A.TAJUDEEN vs. UNION OF INDIA

1 “ REPORTABLE” IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 5773 OF 2009 A. Tajudeen …. Appellant versus Union of India …. Respondent J U D G M E N T Jagdish Singh Khehar, J . 1. Through memorandum dated 12.3.1990 it was alleged, that the appellant herein – A. Tajudeen, without any general or special exemption from the Reserve Bank of India, had received an amount of Rs.8,24,900/- in two installments, at the behest of Abdul Hameed, a person resident in JUDGMENT Singapore. The first installment was allegedly received on 23.10.1989 which comprised of Rs.4,00,000/-. The remaining amount was allegedly received in the second installment on 25.10.1989. As per the memorandum the aforesaid amounts had been received from a local person, who was not an authorised dealer in foreign exchange. 2. Based on the factual position noticed hereinabove, the allegation against the appellant was, that he had violated Section 9(1)(b) of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as, the 1973 Act). Section 9(1)(b) aforementioned, is being extracted hereunder:- Page 1 2 “9. Restrictions on payments – (1) Save as may be provided in, and in accordance with any general or special exemption from the provisions of this sub-section which may be granted conditionally or unconditionally by the Reserve Bank, no person in, or resident in, India shall –

Based on the aforesaid statutory provision, and the factual position noticed hereinabove, the Enforcement Directorate initiated proceedings against the appellant under Section 50 of the 1973 Act. 3. Before adjudicating upon the merits of the controversy, it is essential to narrate the factual position leading to the issuance of the aforesaid memorandum dated 12.3.1990. The facts as they emerge from the JUDGMENT pleadings, and the various orders leading to the passing of the impugned judgment rendered by the High Court of Judicature at Madras (hereinafter referred to as, the High Court) on 28.9.2006, are being chronologically narrated hereunder:- (i) The appellant – A. Tajudeen is alleged to have made a statement to the Enforcement Directorate on 20.4.1989, wherein he acknowledged, that he had received a sum of Rs.1,40,000/- from Abdul Hameed. Out of the above amount, he paid a sum of Rs.60,000/- through his shop boy – Shahib, to Shahul Hameed (a relative of Abdul Hameed) of Village Page 2 3 Pudhumadam. A further amount of Rs.20,000/- was paid to some friends of Abdul Hameed at Keelakarai, and remaining amount was retained by appellant himself. In the statement made on 20.4.1989, it was allegedly

(ii) On 25.10.1989, the officers of the Enforcement Directorate raided the residential premises of the appellant, namely, no. 6, Dr. Muniappa Road, Kilpauk, Madras. At the time of the raid, which commenced at 1.00 pm, his wife T. Sahira Banu was at the residence. The appellant - A. Tajudeen, also reached his residence at 1.30 pm, whilst the officers of the Enforcement Directorate were still conducting the raid. During the course of the raid, a sum of Rs.8,24,900/- in Indian currency was recovered from under a mattress from a bedroom of the appellant’s residence. (iii) A mahazar was prepared on 25.10.1989, depicting the details of the currency recovered from the raid. The said mahazar was prepared in the JUDGMENT presence of two independent witnesses, namely, R.M. Subramanian and Hayad Basha. The above independent witnesses also affixed their signatures on the mahazar. (iv) At the time of the raid itself, the statement of the appellant - A. Tajudeen was recorded (on 25.10.1989). The relevant extract of the aforesaid statement of the appellant is being reproduced hereunder. It needs to be expressly noticed, that the appellant now allegedly disclosed the address of Abdul Hameed, as no. 24, Sarangoon Road, Singapore. Page 3 4

JUDGMENT Page 4 5

(emphasis is ours) (v) During the course of the raid conducted on 25.10.1989, the appellant - A. Tajudeen, was detained by the officers of the Enforcement Directorate. His statement was again recorded on 26.10.1989 by the Chief JUDGMENT Enforcement Officer, whilst he was in custody. Relevant portion of his above mentioned statement is being extracted hereunder:- “I have earlier given statement before you on 25.10.1989. In that I have disclosed that by searching my house on 25.10.1989 your officers have seized a sum of Rs.8,24,900/- which I received from unknown persons on 23.10.1989 and 25.10.1989 on the instructions of Abdul Hameed of Singapore. This is true. On 25.10.1989, the said officers searched the jewellery shop “Banu Jewellers” in which my wife is a partner. At that time I was also there. In the said search no documents were seized. The other partner Mr. Muthusamy who is looking after the seized sum of Rs.8,24,900/- is not related to the said business. As stated by him, there is no connection between the said business and the sums seized. Today your officers searched my room at No. 402, Ganpat Hotel, Nungapakkam High Road, Madras-34 which I have taken on rent. I was there during the search. Since I have lost the key it was Page 5 6

Enforcement Directorate, the statement of his wife T. Sahira Banu was JUDGMENT also recorded on 26.10.1989. The same was allegedly scribed by M.J. Jaffer Sadiq, a nephew, and then signed by T. Sahira Banu. In the above statement, T. Sahira Banu, the wife of A. Tajudeen admitted the recovery of Rs.8,24,900/- by the officers of the Enforcement Directorate, from the residence of the appellant i.e., no. 6, Dr. Muniappa Road, Kilpauk, Madras. (vii) On 27.10.1989, A. Tajudeen and T. Sahira Banu retracted their earlier statement(s), alleging that the same had been recorded against their will and under the threat and compulsion of the officers of the Enforcement Directorate. Page 6 7 4. In response to the memorandum dated 12.3.1990, the appellant filed a reply (which is available on the record of the present case as Annexure P-9). In his reply, he denied having made any statement on 20.4.1989.

memorandum dated 12.3.1990. He also denied the factual contents of the statements dated 25.10.1989 and 26.10.1989. He denied having ever met Abdul Hameed. He also denied, that there was any occasion for him to ask for any loan from the said Abdul Hameed. He denied any acquaintanceship with the said Abdul Hameed. Insofar as the statements recorded on 25.10.1989 and 26.10.1989 are concerned, his specific assertion in his reply was, that he was compelled to make the above statements at the dictation of the officers of the Enforcement Directorate. He also asserted, that the said statements had been made under threat, coercion and undue influence. He highlighted the fact, that on the very day JUDGMENT of his release from detention, i.e., on 27.10.1989, he had addressed a letter to the Enforcement Directorate, repudiating the factual position indicated in the statements made by him on 25.10.1989 and 26.10.1989. He also asserted, that a similar course of action had been adopted by his wife T. Sahira Banu, inasmuch as, she too had repudiated the statement recorded by her on 26.10.1989 at the office of the Enforcement Directorate through a separate communication dated 27.10.1989. Insofar as the currency recovered from his residence is concerned, his explanation was, that he had an established business under the trade name of Seemati Page 7 8 Silks, which had an annual turnover of Rs.25 to 30 lacs. He also asserted, that his wife T. Sahira Banu had also business establishments including Seemati Matchings and Banu Jewellers, from which she was earning

business projects, from which he was also earning independent income. In addition to his financial status reflected hereinabove, it was also the case of the appellant, that he had taken hand loans. The amount which was recovered by the officers of the Enforcement Directorate from his residence on 25.10.1989, was comprised of all the above sources. He clearly and expressly denied, having received the aforesaid currency (Rs. 8,24,900/-) from a person resident in India, at the behest of a person not resident in India. 5. Having examined the response of the appellant, the Additional Director of Enforcement, Southern Zone, Madras, by an order dated JUDGMENT 22.4.1991, arrived at the conclusion, that the appellant was guilty of violating Section 9(1)(b) of the 1973 Act. Having so concluded, the seized amount of Rs.8,24,900/- was ordered to be confiscated. In addition, the appellant was imposed a penalty of Rs.1,00,000/- for contravening the provisions of Section 9(1)(b) of the 1973 Act. Dissatisfied with the order dated 22.4.1991 passed by the Additional Director of Enforcement, Southern Zone, Madras, the appellant preferred an appeal before the Foreign Exchange Regulation Appellate Board (hereinafter referred to as, the Appellate Board). The aforesaid appeal bearing number 316 of 1991 Page 8 9 was allowed by an order dated 31.12.1993. While allowing the appeal, the Appellate Board directed the refund of penalty of Rs.1,00,000/- imposed on the appellant. The Appellate board also quashed the direction pertaining to the confiscation of Rs.8,24,900/- seized from the residence of the appellant. 6. Aggrieved by the order passed by the Appellate Board, the Union of India through the Director of Enforcement preferred an appeal under Section 54 of the 1973 Act, before the High Court. The High Court allowed the above appeal being C.M.A. NPD no. 1282 of 1994 by an order dated 28.9.2006. While allowing the aforesaid appeal, the High Court placed reliance on the statement made by the appellant, before the officers of the Enforcement Directorate on 20.4.1989. The aforesaid statement was referred to, as having been voluntarily made by the appellant. The High Court expressed the view, that the statements recorded by the appellant on 25.10.1989 and 26.10.1989 were voluntarily made by him, and as such, JUDGMENT the retraction of the said statements, was not accepted. Likewise, the High Court accepted the statement of T. Sahira Banu made at the office of the Enforcement Directorate at Madras on 26.10.1989, as voluntary. Her retraction of the said statement was also not accepted by the High Court. The High Court placed reliance on the fact, that the appellant had been produced before the Additional Chief Metropolitan Magistrate, Madras, during the course of his detention, but he had not indicated to the Magistrate during his production, that he and his wife were compelled to make the above statements, by the officers of the Enforcement Page 9 1 Directorate. This was the primary reason for the High Court, in rejecting the retractions made by the appellant and his wife. 7. Insofar as the veracity of name and identity of Abdul Hameed is

personal knowledge of the appellant alone, and therefore, his disclosure about the name and identity of Abdul Hameed could not be doubted. Insofar as the different addresses of Abdul Hameed indicated in the statements dated 20.4.1989 and 25.10.1989/26.10.1989 are concerned, the High Court was of the view, that the appellant had himself disclosed the address of the above mentioned Abdul Hameed, and as such, he cannot be permitted to use the said statements to his own benefit. The High Court was also of the view, that merely because the statements had been recorded at the time of the raid at the residence of the appellant, and whilst he was under detention, it could not be inferred, that the same were JUDGMENT not voluntary. 8. During the course of hearing, the first contention advanced at the hands of the learned counsel for the appellant was, that it was not open to the Enforcement Directorate to rely on the alleged statement dated 20.4.1989, which the appellant is stated to have made before the officers of the Enforcement Directorate. Insofar as the instant aspect of the matter is concerned, it was the vehement contention of the learned counsel for the appellant, that no reference was made to the above statement dated 20.4.1989 in the memorandum dated 12.3.1990. It was further submitted, Page 10 1 that a copy of the aforesaid statement dated 20.4.1989 was never furnished to the appellant. In fact it was the vehement contention of the learned counsel for the appellant, that no such statement was ever made

our attention to the fact, that the High Court in para 16 of the impugned judgment had inter alia, observed as under:- “16. ….. Referring to the explanation given by the officer that they had no record of the statement made on 20.4.1989 at the time when the statement was made by Tajudeen on 26.10.1989…..” It was also submitted, that if the appellant had made any such statement on 20.4.1989, as was now being relied upon by the Enforcement Directorate, he would have most definitely been proceeded against for violation of the provisions of Section 9(1)(b) of the 1973 Act. The very fact that he was not proceeded against, shows that no such earlier statement JUDGMENT may have been recorded by the appellant on 20.4.1989. 9. We have given our thoughtful consideration to the first contention advanced at the hands of the learned counsel for the appellant. There is no doubt whatsoever, that no reliance has been placed on the alleged statement made by the appellant on 20.4.1989 before the officers of the Enforcement Directorate, in the memorandum dated 12.3.1990. Per se, therefore, it was not open to the authorities to place reliance on the aforesaid statement, while proceeding to take penal action against the appellant, in furtherance of the aforesaid memorandum dated 12.3.1990. Page 11 1 Additionally, it is apparent from the reply (Annexure P-9) furnished by the appellant to the memorandum dated 12.3.1990, that the appellant clearly and expressly refuted having executed any statement on 20.4.1989. It

statement on 20.4.1989. It also cannot be overlooked, that no action was initiated against the appellant on the basis of the aforesaid statement dated 20.4.1989. A perusal of the aforesaid statement, in the terms as are apparent from the pleadings of the case, leaves no room for any doubt, that if the appellant had made any such statement, he would have been proceeded against under Section 9(1)(b) of the 1973 Act. The mere fact that he was not proceeded against, prima facie establishes, in the absence of any evidence to the contrary, that the assertion made by the appellant to the effect that he never made such statement, had remained unrefuted. The reason depicted in the paragraph 16 of the impugned judgment JUDGMENT passed by the High Court extracted in the foregoing paragraph is clearly a lame excuse. Even though the aforesaid excuse may have been valid, if the allegation was, that the record of the statement made on 20.4.1989, was not available with the officers of Enforcement Department at the time of the raid on 25.10.1989, yet to state that the aforesaid record was not available when the second statement was made on 26.10.1989 at the office of the Enforcement Directorate, is quite ununderstandable. It is pertinent to mention, that the second statement was recorded by the Chief Enforcement Officer when the appellant – A. Tajudeen was in custody of Page 12 1 the Enforcement Directorate. At that juncture if the record, as alleged, was not available with the authorities, it must lead to the inevitable inference, that the record was not available at all. For the reasons recorded

establish the allegations levelled against the appellant through the memorandum dated 12.3.1990. And secondly, in the absence of having established through cogent evidence, that the appellant had made the above statement dated 20.4.1989, it was not open to the Enforcement Directorate to place reliance on the same, for establishing the charges levelled against the appellant in memorandum dated 12.3.1990. 10. With reference to the statement of the appellant dated 20.4.1989, it is also necessary to record, that we had an impression during the course of hearing, that the above statement would lead us to a clearer understanding of the truth of the matter. After the hearing concluded on JUDGMENT 6.6.2014, we required the learned counsel for the respondent to hand over to us the record of the case. We had clearly indicated to learned counsel, that the purpose for this was, that we wished to examine the alleged statement of the appellant dated 20.4.1989, along with the record connected therewith. In compliance, the summoned record was presented at the residential office of one of us (J.S. Khehar, J.) on 7.6.2014. A perusal of the record revealed, that the same did not comprise of the appellant’s alleged statement dated 20.4.1989, or the record connected Page 13 1 therewith. The said record was therefore returned forthwith (on 7.6.2014 itself), by making the following remarks:

Sd/- (Deepak Guglani) Court Master 7.6.2014 File received by:- Sd/- [Mr. A.B. Ravvi]” Needless to mention, that despite the above remarks no further record was ever brought to our notice. This is a seriously unfortunate attitudinal JUDGMENT display, leaving us with no other option but to conclude, that the alleged statement made by the appellant on 20.4.1989, may well be a fictitious creation of the Enforcement Directorate. In such circumstances, reliance on the appellant’s alleged statement dated 20.4.1989, just does not arise. 11. Having arrived at the aforesaid conclusion, we shall now examine the veracity of the remaining evidence available with the Enforcement Directorate, for substantiating the charges levelled against the appellant through memorandum dated 12.3.1990. Having discarded the statement dated 20.4.1989, what remains is, the statements of the appellant - A. Page 14 1 Tajudeen recorded on 25.10.1989 and 26.10.1989, as also, the statement of his wife T. Sahira Banu recorded on 26.10.1989. Besides the aforesaid statements, the remaining evidence against the appellant is, in the nature

addition to the above, the Enforcement Directorate also relied upon the newspaper sheets of the Hindu and Jansatha, in which the bundles of notes recovered from the residence of the appellant, were wrapped. Insofar as the Hindu newspaper sheets are concerned, they were of the Delhi and Bombay editions dated 19.2.1989, 14.4.1989, 23.7.1989 and 4.10.1989. The sheets of the Jansatha newspaper also pertain to its Delhi and Bombay editions of February, 1989 and 23.10.1989. 12. Insofar as the aforesaid remaining evidence is concerned, it was the vehement contention of the learned counsel for the appellant, that the same was not sufficient to discharge the onerous responsibility of the JUDGMENT Enforcement Directorate, to establish the charge levelled against the appellant. It was the submission of the learned counsel for the appellant, that reliance could not be placed on the statements made by the appellant, as also, his wife (on 25.10.1989 and 26.10.1989). In this behalf, it was sought to be cautioned, that if this manner of establishing charges was affirmed, the officers of the Enforcement Directorate, could easily compel individuals through coercion, threat and undue influence, as they had allegedly done in this case, and then proceed to punish them, on the strength of their own statements. It was submitted, that in the facts and Page 15 1 circumstances of this case, there was ample opportunity available with the Enforcement Directorate, to establish the veracity of the statements made by the appellant - A. Tajudeen and his wife T. Sahira Banu. In this behalf it

Pudhumadam in District Ramanathapuram. He also stated, that the said Abdul Hameed was related to him from his paternal side. In the statements relied upon by the Enforcement Directorate, the appellant had allegedly also disclosed, that Abdul Hameed had contacted him over the telephone from Singapore. It was submitted, that all the above facts were verifiable. It was submitted, that it could not be believed, that officers of the Enforcement Directorate did not verify the authenticity of the factual position in respect of Abdul Hameed. It was further submitted, that the appellant in the statement dated 20.4.1989 had mentioned, that the appellant, on the instructions of Abdul Hameed of Singapore, dispatched a JUDGMENT sum of Rs. 60,000/- (out of total amount of Rs. 1,40,000/-) to Shahul Hameed at Pudhumadam through his shop boy - Shahib. According to the learned counsel, the Enforcement Directorate could have confirmed the aforesaid factual position through Shahib. It is apparent, according to learned counsel, that the aforesaid factual position was found to be incorrect, and therefore, no further statements were recorded by the Enforcement Directorate, in connection therewith. It was also submitted, that the appellant had produced before the Assistant Director of Enforcement, a communication from the Revenue Department of Page 16 1 Singapore, dated 2.9.1990 stating that, there was no such address at no. 24, Sarangoon Road, Singapore, and as such, the very foundational basis of the statements made by the appellant on 25.10.1989 and 26.10.1989

Singapore, depicting that no such address was there at Sarangoon Road, where the said Abdul Hameed was alleged to be running his business. 13. In order to contend that the statements made by the appellant – A. Tajudeen and his wife T. Sahira Banu could not be relied upon in law, learned counsel for the appellant, placed reliance on K.T.M.S. Mohd. v. Union of India, (1992) 3 SCC 178 and invited our attention to the observations made in paragraph 34. The same is extracted hereunder: 34. We think it is not necessary to recapitulate and recite all the decisions on this legal aspect. But suffice to say that the core of all the decisions of this Court is to the effect that the voluntary nature of any statement made either before the Custom Authorities or the officers of Enforcement under the relevant provisions of the respective Acts is a sine quo non to act on it for any purpose and if the statement appears to have been obtained by any inducement, threat, coercion or by any improper means that statement must be rejected brevi manu. At the same time, it is to be noted that merely because a statement is retracted, it cannot be recorded as involuntary or unlawfully obtained. It is only for the maker of the statement who alleges inducement, threat, promise etc. to establish that such improper means has been adopted. However, even if the maker of the statement fails to establish his allegations of inducement, threat etc. against the officer who recorded the statement, the authority while acting on the inculpatory statement of the maker is not completely relieved of his obligations in at least subjectively applying its mind to the subsequent retraction to hold that the inculpatory statement was not extorted. It thus boils down that the authority or any Court intending to act upon the inculpatory statement as a voluntary one should apply its mind to the retraction and reject the same in writing. It is only on this principle of law, this Court in several decisions has ruled that even in passing a detention JUDGMENT Page 17 1

(emphasis is ours) judgment, learned counsel for the appellant also placed reliance on Vinod Solanki v. Union of India, (2008) 16 SCC 537, by inviting our attention to the following conclusion recorded therein:- “36. 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. 37. 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 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. JUDGMENT 38. 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 18herefore. 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 Page 18 1 finding is arrived at only on the basis of such confession although retracted at a later stage.

40. 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. 41. 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 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.” JUDGMENT (emphasis is ours) 14. The aforesaid submissions were sought to be refuted by the learned counsel representing the Union of India, by placing reliance on the findings recorded by the High Court, in the impugned judgment. Page 19 2 15. First and foremost, we shall endeavour to examine the veracity of the statements made by the appellant – A. Tajudeen and his wife T. Sahira Banu on 25.10.1989 and 26.10.1989 to the officers of the Enforcement

innocence or guilt of the appellant will have to be determined on the basis of the statements made by the appellant and his wife (on 25.10.1989 and 26.10.1989) to the officers of the Enforcement Directorate. Therefore, for the case in hand, the above statements are not to be referred to as corroborative pieces of evidence, but as primary evidence to establish the guilt of the appellant. It is in this background, that we shall endeavour to apply the legal position declared by this Court, to determine the veracity and reliability to the statements, which later came to be retracted by the appellant and also by his wife. Insofar as the above statements are concerned, there is no doubt whatsoever, that they were all made either at JUDGMENT the time of the raid, which was carried out by the officers of the Enforcement Directorate at the residence of the appellant, or whilst the appellant was in custody of the Enforcement Directorate. Immediately after the appellant was released on bail by the Additional Chief Metropolitan Magistrate, Madras on 27.10.1989, on the same day itself, both the appellant – A. Tajudeen and his wife T. Sahira Banu addressed communications to the Director, Enforcement Directorate, New Delhi resiling from the above statements, by clearly asserting that they were Page 20 2 recorded under coercion and undue influence, and would not be binding on them. 16. Having given our thoughtful consideration to the aforesaid issue, we

of guilt against the appellant. If findings could be returned by exclusively relying on such oral statements, such statements could easily be thrust upon the persons who were being proceeded against on account of their actions in conflict with the provisions of the 1973 Act. Such statements ought not to be readily believable, unless there is independent corroboration of certain material aspects of the said statements, through independent sources. The nature of the corroboration required, would depend on the facts of each case. In the present case, it is apparent that the appellant – A. Tajudeen and his wife T. Sahira Banu at the first opportunity resiled from the statements which are now sought to be relied JUDGMENT upon by the Enforcement Directorate, to substantiate the charges levelled against the appellant. We shall now endeavour to examine whether there is any independent corroborative evidence to support the above statements. 17. According to the learned counsel representing the appellant, there was an effective opportunity to the officers of the Enforcement Directorate to produce evidence with reference to a number of important facts, disclosed by the appellant while making the aforesaid statements, yet the officers of the Enforcement Directorate chose not to substantiate the same Page 21 2 through independent evidence. He cited a few instances where such evidence could have been easily gathered by the officers of the Enforcement Directorate. In the absence of any corroboration whatsoever,

against the appellant. 18. We have no doubt, that evidence could be gathered to substantiate that Abdul Hameed, the person who is alleged to have dispatched the money from Singapore, was a resident of Village Pudhumadam in District Ramanathapuram, to which the appellant also belongs. Material could also have been gathered to show, whether he was related to the appellant from his paternal side. Furthermore, the Enforcement Directorate could have easily substantiated whether or not, as asserted by the appellant, the aforesaid Abdul Hameed had contacted him over telephone from Singapore, to inform him about the delivery of the amount recovered from JUDGMENT his residence on 25.10.1989. Additionally, the Enforcement Directorate could have led evidence to establish that the aforesaid Abdul Hameed with reference to whom the appellant made statements on 20.4.1989, 25.10.1989 and 26.10.1989, was actually resident of Singapore, and was running businesses there, at the location(s) indicated by the appellant. Still further, the officers of the Enforcement Directorate could have ascertained the truthfulness of the factual position from Shahib, the shop boy of the appellant – A. Tajudeen, whom he allegedly sent to hand over a sum of Rs. 60,000/- to Shahul Hameed (a relative of Abdul Hameed) of Village Page 22 2 Pudhumadam. Had the statements of the appellant and his wife been corroborated by independent evidence of the nature indicated hereinabove, there could have been room for accepting the veracity of the

effort was made by the Enforcement Directorate to gather any independent evidence to establish the veracity of the allegations levelled against the appellant, through the memorandum dated 12.3.1990. We are of the considered view, that the officers of the Enforcement Directorate were seriously negligent in gathering independent evidence of a corroborative nature. We have therefore no hesitation in concluding that the retracted statements made by the appellant and his wife could not constitute the exclusive basis to determine the culpability of the appellant. 19. We shall now deal with the other independent evidence which was sought to be relied upon by the Enforcement Directorate to establish the JUDGMENT charges levelled against the appellant. And based thereon, we shall determine whether the same is sufficient on its own, or in conjunction to the retracted statements referred to above, in deciding the present controversy, one way or the other. First and foremost, reliance was placed on “mahazar” executed (at the time of the recovery, from the residence of the appellant) on 25.10.1989. It would be pertinent to mention, that the appellant in his response to the memorandum dated 12.3.1990 had expressly refuted the authenticity of the “mahazar” executed on 25.10.1989. Merely because the “mahazar” was attested by two Page 23 2 independent witnesses, namely, R.M. Subramanian and Hayad Basha, would not led credibility to the same. Such credibility would attach to the “mahazar” only if the said two independent witnesses were produced as

But then, would the preparation of the “mahazar” and the factum of recovery of a sum of Rs. 8,24,900/- establish the guilt of the appellant, insofar as the violation of Section 9(1)(b) of the 1973 Act is concerned? In our considered view, even if the “mahazar” is accepted as valid and genuine, the same is wholly insufficient to establish, that the amount recovered from the residence of the appellant was dispatched by Abdul Hameed, a resident of Singapore, through a person who is not an authorised dealer in foreign exchange. Even, in response to the memorandum dated 12.3.1990, the appellant had acknowledged the recovery of Rs. 8,24,900/- from his residence, but that acknowledgment JUDGMENT would not establish the violation of Section 9(1)(b) of the 1973 Act. In the above view of the matter, we are of the opinion that the execution of the “mahazar” on 25.10.1989, is inconsequential for the determination of the guilt of the appellant in this case. 20. The only other independent evidence relied upon by the Enforcement Directorate is of pages from the Hindu and the Jansatha newspapers, in which the bundles of money were wrapped, when the recovery was effected on 25.10.1989. In view of the position expressed in the foregoing paragraph, we are satisfied that the charge against the Page 24 2 appellant under Section 9(1)(b) of the 1973 Act, cannot be established on the basis of newspaper sheets, in which the money was wrapped. The newspaper sheets relied upon, would not establish that the amount

not an authorized dealer. 21. Based on the above determination, and the various conclusions recorded hereinabove, we are satisfied, that the impugned judgment passed by the High Court deserves to be set aside. The same is accordingly hereby set aside. Resultantly, the entire action taken by the Enforcement Directorate against the appellant in furtherance of the memorandum dated 12.3.1990, is also set aside. As a consequence of the above, the Enforcement Directorate is directed to forthwith refund the confiscated sum of Rs.8,24,900/-, to the appellant, as also, to return the amount of Rs.1,00,000/-, which was deposited by the appellant as penalty. JUDGMENT 22. The instant appeal is, accordingly, allowed in the abovesaid terms. …………………………….J. (Jagdish Singh Khehar) …………………………….J. (C. Nagappan) New Delhi; October 10, 2014. Page 25 2 ITEM NO.1B COURT NO.6 SECTION XII S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Civil Appeal No(s). 5773/2009 A.TAJUDEEN Appellant(s) VERSUS UNION OF INDIA Respondent(s) [HEARD BY HON'BLE JAGDISH SINGH KHEHAR AND HON'BLE C. NAGAPPAN, JJ.] Date : 10/10/2014 This appeal was called on for judgment today. For Appellant(s) Mr. R. Nedumaran,Adv. For Respondent(s) Mr. B. V. Balaram Das,Adv.(Not present) Hon'ble Mr. Justice Jagdish Singh Khehar pronounced the judgment of the Bench comprising His Lordship and Hon'ble Mr. Justice C. Nagappan. For the reasons recorded in the Reportable JUDGMENT judgment, which is placed on the file, the appeal is allowed. As a consequence, the Enforcement Directorate is directed to forthwith refund the confiscated sum of Rs.8,24,900/- to the appellant, as also, to return the amount of Rs.1,00,000/-, which was deposited by the appellant as penalty. (Parveen Kr. Chawla) (Phoolan Wati Arora) Court Master Assistant Registrar Page 26