NAVIN CHAWLA, J. (ORAL)

1. This appeal has been filed under Section 35 of the Foreign Exchange Management Act, 1999 [hereinafter, “FEMA”] read with Section 54 of the Foreign Exchange Regulation Act, 1973 [hereinafter, “FERA”], challenging the order dated 29.05.2024 passed by the learned Appellate Tribunal for Foreign Exchange under SAFEMA [“the Tribunal”] in Appeal No. FPA-FE-311/DLI/2005, titled as, “Shri Prakash Chandra Yadav vs. The Special Director, Directorate of Enforcement, Delhi”, inter alia dismissing the appeal filed by the appellant herein.

2. The appellant had filed the above appeal before the learned Tribunal, challenging the order dated 30.11.2004, whereby the learned Adjudicating Authority had imposed a penalty of Rs. 5 Lakhs on the appellant for the alleged contravention of Section 8(1) of FERA.

3. The respondent had imposed the above penalty alleging that one Akbar Veerji, an NRI, had opened a Non-Resident External [“NRE”] account with the Canara Bank by depositing foreign exchange in the following manner:-

i. 01.07.92 (cash) US $500/- equivalent to Rs.14,850/-

ii. 04.07.92 (cash) US $10,000/- equivalent to Rs.2,95,000/-

iii. 17.07.92 (F.I.T.T) US $1,39,000/- equivalent to Rs. 42,29,756/-.

4. Out of the amount so deposited, a Cheque amounting to Rs. 30 Lakhs was issued in favour of the appellant on 17.07.1992. Claiming that the same was a violation of Section 8(1) of FERA, proceedings were initiated not only for imposition of penalty under Section 50 of the FERA but a criminal prosecution was also launched inter alia against the appellant.

5. As far as the criminal prosecution is concerned, by an order dated 30.11.2017 passed in CC No. 42/1/14, titled as, “Enforcement vs. Nemi Chand Jain & Ors.”, the learned ACMM, Patiala House Courts has been pleased to acquit the appellant. However, as far as the penalty proceedings are concerned, as noted hereinabove, the Adjudicating Authority imposed a penalty of Rs. 5 Lakhs on the appellant vide order dated 30.11.2004, which has been confirmed by the learned Tribunal by dismissing the appeal filed by the appellant. The present appeal has been filed challenging the said order.

6. The learned Senior Counsel appearing on behalf of the appellant submits that in the present case, as the amount had been transferred to the appellant in Indian currency, there was no violation of Section 8(1) of FERA. He submits that the impugned order has wrongly interpreted Section 8(1) of FERA and is, therefore, liable to be set aside.

7. On the other hand, the learned counsel appearing on behalf of the respondent submits that the present appeal is liable to be dismissed not only on the ground of suppression, inasmuch as the appellant has failed to disclose in the appeal the judgment dated 06.04.2009 passed by this Court in CRL.REV.P. 146/2007, titled as, “Prakash Chand Yadav vs. Enforcement Directorate” [NC No. 2009:DHC:1166], by which the revision petition filed by the appellant against the framing of charge in the criminal case had been rejected by a learned Single Judge of this Court, but even on merits. He submits that in the present case, the alleged Loan Agreement dated 03.07.1992 relied upon by the appellant, would show that the appellant was aware that the amount been given to him as loan was from a NRE account, thereby showing his connivance in violation of Section 8(1) of FERA.

8. He submits that the learned Tribunal has also upheld the impugned penalty by placing reliance on Section 8(2) of FERA, which prohibits conversion of foreign exchange into Indian Currency.

9. We have considered the submissions made by the learned counsels appearing for the parties.

10. There is no dispute on facts inasmuch as it is not denied by the appellant that he has received a cheque of Rs. 30 Lakhs from Akbar Veerji, drawn on his NRE account, wherein the amount was deposited by him in foreign currency, that is, US Dollars. It is also not disputed that the cheque given to the appellant was, however, in