Mumbai: In one of the oldest pending cases investigated by the Enforcement Directorate, a magistrate’s court this week acquitted a 73-year-old South Mumbai businessman and two of his firms in three separate cases related to Rs 17 crore alleged violations of the Foreign Exchange Regulation Act (FERA), marking the end of legal proceedings that spanned 32 years.On Sept 30, 1993, the ED initiated three separate cases against Mahendra Vakharia and associated firms, Mahendra Vakharia and Co, and Guardian Gem & Jewellery & Co, for exporting cut and polished diamonds but failed to realise the full export proceeds within the six-month timeframe mandated by the Reserve Bank of India (RBI). It was alleged that despite receiving opportunity notices requiring them to explain the lack of payment or provide necessary documentation, the accused failed to comply or prove that payment had been received. During the proceedings, the court observed that the prosecution failed to present witnesses for cross-examination by the defence. “The evidence on record does not seem to be sufficient as well as beyond a reasonable doubt, to hold that an opportunity notice was issued to the accused.”The first case, registered on Sept 30, 1993, involved allegations against Mahendra Vakharia and Mahendra Vakharia and Co. regarding the shipment of cut and polished diamonds to various overseas buyers, valued at a total of Rs 1.73 crore. The ED submitted that these goods were declared under the cover of Guaranteed Remittance of Income (GRI) forms, but that the full export proceeds were not realised within the six months prescribed by the RBI or any extended time frame. The complaint further submitted that despite an opportunity notice issued on July 26, 1993, which required the firm to explain if they held the necessary permissions or had taken steps to secure payment, the accused failed to act, thereby allegedly violating provisions of the Foreign Exchange Regulation Act. The second matter, also registered on Sept 30, 1993 and centred on shipments of diamonds valued at Rs 1.79 crore. Similar to the other complaints, the prosecution alleged that these exports were not followed by the receipt of payments within the mandatory timeline set by the RBI. The third case, also registered on Sep 30, 1993, alleged failure to realise export proceeds for shipments of cut and polished diamonds, this time totalling Rs 13.58 crore. The ED’s complaint stated that these exports, made on July 16, 1993, were not accounted for in the prescribed manner despite the passage of the required six-month window.Vakharia denied the allegations and claimed that he was falsely implicated.The court held that it was for ED to prove the guilt of the accused beyond a reasonable doubt. “ It is for the complainant to show that the opportunity notice ie notice to show that the accused had the requisite permission, was served against the accused. However… the complainant did not turn up to prove the contents of complaint,” the magistrate said.
