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2016 Supreme(SC) 388
SUPREME COURT OF INDIA
T.S.Thakur, CJI., Uday Umesh Lalit, J.
Jatin C. Jhaveri – Appellant
Versus
Union of India – Respondent
CIVIL APPEAL NO.11127 OF 2011
WITH
Union of India – Appellant
Versus
Jatin C. Jhaveri, etc. – Respondents
CIVIL APPEAL NOS.11128-31 OF 2011
Decided On : 13-05-2016
IMPORTANT POINT
Disowning foreign currency initially but claiming it subsequently would be suspicious.
‘Acquisition’ of currency must be independently established in terms of section 8(1), FERA.
Headnote:Customs Act, 1962 – Section 113(d) (e) & (i) r/w Section 8(1) and 63, FERA – Appellant dissociating himself from and disowning the currency in question two months after seizure – Subsequently claiming ownership of the same on strength of Currency Declaration Forms – Never producing his passport to prove his visit to USA – Special Director rightly finding the claim suspicious – No special or general permission as contemplated under Section 8(1) of FERA produced – ‘Acquisition’ of currency must be independently established in terms of section 8(1) – Notification No.FERA-81/89-RB dated 09.08.1989, not referred to at any stage, relates to Section 13 and not section 8(1). (Para 7, 8, 9)
Facts of the case:
On the night intervening 27th and 28th July, 1993, one Ajit Dodia intending to board a flight to Hongkong from Mumbai, was caught with a suitcase containing US $ 289,250 and a brief case containing US $ 114,300.
Ajit Dodia disclosed that he and Jatin Jhaveri had packed US dollars in bundles in the evening.
Jatin Jhaveri confirmed that he was to accompany Ajit Dodia to Hongkong on the relevant date and that he had handed over his suitcase to Ajit Dodia who in turn was to hand it over to the brother of Jatin Jhaveri at Hongkong. He however denied ownership of the currency in question and also stated that he had nothing to do with the briefcase. He repeated in writing to stress the point saying “It does not belong to me”.
Proceedings under Clauses (d), (e) and (i) of Section 113 of the Customs Act, 1962 were initiated proposing penalty as well as confiscation of the currency.
Jatin Jhaveri contended that he had been to USA in June 1993 and had entered into contract for supply of polished diamonds and that in pursuance of the contract he had received US $ 289,250. According to him, his baggage that arrived along with him on 25.06.1993 had contained US $ 254,000 while other bag which arrived three days later on 28.06.1993 contained remainder namely US $ 35,250. His claim was supported Currency Declaration Form No.100250 dated 25.06.1993 in respect of US $ 254,000 and Currency Declaration Form No.10763 dated 28.06.1993 in respect of US $ 35,250.
The High Court affirmed the view taken by the Appellate Tribunal and dismissed FERA Appeal No.64-66 of 2006 by its judgment and order dated 19.10.2010. It was observed that the order of CEGAT having attained finality, that order had definite bearing on the controversy in question and though the findings recorded in the Customs proceedings may not be binding on FERA proceedings, it was not possible for the High Court to take a different view in the matter. By the same judgment the High Court allowed Writ Petition No.2976 of 2004 holding that Jatin Jhaveri was entitled to the currency amounting to US $ 289,250 but would not be entitled to any interest thereon.
Finding of the Court:
Appeals preferred by Union of India should be allowed.
Result: Civil Appeal Nos.11128-11131/2011 preferred by Union of India allowed. Civil Appeal No.11127/2011 preferred by Jatin Jhaveri dismissed.
JUDGMENT
Uday U. Lalit, J.
1. These appeals arise out of common judgment and order dated 19.10.2010 passed by the High Court of Judicature at Bombay in FERA Appeal Nos.64-66 of 2006 & in Writ Petition No.2976 of 2004. The challenge in Civil Appeal Nos.11128-11131 of 2011 at the instance of Union of India is to the decision of the High Court dismissing FERA Appeal Nos.64-66 of 2006 while Civil Appeal No.11127 of 2011 filed by one Jatin Jhaveri challenges the dismissal of his Writ Petition No.2976 of 2004.
2. The facts leading to these appeals are as under:-
A. On the night intervening 27th and 28th July, 1993, one Ajit Dodia intending to board a flight to Hongkong from Mumbai, had checked in a grey suitcase and a black briefcase. On suspicion, the Custom Officers searched the baggage and found the suitcase to be containing US $ 289,250 while the brief case contained US $ 114,300. The currency was seized and Ajit Dodia was questioned. He disclosed that he was to accompany Jatin Jhaveri, a diamond trader, that his brother Jitendra Dodia was working with Jatin Jhaveri as a sorter, that his trip was finalized and arranged by Jatin Jhaveri who had driven him to the Airport. In his statement Jitendra Dodia confirmed that he was working with Jatin Jhaveri and that he and Jatin Jhaveri had packed US dollars in bundles in the evening. However Jatin Jhaveri was not available for next two months i.e. till 27.09.1993.
B. In his statement dated 12.10.1993, Jatin Jhaveri confirmed that he was to accompany Ajit Dodia to Hongkong on the relevant date and that he had handed over his suitcase to Ajit Dodia who in turn was to hand it over to the brother of Jatin Jhaveri at Hongkong. He however denied ownership of the currency in question and also stated that he had nothing to do with the briefcase. He repeated in writing to stress the point saying “It does not belong to me”. This incident led to initiation of proceedings under Clauses (d), (e) and (i) of Section 113 of the Customs Act, 1962 proposing penalty as well as confiscation of the currency.
C. In defence, Jatin Jhaveri now contended that he had been to USA in June 1993 and had entered into contract for supply of polished diamonds and that in pursuance of the contract he had received US $ 289,250. According to him, his baggage that arrived along with him on 25.06.1993 had contained US $ 254,000 while other bag which arrived three days later on 28.06.1993 contained remainder namely US $ 35,250. In support of his claim, reliance was placed on Currency Declaration Form No.100250 dated 25.06.1993 in respect of US $ 254,000 and Currency Declaration Form No.10763 dated 28.06.1993 in respect of US $ 35,250. According to him the currency was obtained and imported by him as advance payment towards supply of diamonds, that he could not deposit the currency in the bank as the bank had refused to accept the same and therefore he was proposing to take it along with him to Hongkong on 27.07.1993. It was his further case that while he was going towards the Airport he had received a message that his mother was ill and that Ajit Dodia was intercepted with currency and therefore he did not go to the Airport.
D. Commissioner of Customs by his order dated 30.08.1995 concluded that the currency was being taken by Ajit Dodia illegally. He found that Jatin Jhaveri had played a major role and made available the currency in question and had also packed and concealed the same in the baggage of Ajit Dodia. As regards Currency Declaration Forms, it was observed:
“Shri Jatin C. Jhaveri has come forward with two Currency, Declaration Forms dated 25.6.93 and 28.6.93 to substantiate his claim that this currency was legally imported into India, when he had come from USA on 25.6.93 with US $ 2,59,250/-and made this declaration before the Customs on his arrival. Had these currency declaration forms been with Shri Jatin Jhaveri then in the normal course, they should have been found along with the foreign currency only and the
