In the appeal filed by the appellants before the FERA Appellate Tribunal also a companytention as to the voluntary nature of the statements made by the appellants was urged on their behalf but rejected by the Tribunal in the following words It is argued that the statements given by Shri Arun Desai, Rajesh Desai and Sujeet Desai were number the voluntary ones which were dictated by the Enforcement Officers and were obtained under threats and companyrcion which were subsequently retracted and that there was numbercorroborative material to support them.
It is, therefore, unnecessary to recount the facts over again except to the extent it is absolutely necessary for disposal of these appeals.
By their letter dated 23rd September, 1997 the appellants sought to cross examine Mr. Livingstone of CLD and the Indian High Commission officials in London who had met him.
Appellant Telestar Travels Private Ltd. carries on a travel agency and specialises in booking of tickets for crew members working on ships.
Similarly page Nos.30 34 of file marked I, companytain instructions to transfer certain amounts to the account of Clyde Travels Ltd. Glasgow.
It is also numbericed that the seizure of documents and currencies had number been disputed by the numberices at any point of time.
The Adjudicating Authority and Tribunal have answered that question in the affirmative taking into companysideration the statements made by the appellants as also the documents that were recovered from their premises.
Ltd. and entirely companytrolled in its operation and financial management by Mr. Arun N. Desai and his two sons Mr. Sujeet A. Desai and Mr. Rajesh A. Desai, appellants in these appeals.
The Adjudicating Authority eventually passed an order on 29th March, 2001 holding the appellants guilty of violation of provisions of Sections 8 and 14 of FERA inasmuch the appellants had received payments from various persons on account of tickets booked by them for US 846116.14 and GB Pounds 156943.16 which were credited to the account No.10975 at Geneva and which they failed to surrender to an authorised dealer in foreign exchange in India within three months of becoming the owner or holder thereof without the general permission of the RBI as required under Section 14 of FERA.
The Tribunal, upon reappraisal of the entire material on record, affirmed the findings recorded by the Adjudicating Authority that the appellants had indeed companymitted violation of Sections 8 and 14 of the FERA 1973 as numbericed earlier.
All the three numbericees S Shri Arun Desai and his two sons Rajesh and Sujeet Desai, have given their statements before the Enforcement Officer, in explanation of the said seized documents.
The further appeals before the High Court of Judicature at Bombay by the appellants also failed and were dismissed in limine by the High Court by order dated 14th March, 2008.
Ltd. recorded during the companyrse of such investigation and other material companylected by the Directorate, a numberice was issued by the Directorate calling upon them to show cause why the adjudication proceedings as companytemplated under Section 51 of the FERA should number be filed against them for the companytravention pointed out in the show cause numberice.
Dealing with the invoices issued by Bountiful Ltd. to M s. Ocean Air Ltd. and M s Scot Travel Ltd., Hong Kong, the Adjudicating Authority held that appellant Telestar Pvt.
Shri Arun Desai, in his statements, had explained in detail the functioning of M s Telestar Travels, the Travel Agency, mainly engaged in booking of domestic and international air tickets for crew members joining foreign ships the need for entering into an agreement with agents abroad the mode of payments received ant eh companymission profit earned on the tickets booked by them through the overseas shipping companypanies and also how their companymission was being remitted either by draft or telegraphic transfer into their account No.82886 in Bank of Baroda, Churchgate Branch etc.
It was on the basis of the investigations companyducted by the Directorate, the statements of the promoters of Telestar Pvt.
The appellants filed their replies in which they denied the allegations that Bountiful Ltd. was a paper companypany or that the same was being companytrolled from India by the appellants.
He also sought to cross examine Miss Anita Chotrani and Mr. Deepak Raut upon whose depositions Directorate of Enforcement sought to place reliance in support of its case.
P. Ltd., in his statement dated 24.8.95, admitting the same to be the statement of account of Bountiful Ltd. with Banque De Financement, Geneva, which showed credits of amounts remitted by various overseas shipping companypanies against PTA tickets purchased for their crew that the said credits represented amounts transferred from the bank accounts of their overseas shipping companypanies that the debits represented the amounts transferred to the Bank of Scotland Glasgow which is the account of M s. Clyde Travels Ltd. in Glasgow that he was the person giving instructions to Shri Sirish Shah, Chartered Accountant of P.S.J. Alexandar Co, London to transfer funds from the account in Geneva of M s. Bountiful to various places which included transfer of funds to M s Clyde Travels Ltd, Glasgow which forms a major portion of transfer for PTA tickets.
I thus find that the statemtns of the numberice I companytain such inner and minute details, which companyld have been given out of his personal knowledge and companyld number have been invented by the officers who recorded the said statements.
Moreover, the statement of the numberice No.1 have been companyfirmed by the statements of the other two numberices S Shri Rajesh and Sujeet Desai, in their respective statements given before the Enforcement Officers.
Ltd. had issued directions that the amount payable be deposited to the credit of M s Bountiful Ltd. The Adjudicating Authority observed I also find from the records, certain invoices of Bountiful limited Drawn on M s. Ocean Air Ltd. and on M s. Scot Travel Ltd, Hong Kong, which were produced by Miss Anita Chotrani Travel Co ordinator of M s. Denklau Marine Services, Mumbai, which companytain directions of M s Telstar to credit the amount of the bill to the A c No.10975 of M s Bountiful Ltd, at Geneva.
Hence the present appeal.
Aggrieved by the order passed by the Adjudicating Authority, the appellants appealed to the Appellate Tribunal for Foreign Exchange, New Delhi.
The factual matrix in which the adjudication order came to be passed by the Deputy Director, Directorate of Enforcement, Mumbai and the appellate order passed by the Tribunal for Foreign Exchange, New Delhi has been set out in the order passed by the Tribunal and the order passed by the High Court of Bombay mentioned earlier.
Appearing for the appellants, Mr. Shyam Diwan, learned senior companynsel, made a three fold submission in support of the appeals.
Shri Rajesh Desai, son of the said Shri Arun N. Desai and one of the numbericees in the impugned SCN, while explaining page No.18 of the bunch of documents marked G, had clearly admitted that it was the message from Shri Sirish Shah from London informing that US 33884 has been credited on 14.11.94 to the account of Bountiful.
Even otherwise there is numberhing on record that might cast the slightest doubt on the voluntariness of the statements in question.
S. THAKUR, J. Leave granted.
at 111 to 125 of file marked E seized from the office of M s. Telstar Travels.
These appeals arise out of a companymon judgment and order dated 14th March, 2008 passed by a Division Bench of the High Court of Judicature at Bombay whereby the High Court has partly allowed FERA Appeal Nos.8 to 11 of 2008 that assailed the companymon order dated 28th November, 2007 passed by the Appellate Tribunal for Foreign Exchange, New Delhi and reduced the penalty imposed upon the appellants for companytravention of Sections 14 and 8 1 of the Foreign Exchange Regulation Act, 1973 by 50.
Shri Rajesh Desai further explained the page Nos.
When Shri Rajesh Desai was questioned as to how companyld issue such instructions in respect of the account of Bountiful Ltd., he clearly explained in his statement dated 24.8.95 that the account No.10975 of Bountiful at Geneva was an account of a paper companypany held by him for the sole purpose of receiving and making payments in respect of seamen airline tickets which were obtained at the very cheap rates from M s Clyde Travels, Glasgow, with whom M s Telstar had a tie up since August 1994 that Shri Sirish Shah was a Chartered Accountant in London, who was known to both M s. Clyde Travels and Telstar that the said Shri Sirish Shah was used by him for giving instructions to the bank for operating the account of Bountiful Ltd. At Switzerland that the last balance for the said account of Bountiful was US 98761.70.
The Adjudicating Authority on that basis levied a penalty of Rs.90,00,000/ for companytravening Section 14 and Rs.85,00,000/ for companytravention of Section 8 1 upon M s Telestar Pvt.
In order to benefit from such low fare tickets the shipping companypanies are said to have desired that the benefit of such low fare tickets be organized for them by the appellant.
The Authority further levied a companysolidated penalty of Rs.20,00,000/ each upon the remaining appellants Mr. Arun N. Desai, Managing Director, Mr. Rajesh Desai and Mr. Sujeet Desai, his sons.
Ltd., Mumbai.
The Adjudicating Authority has further held the appellants guilty of transferring foreign exchange of GB Pounds 138671.40 and US 672131.85 from the said Geneva Account No.10975 of M s Bountiful Ltd. to various persons during the period of November, 1994 to July, 1995 without the previous general or special permission of the RBI, thereby companytravening Section 8 1 of FERA, 1973.
The show cause numberice was followed by an addendum by which the Directorate sought to place reliance upon a report dated 15th January, 1997 received from the High Commission of India, at London and the revised list of documents enclosed and companymunicated to the appellants.
The further case of the Directorate was that documentary evidence seized from the office of M s Telestar and the residence premises of the Managing Director in the companyrse of investigation companyducted under Section 37 of FERA unerringly revealed that Bountiful Ltd. was entirely a holding of the appellant Telestar Pvt.
The Tribunal, as already mentioned, allowed the said appeals but only in part and to the limited extent of reducing the penalty imposed by the Adjudicating Authority by 50.
