TMI Blog2010 (10) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... quiry commences from the stage of issue of a notice to show cause under rule 3(1) and such an interpretation is in accord with the terms of section 49(3) of FEMA. Ex-consequenti, the appeal, being sans substance, deserves to be dismissed and, accordingly, it is so directed. - LPA NO. 397 OF 2010 - - - Dated:- 4-10-2010 - DIPAK MISRA AND MANMOHAN, JJ. C. Mukund and Ms. Firdouse Qutbwani for the Appellant. Mrs. Rajdeepa Behura and M.P. Singh for the Respondent. JUDGMENT Dipak Misra, CJ. - Invoking the jurisdiction of this Court under clause 10 of the Letters Patent, the appellant/petitioner ( the appellant ) has called in question the warrantableness of the order dated 21-4-2010 passed by the learned Single Judge in WP (C) No. 4311/2007. 2. The facts which are imperative to be exposited are that the Special Director, Enforcement Directorate (ED), as pleaded by the appellant, initiated a proceeding against the appellant on 22-8-2002 under the Adjudication Proceedings and Appeal Rules, 1974 (for short the 1974 Rules ) and eventually passed the final order on 17-2-2005 whereby he imposed a penalty of Rs. 50 lakhs for contravention of section 18(2) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Committee on Finance held on 9-12-1998 and the Rajya Sabha Debates held on 8-12-1999 to bolster the contention that the intention of the Legislature was not to permit continuance of the proceedings under the FERA after the cut-off date. Reliance was placed on S.K. Sinha, Chief Enforcement Officer v. Videocon International Ltd. [2008] 2 SCC 492 1 and Bachraj Bengani v. A.K. Roy 2009 IV AD (Delhi) 333. 5. The learned Single Judge, after hearing the learned counsel for the parties and after scanning the anatomy of section 51 of FERA, rule 3 of the 1974 Rules, the language employed on the notice dated 28-2-2000 and notice dated 27-3-2001 and after placing reliance on the ratio in Videocon International Ltd. s case ( supra ) and the decisions in Deputy Director, Enforcement Directorate v. Naina Maricair AIR 1990 Mad. 22 and R. Bhaskaran Pillai v. Enforcement Directorate [1980] 50 Comp. Cas. 190 (Ker.) came to hold as follows : "31. The considered view of this Court, is that in the instant case, the adjudicating officer took notice of the contravention when he issued the notices on 28th February, 2000 and 27th March, 2001 to the petitioner. This was within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smuch as the Apex Court has dwelled upon the concept of taking cognizance and the said principle would also apply to the process of initiation of adjudication. To buttress her submission, she has commenced us to the decisions in Bhaskaran Pillai s case ( supra ), Naina Maricair s case ( supra ), R. Sivarajan v. Deputy Director, Enforcement Directorate 1987 (12) ECC 256 and Monotosh Saha v. Special Director, Enforcement Directorate [2008] 86 SCL 121 (SC). 10. To appreciate the rival submissions raised at the bar, we may refer with profit to section 49 of FEMA which deals with repeal and saving. Sub-sections (3) and (4), which are relevant for our purpose, read as follows : "(3) Notwithstanding anything contained in any other law for the time being in force, no court shall take cognizance of an offence under the repealed Act and no adjudicating officer shall take notice of any contravention under section 51 of the repealed Act after the expiry of a period of two years from the date of the commencement of this Act. (4) Subject to the provisions of sub-section (3) all offences committed under the repealed Act shall continue to be governed by the provisions of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty as he thinks fit in accordance with the provisions of section 50 : Provided that the notice referred to in sub-rule (1), and the personal hearing referred to in sub-rules (3), (4) and (5) may, at the request of the person concerned, be waived." 12. Section 51 on which immense emphasis and reliance has been placed upon by Mr. Mukund deals with the power to adjudicate. The said provision reads as follows : "For the purpose of adjudging under section 50 whether any person has committed a contravention of any of the provisions of this Act (other than those referred to in that section) or of any rule, direction or order made thereunder, the adjudicating officer shall hold an inquiry in the prescribed manner after giving that person a reasonable opportunity for making a representation in the matter and if, on such inquiry, he is satisfied that the person has committed the contravention, he may impose such penalty as he thinks fit in accordance with the provisions of that section." 13. The submission of Mr. Mukund, learned counsel for the appellant, is that the command of section 49(3) of FEMA is that no adjudicating officer shall proceed under section 51 of FERA and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dication proceedings ought not to be held. In the event of a person showing sufficient cause, which the adjudicating officer accepts, the proceedings under section 51 of the Act come to an end. If, however, no cause is shown or the cause shown is unacceptable, the proceedings continue and the person is required to appear before the adjudicating officer, either in person or through his lawyer. The oral enquiry then commences. Under rule 3(4) the adjudicating officer is to explain to the person or his counsel, as the case may be, the offence that is alleged to have been committed by such person, indicating the provisions of the Act. Then the person is given an opportunity to produce oral or documentary evidence and on the consideration of the evidence placed before the adjudicating officer suitable orders are passed. The only document that is supplied to the person which contains the materials placed against him as also the contravention, is the show-cause notice issued under rule 3(1). The second notice under rule 3(3) is a mere intimation of the date of hearing for the further proceedings." After so stating, the Bench proceeded to hold as follows : "Section 51 calls upon the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of proceedings before a Magistrate under Chapter XVI. The High Court, in our considered view, was not right in equating initiation of proceedings under Chapter XIV with commencement of proceedings under Chapter XVI." In the said case, after referring to a catena of decisions, Their Lordships held thus : "36. Undoubtedly, the process was issued on 3-2-2003. In our judgment, however, it was in pursuance of the cognizance taken by the Court on 24-5-2002 that a subsequent action was taken under section 204 under Chapter XVI. Taking cognizance of offence was entirely different from initiating proceedings; rather it was the condition precedent to the initiation of the proceedings. 37. Order of issuance of process on 3-2-2003 by the court was in pursuance of and consequent to taking cognizance of an offence on 24-5-2002. The High Court, in our view, therefore, was not right in equating taking cognizance with issuance of process and in holding that the complaint was barred by law and criminal proceedings were liable to be quashed. The order passed by the High Court, thus, deserves to be quashed and set aside." 16. We have reproduced the aforesaid paragraphs from Videocon Inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dless of the consequences that may follow. But if the words used in the provision are imprecise, protean, or evocative or can reasonably bear meaning more than one, the rule of strict grammatical construction ceases to be a sure guide to reach at the real legislative intent. In such a case, in order to ascertain the true meaning of the terms and phrases employed, it is legitimate for the court to go beyond the arid literal confines of the provision and to call in aid other well-recognised rules of construction such as its legislative history, the basic scheme and framework of the statute as a whole, each portion throwing light on the rest, the purpose of the legislation, the object sought to be achieved and the consequences that may flow from the adoption of one in preference to the other possible interpretation." 20. In Kehar Singh v. State ( Delhi Administration ) AIR 1988 SC 1883, it was held thus : "During the last several years, the golden rule has been given a goby. We now look for the intention of the Legislature or the purpose of the statute. First we examine the words of the statute. If the words are precise and cover the situation on hand, we do not go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solutely clear, precise and certain and does not admit of any other interpretation and the legislative intention is absolutely clear. The legislative purpose is that the adjudicating officer shall not take notice of any contravention after the expiry of period of two years from the date of commencement of FEMA. What is submitted by Mr. Mukund is that the date of commencement of hearing for adjudication should be reckoned as the date. The said interpretation is not in accord with the language employed in the statute. It is the sacrosanct duty of the court to interpret the law, to examine the words of the statute and on an examination of the same in a studied manner, we are unable to persuade ourselves to accept the submission of the learned counsel for the appellant. 23. It is so as the first show-cause notice, which was issued on 28-2-2010, clearly shows application of mind to the proceeding which is sought to be adjudicated. The entire allegations have been brought on record. Similarly, from the second show-cause notice, it is clear as day that the entire allegations were put to the appellant. There cannot be any dispute over the same. The word enquiry used in section 51 has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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