Rules of procedure and natural justice.

JUDGMENT :-

T.S. Thakur, J.

1. Leave granted.

2. These appeals arise out of a common judgment and order dated 14th March, 2008 passed by a Division Bench of the High Court of Judicature at Bombay whereby the High Court has partly allowed FERA Appeal Nos.8 to 11 of 2008 that assailed the common order dated 28th November, 2007 passed by the Appellate Tribunal for Foreign Exchange, New Delhi and reduced the penalty imposed upon the appellants for contravention of Sections 14 and 8(1) of the Foreign Exchange Regulation Act, 1973 by 50%. The factual matrix in which the adjudication order came to be passed by the Deputy Director, Directorate of Enforcement, Mumbai and the appellate order passed by the Tribunal for Foreign Exchange, New Delhi has been set out in the order passed by the Tribunal and the order passed by the High Court of Bombay mentioned earlier. It is, therefore, unnecessary to recount the facts over again except to the extent it is absolutely necessary for disposal of these appeals.

3. Appellant-Telestar Travels Private Ltd. carries on a travel agency and specialises in booking of tickets for crew members working on ships. Most of the shipping companies are based abroad with their representatives located in Mumbai who would issue instructions to the appellant-company to arrange air passage for the crew from Bombay and other places in India to particular ports abroad. The company would then take steps to have tickets issued on the basis of such instructions for different destinations. The appellant’s case is that the travel agents in U.K. had of late started offering cheap fares for seaman/crew travelling to join the ships. In order to benefit from such low fare tickets the shipping companies are said to have desired that the benefit of such low fare tickets be organized for them by the appellant. In order to make that possible the appellant-company claims to have approached M/s Clyde Travels Ltd. (CTL) in Glasgow (U.K.) for getting such cheap seaman tickets. According to this arrangement, the CTL would send a Pre-paid Ticket Advice (PTA) to the appellant in India based on which the appellant would secure a ticket from the airline concerned. The money for the tickets would then be credited into the Swiss bank account of Bountiful Ltd., a company registered in British Virgin Islands. Bountiful Ltd. would out of money so received transfer funds to CTL towards the price of the tickets apart from realising 3% of the ticket price towards commission payable to the appellant-company. The appellant- company claims that the process of purchase of tickets as aforementioned was a commercial arrangement that was legally permissible and did not involve any violation of FERA. The Directorate of Enforcement, Mumbai, did not, however, think so. According to the Directorate, Bountiful Ltd. was a paper company that held Swiss bank account which was in turn operated by a person named Mr. Shirish Shah, a Chartered Accountant, operating from London on the instructions of Mr. Rajesh Desai, appellant in SLP (C) No.15549 of 2008 who was none other than the son of Mr. Arun Desai, Managing Director of Telestar Travels Pvt. Ltd. appellant in SLP (C) No.15547 of 2008. The further case of the Directorate was that documentary evidence seized from the office of M/s Telestar and the residence premises of the Managing Director in the course of investigation conducted under Section 37 of FERA unerringly revealed that Bountiful Ltd. was entirely a holding of the appellant-Telestar Pvt. Ltd. and entirely controlled in its operation and financial management by Mr. Arun N. Desai and his two sons Mr. Sujeet A. Desai and Mr. Rajesh A. Desai, appellants in these appeals. It was on the basis of the investigations conducted by the Directorate, the statements of the promoters of Telestar Pvt. Ltd. recorded during the course of such investigation and other material collected by the Directorate, a notice was issued by the Directorate calling upon them to show cause w