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2014 Supreme(Del) 1180
High Court of Delhi
S. MURALIDHAR, J.
Prem Singh & Another
Versus
Special Director Enforcement Directorate
CRL.A. Nos. 276, 277 & 278 of 2008
Decided On : 24-04-2014
For the Appellants:S.S. Gandhi, Senior Advocate with Akshay Anand, Advocate.
The admissibility of retracted confessional statements and the requirement for credible and reliable corroborative evidence when relying on such statements.
Headnote:
Foreign Exchange Regulation Act - Contravention of Sections 8(1) and 8(2) - FERA - 1973 - Summary: The court discussed the contravention of Sections 8(1) and 8(2) of the Foreign Exchange Regulation Act, 1973 (FERA) and the reliance on retracted confessional statements. The court highlighted the legal principles regarding the admissibility of retracted confessional statements and the requirement for corroborative evidence. The court also emphasized the importance of cross-examination and the need for credible and reliable corroborative material.
Fact of the Case:
A raid was conducted resulting in the seizure of Indian currency and documents from the residences of the appellants. Confessional statements were retracted, and the appellants denied violation of FERA. The adjudication order relied on the retracted statements and confiscated the seized money.
Finding of the Court:
The court found that the reliance on retracted confessional statements without credible corroborative evidence was a serious legal infirmity. The denial of cross-examination of the Enforcement Directorate (ED) officials caused severe prejudice to the appellants.
Issues: The issues included the admissibility of retracted confessional statements, the requirement for corroborative evidence, and the denial of cross-examination of ED officials.
Ratio Decidendi: The court emphasized the need for credible and reliable corroborative material when relying on retracted confessional statements. It also highlighted the importance of allowing cross-examination to determine the credibility of the confessional statements.
Final Decision: The impugned orders were set aside, and the appeals were allowed with no orders as to costs. The amounts deposited by the appellants and money seized by the ED were directed to be refunded to the appellants.
1. These appeals are directed against the common order dated 30th November 2007 passed by the Appellate Tribunal for Foreign Exchange (‘AT’) dismissing the Appeal Nos. 618 of 2005, 619 of 2005 and 620 of 2005 thereby confirming the adjudication order (‘AO’) dated 13th June 2005 passed by the Special Director (‘SD’), Directorate of Enforcement (‘DoE’) holding that the Appellants had contravened Sections 8(1) and 8(2) of the Foreign Exchange Regulation Act, 1973 (‘FERA’) and imposing a total penalty of Rs.50 lakhs on the Appellant, Prem Singh (Appellant in Criminal Appeal No. 276 of 2008), and a penalty of Rs.10 lakhs each on the Appellants, Rajendra Singh (Appellant in Criminal Appeal No. 277 of 2008) and Tarlochan Singh (Appellant in Criminal Appeal No. 278 of 2008).
2. A raid was undertaken by the officials of the Enforcement Directorate (‘ED’) in the intervening night of 6th/7th March 1991 at the residential premises of Prem Singh at S-291, Greater Kailash, Part-II, New Delhi resulting in the recovery and seizure of Indian currency of Rs.20,36,000 and some documents. It was stated that during the course of the raid, the Appellant, Rajendra Singh, son-in-law of Prem Singh was also present. He too was searched under Section 34 FERA. The search resulted in the seizure of some documents including Indian currency Rs.1750. When the car of Rajendra Singh was searched some documents were recovered from the brief case belonging to him. His residential premises at J-209, Saket, New Delhi was also searched on 6th March 1991 resulting in the seizure of Indian currency of Rs.80,000 and certain documents. Searches were also undertaken at the residential premises of Mr. Hanwant Singh father of Tarlochan Singh @ Bittoo at JG-3/81-C, Vikaspuri.
3. Rajendra Singh is stated to have made a statement on 7th March 1991. When he was asked to explain about the seized documents recovered from the residence of Prem Singh, he denied knowing about the said documents. As far as Prem Singh and Tarlochan Singh were concerned, it is stated that they were avoiding appearance to the summons under Section 40 FERA. They finally appeared before the ED on 17th/18th December 1991. According to Tarlochan Singh, whatever Prem Singh is stated to have admitted in his statement on 17th/18th December 1991 about their illegal dealings in foreign exchange were true and correct. The entries written against ‘Bittoo’on the reverse of page 3, 7 and 11 of the bunch of loose sheets seized from the residence of Prem Singh showed that he had purchased/sold foreign exchange for Tarlochan Singh at the rates of Rs.22.30 and Rs.25 per dollar which was different from the rates prescribed by the Reserve Bank of India (‘RBI’) to the extent of Rs.19,60,520. Prem Singh is stated to have confessed that the Indian Currency of Rs.20,36,000 seized from his residence on 6th March 1991 was the sale proceeds of foreign exchange sold by him and this was without the permission of the RBI. He is stated to have confessed that from January 1991 to 6th March 1991 he had purchased and sold foreign exchange worth Rs.1.5 crores.
4. Rajendra Singh filed a statement before the learned Additional Chief Metropolitan Magistrate (‘ACMM’) on 8th March 1991 itself stating that he had been subjected to torture and threatened that if he did not make a statement in writing as per the decision of the ED, they would implicate his wife in this recovery and put her behind bars. The other two appellants, Prem Singh and Tarlochan Singh, by separate communications dated 18th December 1991 retracted their respective statements on the ground that they were obtained under coercion and threats.
5. The entries in the bunch of loose sheets recovered from the residence of Prem Singh, on which the ED placed reliance, were admittedly not in English or Hindi. The ED did not translate them. Reliance was entirely placed on the purported explanation of the writings on the loose sheets by Prem Singh in his statement under Se
