IMPORTANT POINT
The parties cannot be allowed to indulge in forum shopping.

Headnote:Foreign Exchange Management Act, 1999- Section 35- Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000-Rule 10- Limitation Act-Sections 5,14-Appeals against order of High Court whereby applications filed by appellants for condonation of delay in filing appeals under Section 35 of the Act were dismissed along with the appeals filed against order passed by Appellate Tribunal for Foreign Exchange- A careful reading of averments showed that there was not even a whisper in the applications filed by appellants that they had been prosecuting remedy before a wrong forum, i.e Delhi High Court with due diligence and in good faith- Apart from this, prayer made in the applications was for condonation of 1056 days’ delay and not for exclusion of time spent in prosecuting the writ petitions before Delhi High Court-This showed that appellants were seeking to invoke Section 5 of Limitation Act, which, , could not be pressed into service in view of language of Section 35 of Act -Appellants prosecuted the writ petitions before Delhi High Court with the sole object of delaying compliance of direction given by Appellate Tribunal and, by no stretch of imagination, it could be said that they were bona fide prosecuting remedy before a wrong forum- Rather, there was total absence of good faith-It was not even the case of appellants that they had filed appeals under Section 35 of the Act within 30 days –Hence Bombay High Court rightly observed that even though the issue relating to jurisdiction of the Delhi High Court to grant time to the appellants to file appeals was highly debatable, the time specified in the order passed by the Delhi High Court could not be extended-Impugned order not suffered from any legal infirmity so as to warrant interference-Appeals dismissed (Paras 22 to 29)
       Facts of the Case :
        Present Appeals have been filed against order of Bombay High Court whereby applications filed by appellants for condonation of delay in filing appeals under Section 35 of the Act were dismissed along with the appeals filed against order passed by Appellate Tribunal for Foreign Exchange.
       Findings of the Court :
        A. A careful reading of averments showed that there was not even a whisper in the applications field by appellants that they had been prosecuting remedy before a wrong forum, i.e Delhi High Court with due diligence and in good faith. Apart from this, prayer made in the applications was for condonation of 1056 days’ delay and not for exclusion of time spent in prosecuting the writ petitions before Delhi High Court.This showed that appellants were seeking to invoke Section 5 of Limitation Act, which, , could not be pressed into service in view of language of Section 35 of Act .Appellants prosecuted the writ petitions before Delhi High Court with the sole object of delaying compliance of the direction given by the Appellate Tribunal and, by no stretch of imagination, it Could be said that they were bona fide prosecuting remedy before a wrong forum. Rather, there was total absence of good faith.
        B. It was not even the case of appellants that they had filed appeals under Section 35 of the Act within 30 days .Hence Bombay High Court rightly observed that even though the issue relating to jurisdiction of the Delhi High Court to grant time to the appellants to file appeals was highly debatable, the time specified in the order passed by the Delhi High Court could not be extended. Impugned order not suffered from any legal infirmity so as to warrant interference. Appeals were dismissed

JUDGMENT

G. S. Singhvi, J.

1. Leave granted.

2. In these appeals prayer has been made for setting aside the order of the Division Bench of the Bombay High Court whereby the applications filed by the appellants for condonation of delay in filing appeals under Section 35 of the Foreign Exchange Management Act, 1999 (for short, ‘the Act’) were dismissed along with the appeals filed against order dated 2.8.2007 passed by the Appellate Tribunal for Foreign Exchange (for short, ‘the Appellate Tribunal’).

Background facts

3. On an information received from the Reserve Bank of India that M/s. Classic Credit Ltd. and M/s. Panther Fincap and Management Services Ltd. had taken loan of 25 lakh shares each of DSQ Industries Ltd. on 1.3.2011 from M/s. Greenfield Investment Ltd, Mauritius and the Indus Ind Bank Ltd with whom M/s. Greenfield Investment Ltd. was maintaining NRE Account had informed that records did not indicate any such transaction, the Directorate of Enforcement, Mumbai conducted enquiries from different sources including Securities and Exchange Board of India, Shri Ketan Parekh, M/s. Integrated Enterprises (I) Ltd., Chennai and Indsec Securities and Finance Ltd. Thereafter, show cause notice dated 23.9.2004 was issued to M/s. Greenfield Investments Ltd., Mauritius, Shri Pravin Guwalewala, Mauritius, Smt. Neena Guwalewala, Mauritius, Shri A. K. Sen, Mauritius, M/s. Classic Credit Ltd., Mumbai, M/s. Panther Fincap and Management Services Ltd., Mumbai, Shri Ketan Parekh, Shri Kartik K. Parekh, Shri Kirit Kumar N. Parekh and Shri Navinchandra Parekh for taking action against them for contravention of the provisions of the Act. After hearing the noticees, the Special Director of Enforcement, Mumbai (for short, ‘the Special Director’) passed order dated 30.1.2006 and, whereby he held that some of the noticees had violated Sections 3(d) and 6(3)(e) of the Act and imposed penalty of Rs.40 crores on M/s. Classic Credit Ltd.; Rs.40 crores on M/s. Panther Fincap and Management Services Ltd.; Rs.75 crores on M/s. Greenfield Investments Ltd.; Rs.80 crores on Shri Shri Ketan Parekh; Rs.12 crores on Shri Kartik K. Parekh; Rs.60 crores on Shri Pravin Guwalewala and Rs.20 crores on Shri A.K. Sen with a direction that they shall deposit the amount within 45 days from the date of receipt of the order.

4. The appellants challenged the aforesaid order by filing appeals under Section 19 of the Act. They also filed applications under Rule 10 of the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 read with Section 19 (1) of the Act for dispensing with the requirement of deposit of the amount of penalty. In paragraphs 4 to 8 of the application filed by him, Shri Ketan V. Parekh made the following averments:

“4. The applicant submits that no case is made out against the applicant as Section 3 (d) of the Act is only attracted in case of a transaction in a foreign currency/foreign security. The appellants case does not attract the provision of Section 3 (d) of the Act.

5. That impugned order passed by Special Director is liable to be set aside in view of the grounds of appeal and the applicant has every hope of succeeding in the matter. As such the applicant has a very good prima facie case on merits and is likely to succeed in the appeal.

6. That the applicant is suffering from a grave financial hardship since all his assets including, properties, movable and immovable have been attached by an order of Ld. Debt Recovery Tribunal on 11th April, 2001 (a copy of the order dated 11th April, 2001 is annexed herewith and marked as Annexure B-1). Moreover the applicant/appellant is a notified person and all his assets including, properties, movable and immovable have been attached by the Government of India pursuant to the Notification dated 6th October, 2001. A copy of the Notification dated 6th October, 2001 is attached herewith and marked as Annexure B-2.

7. That the appellant is further suffering due to another order of attachme

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2011 Supreme(SC) 1108

IMPORTANT POINT The parties cannot be allowed to indulge in forum shopping.

Cases Referred (19)

IMPORTANT POINT
The parties cannot be allowed to indulge in forum shopping.