TMI Blog2013 (1) TMI 392X X X X Extracts X X X X X X X X Extracts X X X X ..... threat assessment made by the Mumbai Police, with regard to the petitioner's safety, and the provision made for his security, while he was in Mumbai. The concerned authority, not being persuaded, by the material supplied and the reasons put forth, issued a second summon to the petitioner under Section 37 on 24.08.2010, requiring the petitioner to appear before him, on 07.09.2010. Admittedly, the petitioner did not appear before the concerned authority, and trotted out the same reasons, i.e., threat to his life. It is at this stage that a complaint under Section 16(3) of the FEMA was filed, on 16.09.2010. Notice in this complaint was issued on 20.09.2010. The DOE, in the background issued a communication to the APO as received by him on 05.10.2010, to take action for revocation of the petitioner's passport under Section 10(3)(c) of the Passports Act who in turn sought an explanation as to why, action ought not to be initiated under Section 10(3)(c) of the Passports Act. Admittedly, the petitioner did not present himself either in response to the summons issued by the DOE nor in response to the show cause notice dated 15.10.2010. Replies were filed, however, on behalf of the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound of breach of principles of natural justice. Argument that show cause notice was issued by one authority i.e., the APO while the impugned order dated 03.03.2011 was passed by the another i.e., the RPO hence breached the principles of natural justice is misconceived as it is seen that against item no. 7A(a) of Schedule I the RPO (Mumbai) is also described as a passport authority alongwith the APO. Therefore, it is not as if the RPO does not have the necessary power invested in him in Section 10(3)(c) of the Act. This is not a case where a hearing was held by the APO and the impugned order was passed by the RPO. This is a case where show cause notices were issued by the APO, while hearing in the matter was held by a superior officer, i.e., the RPO. Therefore, this argument is also not tenable. Argument that the relevant material which formed the basis for issuing the show cause notice was not supplied is also not quite correct as APO vide letter dated 01.11.2010, admittedly had given extracts of the material, which was supplied by the DOE to him. The receipt of the said letter is not denied by the petitioner. It is also not denied by the petitioner that he was made availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against him under section 13 of the FEMA. This communication apparently, also informed the RPO, that notice on the said complaint had been issued on 20.09.2010. 3. The petitioner has challenged, the aforementioned impugned orders, on various grounds, which I will refer to and deal with in the latter part of my judgment. For the moment, it may be relevant to refer to the material and relevant facts which have led to the institution of the present writ petition under Article 226 of the Constitution of India. 4. As indicated above, on 02.08.2010 summons were issued under section 37 of the FEMA, to the petitioner, in respect of investigations being carried out against him for violation of the provisions of FEMA. The petitioner was required to appear before the Assistant Director, on 10.08.2010. It appears that on 08.08.2010, a letter was received through the petitioner s General Counsel and Constituted Attorney, that the petitioner had not made himself available before the concerned officer, due to security concerns, which is why, he was stationed outside the country. 5. The concerned officer, apparently not convinced, with the reasons given in the aforementioned communication r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view that, the petitioner had willfully avoided the summons issued to him, under section 37 of FEMA read with the provisions of section 131 and section 272(A)(i) of the Income Tax Act, 1961, to stall investigation, he decided to institute a complaint for levying penalty on the petitioner under section 13 of FEMA. 9.1. Consequently, a complaint under section 16(3) of FEMA was filed on 16.09.2010. 10. In the said complaint, a notice was issued to the petitioner on 20.09.2010. 11. It appears that on 04.10.2010, the DOE issued a communication which was received by the Assistant Passport Officer (in short APO), on 05.10.2010 informing him with regard to the aforesaid development, with a request that action be taken in public interest for revocation of passport of the petitioner under section 10(3)(c) of the Passports Act, 1967 (in short the Passports Act). 12. On 12.10.2010, the petitioner through his solicitor had sent a reply to the notice dated 20.09.2010 issued in the aforementioned complaint, filed under section 16(3) of FEMA. 13. It appears, based on the information received by the APO, a show cause notice dated 13.10.2010 was issued to the petitioner at the address me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo government departments which, could not be supplied to him. However, certain extracts from the said letters as also information gleaned from other documents, which had formed the basis, for issuance of the show cause notices were set out, and thus, made available to the petitioner. The extracts set out in the communication dated 01.11.2010, adverted broadly, to the following:- (i). The DOE investigation had revealed that the petitioner as the Chairman of the Governing Council of the IPL of the Board of Control for Cricket in India (in short BCCI), had committed gross irregularities in the conduct of the IPL tournaments, and in the award of contracts by the BCCI to various parties in India and abroad. (ii). The fraudulent activities of the petitioner, which were in violation of FEMA, had led to the siphoning of funds to the extent of hundreds of crores of rupees; which apparently he was suspected to have parked outside India. (iii). The petitioner, despite, summons issued by the DOE, on 02.08.2010 and 24.08.2010, had not appeared before the concerned officer. (iv). The petitioner had made himself scarce when, investigations against him had been intensified by various gove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice was issued only to adjudicate upon as to: whether or not proceedings under section 10(3)(c) had to be initiated . 20.2 This stand was reiterated at the hearing held on 18.11.2010. Apart from the above, an objection was also taken to the matter being heard by the RPO, as the show cause notice was issued by the APO. 20.3 The hearing of 18.11.2010 was followed by two letters dated 19.11.2010 and 22.11.2010. In the first letter, an order was sought on the objection taken by the counsel for the petitioner to the matter being heard by the RPO, and by the second letter, a copy of the order was sought whereby, their request for inspection of records, certified copies of the Rojnama and ordersheets, had been declined. 21. The above propelled the RPO to convey to the counsel for the petitioner vide communication dated 23.11.2010 that the Passport Authority at Mumbai was headed by the RPO, Mumbai, who could call upon any officer or staff of his office to assist him and could also delegate the work assigned to him, to subordinate officials, for smooth functioning of his office. It was also communicated to the counsel for the petitioner that, they were taking such like ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1730 hours, while on 01.08.2011, hearing was granted between 1400 hours and 1800 hours. Furthermore, it was conveyed that since, on 01.08.2011, it was mutually agreed that, written submissions as well as additional points which the counsels were required to make, could be filed there was need for the same to be filed at an early date, so as to enable the CPO, to take a decision in the appeal. 29. Accordingly, on 17.08.2011, written submissions were filed on behalf of the petitioner. 30. Almost simultaneously, it appears, the petitioner through his General Counsel and Constituted Attorney filed three applications of even date i.e., 17.08.2011, under the Right to Information Act, 2005 (in short the RTI Act) with : the Public Information Officer of the Ministry of Home Affairs, Govt. of India; the office of the RPO, Mumbai; and the CPIO, Dy. Passports Officer, CPV Division of Ministry of External Affairs. 31. On 12.10.2011, the RPO s office inter alia conveyed to the querist that since information pertains to a third party, it could not be disclosed to him, as there were cases which were being pursued against the petitioner and, as per the directions of the Economic Offences W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to respond to the two summons issued by the DOE dated 02.08.2010 and 24.08.2010 under section 37 of the FEMA. These summons thus, formed the basis for institution of a complaint by the DOE under section 16(3) of the FEMA, on which, notice had been issued, on 20.09.2010. The RPO and the CPO failed to take into account the fact that a detailed reply had been filed, on 12.10.2010, on behalf of the petitioner, stating therein, that he could not appear in person, on account of threat to his life. (iii). There has been no adjudication in the complaint filed under section 16(3) of FEMA, in which, notice has been issued on 20.09.2010. This was so, despite, a reminder being sent on behalf of the petitioner, on 04.10.2011. The provisions of section 16(6) of FEMA require the adjudicating authority to complete adjudication within a period of one year from the date of receipt of the complaint and failure to dispose of the complaint within the stipulated period is required to be backed by definitive reasons. The pendency of those proceedings cannot, therefore, form the basis of the impugned orders. (iv). Under FEMA, any violation can lead to only a civil liability as contemplated under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding would have led to a mere temporary custody of the passport. (xii). Given the threat to the petitioner s life, he had offered to answer any questionnaire that was submitted to him or, answer questions through video-link or, even answer to a commissioner, if so appointed by the DOE. The complete disregard to the alternative modes available, was illegal. The order of revocation of the petitioner s passport in these circumstances was a draconian measure, which failed to satisfy the test of proportionality. (xiii). The two show cause notices issued by the DOE, were mainly directed against the officials of the BCCI which included the President and the Secretary, in respect of, IPL tournament conducted in South Africa, and the issue related to hiring of services of an entity by the name of IMG, for conduct of the said tournament. The petitioner was included as a noticee based on the provisions of section 42 of FEMA, which were pivoted on the petitioner s alleged vicarious liability. The show cause notice did not indicate any personal misdemeanour on the part of the petitioner. (xiv). The RTI applications moved by the Constituted Attorney of the petitioner revealed that the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assport Officer 156(2009) DLT 17 and Canon Steels (P) Ltd. Vs. Commissioner of Customs, (2007) 14 SCC 464 and 2. 40. On the other hand, on behalf of the respondents, the following submissions were made, beginning with a preliminary objection. (i). The preliminary objection taken was, to this court s jurisdiction to entertain and adjudicate upon the present petition. In this regard, it was submitted that the petitioner was a resident of Mumbai and had applied for passport at Mumbai. A major part of the cause of action had arisen in Mumbai including the fact that the first impugned order, which was passed by the RPO, was passed at Mumbai. The only reason that the petitioner had chosen to approach this court, was on account of the order passed by the CPO, in the appeal, preferred by him, under section 11 of the Passports Act. (ii). The impugned order of the RPO, was based on material made available to him, by the DOE. In this regard, a reference was made to the communication dated 04.10.2010 issued by the DOE, wherein a reference had been made to the complaint dated 16.09.2010, filed against the petitioner, under section 16(3) of the FEMA, and the issuance of a subsequent notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, would show that the impugned orders came to be passed in the background of the following events. 42.1 The petitioner was issued a summon under Section 37 of the FEMA on 02.08.2010. It was followed by yet another summon, once again, issued under Section 37 of the said Act, on 24.08.2010. The summons, admittedly, required personal appearance of the petitioner before the concerned officer. The summons were indicative of the fact that the DOE, proposed to take action against the petitioner under Section 13 of FEMA. 42.2 In response to the first summon, issued on 02.08.2010, it was sought to be conveyed on behalf of the petitioner vide communication dated 07.08.2010, which was delivered on 09.08.2010, that there was an apprehension of threat to the petitioner's life. The concerned authority not being convinced, sought further details, from the petitioner vide communication dated 13.08.2010. It is at this stage that the petitioner referred to the threat assessment made by the Mumbai Police, with regard to the petitioner's safety, and the provision made for his security, while he was in Mumbai. The concerned authority, not being persuaded, by the material supplied and the reasons p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his passport. The notice also indicated that if no reply is received within the stipulated period, necessary action under the Passports Act would be initiated against him. 43.2 The brief reason adverted to in the show cause notice of 15.10.2010 was that the complaint filed by the DOE dated 16.09.2010 (on which notice had been issued for non-compliance of the directions contained in summons issued to the petitioner), had been received. The non-compliance is, in substance, related to non-appearance in person by the petitioner, as directed. 43.3 Therefore, an explanation was sought, as to why, action ought not to be initiated under Section 10(3)(c) of the Passports Act. Admittedly, the petitioner did not present himself either in response to the summons issued by the DOE, to which I have made a reference above, nor in response to the show cause notice dated 15.10.2010. Replies were filed, however, on behalf of the petitioner on 12.10.2010, followed by several other communications demanding the material on the basis on which the passport authorities were proceeding to take action in the matter. 44. By virtue of the impugned order, the passport authority, in their wisdom, came to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se notice dated 15.10.2010, that the petitioner had been put to notice of the possible consequences of the failure to give a satisfactory explanation to the concerned officer. The test which the Supreme Court applied in the context of a suit where one party claimed, inter alia, that no relief could be given as a specific issue was not struck was: did parties know that the matter in question was involved in the trial. [see observations in Bhagwati Prasad vs Chandramaul AIR 1966 SC 735 at para 10 to 13]. If the same test is applied, this objection cannot sustain. Therefore, the argument made in this behalf, is without merit. 45. The other argument that the passport authorities had abdicated their power, in as much as, they had acted on the dictation of the DOE, is premised on a submission that the said authorities ought to have examined the validity and veracity of the charge qua which the petitioner was called upon to give evidence by way of the two summons, referred to above, issued under Section 37 of FEMA. It was contended that since the petitioner had not entered into any contract and was only the Chairman of the Governing Council of the IPL tournament, and in that sense, ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the effect on country's relationship with other countries is in issue - necessarily would require reliance to be placed on inputs provided by other wings of the Government of India. The inputs provided may not have the quality of a final determination; however, as long as the material provided is actionable, the passport authority would be well within its right to take the necessary steps for revocation and/or impounding. 45.3 If the aforesaid test is applied to the situations discussed above, I do not see how it cannot apply to the last limb of clause (c) of Sub-Section (3) of Section 10, which invests in the passport authority the power to revoke or impound a passport in the interest of general public - as long as the inputs provided by statutory authorities and other wings of the government, are in the nature of actionable material, no fault can be found with Passport authorities taking recourse to under the said provision. 45.4 The argument of the petitioner that since, the passport authority did not evaluate the merit of the allegation made by the DOE or, the reply sent by the petitioner on 12.10.2010 qua the allegation made against him; resulted in their abdicating their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite clear when it refers to the fact that it is an Act made to consolidate and amend the law relating to foreign exchange, with the objective of facilitating external trade and payments, and for promoting the orderly development and maintenance of foreign exchange market in India. It cannot, therefore, be said that summons issued under FEMA for unraveling details with regard to transactions referred to therein are not in public weal. The summons issued under Section 37, required the petitioner to appear before the concerned authority, in person, to tender evidence in respect of various agreements executed by the BCCI /IPL. It is quite possible that during the course of the petitioner's examination he may have to be confronted with material that may be in possession of the concerned officers of DOE. Therefore, in my opinion, it cannot be said that there was no element of public interest in the passport authorities exercising powers under Section 10(3)(c) of the Passports Act. 46.1 Mr Lalit, learned senior counsel sought to argue that the petitioner had offered to cooperate with the concerned officer of the DOE by offering to be examined by video link or by a commissioner, in Unite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttachment and sale of the delinquents properties; impose fine not exceeding Rs.5000; and order for furnishing security for his appearance, and in default, commit him to the civil prison. 47.2 It is, therefore, contended that this power was available only vis-a-vis a witness and not vis-a-vis a person against whom the proceedings have been initiated. The example given was that of proceedings in a civil suit where, on the failure of a defendant to appear in a proceedings initiated in a civil court, would only result in him being proceeded ex-parte, and not being subjected to the penalties, provided in Section 32 of the CPC. It was submitted that Section 31 which precedes Section 32 of the CPC makes this aspect quite obvious. 47.3 In my view, this submission is again misconceived for the reason that Section 37 is a provision which invest power of investigation for contravention of provisions of Section 13 of FEMA, which necessarily implies that the investigation is directed against the noticee. To aid the officer's investigation under Sub-section (1) of Section 37 powers under the Income Tax Act have been conferred by virtue of sub-section (3) of Section 37. Section 131 of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of show cause notices by the APO was premature. 49. On behalf of the petitioner an elaborate argument has been raised with regard to breach of principle of natural justice. In this regard broadly four submissions were made. First, the proceedings before the RPO were abruptly terminated on 26.11.2010. Second, that the show cause notices were issued by the APO, while the impugned order dated 03.03.2011 was passed by the RPO. Third, the material on which the show cause notice was issued to the petitioner was not supplied to the petitioner. Fourth, no opportunity was granted to cross-examine the officers of DOE. As regards the first submission, it may be noted that the material on record suggests that lengthy hearings were held both on 18.11.2010 and 26.11.2010. In the hearing held on 18.11.2010 time was granted to the petitioner between 1630 hours and 2030 hours. Similarly, while time for hearing on 26.11.2010 was slotted between 1430 hours to 1700 hours, the proceedings actually terminated at 1930 hours. This was followed by permission granted to the petitioner to file his written submissions. Written submissions ran into 438 pages, which was in addition to the written statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Alkalies Chemicals Limited Anr. (1989) 4 SCC 264 at page 268 para 6, which has noticed the said authorities. However, I have not been called upon to deal with such a situation. The submission of the learned counsel for the petitioner on this score is therefore rejected. 49.3 The third limb of this argument which is that the relevant material which formed the basis for issuing the show cause notice was not supplied ,is also not quite correct. The APO vide letter dated 01.11.2010, admittedly had given extracts of the material, which was supplied by the DOE to him. The receipt of the said letter is not denied by the petitioner. It is also not denied by the petitioner that he was made available the complaint filed by the DOE under Section 16(3) of FEMA. The petitioner was well aware of the charge against him and the material which formed the basis of the charge, and therefore, cannot be heard to plead that he had not been supplied with the requisite material to answer the charge. 49.4 The fourth submission made that no right was given to cross-examine officers of DOE, is also untenable for two reasons. First, that there is no inalienable right to cross-examine, it is not unknow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tune of hundreds of crores has been parked by the petitioner outside the country, would require examination. Secondly, there is no scope for invoking the provisions of Article 12 of the CCPR once the municipal law on a given subject occupies the field. See observations of the Supreme court in Vishakha and Ors. Vs. State of Rajasthan and Ors., AIR 1997 SC 3011 at page 298 para 7 and Jolly George Varghese Anr. vs The Bank of Cochin (1980) 2 SCC 360 at page 364 para 6. It is not the case of the petitioner before me, that there is any doubt with regard to the interpretation to be given to the expression in the interest of the general public , appearing in Section 10(3)(c) of the Passports Act. Therefore, this submission of the petitioner is also without merit and is, accordingly, rejected. 52. The last argument made on behalf of the petitioner that in response to the RTI application dated 23.02.2012 moved by the Constituted Attorney of the petitioner had revealed that no case was pending before the Economic Offences Wing (in short EOW) of the Mumbai Police, is also without merit. 52.1 It is noticed that the application dated 23.02.2012 was filed with the Assistant Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to make an appearance . In fact, it is in those circumstances that, the court directed the passport authorities to hand over the petitioner s passport in that case as the principles of natural justice had been breached. There is no such situation obtaining in the present case. 55. As regards the submissions made on behalf of the respondents to jurisdiction of the court to entertain the writ petition on the ground that the jurisdiction of this court is invoked based only on the ground that the order of appellate authority, i.e., CPO has been passed in Delhi, in my opinion, may perhaps have enabled me to employ my discretion and relegate the petitioner to the appropriate court based on the principle of forum non conveniens. See observations in Kusum Ingots and Alloys Ltd. Vs. Union of India (UOI) and Anr., (2004) 6 SCC 254 and Sterling Agro Industries Ltd. Vs. Union of India and Ors., 181(2011) DLT 658. However, having regard to the fact that it is only a discretion that a court may or may not employ in a given case, and given the fact that the petitioner has been seeking a decision in regard to his case for a period of time, it was deemed fair and just to hear the petition and de ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
