JUDGMENT

K.S. Radhakrishnan, J.

1. Crl. M.P. No.11274 of 2013 is allowed.

2. The Special Director of Enforcement, Enforcement Directorate, Government of India, New Delhi, exercising powers under Section 51 of the Foreign Exchange Regulation Act, 1973 (for short 'FERA'), later repealed, initiated proceedings vide order dated 22.9.2000 against M/s Maple Leaf Trading International Pvt. Ltd. (for short 'the Company') for violation of the provisions of Section 19(1)(a) and (d), 29(1)(b), 47(1) and 49(i)(a) read with Section 68 of FERA. Proceedings were also initiated against the other respondents, including 1st respondent, ABN AMRO Bank NV (now called 'Royal Bank of Scotland NV') and 4th respondent - M/s Piccadily Invest AG, Zurich, Switzerland (for short 'Piccadily'). Respondents, aggrieved by the above mentioned order, preferred four appeals before the Appellate Tribunal for Foreign Exchange, New Delhi and the Tribunal allowed those appeals vide its order dated 10.3.2003 and set aside the order of confiscation and the penalty imposed.

3. Union of India, aggrieved by the said order, preferred Criminal Appeal No. 380 of 2003 before the Delhi High Court under Section 54 of FERA read with Section 35 of the Foreign Exchange Management Act, 1999 which was, however, dismissed, stating that neither any question of law nor any legal infirmity had been found in the impugned order passed by the Tribunal. Aggrieved by the same, Criminal Appeal No. 975 of 2007 has been filed by the Union of India, which is treated as the main appeal and being heard along with Criminal Appeal No. 976 of 2007, which was also filed by the Union of India and another against the order of the High Court dated 12.9.2003 setting aside the order confiscating the drafts deposited by few investors in the 2nd company.

FACTS:

4. M/s Maple Leaf Trading International Pvt. Ltd., the 2nd respondent, was formed with the assistance of M/s J. C. Bhalla and Company, a Chartered Accountant firm having its office at New Delhi, in the following circumstances. One Lambert Kroger, Stefen Mayer and Cliff Roy, all foreign nationals, had met Anil Bhalla of the above mentioned firm and expressed their desire for establishing a company for trading in Maple Leaf Gold Coins in India, which they were doing in Netherlands and Germany. Anil Bhalla was informed that necessary approvals would be obtained through M/s. Abascus Legal Group, New Delhi. Anil Bhalla and Rajesh Sethi, Chartered Accountants of that firm, became subscribers of the newly formed company. Cliff Roy, a foreign national and power of attorney holder of 4th respondent - Piccadily informed him that from Abascus, one Vikrant Singh Jafa and Rahul Krishna would be the Directors of the company and ten shares of the company each in the name of Anil Bhalla and in the name of Rajesh Sethi were issued, which were transferred on 19.5.1998 in the name of Vikram Singh Jafa and a sum of Rs.2,000/- was received in cash from Cliff Roy. In the above background, the company was incorporated on 5.4.1998 and, on the same date, Cliff Roy, a foreigner, was appointed as the Director of the Company and on 17.4.1998 he became the Managing Director of the company. Anil Bhalla, Rajesh Sethi (Chartered Accountants) and Rahul Krishnan, then, resigned as Directors of the company on 19.5.1998. Jafa resigned as Director on 11.1.1999. Jafa was holding 49% shares of the company and on 16.4.1999 a Share Transfer Agreement was entered into by him with one A.R. Khan and Lambert Kroger, the Managing Director of the company to transfer 9780 shares of the company to A.R. Khan. The Adjudicating Officer says, ultimately, the Indian company came under the control of Cliff Roy, Paul Singh Clare, Lambert Kroger, all foreign nationals. For deciding the various legal issues at this stage, a detailed analysis of the facts are unnecessary and we do not want to burden our judgment with further factual details, which are all part of the record.

5. We may, for the purpose of deciding