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MOHAN ALWANI Versus DIRECTOR, ENFORCEMENT DIRECTORATE AND ANR.

2015 (5) TMI 907 - DELHI HIGH COURT

Violation of the provisions of Section 9 (1)(b) and 9(1)(d) of FERA - Receipt and distribution of money - Receipt of commission - Validity of assessment proceedings - inordinate delay in conclusion of the proceedings - Held that:- Frivolous proceedings or proceedings taken out to merely delay the day of reckoning cannot be treated as proceedings taken in good faith, and that, mere fact on an application or petition, a stay is granted by a superior court is no ground to construe that the proceedi .....

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ic delays”. In sum, the guideline formulated is to balance and weigh all relevant factors.

Respondents from very inception have procrastinated in prosecuting the case unmindful of the detriment that it would cause to the petitioner. - petitioner, was entitled in law to seek copies of the relied upon documents. The fact that respondents admittedly kept them back till March 2004 clearly shows that either they lacked, for whatever reasons, the interest to prosecute the petitioner or, the .....

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ome to light if, an opportunity was given to the petitioner to cross-examine the panch witnesses, who accompanied the official witnesses at the time of search. - Similarly, the production of co-noticees who allegedly received moneys distributed by the petitioner was equally important from the point of view of the petitioner. These persons have not been produced for cross-examination at least since 2004; despite a categorical request made in this behalf in the communication dated 27.07.2004 addre .....

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dicatory process with due expedition. - adjudication cannot proceed any further on account of undue and unexplained delay in concluding the proceedings. Accordingly, the adjudication proceedings, which commenced vide memorandum dated 14.11.1995, are quashed. - Decided in favour of appellant. - WP(C) 375/2014 - Dated:- 6-5-2015 - MR. RAJIV SHAKDHER, J. For The Petitioner : Mr. R.K. Handoo, Mr. Yoginder Handoo and Mr. Salil Maheshwari, Advocates For The Respondent : Mr. Jasmeet Singh, CGSC JUDGMEN .....

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nforcement Director and yet they have not reached culmination. Thus, in effect, the challenge by the petitioner is raised and confined to one singular ground, which is unexplained delay, which he says, is not attributable to him. 2. In order to appreciate the contours of the challenge laid by the petitioner, it would be relevant to notice the following broad facts :- 2.1 It appears that based on information received by the Enforcement Directorate (in short the E.D.), a raid was conducted at D-43 .....

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ith a SCN. In the SCN, broadly, the allegation made against the petitioner, was that, in his statement he had accepted the fact that he was receiving and distributing moneys at the behest of one Mr. Haji, a resident of Dubai; for which, he was, receiving commission at the rate of ₹ 200/- per one lakh rupees. This activity, as per the statement of the petitioner made to respondents, and as, recorded in the SCN, was on since, middle of April, 1995. 2.4 There was also a reference to certain c .....

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ons of Section 9 (1)(b) and 9(1)(d) of FERA, whereas against those who had received money, it was alleged that they had contravened provisions of section 9(1)(b) of FERA. 2.6 The petitioner was also called to show cause why the sum of ₹ 7 lakhs seized from his premises , should not be confiscated under section 63 of FERA. 2.7 The SCN, had appended to it a list of relied upon documents, including, the panchnama dated 18.05.1995; statements of the petitioner and other persons (Amarjit Singh, .....

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ition that the petitioner retracted his statement made before the E.D. on 29.05.1995 as, according to him, it was taken under coercion. 3.1 It is the case of the petitioner that he received the aforementioned SCN at his residence in Ajmer in Rajasthan, only on, 17.07.1997 i.e., after nearly one year and eight months. 3.2 It appears that, immediately thereafter, on 13.08.1997, the petitioner acknowledging the receipt of the SCN sought copies of relied upon documents as they did not accompany the .....

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as sent via his advocate. 3.5 In this communication sent by the petitioner s advocate, reference was made to the earlier communications on the subject, dated 13.08.1997 and 24.01.1998. The assertion in this communication apart from anything else was the failure on the part of E.D. to supply the relied upon documents. On the record, the petitioner has placed copies of postal receipts of all three communications i.e., communication dated 13.08.1997, 24.01.1998 and 23.10.1998. 3.6 The record shows .....

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in whose favour a draft had to be drawn up for supply of relied upon documents. In this letter, reference was given to the letter dated 19.11.1998 issued by Special Director of E.D. 3.8 Concededly, between 1998 and 2004, there was a complete silence on the part of the respondents with regard to this aspect of the matter. For the first time, on 17.03.2004, relied upon documents were, apparently, supplied to the petitioner. 3.9 I may only note that it is the case of the petitioner that even at thi .....

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innocence should be given an opportunity to cross-examine the investigating officer, the panch witnesses, and the co-accused whose statements were sought to be relied upon by the respondents. 4.1 This request lay dormant for nearly two years and five months. The proceedings were recommenced on 20.12.2006 when, the petitioner was given an opportunity to cross-examine two witnesses. These being, two officers of the E.D. i.e., Mr. A.K. Narang, Assistant Director and Mr. A.K. Mahajan, Assistant Enfo .....

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counsel indicated that since the matter was nearly 18 years old, the record of the case was not traceable with his client, and therefore, the respondents should supply the notice alongwith documents so as to enable the petitioner to proceed in the matter. 4.3 It appears that on 21.11.2013, a hearing was held in the matter when, according to the petitioner, some documents were supplied. Furthermore, a call notice dated 21.11.2013 was also issued fixing further date of hearing on 19.12.2013. 4.4 I .....

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pletely illegible. The fact that proceedings had gone on for 18 years, which had taken a toll on the petitioner s health, resources and financial capacity, was also brought to fore. A prayer was made that the proceedings against the petitioner ought to be dropped. In the alternative it was stated that in case the respondents chose to proceed ahead, they should supply him with the copy of the document, which was found to be illegible, and also, produce the persons referred to in the said letter f .....

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for being given an opportunity to cross-examine the persons, who were referred to in his more recent letter of 16.12.2013. In this context it was indicated that hearing fixed for 20.12.2013 and 23.12.2013, would serve no purpose unless the request made were complied with. 4.6 A request was also made that the hearing in the matter be fixed in January, 2014 subject to the convenience of the respondents so as to enable the petitioner to travel from Ajmer (Rajasthan), as he, evidently, required ass .....

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ates i.e., 13.03.2015 and 17.03.2015; whereupon judgment in the matter was reserved. SUBMISSIONS OF COUNSELS 5.1 On behalf of the petitioner, arguments were advanced by Mr. R.K. Handoo, while submissions on behalf of the respondents have been made by Mr. Jasmeet Singh, Advocate. 5.2 The submissions of Mr. Handoo veer around a singular contention that there has been an enormous delay in the conclusion of the adjudication proceedings, and that, delay, has resulted in causing detriment to the petit .....

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espondents. The money, which was found in the possession of the petitioner, according to the learned counsel, was to be utilized for the said purpose. The explanation given for his presence at Minto house premises was thus : the petitioner had on one of his trips to Delhi befriended one, Mr. Prem, who had asked him to visit his place located at Minto Road. 5.5 According to the learned counsel, the petitioner was accosted and, thereafter, arrested and implicated only for the reason that the other .....

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not reactivate the matter till 2013, save and except for an opportunity being given in December 2006, for cross-examining two official witnesses. 5.7 Mr. Handoo, thus said, that, in this process the respondents have ensured that the Sword of Damocles keeps hanging on the petitioner. The enormous time-lag has ensured loss of crucial evidence, the petitioner s own record in support of his case, is unavailable. The respondents have failed despite request to supply even, in 2013, a copy of the docum .....

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5.8 The learned counsel made it a point to bring to my notice that such is the lackadaisical approach of the respondents that they failed to comply with the statutory provisions of Section 61 of FERA which, then propelled the court to discharge the petitioner in the criminal proceedings. This order of the ACMM dated 28.04.2010, has attained finality. 5.9 In support of his submissions, the learned counsel relied upon the following judgments : Lokesh Kumar Jain Vs. State of Rajasthan, JT 2013 (9) .....

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unt of various requests made by the petitioner s counsel for accommodation. 6.1 In this behalf, the learned counsel brought to my notice, the proceedings which were adjourned from time to time in December 2013. 6.2 The learned counsel, however, conceded that the relied upon documents were supplied to the petitioner only on 17.03.2004. 6.3 In respect of both these aspects, the learned counsel relied upon the averments made in paragraph 3 of the counter affidavit contained under the heading, preli .....

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.2006. 6.5 As regards the petitioner s request for supply of the illegible fax was concerned, Mr. Jasmeet Singh stated that since the fax was available on thermal paper, the same had become illegible over a period of time. 6.6 Apart from the above, what was sought to be conveyed by the learned counsel, was that, the petitioner s story was completely unbelievable which is that, he was carrying a sum of ₹ 7 lakhs to purchase medicines when, at the relevant point in time, under the provisions .....

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ould or should not quash adjudication proceedings on the ground of delay, it would have to take into account the entirety of facts and circumstances, which would include inter alia, the circumstances which highlight the delay caused by the noticee and the seriousness of the offence. The learned counsel submitted that no time limit could be fixed by the court for conclusion of adjudication proceedings. 6.8 In support of his submissions, the learned counsel relied upon the judgment of the Supreme .....

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, which have penal consequences. The genesis of such a plea is based on the judgments of the Supreme Court and various High Courts in respect of delay in prosecution of criminal cases. 7.1 The Supreme Court has time and again ruled that inbuilt in the fundamental right conferred under Article 21 is a right of the accused to expect that the State would prosecute and try his case with speed and expedition. The judgment of the Supreme Court in Hussainara Khatoon Vs. Home Secretary, State of Bihar, .....

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e concerns of the accused have to be examined, which would include factors such as the worry, anxiety, expense and disturbance caused to his vocation as a result of unduly prolonged investigation, enquiry or trial; and furthermore - whether undue delay results in impairment of ability of the accused to defend himself on account of death, dis-appearance or non-availability of witnesses. The court also factored in caveats such as : determination to answers, as to who was responsible for the delay; .....

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t that frivolous proceedings or proceedings taken out to merely delay the day of reckoning cannot be treated as proceedings taken in good faith, and that, mere fact on an application or petition, a stay is granted by a superior court is no ground to construe that the proceedings are not frivolous as very often such orders are obtained on exparte representation. In effect, it was observed by the court that while it may not be advisable or practicable to fix time limit for trial of offences, the c .....

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t, a seven-judges bench of the Supreme Court in the case of P.Ramachandra Rao was called to rule as to whether courts could prescribe a period of limitation which if crossed would lead to termination of legal proceedings. The seven-judges bench of the Supreme Court reiterated the ratio of the judgment of the Constitution Bench in Abdul Rehman Antulay s case and in particular, ruled in line with the said judgment that it was neither advisable nor practicable to provide for a period of limitation. .....

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e) but also qua adjudication under economic laws. 7.6 There are two judgments on this aspect of the matter. The first judgment is of the Division Bench of the Bombay High Court in the case of Smita A. Patel where a Division Bench quashed adjudication proceedings under FERA due to a colossal delay of 16 years. The Division Bench ruled that such delay resulted in mental and physical and harassment to the petitioner, in that case. The proceedings were quashed and costs in the sum of ₹ 15,000/ .....

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ed after lapse of more than 12 years. 10. It is no doubt true that no period of limitation in the Statute to complete the adjudication proceeding is prescribed. But the Apex Court in the case of Government of India Vs. The Citedal Fine Pharmaceuticals Madras and Ors, 1989 (42) E.L.T. 515 (S.C.) = AIR 1989 SC 1771 was pleased to rule that in absence of any period of limitation, it is settled that every Authority is to exercise the power within a reasonable period. What would be reasonable period .....

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n record to justify inaction for such a long period of 12 years for which petitioner is definitely not responsible.. 7.8 A single judge of our court in the case of R.P. Nanda has based on the judgments of the Supreme Court quashed the disciplinary proceedings at the charge-sheet stage in exercise of power under Article 226, on account of unexplained delay. 7.9 As a matter of fact, in the case of Eskay Electronics (I) Pvt. Ltd. and Ors. Vs. P.K. Khera, Superintendent, Central Excise, Preventive, .....

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d. 9. In the present case, what emerges from the record is clearly this, that the respondents from very inception have procrastinated in prosecuting the case unmindful of the detriment that it would cause to the petitioner. 9.1 In this context, the following periods of delay, which are not denied, are easily captured. (i). Though the raid and search on the Minto Road premises was conducted on 18.05.1995, the SCN dated 14.11.1995, was served on the petitioner, only on, 17.07.1997. (ii). Concededl .....

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s. (iii). The respondents instead of supplying the relied upon documents straightaway to the petitioner vide communication dated 19.11.1998 asked him to collect the same from their Zonal Office at Delhi. (iv). The petitioner s request that he be intimated the amount to be sent in that behalf and the person in whose favour the draft had to be drawn, went unheeded. (v). Admittedly, the relied upon documents were supplied by the respondents only on 17.03.2004. From the date of search, by this time, .....

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nearly 7 years, the respondents, in a manner of speech, went into a state of comatose. The proceedings were resurrected, which led to a spate of correspondence, to which I have made a reference above. 10. In this circumstances, can it be said that the petitioner was responsible for delay in conclusion of the adjudicatory process. In my view, the answer has to be in the negative. The petitioner, was entitled in law to seek copies of the relied upon documents. The fact that respondents admittedly .....

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petitioner to summon panch witnesses, the said request was declined by the respondents. This request attains significance as SCN proceeds on the basis as if the petitioner was the owner of the Minto Road premises. The premises, (since then demolished) was, concededly, a Government accommodation. The reason why the petitioner happened to visit the Minto Road premises would have, perhaps, come to light if, an opportunity was given to the petitioner to cross-examine the panch witnesses, who accompa .....

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