Full Judgment
1. The prayer for dispensation of pre-deposit of penalty is allowed and appeal is being disposed off on merits. The case against the appellant was that information was received by Enforcement Directorate to the effect that appellant would be receiving payment of Rs. 6 lakhs from one Shri Kanthi Bai; that on search of the residential and shop premises of the appellant resulted in seizure of Rs. 27,000 along with certain other incriminating documents. The appellant in his statement under section 40 disclosed that one Syed Arabia was working in a shop in Saudi Arabia and who informed that after reaching Riyadh he would be making arrangements in Riyadh and send amounts to him through persons which could be handled by him in Bangalore and after receipt of the money, he should make payments to various persons in Bangalore and the addresses of such persons would be furnished to him. Syed Anwar had offered him a commission of Rs. 200 for distribution of each lakh and he agreed to this proposal. He further disclosed on receiving instructions from Syed Anwar he had collected amounts of Rs. 2,00,000 and one lakh from unknown parsons. He also regularly collected the names and addresses of whom these payments were to be made and the details of the amounts to be paid to them from Syed Anwar. Some unknown persons used to call him over telephone and after enquiring about the amount to be received by him used to give him various amounts. The appellant has been held guilty for contravention of section 9(1)(b) and 9(1)(d) of the FERA, 1973 and penalty of Rs. 10 lakhs has been imposed.
2. Shri Mahendra Singh has assailed the finding on the ground that charges under section 9(1)(b) and 9(1)(d) has not been established. He submitted that there is no evidence regarding receipt of payments.
Dr. Shamsuddin, DLA for the respondents has submitted that there is no infirmity in the order. The learned adjudicating officer recorded the following order :
âI have carefully considered the charges against the noticee as made out in the Show Cause Memorandum and also perused the documents relied upon therein. The contention of the noticee in his reply to the Show Cause Notice that his statement were obtained under duress is unacceptable. This is because, the statement given by the noticee before the Enforcement Officer has been recorded under section 40 of the FERA, 1973 and it explains the documents that have been seized from the noticees possession. On the basis of the documents seized, subsequent follow-up action was taken and the persons whose names figures in the seized documents have confirmed the amounts and the date of receipts, which tally with the statement and the documents seized from the residence of the noticee. The Advocate of the noticee has also pleaded for a lenient action in view of the financial hardship of the noticee. Therefore, the fact of contravention of FERA ,1973 as brought out in the Show Cause Memorandum is established. I accordingly impose a penalty of
Rs. 10,00,000 on Shri Syedullah Sheriff for contravention of section 9(1)(b) and 9(1)(d) of the FERA, 1973 under section 50 of the Act. I also order confiscation of the seized amount of Rs. 27,000 being the amount involved in the contravention, to Central Government in terms of section 63 of the Act. (pp. 15-16)
3. Shri Mahendra Singh has submitted that penalty of Rs. 10,00,000 is extremely harsh. The learned counsel has prayed for reduction in the penalty of Rs. 10,00,000. In my opinion end of justice is to be met by reducing the penalty to Rs. 1,00,000 (Rupees one lakh) which is sufficient. An amount of Rs. 27,000 confiscated from the appellant may be adjusted towards the penalty amount and appellant is directed to deposit balance amount of penalty within three months from the receipt of the order.