LexM/S TELESTAR TRAVELS PVT. LTD. & ORS. versus SPECIAL DIRECTOR OF ENFORCEMENT
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2013] 1 $.C.R. 1005
M/S TELESTAR TRAVELS PVT. LTD. & ORS.
v.
SPECIAL DIRECTOR OF ENFORCEMENT
(Civil Appeal Nos .. 1306-1309 of 2013)
FEBRUARY 13, 2013
[T.S. THAKUR AND M.Y. EQBAL, JJ.]
Foreign Exchange Regulation Act, 1973:
A
B
ss. 8 and 14 - Dealing in foreign exchange without c
previous permission of Reserve Bank - An Indian company
dealing with a foreign company based in UK. and money
transactions made through another company' based outside
India and alleged to be a paper company - Held: There is
no reason to interfere with the concurrent findings of fact that
D
the company concerned was a paper company controlled by
appellants from India -
There appears to be sufficient
evidence on record for the Adjudicating Authority and the
Appellate Tribunal to hold that the appellants were guilty of
violating the provisions of FERA that called for imposition of E
suitable penalty against them. - Appellate Tribunal has
already given relief by reducing the penalty by 50% - Keeping
in view the nature of violations and the means adopted by
appellants to do so, there is no room for any further leniency.
Adjudication Rules under FERA:
F
r. 3 - Delay in pronouncement of order - Held: Delay by
itself would not constitute a ground for setting aside an order
that may otherwise be found legally valid and justified - A
careful examination of the adjudication by the Authority and . G
that of the Appellate Tribunal and ·the High. Court indicates
that no illegality or irregularity has been demonstrated -
Foreign Exchange Regulation Act, 1973 -
s.51 -
Administrative law.
1005
H
1006
SUPREME COURT REPORTS
[2013] 1 S.C.R.
A
Evidence:
Retracted statements - Evidentiary value of - Held:
Adjudicating Authority and Appellate Tribunal have both
correctly appreciated the legal position and applied the same
8
to the case at hand to hold that the statements were voluntary
and, therefore, binding upon appellants.
Evidence Act, 1872:
s. 139 - Cross-examination of person called to produce
c a document -
Held: The documents relied upon by
Adjudicating Authority produced by two officials of Indian High
Commission in London, were permitted to be inspected -
Therefore, refusal of Adjudicating Authority to permit cross
examination of witnesses producing the documents cannot
0 even on principles of Evidence Act be found fault with.
Appellant No. 1-travel agency was engaged in the
business of booking of tickets for crew members working
on ships. For the purpose, the appellants had
arrangement with a company based in U.K. {CTL), which
E would send Pre-paid Ticket Advice {PT A) to appellants in
India. The appellants would then secure ticket from the
air line concerned. The money for the tickets would then
be credited into the Swiss bank account of another
company {'B' Ltd.) registered in British Virgin Islands. '8'
F Ltd. would transfer the funds to CTL towards the price
of ticl(ets after realizing 3% of the ticket price towards
commission payable to the appellant company. The
Directorate of Enforcement issued a shows cause notice
for adjudication proceedings as contemplated u/s 51 of
G the Foreign Exchange Regulation Act, 1973 stating that
'B' Ltd. was only a paper company and was entirely a
holding of the appellant company and was being
controlled by it. The Adjudicating Authority, by order
dated 29.3.2001, held the appellant-company guilty of
H
TELESTAR TRAVELS PVT. LTD. & ORS. v. SPECIAL 1007
DIRECTOR OF ENFORCEMENT
violation of provisions of ss. 8 and 14 of FERA, and
A
imposed upon it a penalty of Rs.90,000/- for contravening
s.14 and Rs.85,00,000/- for contravention of s.8(1) of
FERA. A consolidated penalty of Rs.20,00,000/- each was
imposed on the remaining appellants. The Appellate
Tribunal for Foreign Exchange, in appeal, reduced the
B
penalty by 50%. The further appeals of the appellants
were dismissed in limine by the High Court.
Dismissing the appeals, the Court
HELD: 1.1. Whether or not 'B' Ltd. is a paper C
Company and whether or not it was controlled and
operated by the appellants is essentially a question of fact
to be determined on the basis of the material collected
In· the course of the investigation. The Adjudicating
Authority and Tribunal have answered that question in D
the affirmative taking Into consideration the statements
inade by the appellants as also the documents that were·
recovered from their premises. There appears to be
sufficient evExcerpt shown. Read the full judgment & AI analysis in Lexace.