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2009 Supreme(Del) 907
IN THE HIGH COURT OF DELHI
Honble Judge: Anil Kumar, J.
Virender Kumar Yadav - Appellants
Vs.
Union of India (UOI) and Ors. – Respondent
Writ Petition (Civil) No. 1793/2008
Decided On: 19.08.2009
For Appellant/Petitioner/Plaintiff: Sangita Bhayana, Adv.
For Respondents/Defendant: Rajdipa Behura, Adv.
The main legal point established in the judgment is the importance of considering a party's financial circumstances and the existence of a prima facie case in granting waiver of deposit.
Headnote:
FERA - Foreign Exchange Regulation Act - Section 8(1), 8(2), 40, 52, 57, 49(3), 49(4), 19, 129E of the Customs Act, 1962, Section 35F of Central Excise Act, 1944 - The judgment discusses the application of FERA, specifically Sections 8(1) and 8(2), and the procedural aspects under Sections 52, 57, and 49(3) and (4) of the Foreign Exchange Management Act. The court also refers to the provisions of the Customs Act, 1962, and the Central Excise Act, 1944, in relation to the waiver of deposit. The judgment highlights the interpretation of 'undue hardship' and 'prima facie case' in the context of waiver of deposit and stay applications.
Fact of the Case:
The petitioner seeks setting aside of an order directing the deposit of 20% of the penalty amount within 30 days. The penalty was imposed on the petitioner for illegal acquisition and transfer of foreign currency. The petitioner alleged non-receipt of the show cause notice and financial hardship.
Finding of the Court:
The court found that the petitioner had a good prima facie case and would suffer undue hardship if directed to deposit the penalty amount. The court set aside the order and granted complete dispensation from the deposit of any penalty for hearing the appeal.
Issues: Non-receipt of show cause notice, financial hardship, implication based on confessional statements, and the application of 'undue hardship' and 'prima facie case' in the context of waiver of deposit.
Ratio Decidendi: The court held that the petitioner had a good prima facie case and would suffer undue hardship if directed to deposit the penalty amount. The court emphasized the importance of considering a party's financial circumstances and the existence of a prima facie case in granting waiver of deposit.
Final Decision: The court set aside the order directing the petitioner to deposit 20% of the penalty amount and granted complete dispensation from the deposit of any penalty for hearing the appeal.
Anil Kumar, J.
1. The petitioner seeks setting aside of order dated 31st January, 2008 passed by the Appellate Tribunal for Foreign Exchange in appeal No. 132/2007 directing the appellant to deposit 20% of the penalty amount within 30 days from the date of receipt of the said order.
2. The brief facts to comprehend the disputes are that the penalty was imposed on the petitioner by the Special Director of Enforcement on the allegation that the partner of the petitioner Sh. Hardeep Singh @ Babu and another person Sh. Raman B. Gupta, Sh. Sunil Gill and Sh. Rajiv Kumar and Sh. Deepak were illegally acquiring and transferring foreign currency out of India to bring into India gold, silver and other dutiable goods.
3. The allegation of the petitioner is that the respondents alleged that the goods were purchased by Raman B. Gupta in Hongkong from Sh. Atul P. Shah and consequently Sh. Raman B. Gupta and his others have acted contrary to the provisions of Section 8(1) and 8(2) of FERA, 1973.
4. The petitioner has contended that statements under Section 40 of FERA, 1973 were recorded of Sh. Raman B. Gupta and Sh. Atul P. Shah. Some incriminating documents are also alleged to have been recovered from the residence of Sh. Raman B. Gupta, Sh. Atul P. Shah and from the residence of Smt. Subhadraban, mother-in-law of Sh. Atul P. Shah.
5. The further assertion of the petitioner is that on the basis of an alleged show cause notice which was never received by him after adjudication, the respondent No. 3 has imposed a penalty of Rs. 1,25,00,000/- each on the petitioner and others by order dated 26th March, 1997.
6. The petitioner further pleaded that he had filed a W.P. (C) No. 12940/2006 titled Virender Kumar Yadav v. Union of India and Ors. seeking quashing of the order dated 26th March, 1997 imposing a penalty of Rs. 1,25,00,000/- pursuant to the adjudication proceedings under Section 8(1) and 8(2) of FERA, 1973. The plea taken by the petitioner in that writ petition was that he became aware of the penalty imposed upon him when the proceedings were initiated under Section 57 and 49(3) and (4) of Foreign Exchange Management Act.
7. The writ petition filed by the petitioner being W.P (C) No. 12940/2006 was disposed of by this Court by order dated 22nd August, 2007 holding that there was no proof (acknowledgement Card etc) evidencing service of order on the petitioner. The counsel for the respondent had also agreed to supply a copy of the order dated 26th March, 1997 and pursuant thereto the petitioner was directed to prefer an appeal before the Appellate Tribunal, Foreign Exchange in terms of Section 19 of FEMA within two weeks of the receipt of the order which was to be dispatched by the respondents.
8. The petitioner thereafter filed the appeal under Section 52 of Foreign Exchange Regulation Act, 1973 read with Section 19 of Foreign Exchange Management Act, 1999 against the order No. T-4/55-B/94 dated 26th March, 1997 bearing the file No. 41-43/B/SDE/PXA/97 passed by the Special Director of Enforcement, Mumbai along with an application under Section 52(2) Second Proviso read with Section 19
(1) Second Proviso for exemption from depositing the penalty amount. Along with the appeal the petitioner also filed the copies of the medical certificate of his wife and copies of the income tax return for the year 2005-2006; 2006-2007 and for the year 2007-2008.
9. The application for dispensation from depositing the penalty amount was disposed of by order dated 31st January, 2008 directing the petitioner to deposit 20% of the penalty amount holding that the plea of the counsel for the petitioner that the adjudication order is solely based on retraction confessional statement of the petitioner without any independent corroboration, will be considered when the matter will be heard at length at the time of final disposal. It was held that the adjudication order is not ex facie bad and petitioner had not bothered to file any reply to the show cause
