Union of India (UOI) vs Bendict D''souza

R.M. Savant, J.—The above Appeal challenges the order dated 6-9-1988 passed by the Foreign Exchange Regulation, Appellate Board by which order, the Appeal filed by the Respondent came to be allowed and the order of the Assessment Director of Enforcement dated 30-12-1985 came to be set aside.

The factual matrix involved in the Appeal is as follows:

The Enforcement Director received reliable information that M/s. Sudrashan Jewellers situated at Dhan Laxmi Building, Hanuman Road, Vile Parle (E), Mumbai 400 057, were indulging in illegal purchase and sale of Foreign Exchange. Acting on this information, search operation was carried out in the said shop on 6-12-1985. Whilst, the search operation was in progress, the Respondent above named came there and checked about the rates of foreign exchange with the said shop-keeper. On his personal search being taken by the officers of the Enforcement Directorate, foreign currency was seized to the extent 628/- Bahrain Dinars, 25/- Saudi Riyals and 100 US $, which were taken over by the Directorate under a panchanama dated 6-9-1985. The statement of the Respondent was also recorded on the same date. Thereafter, a Show Cause Notice bearing No. SCN/171/Ad/KKK/B/B/85, dated 18-12-1985 came to be issued to the Respondent for violation of the provisions of Section 8(1) read with Section 64(2) of the Foreign Exchange Regulation Act (for short the said Act), alleging against him that he had gone to M/s. Sudarshan Jewellers for selling foreign exchange which was seized from him by the officers of the Directorate. The said Show cause notice was replied to by his wife Smt. Lucy D''Souza who in the reply pointed out that the Respondent, who was her husband was working as a Driver and that he had taken loan from his employer abroad and when he landed at the Bombay Air Port, he did not have foreign currency and went to M/s. Sudarshan Jewellers for exchange of foreign currency into rupees on the advise of some one. She further sated in her reply that her husband being a poor ignorant man had no knowledge about the rules and regulations. The Show cause notice was adjudicated by the Assistant Director of Enforcement Directorate and by his order dated 30-12-1985, he confirmed the said Show Cause Notice and directed the confiscation of the foreign currency. The Assistant Director, inter alia, observed that the Respondent had not furnished any documents regarding customs declaration in respect of the foreign exchange as the same was to be declared on it being brought into country. The Assistant Director relied upon the statement of his wife as recorded in the Letter dated 24-12-1985 to the effect that the foreign exchange in question would have been encashed from M/s. Sudarshan Jewellers at a premium, had the same not been seized by the officers of Enforcement Directorate. The Assistant Directors, therefore, held that the Respondent had clearly violated the provisions of Section 8(1) read with Section 64(2) of the said Act.

Aggrieved by the said order of the Assistant Director, the Respondent filed an Appeal before the Appellate Board for foreign exchange. The said Appeal came to be allowed by the Appellate Board. The Appellate Board was of the view that there are stages in the commission of offence and the first stage is its preparation and thereafter the commission of offence. Though it is a fact that the Appellant had visited the said M/s. Sudarshan Jewellers and enquired about the rate of Bahrain Dinars, the preparation according to the Tribunal were not completed for the commission of the said offence. The Tribunal was, therefore, of the view that the charge u/s 8(1) read with Section 64(2) of the said Act, has not been sustained. The Tribunal, therefore, set aside the imposition of penalty of Rs. 5000/- on the Respondent as also the confiscation of the seized foreign currency.

As indicated above, it is the said order of the Tribunal, which is impugned in the present Appeal.

We have heard the Learned Counsel for the Appellant. None appears for the Respondent. The Tribunal, in our view, has rightly held that the preparation or intention to commit an offence cannot be equated with the commission of the offence itself. Though the Appellant had made inquiries about the price of the Bahrain Dinars, he had not progressed further as he had been accosted by the officers of the Directorate. The Lower Authority in our view, has erred in relying upon the statement of the Respondent''s wife for coming to a conclusion that the Appellant has contravened the provisions of the said Act.

In our view, no fault can be found with the order of the Tribunal. It is also required to be borne in mind that no substantial question of law has been framed when the Appeal was admitted in the year 1988. In our view no substantial question of law in fact arises in the above Appeal. In that view of the matter, there is no merit in the above Appeal, which is accordingly dismissed.