Back
1995 Supreme(Mad) 295
High Court of Judicature at Madras
THE HONOURABLE CHIEF JUSTICE MR. K.A. SWAMI AND THE HONOURABLE MR. JUSTICE RAJU
A. Abdul Samath - Appellant
Versus
Union of India - Respondents
W.A. No. 851 of 1994, W.P. No. 3487/94, W.M.P. No. 5621/94 and C.M.P. No. 9741/94
Decided On : 10 March 1995
The court clarified the requirements for the issuance and service of show-cause notices in adjudication proceedings under the Foreign Exchange Regulation Act, 1973, and emphasized the importance of avoiding technical contentions that only delay the proceedings.
Headnote:
FOREIGN EXCHANGE REGULATION ACT, 1973 - ADJUDICATION PROCEEDINGS - JURISDICTION - SERVICE OF NOTICE - ANNEXURES - PRINCIPLES OF NATURAL JUSTICE - WRIT PETITION - WRIT APPEAL - DISMISSAL: 1. The authority issuing the show-cause notice under Section 51 of the Foreign Exchange Regulation Act, 1973 (FERA) must be an officer of the rank and designation of the Adjudicating Officer. 2. The non-mentioning of the designation of the Adjudicating Officer in the show-cause notice does not undermine the jurisdiction of the officer to initiate and pursue adjudication proceedings. 3. Service of the show-cause notice by registered post with acknowledgment due to the address of the person concerned is valid, even if it is received by a family member or an authorized agent. 4. The failure to serve copies of all the annexures listed in the show-cause notice does not violate the principles of natural justice at the stage of show-cause notice, as the originals are available for perusal and copies can be requested. 5. A writ petition challenging the jurisdiction of the Adjudicating Officer or the validity of the show-cause notice should not be entertained at the stage of show-cause notice unless there is a ground of total want of jurisdiction. 6. Technical contentions that only delay the proceedings should be avoided by clearly stating the authority under which the notice is issued and using the authorized designation in the notice.
Fact of the Case:
The petitioners, facing adjudication proceedings under the Foreign Exchange Regulation Act, 1973 (FERA), challenged the jurisdiction of the Adjudicating Officers and the validity of the show-cause notices issued to them. They contended that the notices were not issued by the designated Adjudicating Officers, were not served properly, and that certain annexures were not provided to them, violating the principles of natural justice.
Finding of the Court:
The court held that the notifications issued by the Central Government empowered the Special Director and Deputy Director of Enforcement to act as Adjudicating Officers and adjudicate cases of contravention of FERA provisions. The court found that the show-cause notices were issued in exercise of the powers of adjudication and that the failure to mention the designation of the Adjudicating Officer in the notices did not undermine their jurisdiction. The court also held that service of the notices by registered post with acknowledgment due was valid, even if received by a family member or an authorized agent. Regarding the annexures, the court held that the failure to serve copies of all the annexures did not violate the principles of natural justice at the stage of show-cause notice, as the originals were available for perusal and copies could be requested.
Issues: 1. Whether the Adjudicating Officers had the jurisdiction to initiate and pursue adjudication proceedings against the petitioners. 2. Whether the service of the show-cause notices was valid. 3. Whether the failure to serve copies of all the annexures listed in the show-cause notice violated the principles of natural justice.
Ratio Decidendi: 1. The court relied on the notifications issued by the Central Government under Sections 4(1), 3, and 50 of FERA, which empowered the Special Director and Deputy Director of Enforcement to act as Adjudicating Officers and adjudicate cases of contravention of FERA provisions. 2. The court interpreted Rule 10 of the Adjudication Proceedings and Appeal Rules, 1974, which provides for service of notices by registered post with acknowledgment due, and held that such service is valid even if received by a family member or an authorized agent. 3. The court applied the principles of natural justice and held that the failure to serve copies of all the annexures listed in the show-cause notice did not violate the principles of natural justice at the stage of show-cause notice, as the originals were available for perusal and copies could be requested.
Final Decision: The court dismissed the writ petition and the writ appeal, holding that the petitioners' challenges to the jurisdiction of the Adjudicating Officers and the validity of the show-cause notices lacked merit. The court also dismissed the connected writ miscellaneous petition and contempt miscellaneous petition.
RAJU, J.
The above writ appeal and writ petition have been posted together and heard since they involved consideration of identical issues.
2.W.P. No. 3487 of 1994 has been filed for a Writ of Certiorari to call for and quash the Memorandum No. T-4/15/SZ/C/94, dated 9-2-1994 issued by the Deputy Director (Shri A.K. Banerjee), Enforcement Directorate, Southern Zone, Madras-6. The said memorandum calls upon the petitioner and three others to show cause within the time stipulated as to why adjudication proceedings as contemplated in Section 51 of the Foreign Exchange Regulation Act, 1973, hereinafter referred to as 'the Act' should not be held against them for the contravention of the various provisions referred to therein and as to why U.S. $ 13, 000/- and Rs. 2, 60, 915/- Indian currency seized from the petitioner stated to be the amount involved in the contravention in question should not be confiscated to the Central Government under Section 63 of the Act. The said memorandum also informs the recipients including the petitioner of the said memorandum that in issuing the said proceedings reliance is placedinter aliaon the documents listed in the annexure thereto that the originals of the said documents will be made available to the party or their lawyer or to their authorised representative to inspect, if they so desire at the place mentioned after fixing an appointment with the Deputy Director, in addition to inviting their attention to proviso to Rule 3 of the Adjudication Proceedings and Appeal Rules, 1974 hereinafter referred to as 'the Adjudication Rules' and the rights available thereunder.
2(a) The Petitioner approached this Court by filing the above writ petition on more than one ground, but at the time of hearing, the challenge was confined by the learned Senior Counsel to only a few of the grounds to which a reference will be made hereinafter. The main ground of challenge directed against the Memorandum in question is that the impugned memorandum, on the face of it, is shown to have been issued by a Deputy Director of the Enforcement Directorate of Southern Zone and does not contain any indication of having been issued by the said authority as Adjudicating Officer and that the proceedings for adjudication could not be initiated or undertaken by any one except the designated adjudicating officer. Consequently, it is contended that the very memorandum is rendered wholly without jurisdiction and contrary to law and cannot be pursued further against the petitioner. The second ground of challenge urged is the one based upon Rule 10 of the Adjudication Rules. It is contended for the petitioner, relying upon the said rule, that the impugned memorandum came to be served not on the petitioner himself personally, but on the wife of the petitioner and this method of service is not only an unauthorised one, but is contrary to the rules particularly Rule 10 of the Adjudication Rules inasmuch as the wife cannot be considered to be the duly authorised agent of the petitioner. The third and the last of the contention urged at the time of hearing on behalf of the petitioner is that though the annexure to the memorandum lists out four categories of documents, Item Nos. 1 and 4 have not been supplied to the petitioner along with the impugned memorandum and that this has caused grave prejudice to the petitioner resulting in violation of the principles of natural justice, for which the impugned memorandum is liable to be set aside.2(b) The respondent has filed a counter affidavit. While traversing the various averments and claims made in the affidavit filed in support of the writ petition in detail, so far as the points urged at the time of hearing, as noticed supra, are concerned, it is stated that the memorandum under challenge is valid and there is no justification to strike down the same. The Deputy Director Shri A.K. Banerjee was said to have been authorised to issue the show cause notice as Adjudicating Officer under Secti
