notice and that he was inprison for about one week and also paid a fine of Rs.75,000/- before thetrial Court.11. I heard the learned Special Public Prosecutor in this regard. Theleared Special Public Prosecutor would point out that proviso to Section56(1) of FERA 1973 which shows that if there is adequate and specialreasons then the sentence of imprisonment can be even less than sixmonths, the minimum prescribed under Section 56 of FERA 1973. Taking intoconsideration the long ordeal of trial, the accused had faced before theCourts below and also before this court, I am of the opinion that someleniency can be shown on the accused in the sentence.12. In fine, the revision is allowed in part and the conviction bythe first appellate Court in C .A.No.193 of 1998 is confirmed but thesentence alone has been modified to that of the period already undergoneinstead of six months rigorous imprisonment. The fine amount imposed bythe Court below will sustain.sgSd/-Asst.Registrar/true copy/ Sub Asst.RegistrarTo1. The Principal Sessions Judge, Chennai2. The Additional Chief Metropolitan Magistrate, E.O.1,Chennai-83.-do- the Chief Metropolitan Magistrate, Egmore, Chennai4. The Chief Enforcement Offficer, Enforcement Directorate, Shastri Bhavan,Chennai5. The Special Public Prosecutor, Enforcement Directorate.6.The superintendent of Central Prison, Chennai+1 cc to Mr.M.Shahjahan, Advocate Sr.No.22984.+1 cc to Mr.K.Ramasamy, Spl. p.p. Sr.No.23012.AKM(CO)dcp/2.5.07Crl.R.C.No.997/2003