“REPORTABLE”
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5773 OF 2009
A. Tajudeen …. Appellant
versus
Union of India …. Respondent
J U D G M E N T
Jagdish Singh Khehar, J.
1. Through memorandum dated 12.3.1990 it was alleged, that the appellant
herein – A. Tajudeen, without any general or special exemption from the
Reserve Bank of India, had received an amount of Rs.8,24,900/- in two
installments, at the behest of Abdul Hameed, a person resident in
Singapore. The first installment was allegedly received on 23.10.1989
which comprised of Rs.4,00,000/-. The remaining amount was allegedly
received in the second installment on 25.10.1989. As per the memorandum
the aforesaid amounts had been received from a local person, who was not an
authorised dealer in foreign exchange.
2. Based on the factual position noticed hereinabove, the allegation
against the appellant was, that he had violated Section 9(1)(b) of the
Foreign Exchange Regulation Act, 1973 (hereinafter referred to as, the 1973
Act). Section 9(1)(b) aforementioned, is being extracted hereunder:-
“9. Restrictions on payments – (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 –
(a) xxx xxx xxx
(b) receive, otherwise than through an authorized dealer, any
payment by order or on behalf of any person resident outside India;
Explanation – For the purposes of this clause, where any person in,
or resident in, India receives any payment by order or on behalf of any
person resident outside India through any other person (including an
authorized dealer) without a corresponding inward remittance from any place
outside India, then, such person shall be deemed to have received such
payment otherwise than through an authorized dealer;”
Based on the aforesaid statutory provision, and the factual position
noticed hereinabove, the Enforcement Directorate initiated proceedings
against the appellant under Section 50 of the 1973 Act.
3. Before adjudicating upon the merits of the controversy, it is
essential to narrate the factual position leading to the issuance of the
aforesaid memorandum dated 12.3.1990. The facts as they emerge from the
pleadings, and the various orders leading to the passing of the impugned
judgment rendered by the High Court of Judicature at Madras (hereinafter
referred to as, the High Court) on 28.9.2006, are being chronologically
narrated hereunder:-
(i) The appellant – A. Tajudeen is alleged to have made a statement to
the Enforcement Directorate on 20.4.1989, wherein he acknowledged, that he
had received a sum of Rs.1,40,000/- from Abdul Hameed. Out of the above
amount, he paid a sum of Rs.60,000/- through his shop boy – Shahib, to
Shahul Hameed (a relative of Abdul Hameed) of Village Pudhumadam. A
further amount of Rs.20,000/- was paid to some friends of Abdul Hameed at
Keelakarai, and remaining amount was retained by appellant himself. In the
statement made on 20.4.1989, it was allegedly acknowledged by the appellant
that Abdul Hameed was a resident of Singapore, and was running a shop
located at Market Street, Singapore.
(ii) On 25.10.1989, the officers of the Enforcement Directorate raided the
residential premises of the appellant, namely, no. 6, Dr. Muniappa Road,
Kilpauk, Madras. At the time of the raid, which commenced at 1.00 pm, his
wife T. Sahira Banu was at the residence. The appellant - A. Tajudeen,
also reached his residence at 1.30 pm, whilst the officers of the
Enforcement Directorate were still conducting the raid. During the course
of the raid, a sum of Rs.8,24,900/- in Indian currency was recovered from
under a mattress from a bedroom of the appellant’s residence.
(iii) A mahazar was prepared on 25.10.1989, depicting the details of the
currency recovered from the raid. The said mahazar was prepared in the
presence of two independent witnesses, namely, R.M. Subramanian and Hayad
Basha. The above independent witnesses also affixed their signatures on
the mahazar.
(iv) At the time of the raid itself, the statement of the appellant - A.
Tajudeen was recorded (on 25.10.1989). The relevant extract of the
aforesaid statement of the appellant is being reproduced hereunder. It
needs to be expressly noticed, that the appellant now allegedly disclosed
the address of Abdul Hameed, as no. 24, Sarangoon Road, Singapore.
“Today your officers searched my aforesaid house and seized a sum of
Rs.8,24,900/- as set out in the Mahazar. I wanted to establish a jewellery
shop in Madras. I commenced a jewellery shop in the name and style of
“M/s. Banu Jewellers” on 19.10.1989 at No. 12, Ranganathan Road,
Nungambakkam, Madras-34. It is a partnership business wherein my wife T.
Sahira Banu is a partner. For that I sold my wife’s gold jewels and also
taken hand loans from my friends. The said business was started with a
capital of Rs.2,20,000/- in my wife’s name. The other partner Mr. S.
Muthuswamy of No. 20, Indira Nagar, Adyar (I do not remember his address)
has contributed to the capital a sum of Rs.30,000/-.
For expanding the said shop and for improving the business, I required
about Rs.9,00,000/-. My relatives are working in Singapore and Malaysia.
One Abdul Hameed from my native place is carrying on business for the past
15 years at no. 24, Sarangoon Road, Singapore. He is dealing in clothes,
VCRs etc. He came down to Madras about 2 months back. At that time, he
met me at my residence. I told him that a jewellery business to be
commenced and that I require about Rs.9,00,000/- for the said business and
to discharge certain small loans. Further I requested him to help me by
providing the said money assuring to repay the same in 2 or 3 years’ time
with small interest during his visit to India.
He assured to contact me over phone, House telephone no. 666611 on reaching
Singapore. The said Abdul Hameed, about 2 months back, called me over
phone from Singapore and told me that as I requested to him, he had made
arrangements for sending the sum of Rs.9,00,000/- and that he will inform
me about the mode of transmitting the same. Thereafter during the 2nd week
of this month, the said Abdul Hameed contacted me over phone. At that time
he told me that he would send Rs.8,25,000/- in two installments being
Rs.4,00,000/- and Rs.4,25,000/- and that the said money would be delivered
at my house in the 3rd week or 4th week of this month through unknown
person. Pursuant thereto, on 23.10.1989 around 9.00 pm an unknown person
came to my house inquiring about me and gave me Rs.4,00,000/- stating that
he is delivering the same on the instruction of Abdul Hameed of Singapore.
Similarly another unknown person came to my house at 8.00 am on 24.10.1989
and delivered to me Rs.4,25,000/- claiming to be on the instructions of the
said Singapore Abdul Hameed. I was keeping the said Rs.4,00,000/- and
Rs.4,25,000/-, totaling to Rs.8,25,000/-, in my house which was received on
the instruction of Abdul Hameed.
The Enforcement Officer who searched the house seized the sum of
Rs.8,24,900/- which I got in the aforesaid manner. The said Abdul Hameed
who is residing at Singapore is my distant relative on the paternal side.
He is living with his family at Singapore. He used to come down to my
native lace, Pudhumadam Village, once in a year to visit his relatives. He
is aged 45 years and of the height of about 5½ feet, fair complexion and
medium built.
The person who delivered the sum of Rs.4,00,000/- on the instructions of
said Abdul Hameed did not disclose his name and address. He was about 35
years old and with medium height and medium built. He was wearing pants
and shirt. He left within few minutes on delivering the sum of
Rs.4,00,000/- to me and hence I could not notice other identifiable marks.
Similarly the other person who came on 24.10.1989 and delivered the sum of
Rs.4,25,000/- on the instructions of said Abdul Hameed also did not
disclose his name and address. He must be around 40 years old. He is also
medium built and also medium height. Since both of them left my house
within a few minutes on delivering the said sums, I could not notice their
identifiable marks. I was making arrangements to export readymade
garments. In respect thereof, I required the place apart from my house to
meet my customers. For that I have taken on rent room no. 402, in Ganpat
Hotel, Nungambakkam High Road about 4-5 months back from its owner one M.R.
Prabhakaran. I am using the telephone no. 477409 in the said shop, A/C
machine and fridge available in the said room. Since Export business did
not suit me, I left it. The said room is in my possession.”
(emphasis is ours)
(v) During the course of the raid conducted on 25.10.1989, the appellant
- A. Tajudeen, was detained by the officers of the Enforcement Directorate.
His statement was again recorded on 26.10.1989 by the Chief Enforcement
Officer, whilst he was in custody. Relevant portion of his above mentioned
statement is being extracted hereunder:-
“I have earlier given statement before you on 25.10.1989. In that I have
disclosed that by searching my house on 25.10.1989 your officers have
seized a sum of Rs.8,24,900/- which I received from unknown persons on
23.10.1989 and 25.10.1989 on the instructions of Abdul Hameed of Singapore.
This is true. On 25.10.1989, the said officers searched the jewellery
shop “Banu Jewellers” in which my wife is a partner. At that time I was
also there. In the said search no documents were seized. The other
partner Mr. Muthusamy who is looking after the seized sum of Rs.8,24,900/-
is not related to the said business. As stated by him, there is no
connection between the said business and the sums seized.
Today your officers searched my room at No. 402, Ganpat Hotel, Nungapakkam
High Road, Madras-34 which I have taken on rent. I was there during the
search. Since I have lost the key it was opened by a lock repairer.
Pursuant to the said search a quotation from A.L. Textiles Mills dated
15.4.1989 was seized.
Hereinbefore, in April last, I appeared before the officers and gave a
statement. Today I was shown the statement which I have given before the
officers on 20.4.1989. I have stated about the receipt of a sum of
Rs.1,40,000/- through my shop boy, Shahib, on the instructions of said
Abdul Hameed of Singapore and out of the same, I have disbursed Rs.60,000/-
on the instructions of the said Abdul Hameed to Shahul Hameed at Pudhumadam
and the payment of Rs.20,000/- to a friend in Keelakarai through my shop
manager, Hasan. The said Shahul Hameed mentioned in the statement dated
20.4.1989 and Abdul Hameed disclosed in the statement dated 25.10.1989 is
one and the same person. In the said statement dated 24.10.1989 I have
stated that Abdul Hameed is running a fancy store in Market Street in
Singapore. In the statement dated 25.10.1989, I have stated that Abdul
Hameed is running a shop at Sarangoon Road, Singapore. Few months back, he
has shifted his business from the Market Street to Sarangoon Road. In the
statement dated 20.4.1989, I have stated that I am running a textile shop
“Seemati Silks” at Periyakadai Veethi, Ramanathapuram. In the statement
dated 25.10.1989 I have stated that I am the proprietor of “Seemati Silks”
at Salai Street. Periyakadai Veethi is used to be called as Salai Street.
All that I stated in this statement are true.”
(emphasis is ours)
(vi) Whilst the appellant - A. Tajudeen was under detention of the
Enforcement Directorate, the statement of his wife T. Sahira Banu was also
recorded on 26.10.1989. The same was allegedly scribed by M.J. Jaffer
Sadiq, a nephew, and then signed by T. Sahira Banu. In the above
statement, T. Sahira Banu, the wife of A. Tajudeen admitted the recovery of
Rs.8,24,900/- by the officers of the Enforcement Directorate, from the
residence of the appellant i.e., no. 6, Dr. Muniappa Road, Kilpauk, Madras.
(vii) On 27.10.1989, A. Tajudeen and T. Sahira Banu retracted their earlier
statement(s), alleging that the same had been recorded against their will
and under the threat and compulsion of the officers of the Enforcement
Directorate.
4. In response to the memorandum dated 12.3.1990, the appellant filed a
reply (which is available on the record of the present case as Annexure P-
9). In his reply, he denied having made any statement on 20.4.1989. He
asserted, that a copy of the aforesaid statement dated 20.4.1989 had never
been furnished to him, nor had been relied upon in the memorandum dated
12.3.1990. He also denied the factual contents of the statements dated
25.10.1989 and 26.10.1989. He denied having ever met Abdul Hameed. He
also denied, that there was any occasion for him to ask for any loan from
the said Abdul Hameed. He denied any acquaintanceship with the said Abdul
Hameed. Insofar as the statements recorded on 25.10.1989 and 26.10.1989
are concerned, his specific assertion in his reply was, that he was
compelled to make the above statements at the dictation of the officers of
the Enforcement Directorate. He also asserted, that the said statements
had been made under threat, coercion and undue influence. He highlighted
the fact, that on the very day of his release from detention, i.e., on
27.10.1989, he had addressed a letter to the Enforcement Directorate,
repudiating the factual position indicated in the statements made by him on
25.10.1989 and 26.10.1989. He also asserted, that a similar course of
action had been adopted by his wife T. Sahira Banu, inasmuch as, she too
had repudiated the statement recorded by her on 26.10.1989 at the office of
the Enforcement Directorate through a separate communication dated
27.10.1989. Insofar as the currency recovered from his residence is
concerned, his explanation was, that he had an established business under
the trade name of Seemati Silks, which had an annual turnover of Rs.25 to
30 lacs. He also asserted, that his wife T. Sahira Banu had also business
establishments including Seemati Matchings and Banu Jewellers, from which
she was earning income. Besides the aforesaid business establishments, it
was the contention of the appellant - A. Tajudeen, that he had several
other business projects, from which he was also earning independent income.
In addition to his financial status reflected hereinabove, it was also the
case of the appellant, that he had taken hand loans. The amount which was
recovered by the officers of the Enforcement Directorate from his residence
on 25.10.1989, was comprised of all the above sources. He clearly and
expressly denied, having received the aforesaid currency (Rs. 8,24,900/-)
from a person resident in India, at the behest of a person not resident in
India.
5. Having examined the response of the appellant, the Additional
Director of Enforcement, Southern Zone, Madras, by an order dated
22.4.1991, arrived at the conclusion, that the appellant was guilty of
violating Section 9(1)(b) of the 1973 Act. Having so concluded, the seized
amount of Rs.8,24,900/- was ordered to be confiscated. In addition, the
appellant was imposed a penalty of Rs.1,00,000/- for contravening the
provisions of Section 9(1)(b) of the 1973 Act. Dissatisfied with the order
dated 22.4.1991 passed by the Additional Director of Enforcement, Southern
Zone, Madras, the appellant preferred an appeal before the Foreign Exchange
Regulation Appellate Board (hereinafter referred to as, the Appellate
Board). The aforesaid appeal bearing number 316 of 1991 was allowed by an
order dated 31.12.1993. While allowing the appeal, the Appellate Board
directed the refund of penalty of Rs.1,00,000/- imposed on the appellant.
The Appellate board also quashed the direction pertaining to the
confiscation of Rs.8,24,900/- seized from the residence of the appellant.
6. Aggrieved by the order passed by the Appellate Board, the Union of
India through the Director of Enforcement preferred an appeal under Section
54 of the 1973 Act, before the High Court. The High Court allowed the
above appeal being C.M.A. NPD no. 1282 of 1994 by an order dated 28.9.2006.
While allowing the aforesaid appeal, the High Court placed reliance on the
statement made by the appellant, before the officers of the Enforcement
Directorate on 20.4.1989. The aforesaid statement was referred to, as
having been voluntarily made by the appellant. The High Court expressed
the view, that the statements recorded by the appellant on 25.10.1989 and
26.10.1989 were voluntarily made by him, and as such, the retraction of the
said statements, was not accepted. Likewise, the High Court accepted the
statement of T. Sahira Banu made at the office of the Enforcement
Directorate at Madras on 26.10.1989, as voluntary. Her retraction of the
said statement was also not accepted by the High Court. The High Court
placed reliance on the fact, that the appellant had been produced before
the Additional Chief Metropolitan Magistrate, Madras, during the course of
his detention, but he had not indicated to the Magistrate during his
production, that he and his wife were compelled to make the above
statements, by the officers of the Enforcement Directorate. This was the
primary reason for the High Court, in rejecting the retractions made by the
appellant and his wife.
7. Insofar as the veracity of name and identity of Abdul Hameed is
concerned, the High Court expressed the view, that the name and identity of
the person who had dispatched the money in question, was in the personal
knowledge of the appellant alone, and therefore, his disclosure about the
name and identity of Abdul Hameed could not be doubted. Insofar as the
different addresses of Abdul Hameed indicated in the statements dated
20.4.1989 and 25.10.1989/26.10.1989 are concerned, the High Court was of
the view, that the appellant had himself disclosed the address of the above
mentioned Abdul Hameed, and as such, he cannot be permitted to use the said
statements to his own benefit. The High Court was also of the view, that
merely because the statements had been recorded at the time of the raid at
the residence of the appellant, and whilst he was under detention, it could
not be inferred, that the same were not voluntary.
8. During the course of hearing, the first contention advanced at the
hands of the learned counsel for the appellant was, that it was not open to
the Enforcement Directorate to rely on the alleged statement dated
20.4.1989, which the appellant is stated to have made before the officers
of the Enforcement Directorate. Insofar as the instant aspect of the
matter is concerned, it was the vehement contention of the learned counsel
for the appellant, that no reference was made to the above statement dated
20.4.1989 in the memorandum dated 12.3.1990. It was further submitted,
that a copy of the aforesaid statement dated 20.4.1989 was never furnished
to the appellant. In fact it was the vehement contention of the learned
counsel for the appellant, that no such statement was ever made by the
appellant - A. Tajudeen, to the officers of the Enforcement Directorate.
Learned counsel for the appellant, in fact emphatically invited our
attention to the fact, that the High Court in para 16 of the impugned
judgment had inter alia, observed as under:-
“16. ….. Referring to the explanation given by the officer that they had
no record of the statement made on 20.4.1989 at the time when the statement
was made by Tajudeen on 26.10.1989…..”
It was also submitted, that if the appellant had made any such statement on
20.4.1989, as was now being relied upon by the Enforcement Directorate, he
would have most definitely been proceeded against for violation of the
provisions of Section 9(1)(b) of the 1973 Act. The very fact that he was
not proceeded against, shows that no such earlier statement may have been
recorded by the appellant on 20.4.1989.
9. We have given our thoughtful consideration to the first contention
advanced at the hands of the learned counsel for the appellant. There is
no doubt whatsoever, that no reliance has been placed on the alleged
statement made by the appellant on 20.4.1989 before the officers of the
Enforcement Directorate, in the memorandum dated 12.3.1990. Per se,
therefore, it was not open to the authorities to place reliance on the
aforesaid statement, while proceeding to take penal action against the
appellant, in furtherance of the aforesaid memorandum dated 12.3.1990.
Additionally, it is apparent from the reply (Annexure P-9) furnished by the
appellant to the memorandum dated 12.3.1990, that the appellant clearly and
expressly refuted having executed any statement on 20.4.1989. It was,
therefore, imperative for the Enforcement Directorate, to establish through
cogent evidence, that the appellant had indeed made such a statement on
20.4.1989. It also cannot be overlooked, that no action was initiated
against the appellant on the basis of the aforesaid statement dated
20.4.1989. A perusal of the aforesaid statement, in the terms as are
apparent from the pleadings of the case, leaves no room for any doubt, that
if the appellant had made any such statement, he would have been proceeded
against under Section 9(1)(b) of the 1973 Act. The mere fact that he was
not proceeded against, prima facie establishes, in the absence of any
evidence to the contrary, that the assertion made by the appellant to the
effect that he never made such statement, had remained unrefuted. The
reason depicted in the paragraph 16 of the impugned judgment passed by the
High Court extracted in the foregoing paragraph is clearly a lame excuse.
Even though the aforesaid excuse may have been valid, if the allegation
was, that the record of the statement made on 20.4.1989, was not available
with the officers of Enforcement Department at the time of the raid on
25.10.1989, yet to state that the aforesaid record was not available when
the second statement was made on 26.10.1989 at the office of the
Enforcement Directorate, is quite ununderstandable. It is pertinent to
mention, that the second statement was recorded by the Chief Enforcement
Officer when the appellant – A. Tajudeen was in custody of the Enforcement
Directorate. At that juncture if the record, as alleged, was not available
with the authorities, it must lead to the inevitable inference, that the
record was not available at all. For the reasons recorded hereinabove, we
are satisfied in holding, firstly, that the statement dated 20.4.1989 could
not be relied upon by the Enforcement Directorate to establish the
allegations levelled against the appellant through the memorandum dated
12.3.1990. And secondly, in the absence of having established through
cogent evidence, that the appellant had made the above statement dated
20.4.1989, it was not open to the Enforcement Directorate to place reliance
on the same, for establishing the charges levelled against the appellant in
memorandum dated 12.3.1990.
10. With reference to the statement of the appellant dated 20.4.1989, it
is also necessary to record, that we had an impression during the course of
hearing, that the above statement would lead us to a clearer understanding
of the truth of the matter. After the hearing concluded on 6.6.2014, we
required the learned counsel for the respondent to hand over to us the
record of the case. We had clearly indicated to learned counsel, that the
purpose for this was, that we wished to examine the alleged statement of
the appellant dated 20.4.1989, along with the record connected therewith.
In compliance, the summoned record was presented at the residential office
of one of us (J.S. Khehar, J.) on 7.6.2014. A perusal of the record
revealed, that the same did not comprise of the appellant’s alleged
statement dated 20.4.1989, or the record connected therewith. The said
record was therefore returned forthwith (on 7.6.2014 itself), by making the
following remarks:
“Mr. A.B. Ravvi, Assistant Legal Advisor, Directorate of Enforcement,
Ministry of Finance, Government of India, Chennai office, alongwith Mr. B.
Naveen Kumar, Assistant Legal Advisor, Directorate of Enforcement,
Ministry of Finance, Government of India, Headquarters at New Delhi, have
visited the Residential office of Hon’ble Mr. Justice Jagdish Singh Khehar,
Judge, Supreme Court of India, 6, Moti Lal Nehru Marg, New Delhi – 110011,
today on 7th June, 2014 at about 1.30 pm to deliver a file
containing original papers in the matter – Civil Appeal no. 5773 of 2009
(A. Tajudden vs. Union of India). Since the file does not contain document
dated 20.4.1989 (statement of the appellant in the matter), for which the
same was summoned, the file is being returned herewith, as per the
directions of the Hon’ble Judge.
Sd/-
(Deepak Guglani)
Court Master
7.6.2014
File received by:-
Sd/-
[Mr. A.B. Ravvi]”
Needless to mention, that despite the above remarks no further record was
ever brought to our notice. This is a seriously unfortunate attitudinal
display, leaving us with no other option but to conclude, that the alleged
statement made by the appellant on 20.4.1989, may well be a fictitious
creation of the Enforcement Directorate. In such circumstances, reliance
on the appellant’s alleged statement dated 20.4.1989, just does not arise.
11. Having arrived at the aforesaid conclusion, we shall now examine the
veracity of the remaining evidence available with the Enforcement
Directorate, for substantiating the charges levelled against the appellant
through memorandum dated 12.3.1990. Having discarded the statement dated
20.4.1989, what remains is, the statements of the appellant - A. Tajudeen
recorded on 25.10.1989 and 26.10.1989, as also, the statement of his wife
T. Sahira Banu recorded on 26.10.1989. Besides the aforesaid statements,
the remaining evidence against the appellant is, in the nature of a
“mahazar” prepared on 25.10.1989, which was signed by two independent
witnesses, namely, R.M. Subramanian and Hayad Basha. In addition to the
above, the Enforcement Directorate also relied upon the newspaper sheets of
the Hindu and Jansatha, in which the bundles of notes recovered from the
residence of the appellant, were wrapped. Insofar as the Hindu newspaper
sheets are concerned, they were of the Delhi and Bombay editions dated
19.2.1989, 14.4.1989, 23.7.1989 and 4.10.1989. The sheets of the Jansatha
newspaper also pertain to its Delhi and Bombay editions of February, 1989
and 23.10.1989.
12. Insofar as the aforesaid remaining evidence is concerned, it was the
vehement contention of the learned counsel for the appellant, that the same
was not sufficient to discharge the onerous responsibility of the
Enforcement Directorate, to establish the charge levelled against the
appellant. It was the submission of the learned counsel for the appellant,
that reliance could not be placed on the statements made by the appellant,
as also, his wife (on 25.10.1989 and 26.10.1989). In this behalf, it was
sought to be cautioned, that if this manner of establishing charges was
affirmed, the officers of the Enforcement Directorate, could easily compel
individuals through coercion, threat and undue influence, as they had
allegedly done in this case, and then proceed to punish them, on the
strength of their own statements. It was submitted, that in the facts and
circumstances of this case, there was ample opportunity available with the
Enforcement Directorate, to establish the veracity of the statements made
by the appellant - A. Tajudeen and his wife T. Sahira Banu. In this behalf
it was pointed out, that the appellant has allegedly indicated, that Abdul
Hameed, the dispatcher of the funds, was originally from his Village
Pudhumadam in District Ramanathapuram. He also stated, that the said Abdul
Hameed was related to him from his paternal side. In the statements relied
upon by the Enforcement Directorate, the appellant had allegedly also
disclosed, that Abdul Hameed had contacted him over the telephone from
Singapore. It was submitted, that all the above facts were verifiable. It
was submitted, that it could not be believed, that officers of the
Enforcement Directorate did not verify the authenticity of the factual
position in respect of Abdul Hameed. It was further submitted, that the
appellant in the statement dated 20.4.1989 had mentioned, that the
appellant, on the instructions of Abdul Hameed of Singapore, dispatched a
sum of Rs. 60,000/- (out of total amount of Rs. 1,40,000/-) to Shahul
Hameed at Pudhumadam through his shop boy - Shahib. According to the
learned counsel, the Enforcement Directorate could have confirmed the
aforesaid factual position through Shahib. It is apparent, according to
learned counsel, that the aforesaid factual position was found to be
incorrect, and therefore, no further statements were recorded by the
Enforcement Directorate, in connection therewith. It was also submitted,
that the appellant had produced before the Assistant Director of
Enforcement, a communication from the Revenue Department of Singapore,
dated 2.9.1990 stating that, there was no such address at no. 24, Sarangoon
Road, Singapore, and as such, the very foundational basis of the statements
made by the appellant on 25.10.1989 and 26.10.1989 were rendered
meaningless. It was also submitted, that an Advocate had enclosed a copy
of the certificate issued by the Controller of Property Tax, Singapore,
depicting that no such address was there at Sarangoon Road, where the said
Abdul Hameed was alleged to be running his business.
13. In order to contend that the statements made by the appellant – A.
Tajudeen and his wife T. Sahira Banu could not be relied upon in law,
learned counsel for the appellant, placed reliance on K.T.M.S. Mohd. v.
Union of India, (1992) 3 SCC 178 and invited our attention to the
observations made in paragraph 34. The same is extracted hereunder:
34. We think it is not necessary to recapitulate and recite all the
decisions on this legal aspect. But suffice to say that the core of all the
decisions of this Court is to the effect that the voluntary nature of any
statement made either before the Custom Authorities or the officers of
Enforcement under the relevant provisions of the respective Acts is a sine
quo non to act on it for any purpose and if the statement appears to have
been obtained by any inducement, threat, coercion or by any improper means
that statement must be rejected brevi manu. At the same time, it is to be
noted that merely because a statement is retracted, it cannot be recorded
as involuntary or unlawfully obtained. It is only for the maker of the
statement who alleges inducement, threat, promise etc. to establish that
such improper means has been adopted. However, even if the maker of the
statement fails to establish his allegations of inducement, threat etc.
against the officer who recorded the statement, the authority while acting
on the inculpatory statement of the maker is not completely relieved of his
obligations in at least subjectively applying its mind to the subsequent
retraction to hold that the inculpatory statement was not extorted. It thus
boils down that the authority or any Court intending to act upon the
inculpatory statement as a voluntary one should apply its mind to the
retraction and reject the same in writing. It is only on this principle of
law, this Court in several decisions has ruled that even in passing a
detention order on the basis of an inculpatory statement of a detenu who
has violated the provisions of the FERA or the Customs Act etc. the
detaining authority should consider the subsequent retraction and record
its opinion before accepting the inculpatory statement lest the order will
be vitiated. Reference may be made to a decision of the full Bench of the
Madras High Court in Roshan Beevi v. Joint Secretary to the Govt. of T.N.,
Public Deptt., [1983] LW (Crl.) 289, to which one of us (S. Ratnavel
Pandian, J.) was a party.
(emphasis is ours)
In order to supplement the legal position expressed in the above extracted
judgment, learned counsel for the appellant also placed reliance on Vinod
Solanki v. Union of India, (2008) 16 SCC 537, by inviting our attention to
the following conclusion recorded therein:-
“36. A person accused of commission of an offence is not expected to prove
to the hilt that confession had been obtained from him by any inducement,
threat or promise by a person in authority. The burden is on the
prosecution to show that the confession is voluntary in nature and not
obtained as an outcome of threat, etc. if the same is to be relied upon
solely for the purpose of securing a conviction.
37. With a view to arrive at a finding as regards the voluntary nature of
statement or otherwise of a confession which has since been retracted, the
court must bear in mind the attending circumstances which would include the
time of retraction, the nature thereof, the manner in which such retraction
has been made and other relevant factors. Law does not say that the accused
has to prove that retraction of confession made by him was because of
threat, coercion, etc. but the requirement is that it may appear to the
court as such.
38. In the instant case, the investigating officers did not examine
themselves. The authorities under the Act as also the Tribunal did not
arrive at a finding upon application of their mind to the retraction and
rejected the same upon assigning cogent and valid reasons 18herefore.
Whereas mere retraction of a confession may not be sufficient to make the
confessional statement irrelevant for the purpose of a proceeding in a
criminal case or a quasi criminal case but there cannot be any doubt
whatsoever that the court is obligated to take into consideration the pros
and cons of both the confession and retraction made by the accused. It is
one thing to say that a retracted confession is used as a corroborative
piece of evidence to record a finding of guilt but it is another thing to
say that such a finding is arrived at only on the basis of such confession
although retracted at a later stage.
39. The appellant is said to have been arrested on 27.10.1994; he was
produced before the learned Chief Metropolitan Magistrate on 28.10.1994. He
retracted his confession and categorically stated the manner in which such
confession was purported to have been obtained. According to him, he had no
connection with any alleged import transactions, opening of bank accounts,
or floating of company by name of M/s Sun Enterprises, export control, bill
of entry and other documents or alleged remittances. He stated that
confessions were not only untrue but also involuntary.
40. The allegation that he was detained in the Office of Enforcement
Department for two days and two nights had not been refuted. No attempt has
been made to controvert the statements made by appellant in his application
filed on 28.10.1994 before the learned Chief Metropolitan Magistrate.
Furthermore, the Tribunal as also the authorities misdirected themselves in
law insofar as they failed to pose unto themselves a correct question. The
Tribunal proceeded on the basis that issuance and services of a show-cause
notice subserves the requirements of law only because by reason thereof an
opportunity was afforded to the proceedee to submit its explanation. The
Tribunal ought to have based its decision on applying the correct
principles of law.
41. The statement made by the appellant before the learned Chief
Metropolitan Magistrate was not a bald statement. The inference that burden
of proof that he had made those statements under threat and coercion was
solely on the proceedee does not rest on any legal principle. The question
of the appellant’s failure to discharge the burden would arise only when
the burden was on him. If the burden was on the Revenue, it was for it to
prove the said fact. The Tribunal on its independent examination of the
factual matrix placed before it did not arrive at any finding that the
confession being free from any threat, inducement or force could not
attract the provisions of Section 24 of the Indian Evidence Act.”
(emphasis is ours)
14. The aforesaid submissions were sought to be refuted by the learned
counsel representing the Union of India, by placing reliance on the
findings recorded by the High Court, in the impugned judgment.
15. First and foremost, we shall endeavour to examine the veracity of the
statements made by the appellant – A. Tajudeen and his wife T. Sahira Banu
on 25.10.1989 and 26.10.1989 to the officers of the Enforcement
Directorate. Before proceeding with the factual controversy, it is
essential to record, that from the view we have taken in the ultimate
analysis, the innocence or guilt of the appellant will have to be
determined on the basis of the statements made by the appellant and his
wife (on 25.10.1989 and 26.10.1989) to the officers of the Enforcement
Directorate. Therefore, for the case in hand, the above statements are not
to be referred to as corroborative pieces of evidence, but as primary
evidence to establish the guilt of the appellant. It is in this
background, that we shall endeavour to apply the legal position declared by
this Court, to determine the veracity and reliability to the statements,
which later came to be retracted by the appellant and also by his wife.
Insofar as the above statements are concerned, there is no doubt
whatsoever, that they were all made either at the time of the raid, which
was carried out by the officers of the Enforcement Directorate at the
residence of the appellant, or whilst the appellant was in custody of the
Enforcement Directorate. Immediately after the appellant was released on
bail by the Additional Chief Metropolitan Magistrate, Madras on 27.10.1989,
on the same day itself, both the appellant – A. Tajudeen and his wife T.
Sahira Banu addressed communications to the Director, Enforcement
Directorate, New Delhi resiling from the above statements, by clearly
asserting that they were recorded under coercion and undue influence, and
would not be binding on them.
16. Having given our thoughtful consideration to the aforesaid issue, we
are of the view that the statements dated 25.10.1989 and 26.10.1989 can
under no circumstances constitute the sole basis for recording the finding
of guilt against the appellant. If findings could be returned by
exclusively relying on such oral statements, such statements could easily
be thrust upon the persons who were being proceeded against on account of
their actions in conflict with the provisions of the 1973 Act. Such
statements ought not to be readily believable, unless there is independent
corroboration of certain material aspects of the said statements, through
independent sources. The nature of the corroboration required, would
depend on the facts of each case. In the present case, it is apparent that
the appellant – A. Tajudeen and his wife T. Sahira Banu at the first
opportunity resiled from the statements which are now sought to be relied
upon by the Enforcement Directorate, to substantiate the charges levelled
against the appellant. We shall now endeavour to examine whether there is
any independent corroborative evidence to support the above statements.
17. According to the learned counsel representing the appellant, there
was an effective opportunity to the officers of the Enforcement Directorate
to produce evidence with reference to a number of important facts,
disclosed by the appellant while making the aforesaid statements, yet the
officers of the Enforcement Directorate chose not to substantiate the same
through independent evidence. He cited a few instances where such evidence
could have been easily gathered by the officers of the Enforcement
Directorate. In the absence of any corroboration whatsoever, it was
submitted, that retracted statements made by the appellant – A. Tajudeen
and his wife T. Sahira Banu, could not be used to record findings against
the appellant.
18. We have no doubt, that evidence could be gathered to substantiate
that Abdul Hameed, the person who is alleged to have dispatched the money
from Singapore, was a resident of Village Pudhumadam in District
Ramanathapuram, to which the appellant also belongs. Material could also
have been gathered to show, whether he was related to the appellant from
his paternal side. Furthermore, the Enforcement Directorate could have
easily substantiated whether or not, as asserted by the appellant, the
aforesaid Abdul Hameed had contacted him over telephone from Singapore, to
inform him about the delivery of the amount recovered from his residence on
25.10.1989. Additionally, the Enforcement Directorate could have led
evidence to establish that the aforesaid Abdul Hameed with reference to
whom the appellant made statements on 20.4.1989, 25.10.1989 and 26.10.1989,
was actually resident of Singapore, and was running businesses there, at
the location(s) indicated by the appellant. Still further, the officers of
the Enforcement Directorate could have ascertained the truthfulness of the
factual position from Shahib, the shop boy of the appellant – A. Tajudeen,
whom he allegedly sent to hand over a sum of Rs. 60,000/- to Shahul Hameed
(a relative of Abdul Hameed) of Village Pudhumadam. Had the statements of
the appellant and his wife been corroborated by independent evidence of the
nature indicated hereinabove, there could have been room for accepting the
veracity of the statements made by the appellant – A. Tajudeen and his wife
T. Sahira Banu to the officers of the Enforcement Directorate.
Unfortunately, no effort was made by the Enforcement Directorate to gather
any independent evidence to establish the veracity of the allegations
levelled against the appellant, through the memorandum dated 12.3.1990. We
are of the considered view, that the officers of the Enforcement
Directorate were seriously negligent in gathering independent evidence of a
corroborative nature. We have therefore no hesitation in concluding that
the retracted statements made by the appellant and his wife could not
constitute the exclusive basis to determine the culpability of the
appellant.
19. We shall now deal with the other independent evidence which was
sought to be relied upon by the Enforcement Directorate to establish the
charges levelled against the appellant. And based thereon, we shall
determine whether the same is sufficient on its own, or in conjunction to
the retracted statements referred to above, in deciding the present
controversy, one way or the other. First and foremost, reliance was placed
on “mahazar” executed (at the time of the recovery, from the residence of
the appellant) on 25.10.1989. It would be pertinent to mention, that the
appellant in his response to the memorandum dated 12.3.1990 had expressly
refuted the authenticity of the “mahazar” executed on 25.10.1989. Merely
because the “mahazar” was attested by two independent witnesses, namely,
R.M. Subramanian and Hayad Basha, would not led credibility to the same.
Such credibility would attach to the “mahazar” only if the said two
independent witnesses were produced as witnesses, and the appellant was
afforded an opportunity to cross-examine them. The aforesaid procedure was
unfortunately not adopted in this case. But then, would the preparation of
the “mahazar” and the factum of recovery of a sum of Rs. 8,24,900/-
establish the guilt of the appellant, insofar as the violation of Section
9(1)(b) of the 1973 Act is concerned? In our considered view, even if the
“mahazar” is accepted as valid and genuine, the same is wholly insufficient
to establish, that the amount recovered from the residence of the appellant
was dispatched by Abdul Hameed, a resident of Singapore, through a person
who is not an authorised dealer in foreign exchange. Even, in response to
the memorandum dated 12.3.1990, the appellant had acknowledged the recovery
of Rs. 8,24,900/- from his residence, but that acknowledgment would not
establish the violation of Section 9(1)(b) of the 1973 Act. In the above
view of the matter, we are of the opinion that the execution of the
“mahazar” on 25.10.1989, is inconsequential for the determination of the
guilt of the appellant in this case.
20. The only other independent evidence relied upon by the Enforcement
Directorate is of pages from the Hindu and the Jansatha newspapers, in
which the bundles of money were wrapped, when the recovery was effected on
25.10.1989. In view of the position expressed in the foregoing paragraph,
we are satisfied that the charge against the appellant under Section
9(1)(b) of the 1973 Act, cannot be established on the basis of newspaper
sheets, in which the money was wrapped. The newspaper sheets relied upon,
would not establish that the amount recovered from the residence of the
appellant – A. Tajudeen was dispatched by Abdul Hameed from Singapore,
through a person who was not an authorized dealer.
21. Based on the above determination, and the various conclusions
recorded hereinabove, we are satisfied, that the impugned judgment passed
by the High Court deserves to be set aside. The same is accordingly hereby
set aside. Resultantly, the entire action taken by the Enforcement
Directorate against the appellant in furtherance of the memorandum dated
12.3.1990, is also set aside. As a consequence of the above, the
Enforcement Directorate is directed to forthwith refund the confiscated sum
of Rs.8,24,900/-, to the appellant, as also, to return the amount of
Rs.1,00,000/-, which was deposited by the appellant as penalty.
22. The instant appeal is, accordingly, allowed in the abovesaid terms.
…………………………….J.
(Jagdish Singh Khehar)
…………………………….J.
(C. Nagappan)
New Delhi;
October 10, 2014.
ITEM NO.1B COURT NO.6 SECTION XII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s). 5773/2009
A.TAJUDEEN Appellant(s)
VERSUS
UNION OF INDIA Respondent(s)
[HEARD BY HON'BLE JAGDISH SINGH KHEHAR AND HON'BLE C. NAGAPPAN, JJ.]
Date : 10/10/2014 This appeal was called on for judgment
today.
For Appellant(s) Mr. R. Nedumaran,Adv.
For Respondent(s) Mr. B. V. Balaram Das,Adv.(Not present)
Hon'ble Mr. Justice Jagdish Singh Khehar pronounced the
judgment of the Bench comprising His Lordship and Hon'ble Mr. Justice C.
Nagappan.
For the reasons recorded in the Reportable judgment, which is
placed on the file, the appeal is allowed. As a consequence, the
Enforcement Directorate is directed to forthwith refund the confiscated sum
of Rs.8,24,900/- to the appellant, as also, to return the amount of
Rs.1,00,000/-, which was deposited by the appellant as penalty.
(Parveen Kr. Chawla) (Phoolan Wati Arora)
Court Master Assistant Registrar
-----------------------
25
26
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5773 OF 2009
A. Tajudeen …. Appellant
versus
Union of India …. Respondent
J U D G M E N T
Jagdish Singh Khehar, J.
1. Through memorandum dated 12.3.1990 it was alleged, that the appellant
herein – A. Tajudeen, without any general or special exemption from the
Reserve Bank of India, had received an amount of Rs.8,24,900/- in two
installments, at the behest of Abdul Hameed, a person resident in
Singapore. The first installment was allegedly received on 23.10.1989
which comprised of Rs.4,00,000/-. The remaining amount was allegedly
received in the second installment on 25.10.1989. As per the memorandum
the aforesaid amounts had been received from a local person, who was not an
authorised dealer in foreign exchange.
2. Based on the factual position noticed hereinabove, the allegation
against the appellant was, that he had violated Section 9(1)(b) of the
Foreign Exchange Regulation Act, 1973 (hereinafter referred to as, the 1973
Act). Section 9(1)(b) aforementioned, is being extracted hereunder:-
“9. Restrictions on payments – (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 –
(a) xxx xxx xxx
(b) receive, otherwise than through an authorized dealer, any
payment by order or on behalf of any person resident outside India;
Explanation – For the purposes of this clause, where any person in,
or resident in, India receives any payment by order or on behalf of any
person resident outside India through any other person (including an
authorized dealer) without a corresponding inward remittance from any place
outside India, then, such person shall be deemed to have received such
payment otherwise than through an authorized dealer;”
Based on the aforesaid statutory provision, and the factual position
noticed hereinabove, the Enforcement Directorate initiated proceedings
against the appellant under Section 50 of the 1973 Act.
3. Before adjudicating upon the merits of the controversy, it is
essential to narrate the factual position leading to the issuance of the
aforesaid memorandum dated 12.3.1990. The facts as they emerge from the
pleadings, and the various orders leading to the passing of the impugned
judgment rendered by the High Court of Judicature at Madras (hereinafter
referred to as, the High Court) on 28.9.2006, are being chronologically
narrated hereunder:-
(i) The appellant – A. Tajudeen is alleged to have made a statement to
the Enforcement Directorate on 20.4.1989, wherein he acknowledged, that he
had received a sum of Rs.1,40,000/- from Abdul Hameed. Out of the above
amount, he paid a sum of Rs.60,000/- through his shop boy – Shahib, to
Shahul Hameed (a relative of Abdul Hameed) of Village Pudhumadam. A
further amount of Rs.20,000/- was paid to some friends of Abdul Hameed at
Keelakarai, and remaining amount was retained by appellant himself. In the
statement made on 20.4.1989, it was allegedly acknowledged by the appellant
that Abdul Hameed was a resident of Singapore, and was running a shop
located at Market Street, Singapore.
(ii) On 25.10.1989, the officers of the Enforcement Directorate raided the
residential premises of the appellant, namely, no. 6, Dr. Muniappa Road,
Kilpauk, Madras. At the time of the raid, which commenced at 1.00 pm, his
wife T. Sahira Banu was at the residence. The appellant - A. Tajudeen,
also reached his residence at 1.30 pm, whilst the officers of the
Enforcement Directorate were still conducting the raid. During the course
of the raid, a sum of Rs.8,24,900/- in Indian currency was recovered from
under a mattress from a bedroom of the appellant’s residence.
(iii) A mahazar was prepared on 25.10.1989, depicting the details of the
currency recovered from the raid. The said mahazar was prepared in the
presence of two independent witnesses, namely, R.M. Subramanian and Hayad
Basha. The above independent witnesses also affixed their signatures on
the mahazar.
(iv) At the time of the raid itself, the statement of the appellant - A.
Tajudeen was recorded (on 25.10.1989). The relevant extract of the
aforesaid statement of the appellant is being reproduced hereunder. It
needs to be expressly noticed, that the appellant now allegedly disclosed
the address of Abdul Hameed, as no. 24, Sarangoon Road, Singapore.
“Today your officers searched my aforesaid house and seized a sum of
Rs.8,24,900/- as set out in the Mahazar. I wanted to establish a jewellery
shop in Madras. I commenced a jewellery shop in the name and style of
“M/s. Banu Jewellers” on 19.10.1989 at No. 12, Ranganathan Road,
Nungambakkam, Madras-34. It is a partnership business wherein my wife T.
Sahira Banu is a partner. For that I sold my wife’s gold jewels and also
taken hand loans from my friends. The said business was started with a
capital of Rs.2,20,000/- in my wife’s name. The other partner Mr. S.
Muthuswamy of No. 20, Indira Nagar, Adyar (I do not remember his address)
has contributed to the capital a sum of Rs.30,000/-.
For expanding the said shop and for improving the business, I required
about Rs.9,00,000/-. My relatives are working in Singapore and Malaysia.
One Abdul Hameed from my native place is carrying on business for the past
15 years at no. 24, Sarangoon Road, Singapore. He is dealing in clothes,
VCRs etc. He came down to Madras about 2 months back. At that time, he
met me at my residence. I told him that a jewellery business to be
commenced and that I require about Rs.9,00,000/- for the said business and
to discharge certain small loans. Further I requested him to help me by
providing the said money assuring to repay the same in 2 or 3 years’ time
with small interest during his visit to India.
He assured to contact me over phone, House telephone no. 666611 on reaching
Singapore. The said Abdul Hameed, about 2 months back, called me over
phone from Singapore and told me that as I requested to him, he had made
arrangements for sending the sum of Rs.9,00,000/- and that he will inform
me about the mode of transmitting the same. Thereafter during the 2nd week
of this month, the said Abdul Hameed contacted me over phone. At that time
he told me that he would send Rs.8,25,000/- in two installments being
Rs.4,00,000/- and Rs.4,25,000/- and that the said money would be delivered
at my house in the 3rd week or 4th week of this month through unknown
person. Pursuant thereto, on 23.10.1989 around 9.00 pm an unknown person
came to my house inquiring about me and gave me Rs.4,00,000/- stating that
he is delivering the same on the instruction of Abdul Hameed of Singapore.
Similarly another unknown person came to my house at 8.00 am on 24.10.1989
and delivered to me Rs.4,25,000/- claiming to be on the instructions of the
said Singapore Abdul Hameed. I was keeping the said Rs.4,00,000/- and
Rs.4,25,000/-, totaling to Rs.8,25,000/-, in my house which was received on
the instruction of Abdul Hameed.
The Enforcement Officer who searched the house seized the sum of
Rs.8,24,900/- which I got in the aforesaid manner. The said Abdul Hameed
who is residing at Singapore is my distant relative on the paternal side.
He is living with his family at Singapore. He used to come down to my
native lace, Pudhumadam Village, once in a year to visit his relatives. He
is aged 45 years and of the height of about 5½ feet, fair complexion and
medium built.
The person who delivered the sum of Rs.4,00,000/- on the instructions of
said Abdul Hameed did not disclose his name and address. He was about 35
years old and with medium height and medium built. He was wearing pants
and shirt. He left within few minutes on delivering the sum of
Rs.4,00,000/- to me and hence I could not notice other identifiable marks.
Similarly the other person who came on 24.10.1989 and delivered the sum of
Rs.4,25,000/- on the instructions of said Abdul Hameed also did not
disclose his name and address. He must be around 40 years old. He is also
medium built and also medium height. Since both of them left my house
within a few minutes on delivering the said sums, I could not notice their
identifiable marks. I was making arrangements to export readymade
garments. In respect thereof, I required the place apart from my house to
meet my customers. For that I have taken on rent room no. 402, in Ganpat
Hotel, Nungambakkam High Road about 4-5 months back from its owner one M.R.
Prabhakaran. I am using the telephone no. 477409 in the said shop, A/C
machine and fridge available in the said room. Since Export business did
not suit me, I left it. The said room is in my possession.”
(emphasis is ours)
(v) During the course of the raid conducted on 25.10.1989, the appellant
- A. Tajudeen, was detained by the officers of the Enforcement Directorate.
His statement was again recorded on 26.10.1989 by the Chief Enforcement
Officer, whilst he was in custody. Relevant portion of his above mentioned
statement is being extracted hereunder:-
“I have earlier given statement before you on 25.10.1989. In that I have
disclosed that by searching my house on 25.10.1989 your officers have
seized a sum of Rs.8,24,900/- which I received from unknown persons on
23.10.1989 and 25.10.1989 on the instructions of Abdul Hameed of Singapore.
This is true. On 25.10.1989, the said officers searched the jewellery
shop “Banu Jewellers” in which my wife is a partner. At that time I was
also there. In the said search no documents were seized. The other
partner Mr. Muthusamy who is looking after the seized sum of Rs.8,24,900/-
is not related to the said business. As stated by him, there is no
connection between the said business and the sums seized.
Today your officers searched my room at No. 402, Ganpat Hotel, Nungapakkam
High Road, Madras-34 which I have taken on rent. I was there during the
search. Since I have lost the key it was opened by a lock repairer.
Pursuant to the said search a quotation from A.L. Textiles Mills dated
15.4.1989 was seized.
Hereinbefore, in April last, I appeared before the officers and gave a
statement. Today I was shown the statement which I have given before the
officers on 20.4.1989. I have stated about the receipt of a sum of
Rs.1,40,000/- through my shop boy, Shahib, on the instructions of said
Abdul Hameed of Singapore and out of the same, I have disbursed Rs.60,000/-
on the instructions of the said Abdul Hameed to Shahul Hameed at Pudhumadam
and the payment of Rs.20,000/- to a friend in Keelakarai through my shop
manager, Hasan. The said Shahul Hameed mentioned in the statement dated
20.4.1989 and Abdul Hameed disclosed in the statement dated 25.10.1989 is
one and the same person. In the said statement dated 24.10.1989 I have
stated that Abdul Hameed is running a fancy store in Market Street in
Singapore. In the statement dated 25.10.1989, I have stated that Abdul
Hameed is running a shop at Sarangoon Road, Singapore. Few months back, he
has shifted his business from the Market Street to Sarangoon Road. In the
statement dated 20.4.1989, I have stated that I am running a textile shop
“Seemati Silks” at Periyakadai Veethi, Ramanathapuram. In the statement
dated 25.10.1989 I have stated that I am the proprietor of “Seemati Silks”
at Salai Street. Periyakadai Veethi is used to be called as Salai Street.
All that I stated in this statement are true.”
(emphasis is ours)
(vi) Whilst the appellant - A. Tajudeen was under detention of the
Enforcement Directorate, the statement of his wife T. Sahira Banu was also
recorded on 26.10.1989. The same was allegedly scribed by M.J. Jaffer
Sadiq, a nephew, and then signed by T. Sahira Banu. In the above
statement, T. Sahira Banu, the wife of A. Tajudeen admitted the recovery of
Rs.8,24,900/- by the officers of the Enforcement Directorate, from the
residence of the appellant i.e., no. 6, Dr. Muniappa Road, Kilpauk, Madras.
(vii) On 27.10.1989, A. Tajudeen and T. Sahira Banu retracted their earlier
statement(s), alleging that the same had been recorded against their will
and under the threat and compulsion of the officers of the Enforcement
Directorate.
4. In response to the memorandum dated 12.3.1990, the appellant filed a
reply (which is available on the record of the present case as Annexure P-
9). In his reply, he denied having made any statement on 20.4.1989. He
asserted, that a copy of the aforesaid statement dated 20.4.1989 had never
been furnished to him, nor had been relied upon in the memorandum dated
12.3.1990. He also denied the factual contents of the statements dated
25.10.1989 and 26.10.1989. He denied having ever met Abdul Hameed. He
also denied, that there was any occasion for him to ask for any loan from
the said Abdul Hameed. He denied any acquaintanceship with the said Abdul
Hameed. Insofar as the statements recorded on 25.10.1989 and 26.10.1989
are concerned, his specific assertion in his reply was, that he was
compelled to make the above statements at the dictation of the officers of
the Enforcement Directorate. He also asserted, that the said statements
had been made under threat, coercion and undue influence. He highlighted
the fact, that on the very day of his release from detention, i.e., on
27.10.1989, he had addressed a letter to the Enforcement Directorate,
repudiating the factual position indicated in the statements made by him on
25.10.1989 and 26.10.1989. He also asserted, that a similar course of
action had been adopted by his wife T. Sahira Banu, inasmuch as, she too
had repudiated the statement recorded by her on 26.10.1989 at the office of
the Enforcement Directorate through a separate communication dated
27.10.1989. Insofar as the currency recovered from his residence is
concerned, his explanation was, that he had an established business under
the trade name of Seemati Silks, which had an annual turnover of Rs.25 to
30 lacs. He also asserted, that his wife T. Sahira Banu had also business
establishments including Seemati Matchings and Banu Jewellers, from which
she was earning income. Besides the aforesaid business establishments, it
was the contention of the appellant - A. Tajudeen, that he had several
other business projects, from which he was also earning independent income.
In addition to his financial status reflected hereinabove, it was also the
case of the appellant, that he had taken hand loans. The amount which was
recovered by the officers of the Enforcement Directorate from his residence
on 25.10.1989, was comprised of all the above sources. He clearly and
expressly denied, having received the aforesaid currency (Rs. 8,24,900/-)
from a person resident in India, at the behest of a person not resident in
India.
5. Having examined the response of the appellant, the Additional
Director of Enforcement, Southern Zone, Madras, by an order dated
22.4.1991, arrived at the conclusion, that the appellant was guilty of
violating Section 9(1)(b) of the 1973 Act. Having so concluded, the seized
amount of Rs.8,24,900/- was ordered to be confiscated. In addition, the
appellant was imposed a penalty of Rs.1,00,000/- for contravening the
provisions of Section 9(1)(b) of the 1973 Act. Dissatisfied with the order
dated 22.4.1991 passed by the Additional Director of Enforcement, Southern
Zone, Madras, the appellant preferred an appeal before the Foreign Exchange
Regulation Appellate Board (hereinafter referred to as, the Appellate
Board). The aforesaid appeal bearing number 316 of 1991 was allowed by an
order dated 31.12.1993. While allowing the appeal, the Appellate Board
directed the refund of penalty of Rs.1,00,000/- imposed on the appellant.
The Appellate board also quashed the direction pertaining to the
confiscation of Rs.8,24,900/- seized from the residence of the appellant.
6. Aggrieved by the order passed by the Appellate Board, the Union of
India through the Director of Enforcement preferred an appeal under Section
54 of the 1973 Act, before the High Court. The High Court allowed the
above appeal being C.M.A. NPD no. 1282 of 1994 by an order dated 28.9.2006.
While allowing the aforesaid appeal, the High Court placed reliance on the
statement made by the appellant, before the officers of the Enforcement
Directorate on 20.4.1989. The aforesaid statement was referred to, as
having been voluntarily made by the appellant. The High Court expressed
the view, that the statements recorded by the appellant on 25.10.1989 and
26.10.1989 were voluntarily made by him, and as such, the retraction of the
said statements, was not accepted. Likewise, the High Court accepted the
statement of T. Sahira Banu made at the office of the Enforcement
Directorate at Madras on 26.10.1989, as voluntary. Her retraction of the
said statement was also not accepted by the High Court. The High Court
placed reliance on the fact, that the appellant had been produced before
the Additional Chief Metropolitan Magistrate, Madras, during the course of
his detention, but he had not indicated to the Magistrate during his
production, that he and his wife were compelled to make the above
statements, by the officers of the Enforcement Directorate. This was the
primary reason for the High Court, in rejecting the retractions made by the
appellant and his wife.
7. Insofar as the veracity of name and identity of Abdul Hameed is
concerned, the High Court expressed the view, that the name and identity of
the person who had dispatched the money in question, was in the personal
knowledge of the appellant alone, and therefore, his disclosure about the
name and identity of Abdul Hameed could not be doubted. Insofar as the
different addresses of Abdul Hameed indicated in the statements dated
20.4.1989 and 25.10.1989/26.10.1989 are concerned, the High Court was of
the view, that the appellant had himself disclosed the address of the above
mentioned Abdul Hameed, and as such, he cannot be permitted to use the said
statements to his own benefit. The High Court was also of the view, that
merely because the statements had been recorded at the time of the raid at
the residence of the appellant, and whilst he was under detention, it could
not be inferred, that the same were not voluntary.
8. During the course of hearing, the first contention advanced at the
hands of the learned counsel for the appellant was, that it was not open to
the Enforcement Directorate to rely on the alleged statement dated
20.4.1989, which the appellant is stated to have made before the officers
of the Enforcement Directorate. Insofar as the instant aspect of the
matter is concerned, it was the vehement contention of the learned counsel
for the appellant, that no reference was made to the above statement dated
20.4.1989 in the memorandum dated 12.3.1990. It was further submitted,
that a copy of the aforesaid statement dated 20.4.1989 was never furnished
to the appellant. In fact it was the vehement contention of the learned
counsel for the appellant, that no such statement was ever made by the
appellant - A. Tajudeen, to the officers of the Enforcement Directorate.
Learned counsel for the appellant, in fact emphatically invited our
attention to the fact, that the High Court in para 16 of the impugned
judgment had inter alia, observed as under:-
“16. ….. Referring to the explanation given by the officer that they had
no record of the statement made on 20.4.1989 at the time when the statement
was made by Tajudeen on 26.10.1989…..”
It was also submitted, that if the appellant had made any such statement on
20.4.1989, as was now being relied upon by the Enforcement Directorate, he
would have most definitely been proceeded against for violation of the
provisions of Section 9(1)(b) of the 1973 Act. The very fact that he was
not proceeded against, shows that no such earlier statement may have been
recorded by the appellant on 20.4.1989.
9. We have given our thoughtful consideration to the first contention
advanced at the hands of the learned counsel for the appellant. There is
no doubt whatsoever, that no reliance has been placed on the alleged
statement made by the appellant on 20.4.1989 before the officers of the
Enforcement Directorate, in the memorandum dated 12.3.1990. Per se,
therefore, it was not open to the authorities to place reliance on the
aforesaid statement, while proceeding to take penal action against the
appellant, in furtherance of the aforesaid memorandum dated 12.3.1990.
Additionally, it is apparent from the reply (Annexure P-9) furnished by the
appellant to the memorandum dated 12.3.1990, that the appellant clearly and
expressly refuted having executed any statement on 20.4.1989. It was,
therefore, imperative for the Enforcement Directorate, to establish through
cogent evidence, that the appellant had indeed made such a statement on
20.4.1989. It also cannot be overlooked, that no action was initiated
against the appellant on the basis of the aforesaid statement dated
20.4.1989. A perusal of the aforesaid statement, in the terms as are
apparent from the pleadings of the case, leaves no room for any doubt, that
if the appellant had made any such statement, he would have been proceeded
against under Section 9(1)(b) of the 1973 Act. The mere fact that he was
not proceeded against, prima facie establishes, in the absence of any
evidence to the contrary, that the assertion made by the appellant to the
effect that he never made such statement, had remained unrefuted. The
reason depicted in the paragraph 16 of the impugned judgment passed by the
High Court extracted in the foregoing paragraph is clearly a lame excuse.
Even though the aforesaid excuse may have been valid, if the allegation
was, that the record of the statement made on 20.4.1989, was not available
with the officers of Enforcement Department at the time of the raid on
25.10.1989, yet to state that the aforesaid record was not available when
the second statement was made on 26.10.1989 at the office of the
Enforcement Directorate, is quite ununderstandable. It is pertinent to
mention, that the second statement was recorded by the Chief Enforcement
Officer when the appellant – A. Tajudeen was in custody of the Enforcement
Directorate. At that juncture if the record, as alleged, was not available
with the authorities, it must lead to the inevitable inference, that the
record was not available at all. For the reasons recorded hereinabove, we
are satisfied in holding, firstly, that the statement dated 20.4.1989 could
not be relied upon by the Enforcement Directorate to establish the
allegations levelled against the appellant through the memorandum dated
12.3.1990. And secondly, in the absence of having established through
cogent evidence, that the appellant had made the above statement dated
20.4.1989, it was not open to the Enforcement Directorate to place reliance
on the same, for establishing the charges levelled against the appellant in
memorandum dated 12.3.1990.
10. With reference to the statement of the appellant dated 20.4.1989, it
is also necessary to record, that we had an impression during the course of
hearing, that the above statement would lead us to a clearer understanding
of the truth of the matter. After the hearing concluded on 6.6.2014, we
required the learned counsel for the respondent to hand over to us the
record of the case. We had clearly indicated to learned counsel, that the
purpose for this was, that we wished to examine the alleged statement of
the appellant dated 20.4.1989, along with the record connected therewith.
In compliance, the summoned record was presented at the residential office
of one of us (J.S. Khehar, J.) on 7.6.2014. A perusal of the record
revealed, that the same did not comprise of the appellant’s alleged
statement dated 20.4.1989, or the record connected therewith. The said
record was therefore returned forthwith (on 7.6.2014 itself), by making the
following remarks:
“Mr. A.B. Ravvi, Assistant Legal Advisor, Directorate of Enforcement,
Ministry of Finance, Government of India, Chennai office, alongwith Mr. B.
Naveen Kumar, Assistant Legal Advisor, Directorate of Enforcement,
Ministry of Finance, Government of India, Headquarters at New Delhi, have
visited the Residential office of Hon’ble Mr. Justice Jagdish Singh Khehar,
Judge, Supreme Court of India, 6, Moti Lal Nehru Marg, New Delhi – 110011,
today on 7th June, 2014 at about 1.30 pm to deliver a file
containing original papers in the matter – Civil Appeal no. 5773 of 2009
(A. Tajudden vs. Union of India). Since the file does not contain document
dated 20.4.1989 (statement of the appellant in the matter), for which the
same was summoned, the file is being returned herewith, as per the
directions of the Hon’ble Judge.
Sd/-
(Deepak Guglani)
Court Master
7.6.2014
File received by:-
Sd/-
[Mr. A.B. Ravvi]”
Needless to mention, that despite the above remarks no further record was
ever brought to our notice. This is a seriously unfortunate attitudinal
display, leaving us with no other option but to conclude, that the alleged
statement made by the appellant on 20.4.1989, may well be a fictitious
creation of the Enforcement Directorate. In such circumstances, reliance
on the appellant’s alleged statement dated 20.4.1989, just does not arise.
11. Having arrived at the aforesaid conclusion, we shall now examine the
veracity of the remaining evidence available with the Enforcement
Directorate, for substantiating the charges levelled against the appellant
through memorandum dated 12.3.1990. Having discarded the statement dated
20.4.1989, what remains is, the statements of the appellant - A. Tajudeen
recorded on 25.10.1989 and 26.10.1989, as also, the statement of his wife
T. Sahira Banu recorded on 26.10.1989. Besides the aforesaid statements,
the remaining evidence against the appellant is, in the nature of a
“mahazar” prepared on 25.10.1989, which was signed by two independent
witnesses, namely, R.M. Subramanian and Hayad Basha. In addition to the
above, the Enforcement Directorate also relied upon the newspaper sheets of
the Hindu and Jansatha, in which the bundles of notes recovered from the
residence of the appellant, were wrapped. Insofar as the Hindu newspaper
sheets are concerned, they were of the Delhi and Bombay editions dated
19.2.1989, 14.4.1989, 23.7.1989 and 4.10.1989. The sheets of the Jansatha
newspaper also pertain to its Delhi and Bombay editions of February, 1989
and 23.10.1989.
12. Insofar as the aforesaid remaining evidence is concerned, it was the
vehement contention of the learned counsel for the appellant, that the same
was not sufficient to discharge the onerous responsibility of the
Enforcement Directorate, to establish the charge levelled against the
appellant. It was the submission of the learned counsel for the appellant,
that reliance could not be placed on the statements made by the appellant,
as also, his wife (on 25.10.1989 and 26.10.1989). In this behalf, it was
sought to be cautioned, that if this manner of establishing charges was
affirmed, the officers of the Enforcement Directorate, could easily compel
individuals through coercion, threat and undue influence, as they had
allegedly done in this case, and then proceed to punish them, on the
strength of their own statements. It was submitted, that in the facts and
circumstances of this case, there was ample opportunity available with the
Enforcement Directorate, to establish the veracity of the statements made
by the appellant - A. Tajudeen and his wife T. Sahira Banu. In this behalf
it was pointed out, that the appellant has allegedly indicated, that Abdul
Hameed, the dispatcher of the funds, was originally from his Village
Pudhumadam in District Ramanathapuram. He also stated, that the said Abdul
Hameed was related to him from his paternal side. In the statements relied
upon by the Enforcement Directorate, the appellant had allegedly also
disclosed, that Abdul Hameed had contacted him over the telephone from
Singapore. It was submitted, that all the above facts were verifiable. It
was submitted, that it could not be believed, that officers of the
Enforcement Directorate did not verify the authenticity of the factual
position in respect of Abdul Hameed. It was further submitted, that the
appellant in the statement dated 20.4.1989 had mentioned, that the
appellant, on the instructions of Abdul Hameed of Singapore, dispatched a
sum of Rs. 60,000/- (out of total amount of Rs. 1,40,000/-) to Shahul
Hameed at Pudhumadam through his shop boy - Shahib. According to the
learned counsel, the Enforcement Directorate could have confirmed the
aforesaid factual position through Shahib. It is apparent, according to
learned counsel, that the aforesaid factual position was found to be
incorrect, and therefore, no further statements were recorded by the
Enforcement Directorate, in connection therewith. It was also submitted,
that the appellant had produced before the Assistant Director of
Enforcement, a communication from the Revenue Department of Singapore,
dated 2.9.1990 stating that, there was no such address at no. 24, Sarangoon
Road, Singapore, and as such, the very foundational basis of the statements
made by the appellant on 25.10.1989 and 26.10.1989 were rendered
meaningless. It was also submitted, that an Advocate had enclosed a copy
of the certificate issued by the Controller of Property Tax, Singapore,
depicting that no such address was there at Sarangoon Road, where the said
Abdul Hameed was alleged to be running his business.
13. In order to contend that the statements made by the appellant – A.
Tajudeen and his wife T. Sahira Banu could not be relied upon in law,
learned counsel for the appellant, placed reliance on K.T.M.S. Mohd. v.
Union of India, (1992) 3 SCC 178 and invited our attention to the
observations made in paragraph 34. The same is extracted hereunder:
34. We think it is not necessary to recapitulate and recite all the
decisions on this legal aspect. But suffice to say that the core of all the
decisions of this Court is to the effect that the voluntary nature of any
statement made either before the Custom Authorities or the officers of
Enforcement under the relevant provisions of the respective Acts is a sine
quo non to act on it for any purpose and if the statement appears to have
been obtained by any inducement, threat, coercion or by any improper means
that statement must be rejected brevi manu. At the same time, it is to be
noted that merely because a statement is retracted, it cannot be recorded
as involuntary or unlawfully obtained. It is only for the maker of the
statement who alleges inducement, threat, promise etc. to establish that
such improper means has been adopted. However, even if the maker of the
statement fails to establish his allegations of inducement, threat etc.
against the officer who recorded the statement, the authority while acting
on the inculpatory statement of the maker is not completely relieved of his
obligations in at least subjectively applying its mind to the subsequent
retraction to hold that the inculpatory statement was not extorted. It thus
boils down that the authority or any Court intending to act upon the
inculpatory statement as a voluntary one should apply its mind to the
retraction and reject the same in writing. It is only on this principle of
law, this Court in several decisions has ruled that even in passing a
detention order on the basis of an inculpatory statement of a detenu who
has violated the provisions of the FERA or the Customs Act etc. the
detaining authority should consider the subsequent retraction and record
its opinion before accepting the inculpatory statement lest the order will
be vitiated. Reference may be made to a decision of the full Bench of the
Madras High Court in Roshan Beevi v. Joint Secretary to the Govt. of T.N.,
Public Deptt., [1983] LW (Crl.) 289, to which one of us (S. Ratnavel
Pandian, J.) was a party.
(emphasis is ours)
In order to supplement the legal position expressed in the above extracted
judgment, learned counsel for the appellant also placed reliance on Vinod
Solanki v. Union of India, (2008) 16 SCC 537, by inviting our attention to
the following conclusion recorded therein:-
“36. A person accused of commission of an offence is not expected to prove
to the hilt that confession had been obtained from him by any inducement,
threat or promise by a person in authority. The burden is on the
prosecution to show that the confession is voluntary in nature and not
obtained as an outcome of threat, etc. if the same is to be relied upon
solely for the purpose of securing a conviction.
37. With a view to arrive at a finding as regards the voluntary nature of
statement or otherwise of a confession which has since been retracted, the
court must bear in mind the attending circumstances which would include the
time of retraction, the nature thereof, the manner in which such retraction
has been made and other relevant factors. Law does not say that the accused
has to prove that retraction of confession made by him was because of
threat, coercion, etc. but the requirement is that it may appear to the
court as such.
38. In the instant case, the investigating officers did not examine
themselves. The authorities under the Act as also the Tribunal did not
arrive at a finding upon application of their mind to the retraction and
rejected the same upon assigning cogent and valid reasons 18herefore.
Whereas mere retraction of a confession may not be sufficient to make the
confessional statement irrelevant for the purpose of a proceeding in a
criminal case or a quasi criminal case but there cannot be any doubt
whatsoever that the court is obligated to take into consideration the pros
and cons of both the confession and retraction made by the accused. It is
one thing to say that a retracted confession is used as a corroborative
piece of evidence to record a finding of guilt but it is another thing to
say that such a finding is arrived at only on the basis of such confession
although retracted at a later stage.
39. The appellant is said to have been arrested on 27.10.1994; he was
produced before the learned Chief Metropolitan Magistrate on 28.10.1994. He
retracted his confession and categorically stated the manner in which such
confession was purported to have been obtained. According to him, he had no
connection with any alleged import transactions, opening of bank accounts,
or floating of company by name of M/s Sun Enterprises, export control, bill
of entry and other documents or alleged remittances. He stated that
confessions were not only untrue but also involuntary.
40. The allegation that he was detained in the Office of Enforcement
Department for two days and two nights had not been refuted. No attempt has
been made to controvert the statements made by appellant in his application
filed on 28.10.1994 before the learned Chief Metropolitan Magistrate.
Furthermore, the Tribunal as also the authorities misdirected themselves in
law insofar as they failed to pose unto themselves a correct question. The
Tribunal proceeded on the basis that issuance and services of a show-cause
notice subserves the requirements of law only because by reason thereof an
opportunity was afforded to the proceedee to submit its explanation. The
Tribunal ought to have based its decision on applying the correct
principles of law.
41. The statement made by the appellant before the learned Chief
Metropolitan Magistrate was not a bald statement. The inference that burden
of proof that he had made those statements under threat and coercion was
solely on the proceedee does not rest on any legal principle. The question
of the appellant’s failure to discharge the burden would arise only when
the burden was on him. If the burden was on the Revenue, it was for it to
prove the said fact. The Tribunal on its independent examination of the
factual matrix placed before it did not arrive at any finding that the
confession being free from any threat, inducement or force could not
attract the provisions of Section 24 of the Indian Evidence Act.”
(emphasis is ours)
14. The aforesaid submissions were sought to be refuted by the learned
counsel representing the Union of India, by placing reliance on the
findings recorded by the High Court, in the impugned judgment.
15. First and foremost, we shall endeavour to examine the veracity of the
statements made by the appellant – A. Tajudeen and his wife T. Sahira Banu
on 25.10.1989 and 26.10.1989 to the officers of the Enforcement
Directorate. Before proceeding with the factual controversy, it is
essential to record, that from the view we have taken in the ultimate
analysis, the innocence or guilt of the appellant will have to be
determined on the basis of the statements made by the appellant and his
wife (on 25.10.1989 and 26.10.1989) to the officers of the Enforcement
Directorate. Therefore, for the case in hand, the above statements are not
to be referred to as corroborative pieces of evidence, but as primary
evidence to establish the guilt of the appellant. It is in this
background, that we shall endeavour to apply the legal position declared by
this Court, to determine the veracity and reliability to the statements,
which later came to be retracted by the appellant and also by his wife.
Insofar as the above statements are concerned, there is no doubt
whatsoever, that they were all made either at the time of the raid, which
was carried out by the officers of the Enforcement Directorate at the
residence of the appellant, or whilst the appellant was in custody of the
Enforcement Directorate. Immediately after the appellant was released on
bail by the Additional Chief Metropolitan Magistrate, Madras on 27.10.1989,
on the same day itself, both the appellant – A. Tajudeen and his wife T.
Sahira Banu addressed communications to the Director, Enforcement
Directorate, New Delhi resiling from the above statements, by clearly
asserting that they were recorded under coercion and undue influence, and
would not be binding on them.
16. Having given our thoughtful consideration to the aforesaid issue, we
are of the view that the statements dated 25.10.1989 and 26.10.1989 can
under no circumstances constitute the sole basis for recording the finding
of guilt against the appellant. If findings could be returned by
exclusively relying on such oral statements, such statements could easily
be thrust upon the persons who were being proceeded against on account of
their actions in conflict with the provisions of the 1973 Act. Such
statements ought not to be readily believable, unless there is independent
corroboration of certain material aspects of the said statements, through
independent sources. The nature of the corroboration required, would
depend on the facts of each case. In the present case, it is apparent that
the appellant – A. Tajudeen and his wife T. Sahira Banu at the first
opportunity resiled from the statements which are now sought to be relied
upon by the Enforcement Directorate, to substantiate the charges levelled
against the appellant. We shall now endeavour to examine whether there is
any independent corroborative evidence to support the above statements.
17. According to the learned counsel representing the appellant, there
was an effective opportunity to the officers of the Enforcement Directorate
to produce evidence with reference to a number of important facts,
disclosed by the appellant while making the aforesaid statements, yet the
officers of the Enforcement Directorate chose not to substantiate the same
through independent evidence. He cited a few instances where such evidence
could have been easily gathered by the officers of the Enforcement
Directorate. In the absence of any corroboration whatsoever, it was
submitted, that retracted statements made by the appellant – A. Tajudeen
and his wife T. Sahira Banu, could not be used to record findings against
the appellant.
18. We have no doubt, that evidence could be gathered to substantiate
that Abdul Hameed, the person who is alleged to have dispatched the money
from Singapore, was a resident of Village Pudhumadam in District
Ramanathapuram, to which the appellant also belongs. Material could also
have been gathered to show, whether he was related to the appellant from
his paternal side. Furthermore, the Enforcement Directorate could have
easily substantiated whether or not, as asserted by the appellant, the
aforesaid Abdul Hameed had contacted him over telephone from Singapore, to
inform him about the delivery of the amount recovered from his residence on
25.10.1989. Additionally, the Enforcement Directorate could have led
evidence to establish that the aforesaid Abdul Hameed with reference to
whom the appellant made statements on 20.4.1989, 25.10.1989 and 26.10.1989,
was actually resident of Singapore, and was running businesses there, at
the location(s) indicated by the appellant. Still further, the officers of
the Enforcement Directorate could have ascertained the truthfulness of the
factual position from Shahib, the shop boy of the appellant – A. Tajudeen,
whom he allegedly sent to hand over a sum of Rs. 60,000/- to Shahul Hameed
(a relative of Abdul Hameed) of Village Pudhumadam. Had the statements of
the appellant and his wife been corroborated by independent evidence of the
nature indicated hereinabove, there could have been room for accepting the
veracity of the statements made by the appellant – A. Tajudeen and his wife
T. Sahira Banu to the officers of the Enforcement Directorate.
Unfortunately, no effort was made by the Enforcement Directorate to gather
any independent evidence to establish the veracity of the allegations
levelled against the appellant, through the memorandum dated 12.3.1990. We
are of the considered view, that the officers of the Enforcement
Directorate were seriously negligent in gathering independent evidence of a
corroborative nature. We have therefore no hesitation in concluding that
the retracted statements made by the appellant and his wife could not
constitute the exclusive basis to determine the culpability of the
appellant.
19. We shall now deal with the other independent evidence which was
sought to be relied upon by the Enforcement Directorate to establish the
charges levelled against the appellant. And based thereon, we shall
determine whether the same is sufficient on its own, or in conjunction to
the retracted statements referred to above, in deciding the present
controversy, one way or the other. First and foremost, reliance was placed
on “mahazar” executed (at the time of the recovery, from the residence of
the appellant) on 25.10.1989. It would be pertinent to mention, that the
appellant in his response to the memorandum dated 12.3.1990 had expressly
refuted the authenticity of the “mahazar” executed on 25.10.1989. Merely
because the “mahazar” was attested by two independent witnesses, namely,
R.M. Subramanian and Hayad Basha, would not led credibility to the same.
Such credibility would attach to the “mahazar” only if the said two
independent witnesses were produced as witnesses, and the appellant was
afforded an opportunity to cross-examine them. The aforesaid procedure was
unfortunately not adopted in this case. But then, would the preparation of
the “mahazar” and the factum of recovery of a sum of Rs. 8,24,900/-
establish the guilt of the appellant, insofar as the violation of Section
9(1)(b) of the 1973 Act is concerned? In our considered view, even if the
“mahazar” is accepted as valid and genuine, the same is wholly insufficient
to establish, that the amount recovered from the residence of the appellant
was dispatched by Abdul Hameed, a resident of Singapore, through a person
who is not an authorised dealer in foreign exchange. Even, in response to
the memorandum dated 12.3.1990, the appellant had acknowledged the recovery
of Rs. 8,24,900/- from his residence, but that acknowledgment would not
establish the violation of Section 9(1)(b) of the 1973 Act. In the above
view of the matter, we are of the opinion that the execution of the
“mahazar” on 25.10.1989, is inconsequential for the determination of the
guilt of the appellant in this case.
20. The only other independent evidence relied upon by the Enforcement
Directorate is of pages from the Hindu and the Jansatha newspapers, in
which the bundles of money were wrapped, when the recovery was effected on
25.10.1989. In view of the position expressed in the foregoing paragraph,
we are satisfied that the charge against the appellant under Section
9(1)(b) of the 1973 Act, cannot be established on the basis of newspaper
sheets, in which the money was wrapped. The newspaper sheets relied upon,
would not establish that the amount recovered from the residence of the
appellant – A. Tajudeen was dispatched by Abdul Hameed from Singapore,
through a person who was not an authorized dealer.
21. Based on the above determination, and the various conclusions
recorded hereinabove, we are satisfied, that the impugned judgment passed
by the High Court deserves to be set aside. The same is accordingly hereby
set aside. Resultantly, the entire action taken by the Enforcement
Directorate against the appellant in furtherance of the memorandum dated
12.3.1990, is also set aside. As a consequence of the above, the
Enforcement Directorate is directed to forthwith refund the confiscated sum
of Rs.8,24,900/-, to the appellant, as also, to return the amount of
Rs.1,00,000/-, which was deposited by the appellant as penalty.
22. The instant appeal is, accordingly, allowed in the abovesaid terms.
…………………………….J.
(Jagdish Singh Khehar)
…………………………….J.
(C. Nagappan)
New Delhi;
October 10, 2014.
ITEM NO.1B COURT NO.6 SECTION XII
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Civil Appeal No(s). 5773/2009
A.TAJUDEEN Appellant(s)
VERSUS
UNION OF INDIA Respondent(s)
[HEARD BY HON'BLE JAGDISH SINGH KHEHAR AND HON'BLE C. NAGAPPAN, JJ.]
Date : 10/10/2014 This appeal was called on for judgment
today.
For Appellant(s) Mr. R. Nedumaran,Adv.
For Respondent(s) Mr. B. V. Balaram Das,Adv.(Not present)
Hon'ble Mr. Justice Jagdish Singh Khehar pronounced the
judgment of the Bench comprising His Lordship and Hon'ble Mr. Justice C.
Nagappan.
For the reasons recorded in the Reportable judgment, which is
placed on the file, the appeal is allowed. As a consequence, the
Enforcement Directorate is directed to forthwith refund the confiscated sum
of Rs.8,24,900/- to the appellant, as also, to return the amount of
Rs.1,00,000/-, which was deposited by the appellant as penalty.
(Parveen Kr. Chawla) (Phoolan Wati Arora)
Court Master Assistant Registrar
-----------------------
25
26
