IN THE HIGH COURT OF CALCUTTA
Sahidullah Munshi, J.
ITC Limited and Another – Appellants
Vs.
Special Director, Eastern Region, Enforcement Directorate and Another – Respondents
Writ Petition No. 14404 of 2016
Decided On : 07-12-2018
Reopening of adjudication proceedings after a long period under FERA - [REOPENING] - [Adjudication Proceedings under FERA] - [Foreign Exchange Regulation Act, 1973] - The court quashed the memorandum initiating the adjudication proceedings and subsequent notices due to unexplained delay, citing various legal precedents and emphasizing the need for authorities to exercise jurisdiction within a reasonable period. The court highlighted the detrimental impact of reopening proceedings after a long delay and the duty of the authorities to provide reasons for such delays. The judgment also referenced similar decisions by the same court, reinforcing the view that reopening proceedings after an inordinate delay is impermissible under the law.
Fact of the Case:
The petitioner challenged a Memo issued under Foreign Exchange Regulation Act, 1973 (FERA) after a long period, contending that the reopening of the case was unjustified due to the unavailability of evidence and the inordinate delay. The petitioner sought to quash the adjudication proceedings and subsequent notices, citing the bar under the Foreign Exchange Management Act, 1999 (FEMA) and the lack of production of original documents by the respondents.
Finding of the Court:
The court found that the reopening of adjudication proceedings after a long delay was impermissible, emphasizing the need for authorities to exercise jurisdiction within a reasonable period. The court highlighted the detrimental impact of such delays and the duty of the authorities to provide reasons for the same. The court also referenced similar decisions by the same court, reinforcing the view that reopening proceedings after an inordinate delay is impermissible under the law.
Issues: The issues involved in the case included the permissibility of reopening adjudication proceedings after a long delay, the lack of production of original documents by the respondents, and the applicability of the bar under the Foreign Exchange Management Act, 1999 (FEMA).
Ratio Decidendi: The court held that reopening adjudication proceedings after a long delay is impermissible, emphasizing the need for authorities to exercise jurisdiction within a reasonable period. The court cited various legal precedents to support this finding and highlighted the detrimental impact of such delays. The court also emphasized the duty of the authorities to provide reasons for delays in adjudication proceedings.
Final Decision: The court allowed the writ petition, quashing the memorandum initiating the adjudication proceedings and subsequent notices, including those dated 6th July, 2016, 11th July, 2016, and 22nd July, 2016. The court made no order as to costs.
Sahidullah Munshi, J.
In this writ petition, the petitioner has challenged a Memo being No. T4/18-C/97-XX dated 3rd June, 1998 and lso another Memo being No.T4/XX/18-C/97/SCN/1258 (P), dated 6th July, 2016, issued by the Assistant Director for Special Directorate (E.R.), Directorate of Enforcement, whereby the petitioner was sought to be informed that final opportunity was being extended to him to take complete inspection of the relied upon documents once again on 11th July, 2016 at 11:30 a.m. before the Assistant Director (Adjudication). It was indicated in the said Memo that inspection would be a allowed to the persons who will be authorized by the Government. If the inspection process was not completed by the given date, the case would be decided ex parte on its merit as the matter was getting delayed for a long time. The writ petitioner is aggrieved by the reopening of an issue which was closed long back for no fault on the part of the petitioner. It is the contention of the petitioner that, although, the petitioner rendered all co-operation at all stages, but the authority delayed the proceeding unnecessarily and after a lapse of 20 years they wanted to reopen the same once again when the petitioners never thought it fit to preserve the documents and the evidence which were available might have been destroyed and/or not available at the present moment. On such consideration, when the matter was initially moved, an interim protection was granted by an order dated 16th August, 2016 and while passing the interim order, this Court elaborately discussed the necessity of granting interim protection. The said interim order was never challenged by the authority. Direction was issued to file affidavit-in-opposition. Affidavit-in-opposition has been filed. Now, the matter has been taken up for final consideration on affidavits. To better understand the case, following dates are to be taken note of :
LIST OF DATES
3rd June, 1998
Shri M.C. Joshi, Special Director of the Enforcement Directorate, issued Show Cause Memorandum No. T4/18-C/97-XX dated 3rd June, 1998 (hereinafter referred to as SCM XX) to the Petitioner No.1.
11th June, 1998
The petitioner No.1 received SCM XX at its aforesaid office at Kolkata.
12th June, 1998
By a letter dated 12th June, 1998, the Petitioner No.1 wrote to the Respondents denying the allegations in SCM-XX and stating that your Petitioner No.1 would be approaching the office of the Respondents at Kolkata for production of the originals of the documents sought to be relied upon by the Respondents and for inspection of the same by the Petitioner No.1.
1998-2001
The respondents allowed inspection of the Relied Upon Documents (hereinafter referred as the RUDs in SCMXX in a piecemeal manner. At no point of time did they produce all the originals of the RUDs, or give inspection of the same.
2001
In 2001, the Respondents abruptly stopped the process of production of originals and inspection of documents, before the same could be completed.
7th January, 2002
By a letter dated 7th January, 2002, the Petitioner No.1 complained about suspension of the process of giving inspection of documents in August, 2001 and requested the then Special Director of the Enforcement Directorate to allow the Petitioner No.1 to resume inspection of records.
27th May, 2002
The Petitioner No.1 filed an Interim Reply dated 27th May, 2002 to SCM-XX.
3rd July, 2004
Shri G.K.P. Reddy, on whose statement SCM-XX is heavily reliant, passed away.
13th January, 2015
The respondents issued Call Notice T-4/18-C/97-SCNXX/275 dated 13th January, 2015 to the Petitioner No.1, fixing for the first time a date i.e., 6th February, 2015 for personal hearing of SC
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