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2006 DIGILAW 2170 (ALL)

HIRA LAL RAMESH CHAND v. UNION OF INDIA

2006-09-01

G.P.SRIVASTAVA, SUSHIL HARKAULI

body2006
JUDGMENT By the Court.—We have heard both sides. 2. The defence of the department, as argued by the Addl. Standing Counsel, appears to be that the Adjudicating Officer does not have the power of review. The argument is not correct. 3. Section 28(2) of the Foreign Exchange Management Act, 1999 (hereinafter referred to as FEMA for short) specifically confers the power of review (which vests in civil Court under CPC) upon the Appellate Tribunal. Section 16(5) of FEMA says that same power which has been conferred under Section 28 (2) upon the appellate tribunal shall vest with the Adjudicating Authority also. Thus, the adjudicating authority does have the power of review. 4. The petitioner has filed an application dated 9-1-2005 for review of the adjudication order dated 30-11-2004 which is said to have been received by the petitioner on 24-12-2004. A copy of the review application has been annexed as Annexure-1 to this writ petition. Thus, the application for review has been made within less than three weeks of the date of receipt of adjudication order dated 30.11.2004. 5. We have examined the adjudication order dated 30.11.2004. The basis of that order is a finding therein that the petitioner (referred in that order as the noticee firm) has not taken all reasonable steps’ to realise the exports proceeds. 6. While it is true that under Section 18(3) of Foreign Exchange Regulation Act, 1973 (hereinafter referred to as FERA), the presumption is that a person who has sold goods has not taken all reasonable steps to recover or receive the payment for goods and has accordingly violated Section 18(2) of FERA, unless that person proves to the contrary; but the adjudication order dated 30-11-2004 does not indicate as to what possible steps the petitioner could have taken in the facts and circumstances of the case given below, which he did not take. 7. It has been mentioned in the review application that a reply to the show cause notice was submitted by the petitioner on 28.2.2000 and a further reply was submitted on 12 9.2003 annexing all the relevant documents. 8. 7. It has been mentioned in the review application that a reply to the show cause notice was submitted by the petitioner on 28.2.2000 and a further reply was submitted on 12 9.2003 annexing all the relevant documents. 8. The learned Counsel for the petitioner has invited our attention to the letter written on 25.3.1997 by the Second Secretary (Com.) of Indian Embassy in Washington D.C. to the petitioner regarding fraudulent release of the cargo of goods dispatched by the petitioner, by an American company known as M/s. Atlanta Rugs Inc. It has also been pointed out by the petitioner that the goods were dispatched by the petitioner to the aforesaid American company through a shipping company (hereinafter referred as the transporter) and the papers were sent to the said American company through a bank. It was contemplated under the terms of the agreement that the American company would retire the documents on payment to the bank and would thereafter, on the strength of those retired documents, get the goods released from the Transporter and the customs authorities in America. 9. According to the case set up by the petitioner, the bank’s contention is that the documents were never got retired by the American company and the goods were got released by the American company in collusion with the American customs authorities and the Transporter. 10. It is important to note here that the said letter dated 25.3.1997, written by Embassy it has been found that the said American company i.e. Atlanta Rugs Inc. was operating from a business address where it has not been found and is not traceable. The said letter dated 25.3.1997 also says that there is a new company namely Trade India Inc. operating from the said business address but there is no relationship between the Trade India Inc. and Atlanta Rugs Inc. and therefore, the petitioner has been advised not to have any further business dealing with Atlanta Rugs Inc. 11. In the above backdrop the adjudication order before recording the finding that “all reasonable steps have not been taken” should have given at least some indication as to what other steps the petitioner could have taken for realisation of the export proceeds which the petitioner has failed to take. Prima facie, we are unable to find any such thing from the impugned adjudication order. 12. Prima facie, we are unable to find any such thing from the impugned adjudication order. 12. In view of this situation we are of the opinion that review application of the petitioner to say the least deserved to be considered. 13. However, it is made clear that whatever stated above, are not findings which may be considered final by the adjudicating authority or other departmental authorities. These are only prima facie observations for the purpose of deciding this writ petition and for the purpose of considering whether we should direct the adjudicating authority to decide the review application or not, because if the review application was found to be not maintainable in law or was found to be frivolous, we may have refrained from issuing the Mandamus. 14. In the circumstances of the case given above, we direct that the respondent No. 2 will take an early reasoned decision with regard to the contentions of the review application dated 9.1.2005 after giving an opportunity of hearing to the petitioner if personal hearing is sought. The Respondent No. 2 will also be at liberty to make such inquiries as are permissible in the adjudication proceedings. If a certified copy of this order is presented before the respondent No. 2 within two weeks from today, further proceedings pursuant to the adjudication order dated 30.11.2004 will not be taken till the review application is decided by the Adjudicating Officer (Respondent No. 2) 15. The writ petition is disposed of accordingly. Order Accordingly. ———