Mohd. Muslim vs Enforcement Directorate
2009 Latest Caselaw 3804 Del

34
*       IN THE HIGH COURT OF DELHI AT NEW DELHI


+       W.P.(C) 11161/2009


        MOHD. MUSLIM                      ..... Petitioner
                            Through:Mr. Shailendra Bhardwaj      &   Mohd.
                            Saleem, Advocates

                    versus


        ENFORCEMENT DIRECTORATE            ..... Respondent
                      Through:Ms. Rajdipa Behura, Advocate


        CORAM:
        HON'BLE MR. JUSTICE SANJIV KHANNA


                 ORDER

% 16.09.2009

1. By the impugned order dated 16th July, 2009 Appellate Tribunal for

Foreign Exchange has disposed of the application filed by the petitioner for

waiver of pre-deposit of penalty amount of Rs. 3 crores (1.5 crores in two

cases) with a direction to deposit 10% of the penalty amount, i.e., Rs.30

lacs.

2. Learned counsel for the petitioner submits that the petitioner has

been acquitted in the criminal case. He further states that the petitioner

has retracted his statement and the diary relied upon and referred to in

the adjudication order is inadmissible in evidence and does not justify

WPC No.11161/2009 Page 1 imposing the huge penalty of Rs.3 crores. It is stated that no recovery

was made from the petitioner. Learned counsel for the petitioner has also

drawn my attention to the income tax returns as well as statement of bank

accounts of the petitioner and his wife which were filed pursuant to the

direction issued by this Court.

3. Income tax returns reveals that the petitioner has a shop in the

Meena Bazar, Jama Masjid area, Delhi. The petitioner has declared

income between Rs.60,000/- to Rs.1,30,000/- p.a. from the said shop

during the Assessment years 2005-06 to 2009-10. As per the income tax

return for the assessment year 2009-10 the petitioner claims that he had

sales of Rs.7,18,000/- and had made purchases of Rs.6,60,000/- during

the said year. The petitioner has also filed a sale deed dated 12th

February, 1998 by which the petitioner had purchased property No. 2063-

64(entire first floor), Gali Qutabuddin, Kala Masjid, Bazar Turkman Gate,

Delhi measuring 88 sq.yds. for Rs.70,000/-. It is impossible to believe that

a property measuring about 900 sq.ft. in old Delhi could have been

purchased for Rs.70,000/- only.

4. The case against the petitioner is that he was involved in hawala

transactions and had violated the provisions of the Foreign Exchange

Regulation Act, 1973. His statement was recorded on 09.09.1998. In his

statement he had stated that he had visited Pakistan in 1990-91 and at

that time he got in touch with Mr. Rijwan of Lahore who introduced him

WPC No.11161/2009 Page 2 and inducted him into the hawala trade. He used to earn profit of Rs.200

per transaction for a transaction of Rs.1 lac. The petitioner admitted that

he knew Mr. Jasvinder Singh and one Mr. Qazi who had introduced him

with Mr. Jasvinder Singh. In his statement, the petitioner gave details of

various transactions in which he was involved and the name of persons

with whom he had entered into hawala transactions. No doubt that the

petitioner has retracted his statement but this aspect has to be examined

in the appeal keeping in view the facts stated in the statement and

corroborative evidence otherwise available to support the admissions.

The criminal case against the petitioner and others was on account of

recovery of Rs.47 lacs made from a truck. The allegation was that the

said money had link with terrorist organizations. Discharge or acquittal in

the said case per se does not make the adjudication order passed under

the Act as void and bad. It is well settled that standard of proof and

parameters involved in criminal cases and civil cases are different. Prima

facie some material exists against the petitioner and the adjudication order

is not per se illegal. Of course merits and the question of quantum of

penalty imposed is pending before the appellate tribunal. On the question

of quantum of penalty, learned counsel for the petitioner has drawn my

attention to the averments in the adjudication order that the petitioner

was entitled to small commission on the entire value of the transaction and

states that his financial status is not such that he can make payment of

WPC No.11161/2009 Page 3 Rs.30 lacs. It is submitted that the petitioner will not be able to deposit

Rs.30 lacs and thus will be deprived to his right to appeal. In this regard it

may be appropriate to reproduce para 8 of the judgment of the Supreme

Court in Monotosh Saha vs. Special Director, Enforcement Directorate and

Anr. 2008 (11) Scale 603:

"8. It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no leg to stand, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine matter unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand. There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. Merely because this Court has indicated the principles that does not give a license to the forum/authority to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest. Where denial of interim relief may lead to public mischief, grave irreparable private injury or shake citizens' faith in the impartiality of public administration, interim relief can be given."

5. In view of the legal position, the facts of the present case and also

to ensure that the petitioner has access and fair opportunity to challenge

the penalty order, the impugned order dated 16.07.2009 is partly modified

and the petitioner is given liberty to deposit Rs.15 lacs in three

installments of Rs.5 lac each. The first installment will be paid on or

before 31st October, 2009. The second and third installment will be paid

WPC No.11161/2009 Page 4 on or before 31st December, 2009 and 1st of March, 2010. On the said

deposit being made, the appeal of the petitioner will be heard on merit.

In case there is default and failure to deposit the installments, the appeal

of the petitioner will be disposed of as per law. The observations made in

this order are prima facie and tentative and will not influence the Appellate

Tribunal while deciding the appeal on merits.

No costs.

SANJIV KHANNA, J.

SEPTEMBER 16, 2009
RS/VKR




      WPC No.11161/2009                                                Page 5