ORDER OF THE COMMISSION – Hirdaramani and others

083-NLR-NLR-V-77-ORDER-OF-THE-COMMISSION–Hirdaramani-and-others.pdf


ORDER OF THE COMMISSION—Hirdaramani and others
409
[Criminal Justice Commission (Foreign Exchange Offences) ]
Present: G. P. A. Silva, retired C.J. (Chairman),Pathirana, J., and D. Q. M. Sirimane, J.
In re
B. HIRDARAMANI (Chairman, Board of Directors,
Hirdaramani Industries Ltd., Colombo 1)
S. GALETOVIC (Resident Representative, Ingra,
Mahaveli Diversion Project) (Yugoslav National)
GLIGO MLADEN (Business Manager, Ingra) Yugoslav
National)
<4) V. MURJIANI (Textile Merchant)
K. K. JAGTIANI (Film Producer)
C. C. SHARMA (Sindhi Priest)
S. A. S. M. ABDUL HAMEED (Absent) (Indian
National)
D. S. SABNANI (Co-Partner, Crown Silk Stores,
Colombo 11)
Suspects.
Case No. 1/73—CJ.C. (2)
rCriminal Justice Commissions Act, No. 14 of 1972, as amended byCriminal Justice Commissions (Amendment) Law, No. 10 of1972—Sections 2, 3, 6 (I) (d), 11, 15—Offences in relation tocurrency or . foreign exchange—Proof—Meaning of terms“ currency ”, “ foreign currency ”, “ foreign exchange ”—Sale ofGoods Ordinance, s. 2—Monetary Law Act (Cap. 422), ss. 73, 74,76—Exchange Control Act (Cap. 423), as amended by Act No. 17of 1971, ss. 4, 5 (1), 5 (2), 6 AB (a), 6 AB (b), 49, 54—Abetment—Every assistance does not constitute 'abetment—Sentence—Considerations applicable.
The 1st suspect wanted to buy sterling to set up his son inbusiness in England. He failed to obtain any exchange by legitimatemeans and therefore resorted to a course of buying sterling at blackmarket rate. There was overwhelming evidence as to several visitsby the 2nd and 3rd suspects to see the 1st suspect at which thebuying and selling of sterling was discussed and the price in Rupeeswas agreed upon. There was also evidence as to the delivery otthe Rupee payments by the 1st suspect to the 2nd and 3rd suspectsand the receipt by his agent in London of payments of sterlingand dollars at or about the time of the transactions in Ceylonbetween the three suspects. Some of the moneys credited to thebank account of the agent in London was drawn by the agent atthe instance of the 1st suspect.
The 2nd and 3rd suspects were Yugoslav nationals who weretemporarily employed in Ceylon. There was sufficient proof thatwhat was bought and sold in Ceylon was foreign currency.In some instances, money in rupees was paid before ascertaining
LXXVII—IS, 19 <£• 20
1*—A 3,000—<75/03)
410
ORDER OF THE COMMISSION—Hirdaramani and others
from the 1st suspect’s agent whether the foreign money had reachedthe agent’s bank account. In the other instances the money waspaid here after such ascertainment.
Held, that there was sufficient evidence, direct and circumstantial,to establish that the 1st, 2nd and 3rd suspects were guilty ofoffences under section 5 (1)(a) of the Exchange Control Act
(Cap. 422), as amended by Act No. 17 of 1971. Whenever a chargeunder this section has been made out against a particular suspect,such suspect is also guilty of a charge under section 5 (2) as wellas section 6 AB (a) and, in those instances in which some of thesuspects have been charged with disposing of by sale the assetsacquired by them without obtaining the necessary directions fromthe Bank, they too commit an offence under section 6 AB (b).
The Sale of Goods Ordinance does not apply to a sale contemplatedin section 5 (1) of the Exchange Control Act. Even assuming thatthe transaction in the present case was governed by the Sale ofGoods Ordinance, there was a completed sale, in Ceylon, of foreignmoney and not merely an agreement to sell.
The subject matter of the sale was foreign currency within themeaning of the statutory definition of the expression “ foreigncurrency ” in the Exchange Control Act, as amended by Act No. 17of 1971.
Held further, (i) that, when the Criminal Justice Commissionfinds a person guilty of an offence under the Criminal JusticeCommissions Act, No. 14 of 1972, the Commission is not bound toprobe whether the particular act constituting the offence endangeredthe national economy or interests.
(ii) that a person who is charged with abetment of offences ofbuying or selling currency is not liable to be convicted unless hetook such an active part in the transactions in question as to inducethe person buying or selling currency to engage in the transaction.
Observations on the principles to be taken into consideration inimposing sentence.
Reasons for an Order made by the Criminal JusticeCommission (Foreign Exchange Offences).
The Commission was appointed in the following terms : —
“ The Criminal Justice Commissions Act, No. 14 of 1972.
By His Excellency William Gopallawa, President of theRepublic of Sri Lanka
WHEREAS I am of opinion that, within the period of ten yearsimmediately preceding the date hereof, that is to say, the periodcommencing on the 14th day of December, 1962, and endingon the date on which this warrant is issued, there have beencommitted, generally, offences in relation to currency or foreignexchange in contravention of the provisions of law set out inthe Schedule hereto, of such a scale and nature as to endangerthe national economy or interest.
AND WHEREAS I am of opinion that the practice andprocedure of the ordinary courts are inadequate to administercriminal justice for the purpose of securing the trial and punish-ment of the persons who committed such offences.
ORDER OF THE COMMISSION-—tiinlaramani and other;
411
Now, therefore, I, William Gopallawa, President of theRepublic of Sri Lanka, do, in pursuance of the provisions ofsection 2 of the Criminal Justice Commissions Act, No. 14 of 1972,as amended by the Criminal Justice Commissions (Amendment)Law, No. 10 of 1972, by these presents establish a CriminalJustice Commission consisting of three Judges of the SupremeCourt—
to inquire into generally the circumstances which led
to, and all other matters connected with or incidentalto, the commission during the aforesaid period, of all■offences in relation to currency or foreign exchangeof the description and character set out herein ;
to inquire and determine whether any person or
persons, and if so, which persons were or were notguilty of such offences ; and
to deal with the persons so found guilty or not guilty
in the manner prescribed by the aforesaid Act, as soamended.
SCHEDULE
Offences under—
Section 50, 122 or 123 of the Monetary Law Act
(Chapter 422),
the Exchange Control Act (Chapter 423),
the Imports and Exports (Control) Act (Chapter 236),
the Imports and Exports (Control) Act, No. 1 of 1969,
the Customs Ordinance (Chapter 233),
Chapter 5, 5A, 17, 18 or 22 of the Penal Code,
the Post Office Ordinance (Chapter 190),
the Foreign Exchange Entitlement Certificates Act,
No. 28 of 1968,
the Telecommunications Ordinance (Chapter 192).
Conspiracy to commit or attempt to commit or abet, any
of the aforementioned offences.
Given at Colombo, under the Public Seal of the Republic ofSri Lanka, this 14th day of December, One Thousand NineHundred and Seventy-two.
Sgd.President. ”1**—A 13441 (75/03)
412
ORDER OF THE COMMISSION—Hir laramaui and others
R. S. Wanasundera, Solicitor-General (Now Acting Attorney-General) , with E. D. Wikramanayake, Senior State Counsel (NowDeputy Solicitor-General), Sunil de Silva, State Counsel (NowSenior State Attorney) and Douglas Halangoda, State Attorney,for the State.
Desmond Fernando with V. E. Selvarajah, for the 1st suspect.
A. C. M. Ameer, Q.C., with H. L. de Silva, S. H. Mohamed andMark Fernando, for the 2nd and 3rd suspects.
G. E. Chitty, Q.C., with H. L. de Silva, P. Karalasingham andA. R. Mansoor, for the 4th suspect.
A. K. Premadasa, with S. S. Wijeratne, for the 5th suspect.
Chula de Silva, with V. Jegasothy, for the 6th suspect.
M.Tiruchelvam, Q.C., with P. Naguleswaran, for the 8thsuspect.
January 28, 1974. Criminal Justice Commission (ForeignExchange Offences)
REASONS FOR THE ORDER MADE ON 4th JANUARY, 1974
As His Excellency the President of the Republic was of theopinion that within the period of 10 years immediately precedingthe 14th December, 1972, there had been committed, generally,offences in relation to currency or foreign exchange in contra-vention of provisions of law set out in the schedule to theCriminal Justice Commissions Act, No. 14 of 1972, as amended bythe Criminal Justice Commissions (Amendment) Law, No. 10 of1972, of such a scale and nature as to endanger the nationaleconomy or interest, he established a Criminal Justice Commis-sion for the following purposes : —
to inquire into generally the circumstances which led to,
and all other matters connected with or incidental to,the commission during the aforesaid period, of alloffences in relation to currency or foreign exchange ofthe description and character set out therein ;
to inquire and determine whether any person or
persons, and if so, which persons were or were notguilty of such offences ; and
to deal'with the persons so found guilty or not guilty
in the manner prescribed by the aforesaid Act, as soamended.
ORDER OF THE COMMISSION—Hirdaramani and otherx
413
In terms of section 3 of the said Act, we were appointed asmembers of the said Commission by the Honourable the ChiefJustice and we commenced our sittings in this case, which wasthe first to be taken up by us, on the 19th February, 1973 andconcluded them on 1st November, 1973.
Sixty-five charges were framed against the suspects. A sum-mary of the facts of the case against each of the suspects andcopies of some of the statements of each witness were served oneach suspect. The first, second, third and sixth suspects pleadednot guilty to the charges and the fifth suspect pleaded guilty on11th April, 1973 ; the eighth suspect on 28th May, 1973, pleadednot guilty ; the fourth suspect on 11th June, 1973, withdrewhis former plea and pleaded guilty in respect of counts 28, 37,43, 45, 50 and 60 on the ground that he acted as a broker. Noticeof the charges was served on the 7th suspect in Madras on 17thSeptember, 1973. He was not present during the proceedings.
The Criminal Justice Commissions Act, No. 14 of 1972, asamended by the Criminal Justice Commissions (Amendment)Law, No. 10 of 1972, under which our powers, functions andjurisdiction to inquire into crimes and offences of the descrip-tion or character set out in the Warrant establishing thisCommission are defined for the purpose of determining whetherany person charged before us is guilty or not guilty of anyoffence, contains the rules and principles of evidence by whichwe may be guided in order to elicit proof concerning the mattersthat we are called upon to investigate and come to adetermination.
The Act lays down conspicuous departures from wellestablished rules and practices of evidence that normallyobtain in the Courts of law in a criminal trial to determine theguilt or otherwise of persons charged and sets out withprecision in section 15 (a) the standard of proof which mustbe satisfied before a finding of guilty against a person is reached.
The other relevant rules and principles of evidence prescribedby the Act may be summarised as follows : —
In terms of section 3 (6) (b) (c), the Commission maycommence or continue with the inquiry in the absence ofany person, if the Commission is satisfied that such personis evading arrest or absconding or feigning illness or withhis consent.
Section 7 provides that an inquiry under the Act is deemedto be a judicial proceeding within the meaning of the Act.
414
ORDER OF THE COMMISSION—Hirdaramani and others
Under section 11 (1), the proceedings are free fromformalities and technicalities of the rules of procedure andevidence ordinarily or normally applicable to a Court of lawand may be conducted by the Commission in any mannernot inconsistent with the principles of natural justice, whichto the Commission may seem best adapted to elicit proofconcerning the matters that are being investigated.
Section 6 (1)(d) empowers the Commission, notwith-
standing any of the provisions of the Evidence Ordinance orany other written law, to admit any evidence which mightbe inadmissible in civil or criminal proceedings.
Section 11 (2) (a) states that the Commission may at theinquiry, notwithstanding any of the provisions of theEvidence Ordinance, admit any evidence which might beinadmissible if those provisions were applicable.
Under section 11 (2) (b) a confession or other incrimi-natory statement to whomsoever and in whatsoevercircumstances made by any person who is alleged tohave, or is suspected of having, committed an offence,may at any inquiry before the Commission be provedagainst such person, so, however, that if it is sought byor on behalf of such person to reduce or minimise theweight that shall be attached to such confession orincriminatory statement, the burden of proving the factsnecessary to support such contention shall lie on such person.
Under section 11 (2) (d), a confession or other incrimi-natory statement made by an accomplice incriminating anyother person suspected of having committed an offence shallbe relevant and admissible against the latter person only ifsuch an accomplice shall be called as a witness by the Com-mission or the counsel assisting the Commission and tenderedfor cross-examination. The Commission shall attach onlysuch weight to evidence against a person suspected of anoffence proceeding from the confession or incriminatorystatement of an accomplice as, in all the circumstances,appears to the Commission to be safe and just. There is alsoprovision that if such an accomplice gives evidence which is,in material particulars, different from such confession orstatement, the Commission may disregard the evidencegiven by such accomplice and act on such confession orstatement.
ORDER OP THE COMMISSION—Birdaramani and others
415
Any confession or incriminatory statement referred toin section 11 (2) (b) and section 11 (2)(d) shall not
be rendered irrelevant or inadmissible by reason of theprovisions of section 122 (3) of the Criminal Procedure Code.
The Commission is also empowered under section 11 (1)
, if in the course of the inquiry it is of opinion that thereare matters which call for an explanation by any personwhose conduct is the subject of the inquiry, to call uponsuch person to give evidence, and whenever he is calledupon to do so by the Commission, he is bound to giveevidence and to answer any questions that may be put tohim by the Commission or by counsel appearing to assistthe Commission irrespective of whether he intends to tenderother evidence.
The charges against the suspects in this case revolvemainly round certain sections of the Monetary Law Act(Chapter 422) and the Exchange Control Act (Chapter 423).Every charge also specifies section 15 (b) of the CriminalJustice Commissions Act as amended by Law No. 10 of 1972but this is only for the purpose of stating the Penal Sectionwhich involves a party guilty of acts of commission oromission alleged in the said offence.
The section of the Monetary Law Act cited in the chargesis section 76 (3) but it is necessary to refer to the entiresection in order to appreciate the implication of sub-section
thereof. The section provides—
“ (1) The Monetary Board shall determine the minimumrate at which commercial banks may buy spotexchange and the maximum rate at which they maysell spot exchange. Where the Monetary Board hascertified the legal parity of a currency in accordancewith section 73, the maximum and minimum exchangerates established for such currency shall not differfrom such parity by more than one per centum.
No commercial bank shall buy spot exchange at anyrate below the minimum rate determined under sub-section (1) or sell spot exchange at any rate exceedingthe maximum rate so determined ; and no commercialbank shall in respect of any purchase or sale of suchexchange accept any commission or impose any chargeof any description except telegraphic or other costsactually incurred in connection with such purchase orsale.
***•—A 13441 (75/03)
416
ORDER OF THE COMMISSION—Hirdaramani and others
No commercial bank shall carry out any transactionin exchange, not being a spot transaction, at anyrate which differs from the rate determined undersub-section (1) for a spot transaction—
by a margin greater than is reasonable having
regard to the additional costs, expenses or risksof the transaction ; or
by such margin, if any, as may be prescribed
in that behalf by the Monetary Board
The irrelevant portion of the section has beenomitted.
This section which occurs in the Chapter of the MonetaryLaw Act headed “ Instruments of Central Bank Action ” with asub-head relating to operations in gold and foreign exchange hasnecessarily to be interpreted in relation to section 73 to whichit refers and which lays down the maximum and minimum ex-change rates for spot transactions as well as any othertransaction which would generally mean a future transaction.The section is also inextricably interwoven with section 74(1)which empowers the Monetary Board to determine the ratesat which the Central Bank will buy and sell foreign exchangeand section 74 (2) which precludes the Monetary Board, in thecase of spot transactions, from differing by more than one halfof one per cent, from the legal parities determined under section73 and, in the case of transactions other than spot transactions,sub-section 74(3) imposes what may be termed an upper limitto the variation from the rates determined by the MonetaryBoard. The limitation imposed cannot, according to this sub-section, exceed the rate laid down in sub-section (1) by anamount which will cover anything more than the reimbursementof the Central Bank’s expenses by way of additional costs,expenses or risks in the case of each type of transaction. The Actalso lays down the agencies through which foreign exchangeoperations may be transacted by the Central Bank and, apartfrom Commercial Banks and authorised dealers, it is notpermissible for any other person to engage in foreign exchangetransactions such as buying, selling, exchanging, lending orborrowing. The above provisions of the Monetary Law Actbroadly constitute the background for the charges which havebeen preferred against the suspects, so far as that Act isconcerned.
The other Act which immediately concerns the charges is theExchange Control Act, which provides for the conferment ofpowers and the imposition of duties and restrictions in relation
ORDER OP tH »i COMMISSION—Hirdaramani and othera
417
to movements of gold and currency and transactions directly orindirectly involving such movements.
The substantive sections of this Act referred to in the chargesas having been contravened by the suspects are section 5(1) (a)and 5 (2) as well as sections 6AB (a) and 6AB (b). As anintroduction to section 5 it is also necessary to refer to section 4which defines the term “ authorized dealer ” which looms largein both the sub-sections of section 5. We quote below the relevantportions of these sections :
Section 4: The Minister may authorize any commercialbank to act for the purposes of this Act as an authorizeddealer in relation to gold or any foreign currency.
Section 5 (1) : Except with the permission of the bank—
<a) no person, other than an authorized dealer, shall inCeylon buy or borrow any gold or foreign currencyfrom, or sell or lend any gold or foreign currency to,or exchange any foreign currency with, any personother than an authorized dealer, and<b)
Except with the previous general or special permissionof the bank, no person whether an authorized dealer or not,shall enter into any transaction which involves theconversion of Ceylon currency into foreign currency orforeign currency into Ceylon currency at rates of exchange■other than the rates for the time being authorized bysub-section (3) of section 76 of the Monetary Law Act.
Section 6AB : Every person in, or resident in, Ceylonwho, on the date of commencement of this Act, holds, orwho, after such date, acquires by way of purchase, gift,testamentary disposition or otherwise, any foreign assets—
shall, within one month of the commencement of this
Act or the acquisition of the assets, as the case may be,render to the bank a return in such manner and givingsuch particulars with respect to the assets as may beprescribed ; and
shall not dispose of such assets or part thereof in any
manner whatsoever except in accordance with suchdirections as may be given to him by the bank.
We shall first of all deal with the submissions relating tosection 5 which constituted the major attack by counsel forthe suspects. Having regard to the evidence in the case, whichwas hardly contested by the suspects, none of them are autho-rised dealers for the purpose of dealings in foreign currency. The
418
ORDER OF THE COMMISSION—Hirdaramani and others
main point of contest to which the submissions were directedtherefore, so far as this section was concerned, was that therewas no sale of foreign currency on the part of any suspectcharged with that offence, the accent being placed both on themeaning of a £ sale * and the definition of the word “ foreigncurrency Mr. H. L. de Silva, who announced his appearance forthe 1st suspect at a late stage immediately before the commence-ment of the addresses, placed before us a submission which waaboth forceful and attractive, particularly in regard to thedefinition of ‘ foreign currency Before addressing our mind tothat aspect, however, we should like to examine his first argumentthat the facts in this case did not establish a sale as distinctfrom an agreement to sell. It was his submission that ‘ buying rand * selling' in section 5 of the Exchange Control Act contem-plated the passing of property in Ceylon (as this country wasknown at the time of the commission of the alleged offences)and since any property in the goods in this case passed, if at all,in a foreign country, there was no purchase or sale by the 1stsuspect—which equally applies to some of the other suspects—of any property in Ceylon which alone is made an offence undersection 5 (1) (a).
As the argument of counsel involves several concepts andaspects rolled into one we shall endeavour to examine each ofthem separately. We shall first consider the contention that therewas no ‘ sale ’ in this case but only an agreement to sell. Hebased this argument on the further contention that the “Saleof Goods Ordinance ” applied to a sale of currency if there wassuch a sale. In view of the definition of * goods ’ in this ordinanceas including “ all movables excepting moneys ” we are stronglyof the view that the Sale of Goods Ordinance does not apply tothese transactions alleged in the charges. For, it seems to usthat ‘ moneys ’ in the plural in this context must mean currencies(we are using this word in the layman’s sense at this stage) ofcountries other than the country in which a sale takes placebecause it is difficult to contemplate the sale of money of aparticular country within the same country for a moneyconsideration called the price—which are the words occurring insection 2 of the Sale of Goods Ordinance in defining a ‘ sale ’ and“agreement to sell”. If therefore ‘moneys’ of other countries arenot considered as goods in this ordinance, the argument at onceceases to have any validity and we are compelled to fall backon the ordinary meaning of the word ‘sale ’. The best test hereis to pose the question as to what the intention of the partieswas in entering into this transaction. This intention can begathered very clearly from the statements made by the 1stsuspect Bhagawandas Hirdaramani to the Criminal Investigation
ORDER OF '*'H fc; COMMISSION—Hirdaramani and others
410
Department as well as from the statement made to the Assessorof the Inland Revenue Department Mr. O. F. Perera who gaveevidence before us. When these two statements are read, onewould do unwarranted violence to his simple language if onewere to conclude that the 1st suspect had anything in mindother than the buying of foreign money from one party andlater selling it to another or others. We use the words “ foreignmoney ” here and hereafter until we resolve the question regard-ing the interpretation of the word “ foreign currency ” advisedlyand refrain from using the words ‘ foreign currency ’ or ‘ foreignexchange ’ as the meaning of these words too was strenuouslycontested and we therefore feel obliged to consider the.submissions and express our views.
Even assuming that the transaction is governed by the Saleof Goods Ordinance, there was in our view not an agreementto sell but a completed sale of foreign money part of which,-according to the 1st suspect’s statements, was bought by him tohelp his son to establish himself in London without sufferingany loss of financial prestige from the in-laws by obtainingmoney from them. Our Sale of Goods Ordinance is almost areproduction of the English Sale of Goods Act. Very usefulobservations on the concept of a sale and contract to sell can begathered therefore from Chalmers’ commentary on the EnglishSale of Goods Act referred to by Counsel. It would appear fromthis charactistically lucid commentary that a ‘ a sale ’ and * acontract to sell ’ can often be synonymous. Where there is aconsensual contract for the sale of any article or goods, thetransaction may well be considered an outright sale dependingon the intention of the parties as to whether the transaction isto be completed at the time of the payment of the considerationcalled the price. It is generally if conditions are attached to acontract of sale that the transaction becomes a sale on thefulfilment of those conditions subject to which the property inthe goods is to be transferred. Therefore, where no such condi-tions are attached, the sale is complete on payment of the priceand the property in the goods passes even though actualpossession of the goods by the buyer may take place at somelater date or time. Property or ownership in this context passeson the payment of the price and the goods are held thereafterat the buyer’s risk unless there is a condition to the contrary.Quite often, though not always, the acid test for decidingwhether a transaction is a completed sale or an agreement tosell is to ask oneself the question whether the full price has"been paid. Generally speaking where the full price agreed has"been paid there is a completed sale and property in the broadsense passes along with such payment. Implicit in what we have
420
ORDER OF THE COMMISSION—Hirdaramani and others
just said is an agreement regarding a price which precedes thesale and in such a transaction there are two distinct stages ofan agreement to sell when the price is decided, and a completedsale when that price agreed upon is paid. Both these stagestook place in the case under consideration in Ceylon. Thesetwo elements cover two of the ingredients which are necessaryto constitute an offence under section 5(1) of the ExchangeControl Act. In the instant case, the further vital pointarises—and this is where counsel’s arguments are bulkedat every turn by the factual situation—as to whether there hasbeen any dispute between the parties involved, in the transac-tions which form the subject matter of the charges, as to whetherthe sale of the foreign money took place or not. Except in regardto the transaction of the 8th suspect, if there is one matter onwhich there is agreement, it is that one party sold the moneyof one country to another party and paid a price with money ofa different country. Years have elapsed after the transaction andthere has been no dispute between the parties concerned abouteither the price not being paid or the goods not being delivered.In these circumstances it is transparently clear that there wasa consensus ad idem on the part of the parties concerned, oneto buy and the other to sell money followed by a fulfilment ofthe consensus- In these circumstances, abstruse and involvedarguments as to where the sale took place and whether thetransaction was a contract of sale or a sale seem completelyout of place as the negotiations admittedly took place in Ceylonand the price was admittedly paid in Ceylon. Such an argumentcan succeed only if there is a proposition of law that there cannotbe a sale in one country of an article lying in another country.We are certain that Mr. de Silva will never subscribe to sucha proposition and will not succeed if he does. We are thereforesatisfied that, in all the transactions in which foreign moneysare alleged to have been bought or sold in these charges, therehave been sales in Ceylon. This conclusion remains the samewhether the Sale of Goods Ordinance applies to these transactionsor not as we have referred to earlier. To give a simple illustra-tion, supposing X, a person resident in England and owning acar comes to this country on a holiday and, during his stay here,sells this car to Y a resident here and receives the considerationin the form of cash, the arrangement regarding the passing ofproperty being that the buyer’s son who is a student in Englandwill take delivery on the completion of the transaction here. Inthis instance it stands to reason that there is a completed saleof the car by X to Y on payment of the price by Y. The propertyin the car passes to Y immediately on payment of the price andif his son is not given the delivery of the car in England there-
ORDER OE THE COMMISSION—Hirdaramani and others
421
after, X in our view makes himself liable to be sued by Y inCeylon for such non-delivery notwithstanding the fact that thecar was always in England. Equally, if the car has been deliveredto Y’s son as agreed and X and Y are thereafter charged withhaving committed an offence against any law of this country, itwould be idle for the parties to contend that there was no salein Ceylon because the article sold was in England. Yet anotherexample of a transaction which occurs quite often nowadays isthat when a person earns sterling in England he is allowed topurchase and import a car with that money. He has however tobring the money so earned into Ceylon in the first instance- Hethereafter obtains his permit and buys a car from the Ceylonagents of the manufacturers in England by depositing theEupee value of the sterling with the agents. The price paidincludes cost, insurance and freight. What happens thereafter?The buyer does not appropriate the car in fact until it reachesCeylon but the property in the car has passed to him on paymentof the price and if anything untoward should happen to the caror its parts on the way from England to Ceylon the buyer’sremedy is to claim the amount of the loss from the InsuranceCompany. For the' same reason, suppossing the agents here havefailed to ship the car at all they may be held civilly liable fordamages or perhaps criminally liable for cheating on the basisof acceptance of the price and indulging in a. purported saleand thus making a false representation to the buyer. It isinconceivable that the agents should be able Jo avoid liability ineither of these proceedings instituted in Ceylon courts by takingup the position that there was no sale in Ceylon but that thesale was in England because the subject matter of the sale was,if not in fact, at least in law, appropriated or to be appropriatedin England.
We would add here that we have sought to interpret the lawin this respect as a pure question of law and not on the basis thatone law would be applicable if there has been a dispute betweenthe parties concerned and that different considerations wouldapply where the transaction has been fully executed according toplan nor have we proceeded on the basis that any argumentwhich would be available to a party in the event of a disputebetween each other will not be available when the State isinquiring into the contravention of a statutory prohibition whichthe parties are alleged to have infringed. We wish to state this
422
ORDER OF THE COMMISSION—Hirdaramani and others
in view of the submission of Mr. de Silva that it is irrelevantthat the parties have no dispute as to these legal rights in thething which was the subject matter of the transaction and thatthe relevant question is whether the suspects have contravenedthe law or done the prohibited thing in Ceylon.
Allied with this submission was a further submission by Mr. deSilva that such a transaction would only be a contract of sale andnot a sale itself and he drew our attention to certain authoritiesin support of his submission. In deference to his submissions wewould wish to deal with them. If we do not refer to some ofthem it is only because we do not feel it necessary to do so butit will satisfy counsel and their clients for them to know that wehave perused all the cases cited which we consider relevant. Oneof the cases relied on by Mr. de Silva was the House of Lordscase of Badische Anilin Und Soda Fabrik v. Hickson1 (1906) A.C.419. The headnote reads :
“ Where a contract is made in the United Kingdom to sell.patented goods which are abroad, and is completed by appro-priation or delivery abroad, the vendor does not use, exerciseor vend the invention in the United Kingdom within themeaning of the patent. ”
On a reading of all the judgments of their Lordships in theHouse of Lords it seems to us that the word “ patented ” in theheadnote makes all the difference to the principle enunciatedcoupled with the fact that the case dealt with a contract in which,for a particular reasoi*. which would have defeated the purpose ofthe Statute of Monopolies, the appropriation or delivery of thearticle had to take place abroad and not in the United Kingdom.It was only for that reason that the Judges appear to have heldthat the vendor did not vend the invention in the UnitedKingdom. Of the five judgments by each of the Judges whatstrikes us as being indicative of the reason for the decision is tobe found in the last of them by Lord Atkinson where he hasstated :
“ And it is, moreover, quite obvious that a contract enteredinto in England for the sale of a specific ascertained chattelsituated abroad, of a kind and nature protected here bypatent but never imported into this country, can no moredeprive the patentee of his profits, “ raise the price of thearticle at home, hurt trade here, or cause general inconve-nience ” to the community in these kingdoms—the very evilsstruck at by the Statute of Monopolies—than would the samecontract if entered into abroad. The two transactions areindeed equally outside the purview of this statute.”
* 1906 A. C. 419.
ORDER OF THE COMMISSION—Hit dararnani and others
423
He has also referred in his judgment to an important principlewhich we have to bear in the forefront of our mind in this caseand which he himself had gathered from Maxwell on theInterpretation of Statutes—
“ Numerous cases are collected in Maxwell on Statutes,4th ed., pp. 130-146, in which the general words of statuteswere held to be restricted to the specific object aimed at,where it is evident that a literal interpretation of thelanguage used would have carried the operation of the Actbeyond the intention of the Legislature in passing it. ”
In consonance with this principle we have to constantly remindourselves, when interpreting the sections of the Acts said to havebeen contravened by the suspects, what the mischief was that thelegislature intended to prevent. We shall have occasion to referto certain other observations made in Maxwell on this aspectbefore we conclude our reasons for our findings. We can by nomeans therefore rely on this case as laying down a generalprinciple of law that the locus or the situs of the act of sellingof any goods is the place where the goods are appropriated. Norcan we accept counsel’s submission that foreign currency orforeign exchange can be classed as unascertained goods and thatthe principles applicable to that class of goods should apply toeither sterling or dollars. Where the quantum of exchange ofwhatever country is specified in a transaction there is no roomfor argument that the goods Are still unascertained, as everypound or dollar is as good as every other one for a buyer orseller.
The next important submission of Mr. de Silva, which froma purely interpretational standpoint, has almost irresistiblesubstance and has given us considerable difficulty, is the one thatrelates to the meaning of foreign currency in the ExchangeControl Act. His contention was that the charge under section5 (1) (a) cannot be maintained as the subject matter of thealleged sale was not foreign currency within the meaning ofthe statutory definition in this Act. This contention was basedon the absence of evidence regarding the manner in which themoney was remitted from the Yugoslavia Bank or the ForeignTrade to London or the receipt by the 1st suspect’s agent ofany foreign currency within the meaning of the statutorydefinition. At the highest, in his submission, the 1st suspectacquired a credit or balance at a Bank standing in the name ofDialdas & Sons. His further submission was that while a balanceor credit at a Bank constituted foreign exchange, it did notconstitute foreign currency within the meaning of the presentdefinition and could not therefore form the subject of an offenceunder section 5 (1) (a).
!••**—A 13441 (75/03)
424
ORDER OF THE COMMISSION'—Hirdaramani and others
The problem of interpretation of the word currency arisesin this way. Section 5(1) of the Exchange Control Act
prohibits inter alia the sale in Ceylon of any gold or foreigncurrency by any person other than an authorised dealer. ThisAct was enacted in 1953 and the two words ‘currency’ and“foreign currency” were defined as follows: —
“ currency ” means coins and currency notes, and includesbank notes, postal orders, money orders, cheques,drafts, travellers’ cheques, letters of credit, bills ofexchange and promissory notes ;
“ foreign currency ” means any currency other than Ceyloncurrency and includes any drafts, travellers’ cheques,letters of credit, bills of exchange and any otherdocument expressed or drawn in terms of Ceyloncurrency but payable in any other currency ; and anyreference to foreign currency includes a reference toany right to receive foreign currency in respect of anycredit or balance at a bank.
In 1971 came an amendment to this Act (Act No. 17 of 1971)which can safely be presumed to have been intended to includewithin its scope direct or indirect contraventions of exchangecontrol restrictions and the conservation of the fast dwindlingforeign assets of the country as was visualised in the preliminaryevidence given before this Commission by the ExchangeController. This amendment however led to the unexpectedresult, so far as the present case is concerned, in that what wouldhave been a simple issue for decision had the two originaldefinitions referred to continued as they were became a fertilefield for the proliferation of ingenious legal arguments, which,as we indicated earlier, were both substantial and cogent. Adifficulty has thus been created as a result of a material changein this definition and by the introduction of another definitionof the words “ foreign exchange ” for reasons best known to theDraftsman and to the legislature but will remain in the realmsof speculation so far as this Commission is concerned.
The new definitions of “ currency ”, “ foreign currency ” and“ foreign exchange ” are as follows : —
“ currency ” includes coins, currency notes, bank notes,postal orders, money orders, cheques, drafts,travellers’ cheques, letters of credit, bills of exchangeand promissory notes ;
ORDER OF THE COMMISSION—Hirdaramani and others
425
“ foreign currency ” means any currency other than
Ceylon currency and includes any currency payableby a foreign Government or institution to a personin, or resident in, Ceylon in respect of his pension orother gratuities due to him ;
“ foreign exchange ” means foreign currency and includes
all deposits, credits and balances payable in any foreigncurrency, and any such drafts, travellers’ cheques,letters of credit and bills of exchange as are expressedor drawn in Ceylon currency but payable in anyforeign currency. ”
The first difficulty that has to be resolved is in regard to theword ‘ currency ’ itself which is an essential precondition to thedefinition of ‘ foreign currency ’ as the latter includes the former.Mr. de Silva has submitted that while a definition of a wordas meaning something is more restrictive than a definition ofa word as including something and the latter definition enablesa court to give to the word meanings other than thoseenumerated in the definition, this rule is by no meansconclusive. He has pointed to certain instances where the word“ includes ” has been used for the purpose of giving anexhaustive definition of a word. We have to agree with thiscontention as a general proposition. Where, however, a wordhas been defined in an enactment first with the use of the word* means ’ and later amended using the word ‘ includes ’ a courtinterpreting the word after such amendment has to lean towardsthe view that the legislature deliberately intended to make theamended definition inexhaustive of what the word can mean.Another reason for such a conclusion is that the legislature couldalso have used the words “ means and includes ” if the definitionwas intended to be exhaustive. If the definition is not intendedto be exhaustive thep the word currency can have meaningsother than those contained in the definition. It would howevernot be legitimate for this Commission, adopting the same rulesof construction as a court, to read into this definition the verywords which would make it possible to find the suspects guilty.On the contrary, when the word has been given so many mean-ings a court must exercise great caution before giving othermeanings. Moreover, in a definition which uses the wordincludes, what a court can generally do in construing themeaning is to give the natural meaning in addition. Money in abank account being not a natural meaning of currency, we wouldnot be justified in attributing such a meaning to the word. Aswe are in agreement with Mr. de Silva on this rule of construc-tion, it is hardly necessary to look for support from the cases
426
ORDER OF THE COMMISSION—Hirdaramani and others
cited by him ; 63 N.L.R. 409, 67 N.L.R. 1 and the South Africancases. Suffice it is to say that Weerasuriya J.’s observations in thecase of Commissioner of Income Tax v. Baddrawathie FernandoCharitable Trust strongly support Mr. de Silva’s contention andwe are in respectful agreement with those observations.
In this view of the definition of currency, foreign currencywill not include a deposit in a foreign bank. In Mr. de Silva’ssubmission the difficulty is accentuated by the fact that theformer definition which may have included a bank account in aforeign country as foreign currency of that country has been sosplit up in the amendment as to take away bank deposits from themeaning of foreign currency and to include it in the definitionof foreign exchange. We do not think there is an answer to thiscontention as a pure rule of construction. A simple test as tothe correctness of this contention is to answer the questionwhether, if the alleged buying and selling transaction betweenthe 1st suspect on the one hand and the 2nd and 3rd on the otherhand had taken plhce before the Amendment of 1971, and it wasdecided to charge them under the old law would it haveconstituted an offence under section 5 (1) (a) of the ExchangeControl Ordinance, if the only evidence was that the 1st suspectacquired a right to receive foreign exchange by reason of a bankbalance in England. We think the answer has to be in theaffirmative. The next question is—how then does he becomeliable for the same offence after Act No. 17 of 1971 when thewords “ the right to receive foreign currency in respect of anycredit or balance in a bank ” alone have been taken away fromthe definition of foreign currency and attached to a newdefinition of the words “ foreign exchange ”. In fact the wordsare placed in such juxtaposition as to make it appear that afterAct No. 17 of 1971 deposits, credits and balances payable inforeign currency are to be identified as foreign exchange andnot as foreign currency. Even though the words removed fromone definition are not identical with those attached to the other,the substantial portion regarding deposits in a bank have beentaken away from the definition of the word foreign currency.
How then does one arrive at a finding whether the transactionin question comes within the ambit of section 5 (1) (a) ? As wesaid before, if we confine ourselves to theoretical interpretationof words the answer has to be that the offence has not beencommitted. But what are the facts relied on to establish thecharge by way of direct and circumstantial evidence. They arethe following: —
1. The 1st suspect’s admissions to the C. I. D. and theAssessor of Inland Revenue that he wanted to buysterling to set up his son in business in England.
ORDER OF THE COMMISSION—Hirdaramani and others
427
Overwhelming evidence as to several visits by the 2nd
and 3rd suspects to see the 1st suspect at which thebuying and selling of sterling was discussed and theprice in Rupees was agreed upon.
Evidence by confessions of the delivery of the Rupee
payments by the 1st suspect.
Evidence of the relationship of Dialdas to Kishore
Hirdaramani, the son of the 1st suspect.
The receipt by Dialdas & Sons of payments of sterling
at or about the time of the transactions between thesuspects.
The drawing of some of the moneys so received by
Dialdas & Sons at the instance of the 1st suspect.
The confessional statements of the 1st suspect regarding
his several transactions.
The admission by the 1st suspect to the Inland Revenue
Assessor that he failed to obtain any exchange bylegitimate means and that he therefore resorted tothis course of buying sterling.
A simple and legitimate approach in the face of these admis-sions and circumstances would be to consider what thesubstance of the transaction was. If it was a sale of foreigncurrency and was concluded here, the destination of the moneyin the bank account of Dialdas & Sons would only show themode of payment at the other end agreed upon between theparties. What was agreed upon to be paid into Dialdas’account was sterling—the foreign currency—and the fulfilmentof the promise in whatever manner it may have been accom-plished would complete the offence. The Bank account withDialdas & Sons only became a convenient agent for the1st suspect to safeguard the fruits of his completed enterpriseof buying sterling. It is reasonable to draw the inference—in fact it is irresistible though there is no direct evidence—thatthe sterling or the dollars reached the Bank in some formwhich would have constituted * currency ’ in terms of the defini-tion. If it was in any other form which did not constitute* currency ’ who else but the 1st suspect would have known itand why did he not give an explanation which would haveexonerated him, particularly because all the statements madeby him to the C. I. D. were admitted in evidence and he hadnothing to gain by being silent if he had a reasonable explana-tion. The principles of Lord Ellenborough’s dictum in the caseof Rex v. Lord Cochrane and others’ Gurney’s Reports p. 479would appear to operate in the face of the totality of evidence
428
ORDER OF THE COMMISSION—Hirdaramani and others
against the suspects and the failure of the 1st suspect to offeran explanation tells against him. The dictum reads asfollows : —
“ No person accused of crime is bound to offer anyexplanation of his conduct or of circumstances of suspicionwhich attach to him ; but, nevertheless if he refuses to doso where a strong prima facie case has been made out, andwhen it is in his own power to offer evidence, if such exists,in explanation of such suspicious circumstances whichwould show them to be fallacious and explicable consis-tently with his innocence, it is a reasonable and justifiableconclusion that he refrains from doing so only from theconviction that the evidence so suppressed or not adducedwould operate adversely to his interest. ”
In the result, an otherwise powerful legal argument involvingthe construction of words loses its effectiveness by reason of thefactual background.
Mr. de Silva argued that to say that the suspect wanted to buypound sterling and in the end that he did get pound sterlingto his credit in the bank does not answer the question whethera sale of foreign currency took place although it wouldcertainly, establish that he acquired foreign exchange as defined.He added that a court has to ascertain in what physical form orshape the foreign currency existed. We think it necessary togo a step further and ask the question as to what came intothe bank before the foreign money assumed the physical formor shape of realisable currency in the bank account standing inthe name of the Dialdas & Sons, the agent of the 1st suspect. Forwhat was transferred to the 1st suspect was not a Bank accountor a credit or balance at a Bank belonging to the 2nd or3rd suspects but some foreign money which was credited toDialdas & Sons’ bank account. The presence of the money in thebank account of Dialdas & Sons and which was available for useby the 1st suspect is circumstantial evidence establishing thefact that the money had reached the 1st suspect’s agent. Thiswas indeed the submission of the Deputy Solicitor-General. Inthe case of one transaction at least it is known how the foreignmoney reached the account. In the other we do not know thephysical shape in which it came and this is where we considertie inference to be irresistible that it came in a form whichc nstituted foreign currency unless there was evidence to thecontrary from the 1st suspect, within whose peculiar knowledgethe circumstances were, or from someone on his behalf likeDialdas or Kripalani. The mode of payment being to depositthe money to the credit of the Bank account of Dialdas & Sons
ORDER OF THE COMMISSION—Hirdaramani and others
439
what we have to be satisfied of is as to the shape in which themoney travelled from the agent of the 2nd and 3rd suspect tothe agent of the 1st. We are justified in drawing the necessaryinference in the absence of evidence to the contrary that thisjourney was made in the shape of one of the ways comingwithin the definition of foreign currency. The chronology isimportant. In some instances, money in rupees was paid beforeascertaining from Dialdas & Sons whether the foreign moneyhad reached the account. In the others, money was paid hereafter such ascertainment. We are therefore satisfied that whatwas bought and sold in Ceylon was foreign currency.
In this connection we also have in mind the submission of theSenior State Counsel that by the term “ currency ” is meant anyform of units of account expressed in terms of instrumentscapable of transferring the units of account.
' We could of course have, in the exercise of our powers undersection 11 (2) (c), called upon the 1st suspect to give evidenceand explain to us how certain moneys in the form of sterlingfound its way into the account of Dialdas & Sons of which hehad control and for which he paid in Rupees before or afterascertaining that the sterling reached that account. We did nothowever wish to adopt this course unless we were compelledto, as such a course would have put the suspect facing theseserious charges to further anxiety. We therefore decided torefrain from exercising the special powers conferred by this Actand to proceed on the principle which we have always adoptedin the Criminal Courts, in arriving at a finding on the evidenceof the prosecution and drawing the necessary inferences fromcircumstantial evidence. As the available evidence was sufficientto reach a finding beyond reasonable doubt, calling upon thesuspect by us mero motu would only have resulted in avoidableembarrassment to him and confirmed the view we have beenotherwise able to form.
We are also fortified in coming to this conclusion by thefollowing citation from Maxwell on Interpretation of Statutes(Tenth Edition) at page 114 which sets out clearly the princi-ples which a court should follow in approaching the problem ofinterpreting a law intended to prevent any particularmischief : —
“ The office of the judge is, to make such construction aswill suppress the mischief, and advance the remedy, and tosuppress all evasions for the continuance of thdmischief ” (d). To carry out effectually the object of astatute, it must be so construed as to defeat all attempts todo, or avoid doing, in an indirect or circuitous manner that
430
ORDER OF THE COMMISSION—Hirlaramani and others
which it has prohibited or enjoyed (e). Contra legem facit,qui id facit quod lex prohibet. In fraudem vero legis facit,qui salvis verbis legis sententiam ejus circumvenit (/) ; anda statute is understood as extending to all such circumven-tions, and rendering them unavailing. Quando aliquid prohi-betur, prohibetur et omne per quod devenitur ad illud (gf).
“ Whenever it can be shown that the acts of the partiesare adopted for the purpose of effecting a thing which isprohibited, and the thing prohibited is in consequence effect-ed, the parties have done that which they have purposelycaused, though they may have done it indirectly” (h).When the thing done is substantially that which wasprohibited, it falls within the Act, simply because, accordingto the true construction of the statute, it is the thing therebyprohibited (i). Whenever courts see such attempts at con-cealment, “ they brush away the cobweb varnish, ” andshow the transaction in its true light (k). They see thingsas ordinary men do (l), and so see through them, whatevermight be the form or colour of the transaction, the lawlooks to the substance (m). For this purpose the courts gobehind the documents and formalities, and inquire into thereal facts. They may, and therefore must, inquire into thereal nature of that which was done. An Act is not to beevaded by putting forward documents which give a falsedescription of the matter (to). In all such cases, it is, in truth,rather the particular transaction than the statute which isthe subject of construction, and if the transaction is foundin reality to be within the statute, it is not suffered to escapefrom the operation of the law by means of the disguiseunder which its real character is masked. ”
Mr. de Silva submitted that if there was a gap in the lawthrough which an accused may pass it was not for a court tofill that gap and cited the phrase of Lord Simonds in Major & St.Mellons v. Newport Corporation1 (1951) 2 A. E. R. 339 at 841that it would be “ a naked usurpation of the legislative functionunder the thin disguise of interpretation ” to fill such a gap. Inmaking the approach to the problem which we have done,fortified by the well known principles enshrined in the casesreferred to in the above quotation from Maxwell, we feel con-fident that far from filling a gap in the legislature we are accep-ting the contention that counsel contends for but we have atthe same time gone behind the literal meaning of the words andexamined the pith and substance of the enactment in order todecide what the mischief was that the legislature intended toprevent. We might observe that although an accused is free to
{J051) 2 A.E.R. 839 at 841.
ORDER OF THE • COMMISSION—Hirdaramani and others
431
creep through a gap that the legislature has left open, he is notfree to circumvent the law by a device of his own creation.While we must therefore pay our tribute to the very ableargument of Mr. de Silva, we regret that we must reject it asunacceptable in the circumstances of the present case and holdthat the offences under section 5 (1) (a) have been made out inrespect of those suspects who are charged therewith.
Whenever this charge has been made out against a particularsuspect, we find no difficulty in holding that such suspect is alsoguilty of a charge under section 5 (2) as well as 6AB (a) and, inthose instances in which some of the suspects have been chargedwith disposing by sale the assets acquired by them withoutobtaining directions from the Bank, they naturally commit anoffence under section 6AB (b) too.
Regarding section 5 (2) we do not find it possible to agree withthe contention of Mr. de Silva. His submission was that anunauthorised person dealing in a transaction was not coveredby this provision. While it must be conceded that some of theprovisions in the Exchange Control Act and the Monetary LawAct, may have stemmed from the Bretton Woods agreementdesigned to stabilise international monetary exchange rates andmay have been introduced in Ceylon when she incurred certainobligations consequent on her membership of the InternationalMonetary Fund, we think that these provisions of section 5coupled with section 4 can be construed quite independently ofsuch agreement or of the obligations incurred from suchmembership. Section 5 (1)(a) broadly covers one aspect of
foreign currency transactions and provides that-— 1 2 3 4 5 6
(1)The Minister may authorise a Commercial Bank as an
authorised dealer in relation to gold or any foreign
currency.
(2)The transactions under this sub-section are confined to
gold and foreign currency.
(3)All transactions such as selling, buying, etc., of gold or
foreign currency shall be between authorised dealers.
(4)By implication these transactions appear to refer to spot
transactions which are provided for under section 76
of the Monetary Law Act.
(5)No permission of the Bank is necessary for such trans-
actions.
(6)A person other than an authorised dealer can obtain
permission from the Bank to engage in such transac-tions as are referred to in (2) above.
432
ORDER OF THE COMMISSION—Hirdaramani and others
This appears to be a general permission. Section 5(2)
provides for different aspects and covers a much wider field—
For certain transactions the previous general or special
permission of the Bank is necessary.
This permission is equally applicable whether the person.
engaging in the transaction is an authorised dealer ornot.
The transactions are not those referred to in (2) under
section 5 (1) (a) i.e., buying, selling, etc., of gold orforeign currency but covers any transaction involvingthe conversion of Ceylon currency to foreigncurrency or vice versa.
By implication these transactions are not spot transac-
tions but those referred to in section 76 (3) of theMonetary Law Act and the rates of conversion ofcurrency in such cases must be those laid down insection 76 (3) of the Act.
It will therefore be seen that the two sub-sections—whilethey may overlap in one or two respects—cover a multitude ofdifferent matters. The common features seem to be that at leastthe general permission of the Bank is necessary in both kindsof transactions for any person other than an authorised dealerand that the rate of conversion cannot be different from what islaid down in section 76 of the Monetary Law Act. The differencesare that while section 5 (1) (a) speaks only of a (general) per-mission, section 5 (2) refers to a general or special permissionof the Bank; while the former covers a limited number oftransactions, namely, buying, selling, lending, borrowing orexchanging gold or foreign currency, the latter embraces futuretransactions such as contracts to ship goods immediately or inthe future or to buy or sell property in a foreign land or acontract to do so and many others ; while section 5 (1) permitsan authorised dealer to engage in a transaction contemplatedtherein without permission of the Bank, section 5 (2) requiresthe general or special permission of the Bank for a transactionwhether the person concerned is an authorised dealer or not and,lastly, for a person to be liable under section 5 (1) (a) he mustbe in Ceylon when he commits the act constituting the offencewhile under section 5 (2) it would appear possible for anyCeylonese to be charged for a contravention of its provisionswhen he is in Ceylon, wherever the act may have been com-mitted. This of course is not free from doubt as the applicationof the law is not specific. The argument of counsel on thisaspect is therefore based on a wrong premise and is quite unten-able. We think that when even an authorised dealer is covered
ORD ER OE THE COMMISSION—Hirdaramani and others
43 3
by this sub-section under certain circumstances, a fortiori, anunauthorised dealer is caught up. The 1st suspect became liableunder section 5 (1) (a) without more by reason of his not beingan authorised dealer alone and became liable under section 5 (2)by reason of entering into a transaction involving the conversionof Ceylon and foreign currency by reason only of not havingobtained the previous permission of the Bank for such transac-tion, quite apart from non-compliance with section 76 (3) of theMonetary Law Act.
Regarding the submissions relating to section 6AB (a) and6AB (b), when, in fact, the 1st suspect has admitted the disposalof his assets held abroad though in the name of Dialdas & Sons,it is not thereafter open to him for argument that he had noproprietary rights over such assets. As for the situs of engagingin the transaction of disposal our findings regarding ‘ sale ’are equally applicable, even though the assets were in aforeign bank. We must therefore hold that the 1st suspect aswell as other suspects charged with the offence under similar-circumstances is guilty of these charges.
Apart from the question of law argued by counsel for the 1stsuspect, counsel for the 2nd and 3rd suspects sought to arguethat the Governor-General’s (now President’s) opinion in thewarrant establishing the Commission that any particularoffence was of such a scale and nature as to endanger thenational economy or interest was not at all conclusive and thatthis Commission was bound to inquire in each case not onlywhether an offence against the Exchange Control Act andMonetary Law Act was committed but whether it was of sucha scale and nature as to endanger the national economy orinterest. A number of illustrations have been placed before usin the written submissions of counsel to show how any of them,even if they constituted offences under these Acts, would notendanger the national economy or interest. We do not find itpossible to agree with this submission. The warrant says, ifexpressed in simple language, that the President is of opinion—obviously on material placed before him by his advisers—thatduring the period of 10 years preceding the date of the Warrant(14th December, 1972), there had been committed generallyoffences in relation to currency, in contravention of the Actsset out, of such a scale and nature as to endanger the nationaleconomy and interest. In view of these terms it is not thefunction of this Commission to probe the issue whether hisopinion is correct. If counsel’s argument is correct the Warrantshould have been worded differently in terms such as these—Whereas the President is of the opinion that offences relatingto foreign exchange have been committed by various individuals
434
ORDER OP THE COMMISSION—-Hirdaramani and others
during the last ten years the Commission is appointed to inquireand report as to whether transactions involved in such offenceshave endangered the national economy or interests. If thosewere the terms, perhaps this Commission would have had tomake a report only at the end of the inquiry into all the casesbrought up before it from time to time covering the ten yearsimmediately preceding the issue of the warrant. But that is notthe case here. We have been relieved of that responsibility, bythe terms of the Warrant and, by the provisions of section 2 (4)of the Criminal Justice Commissions Act itself, the Governor-General’s opinion has been made final and conclusive. In termsof section- 2 <3) we have been vested with: the jurisdiction toinquire into the various cases that merit inquiry and afterdetermining whether any person or persons were guilty of anyoffences under the Acts enumerated in the Schedule to theWarrant, to deal with the persons so found guilty in the mannerprescribed by the Act. Most of the instances cited by counselmay belong to the category where the offences are of such atechnical nature as not to be taken notice of in terms of themaxim “ de minimis rebus non curat lex ” or not to bevisited with any penalities in the exercise of one’s judicialdiscretion, but the function of the Commission is clear that itdoes not, while finding a person or persons guilty of an offenceunder the Act, also have the responsibility of probing whetherthe particular act constituting the offence endangered thenational economy or interests.
Our inability to accept this submission will at once affect therest of the submissions of counsel that the 2nd and 3rd suspects,in indulging in these transactions with the 1st suspect and theothers not before us in this case, committed no offence. As wehad to point out to Mr. Ameer in the course of his submissions,the evidence led on behalf of his clients would at the highestconstitute circumstances of mitigation and not exoneration andwould tend to show that his clients did not obtain this moneyto promote the insurgent movement. There was however noescape from the conclusion that the offences against theprovisions of the Exchange Control Act and Monetary Law Actwhich we shall set out in due course had been committed bythem. We accept Mr. Ameer’s submissions regarding the non-complicity of the 2nd suspect Galatovic with the Ratnagopaltransaction.
On behalf of the 6th suspect Mr. Chula de Silva in a brief buteffective argument submitted that every assistance does notconstitute abetment in the eye of the law. He cited the case ofRex v. Marshall1 51 N.L.R. 157 at 161 where it was held by the
1 51 N.L.R. 157 at 161.
ORDER OF THE COMMISSION—Hirdaramani and others
435
Court of Criminal Appeal that in order to constitute abetmentthe aid afforded must be such as was essential for the commissionof the crime. Another case in point on which Mr. de Silva reliedwas Ago Singho v. de Alwis 146 N. L. R. 154 in which it was heldthat mere knowledge on the part of the abettor was not sufficientto constitute abetment. This was a Divisional Bench case inwhich the facts were stronger than in the case before us. Thealleged abettor, being the driver of a bus, in fact drove on whenhe knew it was overloaded. He had ir^ fact to stop the bus inorder to permit the conductor to overload. Still the Court heldthat he was not guilty of abetment of the offence of overloadingof which the conductor was found guilty.
As this view of the law has generally gained acceptance in ourcourts, it is hardly necessary to deal in detail with the othercases cited by Mr. Chula de Silva which were also very much inpoint. The facts before us do not show that the 6th suspect tooksuch an active part in the transactions in respect of which hewas charged as to induce the person buying or selling currencyto engage in the transaction. Conversely, his conduct was notsuch as would conclusively lead to the conclusion that thetransactions in which he was associated would not have takenplace but for his intervention. The negligible reward he receivedwas also more consistent with his having received it for somelittle assistance he had rendered but not as a fee for someone butfor whose intervention the transaction would have failed. Wemust of course say that in the transaction with the 4th suspect hesailed much closer to abetment than in the one with the firstwhen he admitted that he dealt with the 4th suspect sternly anddemanded his remuneration for his good offices. We are howevermindful of the fact that the question whether he was an abettorin the real legal sense has to be decided on an inference basedon circumstantial evidence. We must therefore apply the rule ofcircumstantial evidence that a person should not be found guiltyif his conduct is equally consistent with his guilt gr innocence.We have not been able unhesitatingly to hold in his case thatthe circumstances are only consistent with guilt. His conductis not inconsistent with his knowledge of what was happeningand receiving a gift or “ offering ” in consideration for hisintensely sacerdotal functions during which he must haveconstantly prayed for the prosperity of those members of hiscommunity for whom he performed certain religious rites as adaily occurrence. The reward he received may well have been1 46 N. L. R. 154.
436
ORDER OF THE COMMISSION—Hirdaramani and others
for his successful prayers for the prosperity of his devotees andnot a commission for a lucrative business deal. We are unablein the circumstances to say that the case against him has beenproved beyond reasonable doubt.
In view of our further direction to the Director of CriminalInvestigation regarding the 7th suspect we do not propose todeal with the legal position regarding his case.
As regards the charges against the 8th suspect, theobservations we have made on the legal position regarding thebuying and selling of currency in respect of the 1st suspect willapply equally to his case. The failure of the mode of paymentor the payment itself is immaterial. The fact that he enteredinto a transaction with the 4th suspect, to which the latter haspleaded guilty, is hardly arguable. It is further admitted in hisown statement to the Criminal Investigation Department.
We shall be dealing with his case more fully when we discussthe facts relating to him.
The main transaction which formed the subject matter of thecharges under consideration centred round two Yugoslavnationals, Stephen Galetovic and Gligo Mladen, the second andthird suspects respectively, who had taken the first step inrespect of the disposal in Ceylon, in contravention of her foreign.exchange laws, of a sum involving £ 57,000.
Stephen Galetovic was the Resident Representative of a firmcalled Ingra which is an Engineering Group or Union of 21individual companies with the Head Office in Zagreb, Yugoslavia.The third suspect Dr. Gligo in the Business Manager of IngraKonstructor. Konstructor was one of the several Companiesassociated with Ingra.
If the project undertaken is one requiring the attention oftwo or more of these Companies, Ingra acts as contractor forthe project. The execution of the particular project undertakenis left to the Companies concerned and Ingra has nothing to dowith the technical, commercial or financial matters of suchCompany. Ingra only keeps the contractual relation with theother contracting party. Ingra undertook this contract on behalfof Konstructor, Split, Yugoslavia, and two other YugoslavianCompanies. Ingra had interests in Ceylon and had undertakenthe Maskeli-Oya Project, Stage I, on contract during the period1965 to 1969. In 1970 Ingra was awarded the Mahaweli GangaDevelopment, Polgolla Diversion Project contract.
The project was estimated at Rs. 84,000,000 of which the foreigncomponent was Rs. 45,000,000 and the local component wasRs. 39,000,000. According to the contract the Ceylon Government
ORDER OF THE COMMISSION—Eirdaramani and others
437
had to advance Rs. 3,000,000 in foreign currency and Rs. 3,000,000in Ceylon Rupees. The foreign exchange component was to bepaid direct from the World Bank to the account of Konstructorwith the National and Grindlays Bank, London. This amountwas to be paid over a period of 1,200 days according to theprogress of the work.
The material placed before Commission and the chargespreferred against the suspects and in particular the first,second and third suspects show that during the period May toAugust, 1971, Dr. Gligo and Dr. Galetovic had disposed of foreigncurrency amounting to £ 57,000 in Ceylon and realised a sumof Rs. 2,129,000. According to the case presented by the Solicitor-General, Galetovic and Gligo had sold in Ceylon to BhagwandasHirdaramani, a merchant in Colombo, the first suspect, £ 37,000for Rs. 1,369,000 at what is called the black market rate ofRs. 37 per pound. Galetovic and Gligo had also sold to oneR. J. Ratnagopal £ 20,000 for Rs. 760,000. Ratnagopal wasthe Chairman of a Company called the Equipment ConstructionCompany registered in the United Kingdom, and his wife wasChairman of a local company bearing the same name registeredin Ceylon. These companies had extensive dealings with theIngra being the suppliers of heavy machinery and equipmentfor the contruction work undertaken by the Yugoslav Company.
Ratnagopal had in turn sold to Hirdaramani £ 10,000 for a sumof Rs. 370,000. Hirdaramani had subsequently other subsidiarytransactions whereby he re-sold £ 34,000 out of this to Murjiani,the fourth suspect, and £ 10,000 to Thaha and realised a sum ofRs. 1,324,800 and at the end of these transactions Hirdaramanihad acquired £ 13,000 in London valued at Rs. 500,000, evenat his own rate of purchase which was only about Rs. 400,000,and thereby made a Rupee profit of Rs. 100,000. The above isa brief resume of the transactions which bring in the first, secondand the third suspects.
It will be useful to note at this stage that Galetovic was wellknown to Mr. and Mrs. Ratnagopal for over five years and hehad met Mr. Ratnagopal in Yugoslavia in 1967 or 1968. Gligo wasknown to Ratnagopal for several years and he had gone to hishouse several times. He knew his wife and was a good friendof both Ratnagopal and his wife.
Hirdaramani too was known to Ratnagopal from 1953. Hirdara-mani was also well-known to Galetovic with whom he had haddealings and from whose firm Galetovic had bought certain goodsfor his project.
438
ORDER OF THE COMMISSION—Hirdaramani and others
The firm of Dialdas & Sons in London also figures in thistransaction. Dialdas & Sons is owned by one Dialds who is thebrother-in-law of Hirdaramani, the first suspect and is also thefather-in-law of Hirdaramani’s son Kishore. The Manager ofDialdas is one Kripalani.
The name of Peter Muzina had transpired in these transactions.He had been in Ceylon at the time Ingra handled the Maskeli-Oya Project and was the Chief Accountant and TechnicalManager of Konstructor, Split, Yugoslavia, the leading civilengineering company which handled this project for Ingra.
During the time relevant to the transactions which formedthe charges before the Commission, Muzina was Manager ofthe foreign Department of Konstructor and was in Yugoslavia.It was through Muzina that the two Yugoslavs in Ceylonarranged for the foreign currency to be sent to London fromYugoslavia to Dialdas & Co., London, or to J. W. K. Jackson,London, or to the E. C. C. Ltd., account of Ratnagopal in theMidland Bank Ltd., London.
J.W. K. Jackson of Ealing, London, W5, was the agent ofMubarak Thaha of Ceylon. He collected foreign exchange in.the U.K., and informed Thaha in Ceylon by Telex and the latterin turn paid out to his customers in Ceylon in local Rupees.Similarly when Thaha accepted Ceylon Rupees from persons inCeylon for the sale of sterling, he instructed Jackson in Londonwho paid in sterling to the persons whose names were sent upby Thaha.
The Attorney-General in his opening has for conveniencesplit up the transaction in respect of which the charges havebeen formulated into six transactions. For the purpose of dealingwith the charges we propose to deal v/ith them in the samemanner.
We shall, firstly, deal with the charges in respect ofBhagavandas Hirdaramani, the first suspect, Stephen Galetovic,the second suspect and Gligo Mladen, the third suspect.
The first transaction in respect of these suspects relates tocounts 1, 2, 3 and 4 of the charges. In May, 1971, Galetoviccalled on Hirdaramani at his residence at Barnes Place with hiscolleague Gligo. On the evidence, this is the first occasion whenHirdaramani and Gligo met although Galetovic and Hirdaramanihad known each other for a considerable time. Galetovic andGligo intimated to Hirdaramani that they were in a positionto sell £ 10,000 at the black market rate. Hirdaramani who wasat this time on the look out to buy foreign exchange accepted
ORDER OF THE COMMISSION—Birdaramani and others
439
the offer. Immediately he gave Galetovic and Gligo an advancepayment of Rs. 37,000. This was aa advance payment for£ 2,000 at the agreed rate of Rs. 37 per pound sterling. Thearrangement was that the pound sterling was to be depositedwith the firm of Dialdas & Sons in London. Hirdaramani wasinformed over the telephone by Kripalani the Manager ofDialdas & Sons in London that a sum of £ 4,000 had beenreceived in London to the credit of Hirdaramani. Onreceipt of this information Hirdaramani contacted Galetovic andGligo who came and met him and Hirdaramani gave them afurther sum of Rs. 74,000 which would, therefore, cover £ 4,000deposited to the credit of Hirdaramani with Dialdas & Sons,London. In June 1971, Hirdaramani found after contactingKripalani that another £ 4,000 had been received in London tohis credit. After receipt of this information Hirdaramani gaveGaletovic and Gligo another sum of Rs. 148,000. In early July,1971, Hirdaramani telephoned Kripalani and found that a further£ 2,000 had been received in London to his account. ThereafterHirdaramani gave Galetovic and Gligo the balance sum ofRs. 74,000. Hirdaramani had, therefore, received to his creditin London with Dialdas & Sons, London, out of these transactions£ 10,000 for which he paid the Yugoslavs Rs. 370,000 in Ceylon.From the material disclosed in his statement to the Police, itappears that this amount of foreign exchange is still lying to thecredit of Hirdaramani at Dialdas & Sons, London.
The second transaction deals with counts 5 to 14 and counts43 to 48 of the charge. The facts relating to this transaction arebriefly as follows : it covers a period from about the end ofMay, 1971, to about the first week of August, 1971. This trans-action brings in Ratnagopal who is not a suspect before us inthis case. At the end of May, 1971, Gligo had approachedRatnagopal on the question of obtaining Ceylon currency bysale in the black market of 24,000 U. S. Dollars which is saidto be the equivalent of £ 10,000. Keeping this over in mindRatnagopal had met Hirdaramani and asked him whetherHirdaramani was prepared to purchase foreign currency fromhim and worked out the procedure that he should adopt in theevent of such a sale. Hirdaramani indicated to Ratnagopal thatthe foreign currency had to be credited to his account at Dialdas& Sons, in London, and that he would pay Ratnagopal in Ceylonat the black market rate. In June, 1971, however, further stepsin this transaction took place when Gligo arranged for one PeterMuzina of Yugoslavia residing in Yugoslavia to go across toLondon and discuss this matter with Ratnagopal. Peter Muzinawas the Chief Accountant and Financial Manager of Ingra inCeylon during the Maskeli-oya Project which ended in 1969.
440
ORDER OP THE COMMISSION—Hirdaramani aiid othzrs
Ratnagopal had met Peter Muzina after Gligo offered theforeign exchange to him in some place in Europe. Gligo hadgiven his name and address. Gligo had also told Peter Muzinathat Ratnagopal will contact him and discuss this matter. PeterMuzina had written to Gligo and told him that he had metRatnagopal and that he would make arrangements to depositthe money in the way suggested. The subsequent arrangementwas, therefore, that the Yugoslav undertook to transmit foreignexchange from Yugoslavia to Ratnagopal’s account in Englandand Ratnagopal undertook to make payments to Galetovic andGligo in Ceylon currency.
In pursuance of this agreement in July, 1971, Ratnagopal gaveto Kripalani of Dialdas & Sons, London, two cheques drawn onan English Bank each for £ 5,000. This was done about thesecond week of July before Ratnagopal left for Ceylon on 12thJuly, 1971. In consideration of this payment Hirdaramani gaveRatnagopal in Ceylon a total sum of Rs. 370,000 during the periodfrom the middle of July, 1971 to end of July, 1971. To make thesepayments Hirdaramani had to cash cheques of very largeamounts. Ratnagopal thereafter notified Gligo and Galetovic.Gligo came to meet Ratnagopal and removed this money. Ratna-gopal received Rs. 370,000 from Hirdaramani and paid GligoRs. 360,000 thereby making a profit of Rs. 10,000 for himself.Hirdaramani, therefore, had £ 10,000 to his credit in Londonout of this transaction and he sold £ 7,000 to Murjiani the fourthsuspect at the rate of Rs. 39 for a pound. Hirdaramani had £ 3000to his credit at Dialdas & Sons after having made a profit ofRs. 13,500.
The third transaction covers counts 15 and 16 and the factsmay be summarised as follows : After the £ 10,000 transactionwith Ratnagopal, Gligo informed Ratnagopal again that heneeded Ceylon currency urgently and that he could 'giveRatnagopal $ 24,000 Dollars or its equivalent of £ 10,000 whichcould be credited to Ratnagopal’s account in London as wasdone on the previous occasion.
Ratnagopal was in Ceylon at this time. On 3.5.1971 he left forthe United Kingdom, but, before he did this he arranged withhis wife, Mrs. Malini Chitra Ratnagopal, who is a witness in thiscase, and one George Abeyratne to see that the required amountof Ceylon currency was delivered to Gligo during Ratnagopal’sabsence. Ratnagopal sold this foreign exchange to MubarakThaha, a businessman in Colombo, the payment being made toone Kingsley Jackson who was Mubarak Thaha’s agent inLondon. After Ratnagopal received the foreign exchange inLondon he himself paid the amount to Jackson (in London) the
ORDER OF THE COMMISSION—-Birdaramani and others
441
agent of Thaha. Thaha who was in touch with his agent Jacksonon his Telex Machine then paid Ceylon currency to Abeyratnewho appears to have acted as agent to both Thaha andRatnagopal.
During the second week of August, 1971, Mrs. Ratnagopalreceived on this transaction two payments of Rs. 197,000 eachfrom George Abeyratne. On receipt of this money Mrs. Ratna-gopal contacted Gligo who met her at her residence and collectedthe monies. To make up this stipulated amount of Rs. 400,000 ofwhich Rs. 5,000 had been taken by George Abeyratne ascommission, Mrs. Ratnagopal gave a balance of Rs. 5,000 frommonies taken from her firm Equipment Construction Company•of Ceylon.
The fourth transaction refers to counts 17 to 24 of the chargesand covers the same period as the previous transaction.Ratnagopal once again contacted Hirdaramani and offered him£ 20,000. Hirdaramani suspected that this foreign exchange wasfrom the Yugoslavs. Hirdaramani thereafter himself directlycontacted the two Yugoslavs who indicated that they weredesirous of selling about £20,000 in the black market.
Hirdaramani agreed to purchase this foreign exchange from theYugoslavs. He thereafter concluded a deal with Jagtiani the 5thsuspect to re-sell an amount of £ 10,000 out of this amount of£ 20,000 to Thaha and the understanding was that the foreignexchange was to be deposited with one Jackson, Thaha’s agentin London. With this in view Hirdaramani indicated to the twoYugoslavs that the foreign exchange should be transmitted toJackson in London whose address Hirdaramani gave to theYugoslavs. After this deal was concluded Thaha and Jagtianiimmediately drove to Hirdaramani and delivered the sum ofRs. 200,000 as advance. This amount was paid thereafter byHirdaramani to Galetovic and Gligo. At the end of July, 1971,Thaha after cashing a cheque gave Jagatiani, the fifth suspect,a sum of Rs. 200,000 to be given to Hirdaramani. Jagtiani tookthis money in a suit case and delivered it to Hirdaramani, andHirdaramani later paid Galetovic and Gligo a sum of Rs. 170,000after verifying that the entirety of £ 10,000 had been receivedin London.
The fifth transaction is in respect of counts 25 to 33 and 40 '059. This relates to the purchasing of the balance.nt of
£ 10,000 out of the £ 20,000 offered to Hirdaramani eraletovicand Gligo referred to in the previous transaction. This took placeabout the third week of August, 1971.
442
ORDER OF THE COMMISSION—Hir laramani and others
Thaha who had earlier agreed to purchase this amount wasarrested and therefore it was not possible to go through the dealwith him. Hirdaramani thereupon decided that this amount of£ 10,000 be credited to his own account at Dialdas & Sons inLondon. This amount was sold to Murjiyani, the 4th suspect,making use of the services of the sixth suspect, Sharma, asbroker.
Hirdaramani paid the Yugoslavs for this Sterling Rs. 370,000.By sale to Murjiyani he obtained a sum of Rs. 390,000 less anamount of Rs. 500 paid to Sharma. On this transactionHirdaramani made a profit of Rs. 19,500.
The sixth transaction is in respect of counts 34 to 42 and 60 to65. Hirdaramani once again bought a further sum of £ 7,000 fromGaletovic and Gligo at the rate of Rs. 37 per pound. This amountwas credited to his account at Dialdas & Sons, London. Hirdara-mani sold this amount to Murjiyani through the medium ofSharma. Hirdaramani therefore bought this sterling forRs. 259,000 and sold it for Rs. 273,000. After paying Rs. 350 toSharma, Hirdaramani made a profit of Rs. 13,650.
We shall firstly deal with the case against Hirdaramani the 1stsuspect.
The witnesses Tyrell Gunatilleke, S.P., C.I.D., who was incharge of this inquiry in respect of foreign exchange offences,and F. S. P. Wettasinghe, A.S.P., C.I.D., who assisted TyrellGunatilleke, have both, in their evidence, produced the state-ments made by Hirdaramani in respect of foreign currencytransactions, which are the subject matter of the charges beforeus. These statements were made by Hirdaramani whilst he wasunder detention under the Emergency Regulations. P14 was astatement made to the Police by Hirdaramani on 1.9.71 and P14Awas made on the same date. P14B and P14C were made on 13.9.71,P14D on 13.9.71 and P14E on 11.10.71. These statements are of aconfessional nature, and in all of them Hirdaramani has admittedthe foreign currency transactions which are the subject matterof the charges before us.
In these statements, particularly in P14C of 13.9.1971,Hirdaramani the 1st suspect has admitted—
the purchase of £37,000 sterling for Rs. 1,360,000 fromGaletovic, the 2nd suspect and Gligo, the 3rd suspect,between May, 1971 and August 1971, at differenttimes ;
ORDER OF THE COMMISSION—Hirdaramani and others
443
the purchase in July, 1971, of £ 10,000 Sterling from.
Ratnagopal and payment to him of Rs. 370,000 inconsideration thereof. This Sterling was deposited tohis credit with Dialdas & Sons ;
the arrangement by which the pounds Sterling which
he purchased from the Yugoslavs was to be depositedwith Dialdas & Sons, London, to his credit;
the instructions he gave to Galetovic and Gligo to
deposit £ 10,000 Sterling with J. W. K. Jackson inLondon who was Thaha’s agent in London ;
the sale of £ 10,000 Sterling to Thaha through Jagtiani,
the 5th suspect, at Rs. 40 a pound Sterling ;
the sale of £ 24,000 Sterling to Murjiani, the 4th suspect
in 3 transactions of £ 7,000 Sterling, £ 7,000 Sterlingand £ 10,000 Sterling. The sum, of £ 13,000 Sterlingis still lying to his credit with Dialdas & Sons inLondon.
These statements which Hirdaramani has made to the Policeare admissible under section 11 of the Criminal JusticeCommissions Act, against him.
In our view no satisfactory evidence has been led to reduceor minimise the weight that should be attached to theseconfessional statements. The burden of proving the matterswhich reduce or minimise the weight that should be attachedto such confessional statements is on Hirdaramani. Hirdaramanihas not given evidence challenging or controverting theseincriminatory statements against him contained in the state-ments he has made to the police.
There is also the evidence of the 3rd suspect Gligo given onoath before us which corroborates the confessional statementsmade by Hirdaramani to the police. According to Gligo, in May,1971, when he thought he was getting into financial difficultiesin connection with the contract which Konstructor had in respectof the work on the Mahaveli Diversion Scheme (PolgollaProject), he explained to Galetovic the 2nd suspect the needfor immediate money. Then having failed to raise a loan fromthe Bank, Galetovic took Gligo to Hirdaramani, and Gligo thennarrated in detail how Hirdaramani bought £ 37,000 Sterling forRs. 1,369,000. He gave details as to how the money was to bedeposited to the credit of Hirdaramani with Dialdas & Sons,London, to which firm £ 27,000 Sterling was sent to the creditof Hirdaramani, and two crossed cheques for £ 10,000 Sterlingwere sent to Thaha’s agent Jackson in London. According to the
444
ORDER OF THE COMMISSION—Hirdaramani and others
document P29, it was on Dr. Gligo’s instructions that PeterMuzina despatched the sterling to Dialdas & Sons throughJackson. Gligo has informed Muzina that he received Ceyloncurrency for the foreign currency.
The other witness who gave evidence before us in respect ofthe charges against Hirdaramani was one O. F. Perera, SeniorAssessor of the Department of Inland Revenue. He stated thathe had read in the newspapers about the Supreme Courtproceedings in respect of the habeas corpus application madeon behalf of Hirdaramani through which he came to know thatHirdaramani was involved in foreign currency transactions. Heinterviewed Hirdaramani on two occasions in the presence ofHirdaramani’s Accountant, one Ratnam of Pope & Company.Witness Perera explained the procedure of the interview hehad with Hirdaramani. He said that he questioned Hirdaramaniand that simultaneously notes were made and the notes weretyped by the Typist, and on a date convenient to both partiesthey went through the notes of the interview and the accuracyof the notes was confirmed by signing them. He said thatHirdaramani signed them after they were read over to him. The1st interview took place on 21.11.1972 and Hirdaramani signedthe interview notes on 14.12.1972. These notes are a production,marked P44. Under the heading, “Foreign ExchangeTransactions”, Hirdaramani has admitted to witness Perera ofthe Inland Revenue Department that from May, 1971 to August,1971, he has bought 47,000 pounds sterling in the black marketas follows: —
£ 10,000 from Ratnagopal,
£ 37,000 from officials resident in Ceylon, who are
representatives of Ingra and Konstructor.
Shortly after these purchases he has sold £ 34,000 in thefollowing manner : —
an aggregate of £ 24,000 to one Murjiani by three
transactions of £ 7,000, £ 7,000 and £ 10,000 ;
£ 10,000 again to A. M. Thaha.
A further sum of £ 13,000 was lying to his credit in Londonwith the father-in-law of his son, Dialdas.
Gligo’s evidence is that he has instructed Peter Muzina whowas the Manager of the foreign Department of Konstructor inYugoslavia, to remit these sums in pounds sterling to Dialdas& Sons, London, and to Jackson of London. P29A is an affidavitsworn by the authorised representative of Konstructor, one
ORDER OF THE COMMISSION—Hirdaramani and others
445
Kriste Piskulic, before the Municipal Court in Split, Yugoslavia,on 22.5.1972. This affidavit reveals that Konstructor on theorders of Gligo had made the following payments : —
On 18.6 71, 2,000 pounds sterling, in favour of Dialdas &
Sons, London ;
On 7.7.71, 2,000 pounds sterling, in favour of Dialdas &
Sons, London ;
On 22.7.71, 2,000 pounds sterling, in favour of Dialdas &
Sons, London ;
On 30.7.71, 4,000 pounds sterling, in favour of Dialdas &
Sons, London ;
On 30.7.71, 7,000 pounds sterling, in favour of Dialdas &
Sons, London ;
On 16.8.71, 10,000 pounds sterling, in favour of Dialdas &
Sons, London, and
On 30-7.71, 10,000 pounds sterling, in favour of Jackson,
London.
Peter Griggs, the Chief Detective Inspector of Scotland Yard,London, who assisted A.S.P., Wettasinghe in the ILK. ininvestigating into foreign currency transactions gave evidencebefore us. He said he recorded the statement of J. W. K.Jackson of Ealing, London, on 27.5.72, and on 30.5.72, in thepresence of A. S. P., Wettasinghe, he again recorded his state-ment on 2.6.72. A further statement was recorded on 26.7.72,but this was not in the presence of Wettasinghe. Jackson wasThaha’s agent in London- In his statement (P37) dated 27.5.72,Jackson of Ealing, London, on 27 5.77, and on 30-5.72, in theAugust, 1971, he received to his account two sums of sTeHin|f"pounds—£ 10,000 and £ 15,000, on behalf of Mubarak Thaha,from a firm known as the ‘ Konstructor Split, Yugoslavia’ . Thewitness Griggs also recorded the statement of N. S. Kripalani,the Manager of Dialdas & Sons, in London. In his statement(P38) of 2nd June, 1972, made to witness Griggs, Kripalani hasadmitted that between May and August, 1971, a sum of £ 47,000was received by him and. entered in the books of Dialdas & Sons,London, on behalf of Hirdaramani of Ceylon. Kripalani givesdetails of the pounds sterling received by Dialdas & Sons, tothe credit of Hirdaramani. The evidence reveals that Hirdara-mani’s brother-in-law is the owner of Dialdas & Sons, and thatHirdaramani’s son, Kishore, was also married to the daughter ofDialdas.
446
OR DIO R OF THE COMMISSION—Hirdaramani and others
In respect of the charge of failure on the part of the suspectsconcerned to render to the Central Bank a return of the assetsheld by them in terms of Section 6AB (a) of the ExchangeControl (Amendment Act) Mr. K. A. Rupasinghe, StaffAssistant, Central Bank of Sri Lanka, produced the GazetteP47 giving a list of authorised dealers in foreign currency.The suspects’ names are not in this list. Quite apart from thatthere is no evidence that the suspects have tendered any returnin terms of this section in respect of the assets held by them.
We are satisfied beyond reasonable doubt that BagawandasHirdaramani, the 1st suspect, is guilty on counts 1, 2, 4, 7, 8, 9,10, 13, 14, 17, 19, 20, 21, 23, 24, 25, 27, 28, 29, 31, 32, 34, 36, 37, 38,40 and 41.
We shall next consider the evidence against Galetovic, the2nd suspect. The main evidence against this suspect consistedof the statements he has made to the police while he was underdetention. These statements have been referred to and producedby witnesses Tyrell Gunatilleke and Wettasinghe.
In the statement (P19) made by him on 6.9.71, he denies thathe was aware of any arrangement whereby Gligo had come toterms with Ratnagopal to get down the proceeds of foreignexchange to Ceylon for any purpose whatsoever. In hisstatement P 19B of 13.9.1971, made at 11 p.m. he says that theonly transaction between Gligo and Hirdaramani was in respectof linen. He flatly denied that there was any foreign currencytransaction with Hirdaramani. Thereafter he was confrontedwith Hirdaramani and Gligo. In his statement P 19E, made at12.32 a.m. on 14.9.72 he went to the length of only saying thatin April, 1971, during one of his visits to Hirdaramani, Hirdara-mani told him that his son and father-in-law are in London andthat if he needed any help in London, Hirdaramani could assisthim through his son’s father-in-law. He has said that he sent£ 450 in three instalments, to be kept at Dialdas & Sons’ in theevent of any member of his family needing this sum in Londonto buy anything there. He admitted however that he had anaccount in Lloyds Bank, London, and that he has instructed thisBank to remit this amount to Dialdas & Sons, London. On thisoccasion too he denied any foreign currency transactionsinvolving Gligo and Hirdaramani. In his statement P19F of14.9.71, again, he does not admit the transactions in respect ofthe charges before us. However, on 4.12.71 he addressed a letterto the S.P. (C.I.D.), which is marked P 5 X, in which heapologised and expressed his deepest sorrow for the inconveni-ence caused as a result of his “ incomplete and partially incorrectstatement ” he gave earlier. In this letter he admits taking
ORDER OF THE COMMISSION—Htrdaratnani and others
447
Gligo to Hirdaramani, the purpose being to get a private loan,and to get the offer for linen. He has introduced Gligo toHirdaramani as a gentleman who is a main representative ofKonstructor, and the Business and Financial Manager thereof.He wanted a loan from Hirdaramani. Hirdaramani replied thatno loan was possible but that if Gligo could remit £ 10,000 to anEnglish Company in London he could pay 50 per cent,immediately and the balance later. Gligo accepted this proposaland the deal was fixed. He has stated further in this letter thathe had tried to divert Gligo from this business but failed. Henext refers to the other transactions whereby foreign currencywas purchased by Hirdaramani.
Galetovic further admits in this statement that after thison 28.2.72 in which he refers to the letter P5X addressed to theS. P. (C. I. D.). In this statement Galetovic says that he wasan eye-witness to a transaction in foreign exchange and localcurrency between Gligo and Hirdaramani. He admits havingintroduced Gligo to Hirdaramani in order to solve the problemof shortage of local money for work in the Mahaveli Project.Gligo and Hirdaramani met in a sitting room of the groundfloor of the residence of Hirdaramani. To a proposal for a privateloan Hirdaramani replied that it was not possible to give a loan.He says that Gligo accepted a deal whereby, if foreign currencywas deposited in an English Company in London, Hirdaramaniwould give local currency. He stated he was present throughoutthe discussion. He stated further that Hirdaramani indicatedthat sterling should be remitted to Dialdas & Sons, London.
Galetovic further admits in this statement that after thisinitial visit to the house of Hirdaramani in connection with thistransaction he visited Hirdaramani’s house on three or fouroccassions in the company of Gligo to collect the instalmentsof money in Ceylon currency in connection with this transaction.He further admits that during the 3rd or 4th visit to theresidence of Hirdaramani to finalise the instalments Hirdara-mani asked Gligo whether he could make two more remittancesto London to two different addresses, namely, Dialdas & Sonsand one Jackson. He however stated that while they werereturning home after this transaction he warned Gligo to giveup this deal as otherwise he would be forced to inform theHead Office.
Galetovic in all his statements denies that he was aware ofany transaction between Ratnagopal and Gligo.
Gligo in his evidence before us confirmed that Galetovic tookhim to Hirdaramani and that he did not know Hirdaramanibefore that. He referred to the transaction in the presence of
448
ORDER OF THE COMMISSION'—Hirdaramani and others
Galetovic whereby ultimately £ 37,000 was forwarded toHirdaramani for a sum of Rs. 1,369,000. Gligo also stated thatGaletovic was not aware and had no hand in the transactionsin respect of foreign currency which Gligo had with Ratnagopal.
On the admissible evidence against Galetovic, although thereis only a suspicion that Galetovic may have had a connectionin the Ratnagopal transaction, yet, we are not satisfied beyondreasonable doubt that Galetovic was involved in the foreigncurrency transaction between Ratnagopal and Gligo.
In respect of the foreign currency transaction betweenGaletovic and Gligo on the one hand and Hirdaramani on theother hand, Mr. Ameer, learned Senior Counsel for Galetovic,submitted that Galetovic did nothing more but accompany Gligoand that Galetovic was a mere messenger. In our view Galetovicwas the architect and the brains behind these illegal foreignexchange transactions whereby Yugoslavs were able to disposeof large amounts of foreign currency in this country. In ourview, further, the admission by Gligo in P19E, the statementhe made to the Police on 14.9.71 that he remitted £ 450 toDialdas & Sons for which he said he received no rupees inCeylon was no innocent transaction. One cannot understandwhy, when he had an account with Lloyds Bank, London, heneeded his own money to be deposited with Dialdas & Sons,in London, to enable him or his family to buy anything inLondon if they happened to go there. Galetovic had a bettercommand of the English Language and spoke English fluentlywhile Gligo’s English was poor. He would have therefore beenthe chief negotiator with Hirdaramani.
In his statement P19N, made to the Police on 15.4.72, he statesthat the English currency received as a part of his emolumentsis banked at Lloyds Bank, London, to his account. He hadenough pounds sterling available to him in his account at LloydsBank if he or his family needed money in the U. K. In ourview this £ 450 initial deposit with Dialdas & Sons, was a trialtransaction and this was to be the modus operandi for futureillegal foreign currency transactions. His statement to the Police,P19J, made on 16.12.71 shows that he was not a raw novice inrespect of foreign currency dealings in this country. In hisstatement he admits that he passed information to Hirdaramanithat one Dr. Simon of Konstructor, Split, Yugoslavia, wasinterested in selling foreign exchange in Ceylon. He admitsalso that he knew Jagtiani although he has not met him as hisname was mentioned to him by Hirdaramani. Jagtiani is the5th suspect in this case. A false denial made by Galetovic inhis original statement to the Police that he had nothing to do
ORDER OF THE COMMISSION—Hirdaramani and others
449
with the foreign exchange transactions of Gligo and Hirdara-mani or any knowledge thereof, and the belated admission inP5X, his letter to the SP., C.I.D., and P 191 of 28.2.72.where he admits his presence on the occasion of currencydealings between Hirdaramani and Gligo, which were putthrough, lead us to the irresistible conclusion that he and Gligowere not only fully aware of the full implications of the illegalforeign exchange sales to Hirdaramani but that Galetovic wasa party with Gligo for the sale of £ 37,000 to Hirdaramani, inreturn for Rs. 1,369,000.
We are satisfied, therefore, beyond reasonable doubt thatthe charges in regard to Galetovic in respect of the sale offoreign currency to the value of £ 37,000 to Hirdaramani havebeen proved beyond reasonable doubt.
We accordingly find Stephen Galetovic, the 2nd suspect,guilty of counts 1, 3, 17, 18, 28, 26, 34 and 35.
Having considered all the available evidence, we do not thinkthat there is justification to convict the 2nd suspect Galetovicwith what may be called the Ratnagopal transactions referredto in counts 5, 6, 15 and 16. We accordingly find him not guiltyof counts 5, 6, 15 and 16 and we acquit him on these counts.
We shall next consider the case against Gligo, the 3rd suspect.Gligo is the Business & Finance Manager of Konstructor inCeylon. He was the only suspect who gave evidence on oathbefore us voluntarily. He spoke of the financial affairs of INGRAin Ceylon up to May, 1971, and as they were getting into moredifficulties due to shortage of funds he decided to raise a loanin Ceylon in Ceylon rupees. He approached Ratnagopal, whomhe had known and met in Yugoslavia, for a loan of Rs. 400,000.00to be repaid in a year. He met him in May, 1971. Ratnagopaloffered him three proposals. He said he wanted a bank guaranteein foreign currency. Secondly, he said that he could give thismoney and that he could ask an agent of his to pay provided acommission was paid to him, but this also must be guaranteedin foreign currency. Thirdly, be said that if foreign currency isdeposited to Ratnagopal’s account in London, Gligo will receiverupees in Ceylon. Gligo told him that he was only concernedwith the loan. No final arrangements were made.
Gligo next informed Peter Muzina, the Manager of theForeign Department of the Firm in Yugoslavia, about hisdifficulties. He informed Muzina also the discussions he hadwith Ratnagopal about the loan. Muzina told him that he woulddiscuss this matter with Ratnagopal. Obviously these discussions
450
ORDER OF THE COMMISSION—Hirdaramani and others
with Peter Muzina were by letters. Ratnagopal told Gligo thathe would go abroad and discuss the matter with Peter Muzinapersonally. Gligo also told Ratnagopal to discuss the matterwith Muzina. Ratnagopal left Ceylon on 31.5.1971.
In the meantime, Gligo said that the financial positionworsened. Having had no definite word from Ratnagopal hebroached the subject to Galetovic the second suspect about thefinancial position of Konstructor.*
In June, 1971, he and Galetovic went to Grindlays Bank, butthey were not able to get a loan. He then described howGaletovic took him to Hirdaramani and how he was able tosell £ 37,000 to Hirdaramani in a series of transactions, wherebythey were able to realise Rs. 1,369,000 in local currency.Galetovic was present during these transactions withHirdaramani. We have discussed fully this aspect of thetransaction when we dealt with the evidence againstHirdaramani and Galetovic. There is, however, one matter ofsignificance which we have to repeat, and it is what Gligo statedregarding the remittance of foreign exchange to Dialdas &Company and Jackson. Gligo did this by giving instructions toPeter Muzina, the Manager of the Foreign Department ofKonstructor in Yugoslavia. Whenever he received money inCeylon currency he informed Peter Muzina. Gligo, thereforeadmits that he sold the foreign currency to the value of £ 37,000to Hirdaramani in Ceylon rupees.
Gligo then refers to the return of Ratnagopal from abroadand to the fact that Muzina informed him that he had metRatnagopal abroad. Muzina informed him the transaction wasalright and that Ratnagopal will explain to him in detail andthat Ratnagopal will give him the money. He met Ratnagopalin mid July, but Ratnagopal did not tell him the arrangementshe had made with Muzina. He said that Ratnagopal gave himin three instalments Rs. 360,000. Ratnagopal told him that hewill be leaving for England again and that he had instructedhis wife to give him more money. The evidence is that Ratna-gopal left Ceylon on 3.8.1971 and only returned to Ceylon on28.8.1971. Gligo is emphatic that he was unaware of the trans-actions Ratnagopal had with Muzina abroad or in London. Heagain stated that if Muzina and Ratnagopal did anything inLondon he did not know anything about it.
In brief it may be stated that Gligo admitted his foreigncurrency transactions with Hirdaramani, but in regard to hisdealings with Ratnagopal that as far as he was concerned hewas getting a loan from Ratnagopal in Ceylon rupees and hewas unaware of the dealings Ratnagopal had with Muzina.
ORDER OF THE COMMISSION—Hirdaramani and others
451
He further admitted that in accordance with what Ratnagopalstated to him before he left the Island, after his depature Ratna-gopal's wife Malini Chitra Ratnagopal gave him Rs. 400,000.00 inthree instalments, two of Rs. 197,500 and one of Rs. 5,000. Gligotherefore received from Ratnagopal a total sum of Rs. 760,000 inCeylon rupees. If you add this amount of Rs. 1,369,000 hereceived from Hirdaramani, Gligo had received in all Rs. 2,129,000.
The statements made by Gligo to the Police in connection withthese foreign currency transactions have been produced. Thesestatements were also made when Gligo was under detention, under the Emergency Regulations. In his first statement P15 of2.1.1971 he denied he went to Mrs. Ratnagopal’s house andobtained money between 3.8.1971 and 28.8.1971, that is the periodwhen Ratnagopal was away in England. He also denied thatbefore Ratnagopal left Ceylon he gave him any money for anypurpose. He denied that he had any monetary transactions inCeylon or abroad with Ratnagopal. On the same day he wasconfronted with Mrs. Ratnagopal. He made a statement in herpresence. In P15B he still denied the transaction In P15C Gligosaid that Mrs. Ratnagopal was lying. We shall discuss theevidence of Mrs. Ratnagopal shortly. On 3.9.1971 in P15D headmitted that he did not speak the truth before this and that hewished to speak the truh of his own accord. He said that whatMrs. Ratnagopal said in his presence was the truth, that she gavehim Rs. 395,000 on two occasions, and that before Ratnagopal leftCeylon he gave him Rs. 350,000. He admitted that he askedRatnagopal for a loan of Rs. 400,000 as he was short of money.He also made this admission in this statement:“ I am asked
what Ratnagopal told me when I asked him for this loan ofRs. 400,000. He did not give me an answer at first. Ratnagopallater said he will give me Ceylon rupees at the rate of aboutRs. 36 per pound sterling or Rs. 15 per U.S. Dollar. He said thatthe money should be deposited in London at the time he paidthe money in Ceylon. We arranged that I should repay themoney to him in Ceylon, he will repay the money givento him abroad to my Company in Yugoslavia. ” Gligofurther stated that “ after my discussion Ratnagopal left Ceylonand he met my man, Mr. Peter Muzina, the Business Manager ofmy firm, in some place in Europe. I told Ratnagopal to meet him^and gave his name and address. I told Peter Muzina that Ratna-gopal will contact him and discuss this matter. I also informedPeter Muzina about the shortage of money and explained theplan to him. ”
Gligo further stated : “I believe that Peter Muzina had sentto Ratnagopal the amount of foreign currency required to meetthe value of Rs. 745,000 at the rate of Rs. 36 per pound. I have
452
ORDER OF THE COMMISSION—Hirdaramani and others
not preserved my correspondence with Peter Muzina. ” Thisconduct militates against the innocence of Dr. Gligo regardingthe nature of the transaction.
In P15E dated 3.9.1971, Gligo again admits that he receivedfrom Mrs. Ratnagopal two instalments of Rs. 395,000 each. Hesaid that he took this money from Mrs. Ratnagopal on instruc-tions from Mr. Ratnagopal. His position in P15F of 4. 9. 1971 isthat Ratnagopal gave him in Ceylon rupees a loan. In P15H heagain admits the receipt of Rs. 360,000 from Ratnagopal andRs. 400,000 from Mrs. Ratnagopal. He further stated in P15H thatafter Ratnagopal returned, on the morning of 1.9.1971 when hewas going in his car to Ratnagopal’s house he saw some peopleoutside Ratnagopal’s house, and there were some Police officers.He went back to his house and burnt all documents. It is inevidence that he burnt even the correspondence he had withPeter Muzina in connection with this transaction. In his state-ment. P15J of 7.9.1971, he narrated how Wettasinghe, A.S.P.,took him to Polgolla and how a sum of Rs. 1,000,000 was recoveredin a pillow case in the room occupied by Luka, the cashier ofKonstructor. After the recovery of this money, Gligo said in hisstatement that he apprised Wettasinghe for the first time of hisdealings in June, July and August, 1971, with Hirdaramani,whereby he sold £ 37,000 to Hirdaramani at Rs. 37 per poundand realised a sum of Rs. 1,369,000. In P15J he admits how he hadrealised a total of Rs. 2,129,000, i.e., from Ratnagopal Rs. 760,000and from Hirdaramani Rs. 1,369,000. He gave details of howforeign currency was sent to Dialdas & Sons. The first paymentwas £ 10,000 and was sent to Dialdas & Sons to the credit ofHirdaramani. The second payment was £7,000 (Sterling) andwas sent to Dialdas & Sons to the credit of Hirdaramani. Thethird payment consisted of two cheques which were drawn infavour of Jackson of London whose address was given by Hirda-ramani. The fourth payment was £ 10,000 (Sterling) and was tobe deposited with Dialdas & Sons to the credit of Hirdaramani.P15L dated 14.9.1971 is a detailed statement made by Gligo to thePolice, in which he gives a full and complete statement of thedeposit of £ 27,000 with Dialdas & Sons and £ 10,000 withJackson. He states that Galetovic was only a messenger in thetransactions with Hirdaramani, as in fact all transactions weredone by him (Gligo).
Mrs. Malini Chitra Ratnagopal, the wife of Ratnagopal, in herevidence told us how she gave Dr. Gligo large sums of moneyon two occasions. On the first occasion one Mr. Abeyratne cameand gave her a parcel which was handed over to Gligo.Abeyratne told her that the parcel contained Rs. 197,500. Abey-ratne gave her a second parcel, also containing Rs. 197,500. Gligo
ORDER OF THE COMMISSION-—Birdaramani and others
453
came and collected these monies. Subsequently, she also gaveGligo Rs. 5,000. She said that Ratnagopal, before he left Ceylon,gave her instructions regarding these payments.
The important question we have to ask ourselves is whetherGligo was concealing from us the knowledge that he receivedthese monies from Ratnagopal, that Ratnagopal will receiveforeign currency in London for the Ceylon rupees given to him.As we pointed out, Gligo emphatically denies that he knew ofany transactions between Peter Muzina and Ratnagopal.
The circumstantial evidence in the case and the inferencethat one can draw from the evidence given by Gligo, and alsothe other evidence in the case, lead us to the irresistible conclu-sion that Gligo was suppressing from the Commission hisknowledge and complicity in the transaction, whereby PeterMuzina remitted out of Konstructor funds in Yugoslavia toRatnagopal in the form of foreign currency in London forCeylon rupees which Gligo received in this country. Theevidence proves conclusively that, even conceding that thetransaction began as a request for a loan by Gligo fromRatnagopal, it ultimately matured into a foreign exchange dealwhereby Ratnagopal purchased foreign currency and gaveGligo Ceylon rupees in payment.
We wish at this stage to refer again to the document P29A,the affidavit sworn to by the authorised Representative ofKonstructor, before the Municipal Magistrate in Split. Therelevant portion of the affidavit reads as follows : —
“ On the orders of Dr. Mladen Gligo, Branch Office Directorfor Administration and Finances, the followingpayments have been effected through the Bank inLondon.” Items 1 to 6 refer to £ 27,000 that have beensent between 18.6.1971 and 16.8.1971 from Konstructorin favour of M. Dialdas & Sons, London. Item 7 statesthat on 8.7.1971 the amount of U. S. Dollars 24,000 infavour of E. C. C. Account No. 90322350, MidlandBank Ltd., Gresham Street, London, E. C. 2 ; item 8,on 26.7.1971 the amount of U. S. Dollars 48,000 infavour of E. C. C. Account No. 90322350 MidlandBank Ltd., 2 Gresham Street, London, E. C. 2, “ havingbeen sent by Konstructor. ”
C. C. is an English Company of which Mr. Ratnagopal isthe Chairman, and had dealings with INGRA in Ceylon. Theysupplied INGRA with machinery and other articles.
454
ORDER OF THE COMMISSION—Hirdaramani and others
This affidavit, therefore, unequivocally connects Muzina withGligo and shows that it was on Gligo’s instructions thatMuzina had remitted foreign currency to the account ofRatnagopal’s Company, E. C. C. at the Midland Bank Ltd.,London. No reasons have been given why the AuthorisedRepresentative of Konstructor should deliberately lie and statethat it was on the instructions of Gligo that the foreign currencywas sent to Ratnagopal’s Company Account in London.
Apart from this, it must be recalled that Gligo admitted thatwhen he sold foreign currency to Hirdaramani, he instructedMuzina to remit the foreign currency to either Dialdas & Sonsor Jackson. One cannot believe, therefore, that when Gligo wastransacting foreign currency deals with Ratnagopal, he did notuse the same modus operandi—that is, instructing Peter Muzinato remit the money to London, which means he adopted in theHirdaramani transactions.
It is also difficult to believe that Gligo’s transactions withRatnagopal and his receipt of Ceylon currency, were on thebasis of a loan. Why was no receipt given to Ratnagopal forthis sum of Rs. 760,000 ? No entries have been made in any booksof Konstructor in Ceylon in respect of this. No such accountbooks were produced before us. Gligo says that he did not evengive an undertaking and say when he will repay this loan. Nosecurity was given to Ratnagopal for the loan of this large sumof money. If this was a bona fide transaction of a loan fromRatnagopal, why did not Gligo tell Luka the Cashier the truecharacter of this transaction ? Why did he tell Luka that itwas money obtained from the Bank ? Lastly, why did Gligo on1.9.1971 when he was going to visit Ratnagopal having seenpolice officers outside Ratnagopal’s house reverse his car and goback to his home and burn all correspondence, including theletters written by Peter Muzina ? It is no doubt true thatRatnagopal had cautioned Gligo after his return from Englandthat there was a talk that the money that was realised by thesale of foreign exchange had been diverted for the insurgencymovement. There was no necessity to burn the correspondencewith Peter Muzina for this reason, because these letters wouldhave shown the true and bona fide nature of the transaction, ifit was really so.
The statement m the affidavit (P29) that it was at the instancof Gligo that foreign currency was remitted by Konstructorfrom Yugoslavia to Ratnagopal’s E. C. C- Account in the MidlandBank, London, throws considerable light on the real object thatGligo had in mind in destroying the correspondence he hadwith Peter Muzina.
ORDER OF THE COMMISSION—Hirdaramani and others
455
If this was not the correct position we feel certain that it waswithin Gligo’s power to call some evidence to refute it and tosupport his own evidence of his innocence. The failure on hispart to place any such evidence is a circumstance that operatesagainst his innocence.
We are satisfied, beyond reasonable doubt, therefore, thatGligo had full knowledge of the transaction between Muzinaand Ratnagopal whereby Ratnagopal received foreign currencyto his ECC Account in the Midland Bank, London. In return forthe foreign currency Ratnagopal received in London, Gligoreceived Rs. 760,000 in Ceylon from Ratnagopal.
Gligo has stated in his evidence that £ 10,000 was sent toJackson, Thaha’s Agent, by crossed cheques at Hirdaramani’s^request. He has instructed Muzina to remit these cheques to theaddress given by Hirdaramani. The crossed cheques werereceived by Jackson to his account at Barclays Bank Limited,London. The statement made by Jackson to Detective InspectorGriggs (P37) dated 27th May, 1972, and the letter (P23) dated6th August, 1971, from Barclays Bank Limited, to Jacksonstating that the Bank has received £ 10,000 from KonstructorSplit and asking for instructions from Jackson, and Jackson’sletter to the Bank (P24) dated 11th August, 1971, to transferthis £ 10,000 to his account at Westminster Bank Limited,London, are all proof of this transaction. This item of £ 10,000has been also entered in the Accounts Book (P25) which containsthe foreign currency transactions entered by Jackson on behalfof Thaha. The documents P23, P24, and P25 were recovered byGriggs after interrogating Jackson in London.
We are therefore satisfied, beyond reasonable doubt, that GligoMladen, the 3rd suspect, is guilty of the following counts : —
3, 5, 6, 15, 16, 17, 18, 25, 26, 34, and 35.
We are satisfied that the rates of exchange at which the buyingand selling of foreign currency in respect of the charges beforethe Commission and in respect of the transactions involving theconversion of foreign currency into Ceylon currency and theconversion of Ceylon currency into foreign currency, were atrates higher than the rates for the time being authorised bysection 76 (3) of the Monetary Law Act, Chapter 422.
In respect of the charges under section 5(1) of the ExchangeControl Act, Chapter 423, we are satisfied that these transactionswere done without the permission of the Central Bank. Theforeign currency transactions which are the subject-matter ofcharges under section 5 (2) of the Exchange Control Act in ourview had been entered into without the previous general orspecial permission of the Central Bank.
ORDER OF THE COMMISSION—Hirdaramani and o'bers
460
Under section 49 of the Exchange Control Act in any prosecu-tion of a person for an offence against this Act, the burden ofproving that he had obtained the permission or the consent ofthe Bank for doing the act or making the omission whichconstitutes the offence shall be on him. The suspects have failedto discharge this burden.
We are also satisfied that the following suspects, in respect ofwhom charges have been preferred before us, are not authoriseddealers within the meaning of the Exchange Control Act : —
Bhagawandas Hirdaramani, the 1st suspect,
Stephen Galetovic, the 2nd suspect,
Gligo Mladen, the 3rd suspect,
Vashdev Murjiani, the 4th suspect,
K. K. Jagtiani, the 5th suspect,
D. S. Sabnani, the 8th suspect,
S. A. S. Mohamed Abdul Hameed, the 7th suspect.
So are the following persons, viz. Rajamandri JayagandhiRatnagopal and Mubarak Thaha, whose names have transpiredin the course of the evidence.
In regard to the charges under section 6AB (a) of theExchange Control Act, namely counts 4, 13, 23, 31, 40, we aresatisfied that the suspects concerned have, within one month ofthe commencement of the acquisition of the foreign assetsreferred to in the charges, failed to render to the Central Bankin such manner and giving such particulars with respect to theassets as are prescribed.
We are satisfied in regard to the charges under section 6AB (o),namely counts 14, 24, 32, and 41, that the disposition of theforeign assets were done without obtaining the directions of theCentral Bank.
The 4th, 5th, 6th, 7th and 8th suspects are alleged to havetaken part, at various stages and in various degrees, in thedisposal of foreign currency, acquired by the 1st suspect in histransactions with the 2nd and 3rd suspects. The only evidenceon which a conclusion can be reached in respect of these suspects(except the 7th) consists of their statements made to the Police.
As far as the 7th suspect is concerned, there was no evidenceavailable on which we could reach a positive finding. The parthe played, however, emerges from the statements of the othersuspects, available on which we could reach a positive findingparticularly the 4th suspect, but since none of these other
ORDER OF THE COMMISSION—Hirdarcrmani and others
467
suspects were called to give evidence, those statements cannotbe used against the 7th suspect. We shall advert to his case ingreater detail in due course.
We now proceed to consider the case against each of the 4thto 8th suspects, but briefly in respect of the 4th, 5th and 7thsuspects as the two former tendered pleas of guilty and, asalready stated, there is no evidence against the last mentioned.
There were as many as 21 charges (namely counts 9, 11, 28,30, 37, 39, 43, 44, 46, 47, 49, 50, 51, 52, 55, 56, 58, 60, 61, 63 and 64)framed against the 4th suspect. The involvement of the 4thsuspect is in connection with the disposal of foreign currencypurchased by the 1st suspect from the 2nd and 3rd suspects inthree of the transactions he had with the latter. On one occasion,the 1st suspect is alleged to have purchased £ 10,000 from the2nd and 3rd suspects and disposed of a sum of £ 7,000 out ofthis amount through the 4th suspect to the 7th suspect’s agentin Hong Kong (counts 9, 11, 43, 44, 46 and 47).
On another occasion, the 1st suspect is alleged to have pur-chased another £ 10,000 and disposed of £ 8,000 out of this sumthrough the 4th suspect to the 7th suspect (counts 28, 30, 49,51, 55 and 56), and the balance £ 2,000 also through the 4thsuspect to the 8th suspect (counts 50, 52 and 58) though thedelivery of this latter sum failed due to various circumstances.On a third occasion, the 1st suspect is alleged to have purchased£ 7,000 and disposed of this sum through the 4th suspect to the7th suspect (counts 37, 39, 60, 61, 63, & 64) •
At an early stage in the proceedings, the 4th suspect who hadoriginally pleaded “Not guilty ”, withdrew that plea and pleaded“ Guilty ” to the following counts against him, namely, 28, 37,43, 49, 50 and 60—all offences involving the conversion of foreigncurrency into Ceylon currency in contravention of section 5 (2)of the Exchange Control Act. He pleaded guilty on the basisthat he was merely an agent who put through these transactionsfor a commission. The learned Solicitor-General stated that the4th suspect was really a go-between and consented to his pleabeing accepted on the basis on which it was tendered and under-took to reconsider the question regarding the remaining chargespreferred against him. He did not after consideration think itnecessary to proceed on such remaining charges in view of theplea of guilty tendered by him, but only suggested the appro-priateness of an order being made in regard to count 9 too. Wehave considered all the circumstances and the statement madeby the 4th suspect on 24.3.1973 (P 40) in which he admitted the
458
ORDER OF THE COMMISSION—Hirdaramani and others
part he played in these transactions and we are satisfied thatthe plea of “ guilty ” tendered by him can be accepted in respectof these counts, and on the basis on which it was tendered.
The 4th suspect did not plead guilty to count 9, and learnedcounsel assisting the Commission submitted that a finding wouldhave to be reached in respect of that count as that count toowas exactly similar to the counts to which the 4th suspect hadpleaded guilty. This count is in respect of the £7,000 for whichthe 4th suspect negotiated with the 1st suspect. A separatecount (43) has been framed for his negotiations in respect ofthis sum of £7,000 with the 7th suspect. In each instance hehad entered into a transaction (first with the 1st suspect andthen with the 7th suspect) involving the conversion of Ceyloncurrency into foreign currency. He has pleaded guilty in respectof his transaction with the 7th suspect (count 43) and in hisstatement he had admitted the entire transaction. We are, there-fore, satisfied, beyond reasonable doubt, that the 4th suspectis guilty under count 9 also. In view of the above and of hisplea of guilty, we find the 4th suspect guilty under counts 9,28, 37, 43, 49, 5-0 and 60.
The 5th suspect is charged only on one count, namely count22, for abetting the 1st suspect and one Mubarak Thaha to enterinto a transaction involving the conversion of foreign currencyinto Ceylon currency in contravention of section 5 (2) of theExchange Control Act. This charge is based on a transactionin which the 1st suspect is alleged to have purchased £10,000from the 2nd and 3rd suspects at Rs. 37 per £ sterling. Hetold the 5th suspect that he had sterling for sale at Rs. 40 per£ sterling. The 5th suspect contacted Mubarak Thaha whowas willing to buy sterling at that rate. The 5th suspect wasthereafter instrumental in obtaining the purchase price of Rs. 4lakhs from Mubarak Thaha in two instalments of Rs. 2 lakhseach and he delivered the cash to the 1st suspect who, accordingto Thaha’s instructions, credited the £10,000 to Thaha’s agent,Jackson, in London.
The 5th suspect has admitted this transaction and the part heplayed therein in his statement to the Police (P28) and alsothe fact that he received Rs- 10,000 as his commission on thisdeal from the 1st suspect. He pleaded guilty to this charge atthe beginning of this inquiry and we accepted his plea.
The 6th suspect is charged on three counts, namely, 12, 33 and42. These are based on three alleged transactions that the 4thsuspect had with the 1st suspect for three sums of £7,000,
ORDER OF THE COMMISSION—Hirdaramani and others
459
£7,000 and £10,000 referred to earlier in considering the caseagainst the 4th suspect. The allegation against the 6th suspectis that he abetted the 1st and 4th suspects to enter into thesetransactions and thereby committed offences under section 5 (2)of the Exchange Control Act, read with section 102 of the^PenalCode. As stated earlier, the only evidence on which a conclusioncan be reached against him is his statement (P30A) made to thePolice on 15.12.1971. The 6th suspect has there stated that the1st suspect wanted him to give a message to the 4th suspect tomeet the 1st suspect in his office. He conveyed this messageto the 4th suspect who smiled to himself on hearing it. The6th suspect knew that the 4th suspect was “well known in thePettah for illicit traffic in foreign exchange ”. About 5 or 6days after he conveyed.this message to the 4th suspect, the 1stsuspect gave him Rs. 350. He inquired from the 1st suspectthe reason for this and the 1st suspect told him that he hadsold £7,000 to the 4th suspect and asked the 6th suspect tokeep the Rs. 350 and not to ask questions.
The 6th suspect then went to the 4th suspect and told himwhat the 1st suspect said and the fact that he had been givenRs. 350. The 4th suspect stated that he had still not receivedthe £ 7,000 and asked the 6th suspect to come in a few days.Thereafter the 1st suspect gave the 6th suspect two furthersums of Rs. 350 and Rs. 500 on two occasions, stating that hehad sold further sums of £7,000 and £10,000 to the 4th suspect.The 6th suspect went and met the 4th suspect on many occasionsand told him about these two further transactions between the1st and 4th suspects. The 4th suspect then gave the 6th suspecta sum of Rs. 500. Shortly afterwards, the 1st suspect was takeninto custody and sometime thereafter, the 4th suspect left theIsland.
It would be seen from the above that the 6th suspect, apart fromconveying the message of the 1st suspect to the 4th suspect (notbeing even aware at that time in what connection the 1st suspectwanted to see the 4th suspect) has not taken any active part inthe transactions themselves. He no doubt became aware of thetransactions when the 1st suspect told him about them and paidhim certain sums of money on three occasions on calculations of5 cents for every £ sterling made solely by the 1st suspect andwith which the 6th suspect had nothing whatever to do. Infact the 6th suspect told the 1st suspect on one occasion that hedoes not feel that he has earned the money that was being paidto him. The statement of the 6th suspect does not show that he
4=6
ORDER OF THE COMMISSION -Hirdaramani and others
had anything to do with the transactions themselves as theywere conducted by the 1st suspect all on his own, and directlywith the 4th suspect.
It is true no doubt that the 6th suspect, having received thesesums of money from the 1st suspect, went on numerous occasionsto see the 4th suspect and told him the fact that he knew aboutthe 4th suspect’s transactions with the 1st suspect and the factthat he received three sums of money from the 1st suspect andasked the 4th suspect “ What is he going to do about it for meIt was then that the 4th suspect told him that there was plentyof time and he would see to the 6th suspect’s interests and notrun way. It was sometime thereafter that the 4th suspect paidRs. 500 to the 6th suspect.
It was suggested by learned State Counsel that the role of the6th suspect was that of a go-between so that the transactionswould not be capable of being traced to either the 1st or 4thsuspect and the 6th suspect thereby intentionally facilitated thecommission of offences under section 5 (2) of the Exchange Con-trol Act. We are unable to state with any degree of confidencethat the statement of the 6th suspect necessarily warrants such aninference. That statement undoubtedly shows that the 6thsuspect, at a certain stage, was aware of the transaction betweenthe 1st and 4th suspects since he had “ somewhat unexpectedly ”received monies from the 1st suspect in respect of each of thesetransactions and he used this fact to see if he could also get somemoney from the 4th suspect. In other words, since the originalinnocent message he conveyed from the 1st suspect to the 4thsuspect resulted in fruitful foreign currency transactions and heunexpectedly and luckily received “ santhosams ” from the 1stsuspect on that account, he was persuading the 4th suspect alsoto give him a similar “ santhosam ”. It must also be rememberedthat the 6th suspect is a priest of the Sindhi community,ministering to the needs of that community and both the 1stand 4th suspects are members of that community-
We think that the most that can be said on the statementof the 6th suspect is that having knowledge of the transactionsbetween the 1st and 4th suspects, he received, unasked, threesums of money from the 1st suspect and he persuaded the 4thsuspect also to make similar payment. Mere knowledge that anoffenee was committed or of an unlawful transaction isinsufficient to establish abetment. In order to make a personan abettor, the facility or aid afforded by him to the doer ofthe act must be such as was essential for the commission of thecrime abetted. (Vide 51 N.L.R. at 157, 46 N.L.R. at 154 and45 N.L.R. at 551) .
ORDER OF THE COMMISSION—Hirdaramam and others
4A1
In view of these matters, we are unable, on the sole statementof the 6th suspect, to reach beyond reasonable doubt, theconclusion that he abetted the 1st and 4th suspects in thecommission of offences under section 5(2) of the ExchangeControl Act. We accordingly hold that the 6th suspect is notguilty of counts 12, 33 and 42 and acquit him.
There are 9 charges framed against the 7th suspect, namelycounts 43, 45, 48, 49, 53, 57, 60, 62 and 65. These charges are inrespect of the disposal by the 4th suspect of the three sums hepurchased from the 1st suspect. As stated earlier, in consideringthe case against the 4th suspect, he purchased three sums offoreign currency, namely £ 7,000, £ 7,000 and £ 10,000 from the1st suspect. The 4th suspect disposed of the two former sumsand £ 8,000 out of the last-mentioned sum to the 7th suspectand transferred these sums to an address in Hong Kong asinstructed by the 7th suspect- Notice of these proceedings andthe charges against him were served on the 7th suspect in Madrasin India on 17th September, 1973 by Mr. F. S. P. Wettasinghe,A.S.P., but the 7th suspect did not attend the inquiry before us.The inquiry against the 7th suspect was therefore conducted inhis absence in terms of section 5 (6) (c) of the Criminal JusticeCommission Act as we were satisfied on the evidence placedbefore us, that he was absconding. Apart from the statementsmade by the 1st and 4th suspects (who were not called aswitnesses and whose statements cannot therefore be used againstthe 7th suspect), there was no other evidence on which wecould reach a finding either way in respect of the 7th suspect.As the 4th suspect’s statements to the Criminal InvestigationDepartment, however, involved the 7th suspect in several illegaltransactions in foreign exchange, we were not satisfied that the7th suspect had not committed any offence and considered ftappropriate to direct further investigations and to bring up hiscase before the Commission in due course.
There are three charges—counts 50, 54 and 59—against the 8thsuspect. These are based on the purchase by the 4th suspect of asum of £ 10,000 from the 1st suspect and the disposal of £ 2,000out of this sum to the 8th suspect for Rs. 80,000. Count 50 is forentering into a transactoin involving the conversion of Ceyloncurrency into foreign currency in contravention of section 5 (2) ;count 54 is for buying foreign currency in contravention ofsection 5(1)) (a) ; and count 59 is for failing to make a returnof his foreign assets in contravention of seetion 6AB (a) of theExchange Control Act.
The case against the 8th suspect also rests entirely on thestatements made by him to the Police and produced markedP41 and P41(a) to (c). These statements show that the suspect
462
ORDER OF THE COMMISSION'—Hirdaramani and others
at first denied that he had any transaction with the 4th suspectinvolving foreign currency. Later, however, he admitted that hehad a transaction with the 4th suspect. Since the nature-of the transaction and whether it amounted to a sale or purchaseor an attempt to sell or purchase foreign currency under section.5(1) (a)—an allegation in count 54—was the subject of muchargument before us, it is best that the relevant portions of thestatement of the 8th suspect be reproduced:
“ I have been interrogated by A.S.P. Mr. Wettasinghe onthe statement made by me and I have, in that statement,admitted certain aspects of my transactions with Murjiani. Inthat, it is correct that Murjiani offered me somewhere inJuly-August 1971, £ 2,000 at the rate of Rs. 40 per £ sterling.However, I withheld the fact that I did purchase the £ 2,000sterling (in) question. I did so because I only paid for thispurchase and the person on whose behalf I did so wasa very close friend of mine who is since dead and I did notwant to bring his name into disrepute now that he is dead.To continue, sometime in 1970 G. Boolchand of Jaipur,who was a resident in Ceylon on a Temporary ResidencePermit and a very close friend of mine who knew me fromchildhood, gave me, just before he died in 1970, two bluesapphire stones weighing about 21 carats in all worth aboutRs. 50,000 or Rs. 60,000 at that time. He was then living atThimbirigasyaya. I cannot remember the address but I canprovide it later. He was employed in a firm as an Accountant.Before his death, he requested me to sell these two stonesat a good price and send the proceeds to his former employer,Mr. G. Hasaram of Style, Connaught Place, New Delhi.After Mr. Boolchand’s death somewhere in 1971, oneMr. Samsudeen, a gem broker resident in Galle, boughtthese two blue sapphires from me and gave me Rs. 83,000.I kept this money at home and informed Mr. Hasaram whenI was in India that I had received instructions from Boolchandto send him the proceeds of the sale of these two stones.Hasaram then gave me the following address in London toremit these proceeds to G. Hasaram, Park West, 216,Marble Arch, London. I believe this address as I canrecollect is correct but I am not sure of the number. Some-time in July-August 1971 when my brother Ashok was inSpain, Vashi Murjiani of Dickmans Road came to my officewith my Manager, Kishinchand Telaram, and asked mewhether I was interested in buying £2,000 sterling to £3,000sterling at the rate of Rs. 40 per £. At first I told Murjianithat I was not interested. Murjiani then said that it was abargain for that rate. I told him that I would consider this
ORDER OF THE COlHMISSIOK—Hirdarantani and other*
463
and asked him to come again in a few days. A few dayslater he came again and by that time I had sold Boolchand’stwo blue sapphires. On this occasion, he offered me the£ 2,000 and I accepted the offer. I then gave him the addressof Hasaram referred to above for this sterling to be creditedand paid Murjiani Rs. 80,000 on the following afternoon orso. I paid the Rs. 80,000 to Murjiani in cash for the £2,000at the rate of Rs. 40 per £. On this day, when I went homefor lunch, I brought the Rs. 80,000 and handed it over toMurjiani when he called for it that afternoon. I am askedwhether it is correct that the Rs. 80,000 was given by meto my Manager K. Tolaram, to be handed over to Murjianiwhen he called for it that day. My answer is that as faras I can recall, I paid the money to Murjiani. Tolaram mayhave been present at that time. I think this was paid in myoffice. About three days later, Murjiani returned and toldme that the money could not be sent to Hasaram’s address.He said that it was not workable but did not explain further.I then told him that the money should be sent to this person.He then asked me for another address and returned theearlier slip to me. I then told him that I was not interestedand to return the money. Murjiani then told me that hewas already committed for the transfer and warned anotheraddress. I then told him to come again in a few days. In themeantime, I contacted Hasaram by letter and explained theposition to him. He then sent me another address whichreads—as far as I can remember—as follows . Narendra,Oxford Street, London. I cannot remember the initials or thenumber of the premises. Thereafter Murjiani did not cometo see me again. I got the second address from Hasaram byabout the end of August, 1971. To date I have not seenMurjiani. I do not know yet what has happened to theRs. 80,000 I gave Murjiani as the £ 2,000 could not becredited as agreed upon. Since Murjiani did not come tocollect this second address. I did not ask Murjiani who wasproviding the sterling for sale nor did he tell me. ”
The 8th suspect did not give evidence or contradict or attemptto minimise the effect of the above confessional statement. Wemust, therefore, consider whether this statement establishes anyone or more or all of the three charges against him. Thisstatement undoubtedly shows quite clearly that the 8thsuspect had entered into a transaction involving the conversionof Ceylon currency into foreign currency (viz. pounds sterling)in contravention of section 5 (2) of the Exchange Control Act.We are, therefore, satisfied, beyond reasonable doubt, thatthe 8th suspect is guilty under Count 50.
464ORDER OF THE COMMISSION—Hirdaramani and others
On the question as to whether the 8th suspect purchasedforeign currency in contravention of section 5 (1) (a) of theExchange Control Act, it was urged that £ 2,000 sterling was notavailable to the 4th suspect in view of the statement of the 1stsuspect and that, therefore, neither a purchase nor an attemptto purchase has been established against the 8th suspect. Thiswas based solely on the fact that the 1st suspect, in hisstatement, had admitted that he disposed of three sums ofsterling, viz. £ 7,000, £ 7,000 and £ 10,000 to the 4th suspect andhad also stated that, to the best of his recollection, thesesums were transferred to “ Murjiani’s (4th suspect’s) contactin Hong Kong (P14C and P14J). ”
Now the statement of the 4th suspect shows that out of thelast £ 10,000, only £ 8,000 was disposed of to the 7th suspectand sent to an address in Hong Kong, and it was the balance£ 2,000 that was sold to the 8th suspect. There is also the factthat according to the 1st suspect’s statement, even after all thedisposals of sterling, he still had left with him £ 13,000 sterlingin London. The submission of learned counsel for the 8th suspectthat there was no sale as the goods, viz. £ 2,000 sterling, was notavailable for sale cannot be maintained as this amount of sterlingwas available not only out of the £ 10,000 but also out of the£ 13,000 above referred to. The statements of the 1st and 4thsuspects are not evidence against the 8th suspect, but where itwas sought to secure some advantage on behalf of the suspect,we freely allowed learned counsel to do so by referring tostatements of persons who were not called as witnesses. But,when such an advantage was sought, it was necessary and onlyfair to examine the statements made by such persons, not calledas witnesses, for the limited purpose of seeing whether suchadvantage was, in fact, available to a suspect as distinct fromusing such statement against a suspect. It is only in this contextthat the statement of the 1st and 4th suspects have been referredto above.
It was also urged that the £2,000 was, any case, not sentto the first address given by the 8th suspect, and there wasnothing to show that the 8th suspect did, in fact, receive £ 2,000for the Rs. 80,000, he paid to the 4th suspect. The statement ofthe 8th suspect, however, shows quite clearly that he agreed.
SENTENCEAfter a careful consideration of all the submissions made bycounsel on both sides on the law applicable to the question ofsentence we have reached the conclusion that the provisions of
ORDER OF THE COMMISSION—Hirdarainani and. others
465
the Exchange Control (Amendment) Law, No- 39 of 1973 areapplicable to this case and that the convicted accused are liableto the penalties prescribed thereunder.
Of all the duties of a Judge the one that gives the greatestanxiety is the decision as to the appropriateness and the quantumof the sentence that would fit an offence of which an accused isfound guilty. This is invariably an area where the discretion isleft entirely to the Court with two widely different terminalpoints for the reason that the facts which constitute evidence ofan offence can be so different in character meriting a punishmentin proportion to its gravity or its extenuating circumstances.While in some cases the offence is established but only in atechnical sense, at the other extreme can be an offence teemingwith circumstances of aggravation of the highest degree.
What presents the greatest difficulty causing long and anxiousdeliberation is to decide the correct measure of punishment to beadministered for a particular offence. Some of the factors whichcontribute to an offence are visibly ponderable while others areimponderable. A Judge would always be naturally apprehensiveof the over present factors of human fallibility and would there-fore prefer to err on the side of leniency particularly whenthere is the awareness that his decision has no right of appeal.It is with all these considerations in the forefront of our mindsthat we approach our task of deciding on the sentence in thiscase the type of which is, for many reasons, unprecedented in theannals of this country’s legal history.
The following matters stand out prominently in considering thesentence in the case : —
This country has been in the throes of a foreign exchange
crisis of unprecedented magnitude over the last severalyears and certainly during the material period concernedin these offences.
The balance of payments position in our international trade,
having regard to the essentials of life which we havenecessarily to import for the survival of the people andfor which payment has to be made in foreign exchangehas reached alarming proportions.
Prevention or obstruction by whatever manner of the
legitimate avenues of foreign exchange into the countryor the misuse by individuals of the meagre foreignexchange available to the country for private profit inthese circumstances has to be viewed es an anti-socialactivity of the utmost gravity.
436
OBDJSK OF THE COMMISSION—Hirdaramani and others
The seriousness of the offences is aggravated when such
offences are perpetrated by persons with education andstature in the business world, enjoying financial. affluence, and to whom this country has granted specialprivileges and facilities.
All the elements of planning and premeditation which
ordinarily heighten the seriousness of an offence arepresent in the cases of the 1st, 2nd, 3rd and even the4th accused, though we recognise, of course, that, so faras the trial is concerned, the 4th accused pleaded guiltyto some of the charges against him with somequalification at an early stage.
The excuse given by the first accused—which itself is not
a cogent one—that his object was to advance his son’sbusiness in England and to market the goods producedby him in Ceylon, as this country was then known, doesnot bear examination as he did not stop at the amountrequired for the purpose of promoting his son’s welfarebut bought and made a business deal of foreign currencyvery much in excess of this amount.
So far as the 2nd and the 3rd accused are concerned they
did not adopt the legitimate course of approaching theGovernment of this country or the Board acting on itsbehalf or their own Company in Yugoslavia even if intruth they anticipated financial difficulties in the per-formance of their contract but followed the course ofsurreptitious and illegal dealing in foreign currency.
8 The sum involved in the offences is comparatively large anda few transactions of that magnitude can well cripple theeconomy of a developing country such as ours.
Offences such as these are difficult of detection and thesetransactions too may have passed un-notioed but for thefortuitous circumstance of its proximity to the armedinsurrection of 1971. While we are fully mindful of thestations in life to which you belong and your respectiveages and the mental stress which must necessarily resultfrom a severe sentence, it is also our unpleasant butbounden duty to impose on you a sentence that takes allthe foregoing factors into account. Performance ofpainful duties is an essential part of the burdens of ouroffice, and we cannot, however distasteful the task,avoid the performance of those onerous duties with afull appreciation of the importance of the deterrentaspect of punishment in this class of offence. We might
ORDER OF THE COMMISSION—Hirdaramani and others
467
also state that the maximum punishment laid down bythe law for these offences is imprisonment of fiveyears on each count which can be made to run consecu-tively up to a maximum of 10 years, together with a fineup to a maximum of three times the amount involvedthe offences and the forfeiture of the currency concernedin the offences. Bearing these aspects in mind and takinginto account all the circumstances urged by counsel onyour behalf, the fact that an amount of foreign exchangeequal to the amount which formed the subject matter ofthe charges has been brought into the country and thatyou have been kept in detention and in remand forvarying periods, we impose on you the followingsentences which fall far below the maxima prescribedby law:—
[The Commission then imposed sentences on eachsuspect according to the counts on which he was foundguilty.]
It is regretted that, owing to unavoidable circumstances, theaurreut Volume LXXVII cannot be completed.