The Hindu : FERA accused not entitled to FEMA benefits: HC

Online edition of India's National Newspaper
Saturday, Feb 22, 2003

Southern States

Southern States - Tamil Nadu-Chennai

FERA accused not entitled to FEMA benefits: HC

By A. Subramani

CHENNAI FEB. 21. Persons accused of white-collar economic crimes, punishable under the erstwhile Foreign Exchange Regulatory Act, are not entitled to benefits of the Foreign Exchange Management Act 1999, which replaced the FERA, the Madras High Court has ruled. The crucial difference is that the FEMA does not contemplate any punishment for offences.

Reversing two judgments of acquittal involving three FERA accused, Justice P.D. Dinakaran said, ``as per Section 49(4) of the FEMA, all offences committed under the repealed FERA shall be governed by the FERA provisions as if it has not been repealed at all''.

The judge pointed out that the new Act was provided with a repeal and saving clause in Sections 49(3) and 49(4) of the FEMA, and set aside two orders of Economic Offences courts I and II, passed in 1994 acquitting three persons accused of having received huge sums from non-resident Indians and distributing the money here without valid permission from the Reserve Bank.

After busting the racket, the Enforcement Directorate Additional Director imposed a fine of varying sums on Khader Sulaimaan, P. Krishnasamy and J. Sampath Kumar. However the additional chief metropolitan magistrate courts (EO-I and II) acquitted the three.

The ED Counsel, K. Kumar, submitted that in view of the saving clauses, the offence committed under the FERA should be dealt with only under the provisions of the repealed Act, notwithstanding the repeal of the measure as the Supreme Court had time and again held that the offence committed under the FERA was serious in nature.

Mr. Justice Dinakaran, allowing the appeals, said: ``The entire community will be aggrieved if the economic offenders who ruin economy of the State are not brought to book. A murder may be committed in the heat of the moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit, regardless of the consequence to the community''.

Rejecting defence arguments that since the accused had retracted on their confessional statements they could not be admissible evidence, the judge said, ``... for an offence punishable under the FERA, the well-settled legal position is that confession could be the sole basis for conviction. But if it is retracted by the accused, the burden will be on the accused to prove that the statement was obtained under threat, duress and promise''.

He also concluded that non-examination of persons who either paid money to the accused or received it from the accused, or the bankers through whom the amounts were disbursed, is not fatal to the case of the prosecution. ``It is clear that the material, oral and documentary evidence relied upon by the prosecution substantially proved the charges framed against the accused'', he said.

In the end, he imposed a fine of varying sums on the three offenders and sentenced them `till the rise of the court'.

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