Muneesh Suneja Alias Goldy vs Chief Enforcement Officer
2022 Latest Caselaw 17507 P&H

CRR-4694-2016                                                    -1-



           IN THE HIGH COURT OF PUNJAB AND HARYANA AT
                          CHANDIGARH

                                                 CRR-4694-2016 (O&M)
                                                 Reserved on: 15.12.2022
                                                 Pronounced on: 22.12.2022

Muneesh Suneja @ Goldy
                                                                       ... Petitioner


                                           Vs.


Chief Enforcement Officer, Enforcement Directorate, Jalandhar
                                                                   ... Respondent
CORAM: HON'BLE MR. JUSTICE ARVIND SINGH SANGWAN

Present:     Mr. Bipan Ghai, Sr. Advocate with
             Mr. Nikhil Ghai, Advocate,
             Mr. A.S. Pannu, Advocate
             for the petitioner.

             Mr. Satya Pal Jain, Additional Solicitor General of India with
             Mr. Pankaj Gupta, Sr. Panel Counsel
             for the respondent.

                   *******
ARVIND SINGH SANGWAN, J. (ORAL)

Challenge in this revision petition is to the judgment dated

08.12.2016 passed by the lower appellate Court, vide which appeal filed by the

petitioner against the judgment of conviction and order of sentence dated

31.03.2014, holding him guilty of offence under Section 8(1) & 8(2) of Foreign

Exchange Regulation Act (for short 'FERA') and sentencing him to undergo

imprisonment for a period of six months and to pay a fine of Rs.5,000/- and in

default of payment of fine, to further undergo R.I. for a period of three months,

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was dismissed, whereas another appeal filed by the complainant for

enhancement of the sentence was allowed and the petitioner was directed to

undergo R.I. for a period of two years and to pay a fine of Rs.5,000/-. In default

of payment of fine, to further undergo R.I. for a period of two months under

Section 56 of FERA.

Brief facts of the case are that on 18.06.1997, the Punjab Police

intercepted one Piara Lal and Madan Lal, who were coming from Delhi to

Punjab in Punjab Roadways bus and recovered Rs.2.00 lacs and Rs.1.90 lacs,

respectively. Thereafter, FIR No.90 dated 18.06.1997 under Sections 411 & 414

of the Indian Penal Code, 1860 (for short 'IPC') and Section 9 of FERA was

registered. Later on, during the investigation of Piara Lal and Madan Lal, a raid

was conducted on residence of petitioner Muneesh Suneja @ Goldy and

recovery of DM5300, Rs.3.00 lacs in cash, 08 yellow material biscuits of 10 toll

each with a foreign mark along with certain incriminating documents was

effected. In the meantime, another accused Jagdish Chand was also

apprehended by the Enforcement Directorate and from his search, 7360 US

dollars, 3295 UK pounds, 4135 Canadian dollars and 360 Australian dollars

(total having value of Rs.6,14,283/-) were recovered. In the statement, Jagdish

Chand disclosed that said currency was given to him by his employer Sanjay,

resident of Ludhiana and he used to purchase foreign exchange from petitioner

Muneesh Suneja @ Goldy. In the disclosure statement, the petitioner stated that

he used to purchase foreign exchange from co-accused Rakesh Kumar of

Adampur and Sanjay used to sent foreign exchange through Jagdish Chand. It

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was revealed from the investigation that for the last one and half year,

transaction of more than Rs.11.00 crores was done. In the search of premises of

co-accused Rakesh Kumar, foreign currency equivalent to Rs.1,04,10,004/- was

recovered. It was found that co-accused Madan Lal, Piara Lal and Rakesh

Kumar are closely related to each other. Petitioner Muneesh Suneja @ Goldy

was found not to be an authorized dealer in foreign exchange, therefore, he

violated the provisions of Sections 8(1) & 8(2) of FERA and as such, he is

liable to be prosecuted under Section 56 of FERA read with Sections 49(3) and

49(4) of Foreign Exchange Management Act, 1999 (for short 'FEMA').

Thereafter, formal complaint under Section 56 of FERA was filed by authorized

person i.e. Chief Enforcement Officer, Jalandhar. The accused were summoned

to face the trial vide order dated 21.05.2002.

It is a fact that during the trial, accused Madan Lal and Piara Lal

died and accused Jagdish Chand was never arrested and was declared

proclaimed offender.

In the trial, which was faced by petitioner Muneesh Suneja @

Goldy, Rakesh Kumar and Sanjay, the complainant examined PW1 HC Harmail

Singh, who had registered formal FIR No.90 dated 18.06.1997 in Police Station

Payal as Ex.PW1/A.

Enforcement Officer N.K. Dhaka, who conducted the search in the

residential premises of petitioner Muneesh Suneja @ Goldy along with two

officials I.M. Bhatia and V.P. Gogiya, appeared as PW2 and proved the

panchnamas Ex.PW2/A to Ex.PW2/C regarding recovery of foreign currency

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Ex.PW2/D and recovery memo of gold Ex.PW2/E.

Assistant Director of Enforcement I.M. Bhatia appeared as PW3

and proved statement of accused recorded under Section 40 of FERA as

Ex.PW3/A and Ex.PW3/B.

Assistant Director K.R. Thapar appeared as PW4 and proved the

complaint Ex.PW4/A.

The pre-charge evidence of the complainant was closed by the

Special Public Prosecutor. On the basis of pre-charge evidence, a formal

chargesheet was filed for contradiction of Sections 8(1) & 8(2) punishable

under Section 56 of FERA. All three accused did not plead guilty and claimed

trial.

After framing of charge, accused were granted permission to cross-

examine the witnesses i.e. PW1 to PW4. After completing the cross-

examination, Special Public Prosecutor closed the post-charge evidence.

Thereafter, statements of the accused were recorded under Section 313 Cr.P.C.

and all the incriminating evidence was put to them. The accused denied the

same and pleaded their innocence. In defence evidence, petitioner Muneesh

Suneja @ Goldy appeared as DW1 and accused Sanjay appeared as DW2.

Thereafter, the trial Court acquitted two accused Rakesh Kumar

and Sanjay vide judgment dated 19.02.2011 passed by the Chief Judicial

Magistrate, Jalandhar, whereas petitioner Muneesh Suneja @ Goldy was

convicted. He preferred an appeal before the lower appellate Court and the

Additional Sessions Judge, Jalandhar, vide judgment dated 01.07.2013, set

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aside the judgment of conviction and order of sentence and remanded the case

back for decision afresh, after affording further opportunity to the accused to

lead further defence evidence. In pursuance thereof, petitioner Muneesh Suneja

@ Goldy examined DW3 Pankaj Bhai Goswami to prove the bill Ex.D1 and

authorization letter Ex.DW3/1, his driving licence Ex.DW3/2, PAN Card

Laljibhai Kanjibhai Soni Ex.DW3/3. In cross-examination, this witness stated

that gold is a notified item and in this regard, import licence is granted by

DGFT, which is to be mentioned in the bill, however, he denied the suggestion

that bill Ex.D1 is a forged document.

Shiv Kumar Gupta appeared as DW2 (again marked as DW2,

though he was DW4). This witness proved the income tax return as Ex.DW1/A.

Thereafter, the trial Court, vide judgment dated 31.03.2014, held

the petitioner guilty of keeping in his possession DM5300, in violation of

provisions of Sections 8(1) & 8(2) of FERA, however, it was held that the

prosecution has failed to prove that the gold recovered or Rs.3.00 lacs was on

account of trading in foreign exchange. Vide order of even date, the petitioner

was sentenced to undergo R.I. for a period of six months and to pay a fine of

Rs.5,000/-. In default of payment of fine, he was ordered to further undergo R.I.

for a period of three months. It was stated that the custody period as undertrial

will be set off and the case property will be confiscated, however, the gold in

question i.e. 08 biscuits of 10 tola each and Indian currency of Rs.3.00 lacs is to

be returned to the accused against receipt, after expiry of period of limitation.

Thereafter, two appeals were preferred before the lower appellate

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Court. First appeal was filed by the petitioner challenging his conviction and

order of sentence and second appeal was filed by the complainant/Chief

Enforcement Officer for enhancement of the sentence. The lower appellate

Court, vide impugned judgment dated 08.12.2016, dismissed the appeal filed by

the petitioner, however, allowed the appeal filed by the complainant.

Resultantly, sentence of 06 months R.I. awarded by the trial Court was

enhanced to R.I. for a period of 02 years, however, fine of Rs.5,000/- was

retained.

This revision petition is pending since 2016 and is still in motion

hearing.

Vide order dated 10.03.2017, sentence of the petitioner was

suspended, observing that out of 02 years R.I. awarded by the lower appellate

Court, the petitioner has already undergone incarceration for a period more than

07 months.

LCR is requisitioned.

Learned senior counsel for the petitioner has argued that the trial

Court recorded the findings in paras No.23 to 27 of its judgment observing that

under first point, it was held that no evidence has come forth to establish

beyond doubt that there was nexus between purchased gold and use of foreign

exchange, therefore, the petitioner cannot be held guilty of violating the

provisions under Sections 8(1) & 8(2) of FERA. It is also held that since the

accused has not claimed ownership of the recovered gold and he retracted his

confession made before PW3, which are on record as Ex.D4 and Ex.D5, stating

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that the gold was purchased from M/s Laljibhai Khanjibhai Jewellers,

Ahemdabad, therefore, the prosecution has failed to prove that gold was

purchased using foreign exchange and the findings at first point were returned

in favour of the petitioner.

So far as point No.2 is concerned, it was held that it cannot be

concluded that retraction is mere an afterthought and had been influenced by

the fact that when he was detained and produced in the Court, he had no

availability of legal help and this point was decided in favour of the

prosecution.

So far as third point is concerned, it was held that DM 5300 were

recovered from the petitioner, as per panchnama Ex.PW3/A, which is a

confessional statement. On 4th point, it was held that mere possession of Indian

currency is not an offence and decided it in favour of the accused-petitioner.

It is further submitted that once the trial Court recorded a finding

that as per statement of DW3 Pankaj Bhai Goswami, jewellery was purchased

from M/s Laljibhai Khanjibhai Jewellers of Ahmedabad, as reflected in the

Income Tax Return, the lower appellate Court could not have reversed the

findings on this aspect.

It is also argued that the lower appellate Court failed to appreciate

that the petitioner was in custody and was forced to make confessional

statement regarding the recovery, whereas DM 5300 were not proved to be

recovered from the residential premises of the petitioner. Learned counsel laid

much emphasis that since two co-accused Rakesh Kumar and Sanjay were

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acquitted as per judgment dated 19.02.2011, which has attained finality, the

petitioner, who was implicated on their disclosure, cannot be convicted, as there

is no independent evidence against him. It is submitted that except the voluntary

statement of the petitioner, which was later on retracted by him at the first

available opportunity, when he got the legal assistance, there is no other

evidence on record, therefore, statements of the petitioner recorded by PW2

under Section 40 of FERA were not voluntary and he cannot be held guilty on

the solitary statements, which were later on retracted, as the confession was not

voluntary in nature. The reliance is placed on the judgment of the Hon'ble

Supreme Court in Vinod Solanki Vs. Union of India and another, 2009 (1)

RCR (Crl.) 911, wherein it is held as under: -

"34. 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. 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

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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.

35. 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 therefor. 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.

36. 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

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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.

37. 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. 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

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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."

It is thus submitted that the statement Ex.PW3/A is an involuntary

statement and the petitioner cannot be held guilty on this sole evidence and is

entitled to be acquitted, as held by the Hon'ble Supreme Court of India.

It is next argued that it has come in the cross-examination of PW2

that Jagdish Chand was never arrested regarding alleged recovery. PW3, in

cross-examination, stated regarding discrimination between accused Jagdish

Chand and the petitioner and admitted that no reply was sent to the retraction

made by the petitioner, therefore, retracted statements of the petitioner were

never disputed by the prosecution. It is submitted that it is evident from cross-

examination of PW2 and PW3 that the petitioner has been falsely implicated, as

nothing incriminating was recovered from his shop, therefore, there is no

violation of Sections 8(1) & 8(2) of FERA. It is stated that the petitioner was

carrying on legal business of sale and purchase of electronic goods in New

Delhi and in police custody, he was forced to make involuntary statement on

19.06.1997 by the officials of Punjab Police and Enforcement Directorate and

again on 20.06.1997, he was forced to make involuntary statement under

Section 40 of FERA. It is stated that MLR of the petitioner conducted at the

instance of the Court, where he was produced, reflects that he was tortured and

beaten.

It is next argued that except the involuntary statements, there is no

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other evidence against the petitioner regarding recovery and there are material

contradictions in the statements of PW2 and PW3, which are not explained by

the prosecution. It is submitted that search of house of the petitioner was not

conducted in the presence of respectable persons of the locality and the

panchnama was prepared much after search of shop of the petitioner. It is

submitted that it is admitted by PW3 I.M. Bhatia and PW2 N.K. Dhaka that

Jagdish Chand was never arrested in this case and the entire liability is illegally

fixed on the petitioner.

It is further submitted that while enhancing the sentence of the

petitioner, the lower appellate Court has not appreciated the legal proposition,

as held by the Hon'ble Supreme Court that in an appeal seeking enhancement of

the sentence, the Court is to make special grounds for enhancement. Learned

counsel has relied upon a judgment in Shiv Govind Vs. The State of M.P.,

1972 AIR (Supreme Court) 1823, wherein the Hon'ble Supreme Court has

held as under: -

"It seems clear to us that the High Court had overlooked the

principles, laid down by this Court repeatedly, which

should govern the exercise of powers of the High Court to enhance

sentences Imposed by trial courts. In Bed Raj v. The State of Uttar

Pradesh (1955) 2 SCR 583. this Court observed at page 588-589:

"A question of a sentence is a matter of discretion and it is

well settled that when discretion has been properly

exercised along accepted judicial lines, an appellate court

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should not interfere to the detriment of an accused person

except for very strong reasons which must be disclosed on

the face of the judgment; See for example the observations

in Dalip Singh v. State of Punjab (1954 S.C. Rule 146,

156) and Nar Singh v. State of Uttar Pradesh [1955](1)

S.C.R. 238, 241). In a matter of enhancement there should

not be interference when the sentence passed imposes

substantial punishment. Interference is only called for

when it is manifestly inadequate. In our opinion, these

principles have not been observed. It is impossible to hold

in the circumstances described that the Sessions Judge did

not impose a substantial sentence, and no adequate reason

has been assigned by the learned High Court Judges for

considering the sentence manifestly inadequate. In the

circumstances. bearing all the considerations of this case

in mind, we are of opinion that the appeal (which is limited

to the question of sentence) should be allowed and that the

sentence imposed by the High Court should be set aside

and that of the Sessions Court restored"."

It is submitted that the trial Court has taken a balanced and

objective view, while awarding sentence of 06 months and the lower appellate

Court has wrongly enhanced the sentence and prayed that judgment of

enhancement of sentence be set aside, as it was set aside by the Hon'ble

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Supreme Court in Shiv Govind's case (supra).

It is further submitted that the petitioner has already undergone

more than 07 months of sentence; he is facing protracted trial since 1997,

therefore, being first offender, he may be granted the concession of probation of

good conduct or in the alternative, impugned judgment passed by the lower

appellate Court be set aside.

In reply, learned Additional Solicitor General of India has argued

that the lower appellate Court has right enhanced the sentence considering

gravity of the offence, as sentence of 06 months R.I. awarded by the trial Court

was inadequate. It is submitted that the petitioner was found involved in huge

transaction of foreign exchange and was dealing in prohibited items i.e. gold

biscuits of foreign origin and therefore, it being an economic offence, sentence

was right enhanced.

After hearing learned counsel for the parties, considering the

limited scope of an appeal against acquittal filed under Section 378 Cr.P.C., this

Court finds that the lower appellate Court has patently erred in enhancing the

sentence without making out a special case, for the following reasons: -

(a) The only reason given by the lower appellate Court in para No.35

of the impugned judgment reads as under: -

"Now coming to the question of sentence.

Appellant/accused has submitted that he has already

remained in custody for a period of 4 ½ months and he is

sole bread earner of his family consisting of his wife, his

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two children, his old and ailing mother. His children are

studying. The mother of the appellant has slip disc and she

has severe pain in her knee and in her back. The condition

of his mother is very critical and there is no one else to

look after the family of the appellant. I have considered the

request of the appellant/accused for taking a lenient view

on sentence, but the prosecution has duly proved on record

the guilt of the accused beyond any shadow of doubt that

the documents written in the hands of the accused himself

and admitting his guilt with regard to the transaction made

regarding the purchase of foreign currency from

unauthorized sources and retraction of the same after due

deliberation, but the learned trial Court inspite of this fact

granted the minimum sentence. In this way, the offence

committed by the appellant/accused is of serious in nature.

Hence, the sentence announced by the trial Court is

modified and is enhanced to undergo rigorous

imprisonment for two years and to pay fine of Rs.5000/-. In

default of payment of fine, to further undergo rigorous

imprisonment for two months under Section 56 of FERA

1973. The fine has already been paid before the Trial

Court."

(b) A perusal of the findings recorded by the lower appellate Court

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would show that no special reasons have been assigned to make

out a case for enhancement of the sentence. In view of judgement

of the Hon'ble Supreme Court in Shiv Govind's case (supra), the

lower appellate Court was required to record a finding that the trial

Court, while awarding the sentence of six months R.I., has not

properly exercised its discretion and the lower appellate Court

should not interfere to the detriment of an accused, except for

strong reasons, which must be disclosed on the face of the

judgment, however, no such reasons have been assigned, therefore,

this Court finds that enhancement of sentence is not justified.

(c) As argued on behalf of the petitioner that the petitioner being an

accused of commission of offence is not expected to prove that

confession was obtained from him by inducement, threat or

promise and the burden is on the prosecution to show that

confession was voluntary in nature, in view of judgment of the

Hon'ble Supreme Court in Vinod Solanki's case (supra), both the

Courts have recorded a finding that confessional statement is

proved by PW3, who recorded the same and during cross-

examination, his testimony could not be shattered. Even as per

statements of PW1 and PW2, who were the witnesses of the

confessional statement, it could not be proved that statement was

involuntary, though it was retracted by the petitioner at a

subsequent stage.

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(d) The lower appellate Court failed to consider that the initial

recovery was from co-accused Rakesh Kumar and Sanjay, who

stand acquitted vide judgment dated 19.02.2011 and prosecution

never challenged their acquittal before higher Court. The petitioner

was nominated on their statements and once they were acquitted,

the link to convict the petitioner was not proved. Therefore, the

enhancement of sentence was not justified.

In view of the reasons recorded above, present revision petition is

partly allowed to the extent that impugned judgment passed by the lower

appellate Court, enhancing six months R.I. and fine of Rs.5,000/-, as awarded

by the trial Court, to 02 years R.I. and to pay a fine of Rs.5,000/- and in default

thereof, to further undergo R.I. for two months, is set aside and that of the trial

Court is restored.

As the fine has already been paid and the petitioner, as per the

custody certificate, has already undergone 07 months of sentence i.e. over and

above 06 months R.I. awarded by the trial Court, no further action is called for,

as he has already undergone the entire sentence.

With the aforesaid modifications, present revision petition is

disposed of.

                                             [ ARVIND SINGH SANGWAN ]
22.12.2022                                            JUDGE
vishnu


Whether speaking/reasoned : Yes/No

Whether reportable          : Yes/No




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