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2010 Supreme(Bom) 80
IN THE HIGH COURT OF BOMBAY
V. C. Daga and K. K. Tated, JJ.
CAMBATA INDUSTRIES PVT. LTD. , MUMBAI
Versus
ADDITIONAL DIRECTOR OF ENFORCEMENT, MUMBAI
W. P. No. 2558 of 2003
Decided On : JANUARY 18, 2010
A.S.RAO, AMARCHAND, MANGALDAS, RUI RODRIGUES, S.A.
Headnote:Foreign Exchange Regulation Act, 1973 - Section 51 - Foreign Exchange Management Act, 1999, Section 14 - Constitution of India, Article 226 - Writ petition - Petitioners seeking a writ in nature of prohibition or Direction, prohibiting respondents from proceedings with adjudication pursuant to their letters dated 3rd July and 29th August of 2001 - Notice of show-cause as to violation of Foreign Exchange Act/Rules - Activities pertaining to years 1950-60-70 - Notices issued in 1973-74 - Not followed up - Again revived in 2001 - Challenged on ground of inordinate delay in adjudication - Held - A lapse of 30 to 35 years in adjudication process to be taken into consideration - Such delay not justified - Respondents not alleging any malice on part of petitioners - Respondents cannot be allowed to re-open proceedings - Petition allowed. - At the outset, it may be stated that it is not the case of the petitioners that the Adjudicating Authority had no jurisdiction to initiate the proceedings. The contention raised in the present petition is that the Adjudicating Authority would cease to have jurisdiction by lapse of time. The question that really arises for consideration is; whether or not the adjudication proceedings on account of lapse of more than two decades have become stale and any further continuation thereof would be arbitrary? In that case there was a delay of 10 years in completion of adjudication proceedings. The challenge was that the consignment of cod liver oil imported by importer having already been cleared ten years before, show-cause notice with regard to confiscation of imported goods was rendered redundant. The Division Bench upheld the contention of the petitioners on two grounds firstly; there was no explanation as to why the adjudication was not completed within 10 years and secondly; imposition of penalty after 10 years was found to be not just and fair.
Having taken survey of the law holding the field, if one turns to the factual matrix of the case in hand which would unequivocally goes to show that the impugned show-cause notices were seeking to adjudicate upon the matters allegedly took place in the year 1958, 1966 and 1970. The first date of hearing of the show-cause notice was fixed on 10th April, 1974. Almost for a period of 27 years, no steps were taken by the respondents to proceed with the adjudication proceedings. For the second time, notices were issued on 3rd July, 2001 calling upon the parties to appear for personal hearing on 17th July, 2001. No steps were taken by the respondent No. 1 to proceed with the adjudication process. No fault can be attributed to the petitioners for this delay and inaction on the part of the respondents. The respondents are not alleging any malice on the part of the petitioners. It is not the case of the respondents that the petitioners are responsible for delaying the proceedings. No justification is to be found in the explanation for causing delay in the adjudication process. The absence of relevant record due to lapse of more than 30-35 years is also a factual aspect which needs to be taken into account. In Court’s view, the respondents cannot be allowed to re-open the proceedings. If allowed it would cause serious detriment and prejudice to the petitioners. The Department is not entitled to re-open old matters in this manner. As rightly observed in the earlier judgment of the Court, if the Department’s contention as to limitation were to be accepted, it would be mean that the department can commence adjudication proceedings 20 years, 25 years or 30 years after the original show-cause notice which cannot be permitted. In the peculiar facts and circumstances of this case, petition is being allowed. Needless to observe that Court’s view is solely based on the facts of this case.
( 1 ) PETITIONERS are seeking a Writ of Prohibition or a Writ in the nature of Prohibition and/or direction under Article 226 of the Constitution of India prohibiting the respondents from proceeding with the adjudication pursuant to their letters dated 3rd July, 2001 and 29th August, 2001 annexed to the petition. Factual Backdrop:
( 2 ) THE petitioners herein are facing adjudication proceedings under the provisions of Foreign Exchange Regulation Act, 1947, Foreign Exchange regulation Act, 1973 and Foreign Exchange Management Act, 1999 for the alleged acts and omissions alleged to have been committed in the year 1958, 1966 and 1970.
( 3 ) THE petitioners herein, states that the show cause notices were issued against them somewhere in the month of September, 1973 and June, 1974 requiring them to appear before respondent No. 1 in-person or through their advocate on 10th April, 1974. The petitioners failed to appear. No reply was filed on behalf of the petitioners. In spite of this no action was taken by the respondents to act upon the show cause notices purportedly issued in the month of September, 1973 and June, 1974.
( 4 ) FOR the first time, after 27 years, the petitioners were again called upon to appear for personal hearing before respondent No. 1 i. e. on 17th July, 2001. The petitioners did not appear for hearing on 17th July, 2001.
( 5 ) IT appears that after repeal of FERA, 1973, the stock of all pending cases was taken by the prosecution department. Finding pendancy of the show cause notices, proceedings were revived to adjudicate upon the show cause notices after expiry of almost more than 27 years as stated hereinabove.
( 6 ) THE petitioners have invoked the Writ Jurisdiction of this Court under article 226 of the Constitution of India in the year 2003 contending that the impugned action seeks to adjudicate upon the acts and omissions alleged to have taken place in the year 1958, 1966 and 1970 pursuant to the show cause notices issued in the year 1973-74 which are deficient in material facts and particulars. Contentions:
1. According to the petitioners, matter is now over 28 years old. There has been no correspondence from the Department at all for a period of 28 years in relation to the impugned show cause notices. The Department has out of the blue sought to adjudicate upon the impugned show cause notices. In their submission, neither they have any record of the receipt of the impugned show cause notices nor any records of the action sought to be adjudicated upon by the show cause notices. No evidence is available at this length of time. In the premises, the further proceeding pursuant to the impugned show cause notices is wholly arbitrary and deprives the petitioners of their right of equality before the law and violates the guarantee enshrined in Article 14 of the Constitution of India.
( 7 ) THE petitioners submit that the long delay of 28 years has effectively deprived the petitioners to effectively explain their case. In the premises, the petitioners submit that even though no period of limitation has been prescribed for completing adjudication proceedings, the reopening of the proceedings after such a long period is invalid and without any effect in law and the same amounts to a proceeding wholly without or in excess of jurisdiction.
( 8 ) THE petitioners submit that the impugned proceedings are in the teeth of the observations of the Apex Court which sets out the concerns which underline the right to a speedy trial as laid down in A. R. Antulay vs. R. S. Nayak, (1992) 1 scc 225 under:
(i) The worry, anxiety, expense and disturbance to vocation and peace resulting from an unduly prolonged investigation, inquiry or trial should be minimal; (ii) Undue delay may result in the impairment of the ability of the accused to defend himself, whether on account of death, disappearance or non-availability of witness or otherwise.
( 9 ) ACCORDING to the petitioners, it is well established that inordinately long
