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TMI Blog2015 (1) TMI 1074X X X X Extracts X X X X X X X X Extracts X X X X ..... Srilankas and Dubai. Investigation was commenced with regard to the allegation of under invoicing of their export and receipt of differential amount through illegal channel. On completion of investigation, show cause notices were issued to the petitioners on the basis of complaint filed under section 16(3) of the Foreign Exchange Management Act, 1999 (FEMA). The petitioners submitted their representation through their counsel on 15.7.2010, for cross examination of the witnesses to the magazer, the officers who carried out investigation, the General Manager and Export Manager of the Company as well as the officers of Customs who assessed the shipping bills. The petitioners also sought for copies of the shipping bills and invoices which had been tendered by them to the customers authorities. Adjudicating authority by the impugned proceedings rejected the request of the petitioners. 4. Mr.B.Kumar, learned Senior Counsel appearing for the petitioner after elaborately referring to the statutory provisions and the scheme of FEMA submitted that the entire adjudication proceedings right from the stage of commencement is vitiated for not following the procedure under FEMA. It is submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justice must be followed since any order passed will affect the personal liberty under section 14 of FEMA, as he can be sent to prison for non-payment of penalty and such/any order to be passed by the adjudicating authority would result in grave prejudice to the noticee. Therefore, it is submitted that the while passing the impugned proceedings this has not considered and the valuable right of the petitioner under Sub Rule (6) of Rule 4 of the Rules has been given a goby, therefore it is liable to be set aside. In the alternate, it is submitted that unless the right of cross examination is granted, the entire proceedings will become a farce. 9. Reliance was placed on the decisions of this Court in the case of V.BHASKARAN AND OTHERS v. THE SPECIAL DIRECTOR,ENFORCEMEN DIRECTOR [in W.P.No.18918 of 2000 etc.batch Dated 24.6.2005] and in particular paragraph Nos. 33,37 and 38 of the Judgment, which deals with the right of cross examination. Reliance was placed on the decision of the Hon ble Supreme Court in the case of NATWAR SINGH v. DIRECTOR OF ENFORCEMENT AND ANOTHER [(2010) 13 SCC 255], wherein it has been held that the adjudicating authority is bound to follow the prescribed proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioners should be directed to submit their reply to the show cause notice and thereafter to participate in the proceedings. In support of his contention, the learned counsel placed reliance on the decision of this Court in W.P.No.18096 of 2013 dated 30.8.2013, W.P.No.20592 of 2014 dated 25.8.2014 and W.P.No.14639 of 2014 dated 6.6.2014. 13. Heard the learned Senior counsel appearing for the petitioners and the learned counsel for the respondents and carefully perused the materials placed on record. 14. Though the learned Senior counsel for the petitioners made elaborate submissions on the scheme of FEMA and as to how the procedure under Rule 4 of the Rules have to be followed, to decide the controversy involved in this Writ Petition, it may not be necessary to refer to the manner in which the adjudicating authority has commenced the proceedings, since the challenge is only to an interlocutory order passed by the respondent. In W.P.No.18096 of 2013, somewhat identical prayer was made by the petitioner therein. The said Writ Petition was filed challenging the order passed by the respondents, rejecting the request for cross examination. In fact identical submission was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a prayer was made to forbear the respondents from holding adjudicating proceedings pursuant to the show cause notice without first complying with Rule 4(3) of the Rules and communicate the reasons, this Court by order dated 25.8.2014, dismissed the Writ Petition. While doing so, reference was made to Rule 4 of the Rules and it was observed as follows: "9. A careful look at the provisions of sub-rules (1) to (12) of Rule 4 would show that the enquiry by the respondent, comprises of five stages, which are as follows:- 1. The issue of show cause notice of a duration of not less than ten days, calling upon the person to show cause as to why an enquiry should not be held, for any contravention. 2. The issue of a notice fixing the date for the appearance of the person, if after considering the cause shown by the person to the show cause notice, the adjudicating authority is of the opinion that an enquiry should be held. 3. The explanation by the adjudicating authority in person, either to the noticee or to his authorised representative, the contravention committed by the noticee with reference to the provisions of the Act or the Rules or the Regulations. 4. Giving of an opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the representation made by them dated 12.7.2010 is misconceived and the respondents rightly rejected the same. The petitioners cannot device their own procedure as per their whims and fancies and they are bound to follow the procedure contemplated under the Act and Rules. Hence, no grounds are made out to interfere with the impugned order. 18. Learned Senior counsel for the petitioners submitted that the show cause notice itself is vitiated on account of failure to follow the procedure under Rule 4 of the Rules and it is submitted that the adjudicating authority has straight away proceeded to the stage of Rule 4(4) of the Rules. 19. Though the show cause notice is not the subject matter of challenge in this Writ Petition, nevertheless, since arguments were advanced on behalf of the petitioner, the contentions raised are also considered. 20.On a bare reading of the show cause notice it is seen that a complaint was made under section 16(3) of FEMA for contravention of the provisions of FEMA. The adjudicating authority on a perusal of the complaint and after considering the cause assigned by the complainant in the said complaint, stated that it appears that there is contraventio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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