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2003 DIGILAW 1115 (BOM)

Ila Dinesh Zaveri v. Union of India & others

2003-10-15

NISHITA MHATRE, R.J.KOCHAR

body2003
JUDGMENT - KOCHAR R.J., J.:---The petitioner, the sole proprietress of M/s. Mono International, Bombay is aggrieved by the impugned order dated 17th March, 1993 passed by the Additional Director General of Foreign Trade pursuant to the show cause notice dated 25th August, 1992 under section 14(1) for action under section 11(2) of Foreign Trade (Development and Regulation) Ordinance, 1992 holding her guilty of contravention of section 11(2) of the said Act and imposing a fiscal penalty of Rs. 40 lakhs on M/s. Mono International and the petitioner. 2. The petitioner claims to be a member of the Gem and Jewellery Export Promotion Council and has been issued a registration-cum-membership of the said Council. The petitioner appears to carry on business of export of colour stones, geological mineral specimens and handicrafts. The petitioner further appears to have been issued an Importer Exporter Code (IEC) by the office of the Joint Chief Controller of the Imports and Exports, Mumbai for the purpose of obtaining licences. The petitioner has also set out the details of total export turnover and also statement of net income of the petitioner. According to the petitioner, she received an alert circular/alert notice dated 27th June, 1990 from Gem and Jewellery Export Promotion Council informing of the suspension of 22 REP licences including the REP licences purportedly issued in the name of M/s. Mono International by respondent No. 2. The petitioner by her letter dated 2nd July, 1990 protested against the said notice and submitted that the petitioners had never applied for or been granted the purported suspended licences and that the petitioner had never exported diamonds and that she had no bank account with Citi Bank, Nariman Point. According to the petitioner, she addressed a letter dated 3rd July, 1990 to the Director of Revenue Intelligence, pointing out the facts set out in the aforesaid letter dated 2nd July, 1990. It further appears that the petitioner received a copy of the order passed by the respondents dated 25th June 1990 whereby 22 REP licences were suspended as an annexure to the alert notice dated 27th June, 1999. The petitioner and her husband both attended the office of respondent No. 2 along with their income tax consultant and pointed out that inconsistencies in the supporting documents submitted for the grant of REP licences issued in the name of the petitioner. The petitioner and her husband both attended the office of respondent No. 2 along with their income tax consultant and pointed out that inconsistencies in the supporting documents submitted for the grant of REP licences issued in the name of the petitioner. They also explained that the purported signature on the application form was not that of the petitioner and that rubber stamp was not that of the petitioner's firm and that it was not normally used by the petitioner. The petitioner also explained that the invoices and rubber stamps were not used by the petitioner firm before the said authority. According to the petitioner, on 10th July, 1990 in the office of the respondent No. 2, she made representations repeating that the petitioner had not applied for the purported licences and that the supporting documents were forged. According to the petitioner on 12th June, 1990 she applied for issue of REP licence for export of precious and semi precious stones for quarter ending January to March 1990 for Rs. 20,374.90 with the supporting documents. The petitioner was granted such REP licences on 27th March, 1991 without any deduction for Rs. 20,400/-. It further appears that the certain officers visited the petitioner's premises to check and confiscate goods and material imported under the purported licences and related documents, however, neither the goods nor the documents in connection therewith were found by the said officers. On 25th August, 1992, the petitioner received a show cause notice issued by the Additional Chief Controller of Imports and Exports. On 12th September, 1992 the petitioner filed a reply to the said show cause notice denying the charges levelled against her. The petitioner attended the office of the respondent No. 3 on 1st March, 1993 pursuant to the notice dated 28th October, 1992 for hearing. According to the petitioner, the respondent No. 3 did not put any question and the hearing ended abruptly. The petitioner received the impugned order dated 17th March, 1993 from the respondent No. 3 holding the petitioner guilty of contravention of section 11(3) of the Act and imposing fiscal penalty of Rs. 40 lakhs on the petitioner. The petitioner has challenged the said order under Article 226 of the Constitution of India being arbitrary, illegal and perverse. 3. This Court (Pendse and A.P. Shah, JJ.) had granted Rule and the stay of the said impugned order on 14th June, 1993. 40 lakhs on the petitioner. The petitioner has challenged the said order under Article 226 of the Constitution of India being arbitrary, illegal and perverse. 3. This Court (Pendse and A.P. Shah, JJ.) had granted Rule and the stay of the said impugned order on 14th June, 1993. Since then, the respondents have not cared to file their affidavit in reply controverting the allegations made in the said petition. According to us, this conduct on the part of the respondents reflects gross negligence on the part of the concerned authorities. An affidavit in reply was expected to be filed atleast after eight weeks from the date of grant of rule, after hearing the respondents. It appears that after a decade or so this petition appeared for final hearing for the first time on 24th September, 2003. Even on that date no affidavit in reply was filed. It appears that on that date the hearing was adjourned by one week. It further appears from the roznama that the petition appeared for hearing on 1st October, 2003 and was further adjourned by two weeks. Even then, no affidavit in reply was filed. Today when the petition was called out for hearing Shri Shah, the learned Counsel for the respondents, again prayed for an adjournment to file affidavit. According to us, the said application ought not to have been made for filing affidavit in reply. The respondents had more than ten years period to prepare and file an affidavit in reply in such a simple matter. We, therefore, decline to grant any more adjournment, particularly when Shri Subramanian the learned Counsel appearing for the petitioner, very strongly opposed any adjournment. He is fully justified in opposing the application for adjournment. According to us a period of 10 years is more than enough time for the respondents to file affidavit in reply and no more leniency or mercy could be shown to the respondents for their gross negligence in the matter. We are not blaming the learned Counsel for the respondents, as it was perhaps not possible for him to file affidavit in reply for want of instructions from the respondents. 4. We have carefully gone through the impugned order passed by the respondent No. 3. The learned Authority has in the first four paras set out the facts in the matter. Even in the para 5 the facts are stated. 4. We have carefully gone through the impugned order passed by the respondent No. 3. The learned Authority has in the first four paras set out the facts in the matter. Even in the para 5 the facts are stated. Barring the following sentences, we do not find any reasoning recorded by the learned Authority. "I have examined these aspects. It is seen from the record that the signature of the proprietor into file fully tally with those contained in the licencind file." Apart from this observations there is absolutely no discussion of the material considered by the said authority. There is absolutely no reference to what file or what application he had referred to tally the so called signatures of the proprietor. The minimum which was expected from even a quasi judicial authority is bare discussion of the material on the basis of which findings are recorded and conclusions are drawn. The fiscal penalty of Rs. 40 lakhs is a very serious and grave order as far as the petitioner is concerned. According to us, passing of such an order required some semblance of application of judicious mind to the material before the authority. The petitioner had submitted her reply to the show cause notice and had denied the fact that she had ever applied for import licence. She had also pointed out that she was not carrying on the said business for which the purported licence was allegedly obtained by her and on the basis of which she was sought to be penalised. It further appears that she herself had pointed out to the authorities that some fraud was being played to import diamonds by some unscrupulous persons. She had not vaguely denied the allegations. She had substantiated her case by putting forward good material before the authority. The petitioner had placed whatever material could be placed before the authority in support of her denial of the charges. On the contrary, the authority has not only not discussed the said material and the ground put forward by the petitioner but has also not considered the fact that there was no other material before the authority to find the petitioner guilty of the serious charge levelled against the petitioner. Barring making a bald observations that he had tallied two signatures and that he found that it was the signature of the petitioner. Barring making a bald observations that he had tallied two signatures and that he found that it was the signature of the petitioner. There is no reference as to which signatures were compared and tallied by the said authority. Obviously the respondent No. 3 was not a hand writing expert and could not have recorded a finding whether the signatures were forged or not. If he was to decide on the basis of the signatures, he ought to have sent the matter to handwriting expert. He ought to have put the said signature to the petitioners at the time of hearing. The learned Authority has also not applied its mind to the other material and grounds on which the petitioner tried to point out that the petitioner was not at all involved in the import of the said diamonds. 5. There is absolutely no reason to disbelieve or disregard the statement made by the petitioner and the material produced by her at the time of the enquiry. According to us, the respondent No. 3 has very lightly and casually dealt with the matter and has imposed a very heavy fiscal penalty to the tune of Rs. 40 lakhs, without any material or evidence on record. The findings recorded by the learned Authority are devoid of evidence, baseless and perverse and, therefore, they deserve to be quashed and set aside. The petition succeeds. The Rule is made absolute in terms of prayer Clauses (a), (b) and (c) with no order as to costs. Petition succeeds. -----