Court Acquits South Mumbai Businessman Mahendra Vakharia in 32-Year-Old FERA Case
A Mumbai magistrate's court this week acquitted a 73-year-old South Mumbai businessman and his two firms in three separate cases involving alleged Foreign Exchange Regulation Act (FERA) violations of Rs 17 crore. The decision marks the end of a 32-year-old legal battle, which was one of the oldest pending cases investigated by the Enforcement Directorate (ED).
The accused, Mahendra Vakharia, along with his associated firms, Mahendra Vakharia and Co, and Guardian Gem & Jewellery & Co, were cleared of all charges after the court found the prosecution's evidence to be insufficient.
The legal proceedings began on September 30, 1993, when the ED initiated three separate cases against Vakharia and his businesses. The central agency alleged that the firms had exported 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).
According to the prosecution, the ED had issued opportunity notices to the accused, requiring them to explain the lack of payment or to provide the necessary documentation. The ED claimed that Vakharia and his firms failed to comply with these notices or prove that the export payments had been received.
However, during the trial, the court observed critical gaps in the prosecution's case. Specifically, the prosecution failed to present its witnesses for cross-examination by the defence.
Without the opportunity for cross-examination, the court ruled that the evidence presented was inadequate. The court stated that the evidence on record did not seem to be sufficient, nor was it beyond a reasonable doubt, to hold that an opportunity notice was actually issued to the accused.
The first of the three cases, registered on September 30, 1993, focused on allegations against Mahendra Vakharia and Mahendra Vakharia and Co. This case concerned the shipment of cut and polished diamonds to various overseas buyers, which was valued at a total of Rs 1.73 crore.
With the court finding a lack of sufficient evidence and noting the absence of witnesses for cross-examination, the magistrate acquitted Vakharia and both of his firms, concluding more than three decades of litigation.
