$~26 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 29.11.2024 + W.P.(C) 535/2014 PANKAJ KAPAL MEHRA .....Petitioner Through: Mr. Hemant Phalpher, Mr.

Yogesh Tyagi and Ms. Anisha Goyal, Advocates.

versus UNION OF INDIA & ANR. .....Respondents Through: Ms. Monika Arora, CGSC with Mr. Subhrodeep Saha and Ms.

Radhika Kurdukar, Advocates.

CORAM:

HON'BLE MS. JUSTICE TARA VITASTA GANJU TARA VITASTA GANJU, J.: (Oral)

1. The present Petition has been filed by the Petitioner setting out the following prayers:

“(a) Set aside the impugned penalty order dated 25.6.2013 in so far as it imposes the penalty on the petitioner.

(b) Order payment of cost to the petitioner for forcing him into litigation.

(c) Issue any other direction/order as may be deemed just and proper in the interest of justice.”

2. The Impugned Order dated 24/25.06.2013 has been passed against a public limited Company, named M/s Orkay Industries Ltd and its 14 Directors, levying a fine in the sum of Rs. 1 Crore pursuant to an Order- in-Original No. 03/02/002/00835/AM03, dated 29.03.2004. The operative part of the Order-in-Original dated 29.03.2004 is set out below:

“11. I, in exercise of powers vested in me under Section 13 of Foreign Signature Not Verified Digitally Signed W.P.(C) 535/2014 Page 1 of 19 Trade Development & Regulation) Act, 1992 do hereby impose fiscal penalty of Rs. 1,00,00,000/- (Rupees One crore only) on the firm M/s. Orkay Industries Ltd. N.K. M. International House, Babubhai Chinai Marg, 178, Backbay Reclamation, Mumbai- 400 020 and also its Directors/Partners etc. under Section 11(2) of Act.”

[Emphasis supplied]

3. Briefly the facts are that the Petitioner was employed as an Executive Director in a public limited company called M/s Orkay Industries Ltd [hereinafter referred to as “Company”], which was engaged in the export of polyester texturised yarn by processing partially oriented polyester yarn which it imported.

4. The Company went into liquidation and a provisional liquidator was appointed by the Bombay High Court on 21.04.1998. Pursuant to the order for provisional liquidation, the records and documents of the Company were taken over by the official liquidator appointed by the Court. The liquidation process was completed on 14.12.1998.

4.1 A show-cause notice was sent by Respondent No.2 under Section 14 of the Foreign Trade (Development and Regulation) Act, 1992 [hereinafter referred to as the “FTDR Act”] to the Company including its 14 Directors and the Petitioner on 07.04.2003 for non-fulfilment of its export obligations under the FTDR Act. A Reply to the show-cause notice was given by the Petitioner by its communication on 12.05.2003. In its Reply to the show-cause notice, it was clarified by the Petitioner, that the Company was a public limited company with several Directors and the Petitioner was not involved in the fulfilment of the export obligation by the Company. The show-cause notice was responded to by Signature Not Verified Digitally Signed W.P.(C) 535/2014 Page 2 of 19 the Petitioner in his individual capacity.

4.2 Subsequently, the Respondent No.2 issued an Order-in-Original on 29.03.2004 [hereinafter referred to as the “OIO”] and imposed a fiscal penalty of Rs.1 Crore on the Company and on all its Directors under Section 11(2) of the FTDR Act.

4.3 The Petitioner filed an Appeal on 07.07.2013 under Section 15 of the FTDR Act against the OIO. The said Appeal was dismissed by Respondent No.2 by an Order dated 24/25.06.2013 [hereinafter referred to as the “Impugned Order”]. It is this Order that has been challenged by the Petitioner before this Court.

5. It is the case of the Petitioner that the Petitioner was employed as an Executive Director of the Company in 1980’s and his role was limited to project implementation, Research and Development and Human Resource Management.

5.1 Learned Counsel for the Petitioner has contended that neither the show-cause notice nor the OIO gave any reasoning for fastening the liability on the Petitioner. It