CHENNAI: Holding that former member of Parliament T T V Dinakaran was taking different stands, the first bench of the Madras High Court upheld an over 15-year-old order of the Foreign Exchange Regulation Appellate Board (FERAB), which imposed a penalty of Rs 28 crore on him.
The fine was imposed on Dinakaran on May 5, 2000 for contravention of various provisions of the Foreign Exchange Regulation Act (FERA). The charge against him was that he had acquired USD 62.61 lakh from persons other than the authorised dealers in foreign exchange, deposited them in different companies incorporated in the British Virgin Island with Barclays Bank and other places and then lent the exchange to a person who was not a authorised dealer. He had failed to offer it for sale to an authorised dealer in foreign exchange in India within three months from the date of becoming the owner of the dollars.
The main contention of senior counsel B Kumar was that all the charges had been framed against Dinakaran based on the premise that he was, during the relevant point of time, a resident of India. But he was not so. He was in Singapore, he had claimed. Hence, Dinakaran should have been exonerated of all charges, he argued.
Accepting the arguments of ED senior counsel G Rajagopalan, the bench of Chief Justice S K Kaul and Justice R Mahadevan referred to a habeas corpus writ petition filed by Dinakaran, when he was detained under COFEPOSA in 1996. When the matter came up before a division bench of this court, he did not claim that he was not a resident of India. In the election petition filed by him during the Lok Sabha elections in 1995, he had claimed that he was a citizen of India. But before the Foreign Exchange Regulation Authorities, he had claimed that he was not a citizen of India. Thus, Dinakaran was taking different stands, which were not permissible under law.
“In such view of the matter, this court deems it fit only to hold that the order passed by the Board does not require any interference,” the bench said. Rejecting the second contention, the bench held the appellate authority has ample powers under section 52(4) of FERA to modify the orders of the adjudicating authority, which took a lenient view towards Dinakaran.
Turning down the third contention that the findings of the adjudicating authority, who had formed part of the investigating agency, could not be relied upon as he was likely to be biased, the bench said that in this case, A P Kala, who was the adjudicating officer, had only monitored the investigation. He did not take part in issuing summons or recorded statements and searches. There was nothing on record to show that the adjudicating officer was prejudiced, the bench said.
Rejecting the fourth and last contention that a company was given protection under the Companies Act, the bench said the protection under the law, was not an absolute bar to proceed against its directors and it was to be decided on the facts of each of the case.
“In the result, all the questions of law are answered against the appellant and in favour of the revenue (department),” the bench said, confirming the order of the Board and dismissed the appeal.