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Connor Information Techno. Ltd. Versus Spl. Dir. of Enforcement Directorate, New Delhi

2015 (3) TMI 1165 - APPELLATE TRIBUNAL FOR FOREIGN EXCHANGE, NEW DELHI

Application for amendment in the memo of appeal - Held that:- The amendment application appears to have been made bonafidely and through it the appellant wants to bring on record the subsequent developments. Through the proposed amendment, no new cause has been set up by the appellant and is in continuation of the facts which were placed earlier. The subsequent developments are being placed before the Tribunal, so that they may be duly considered at the time of the final disposal of the appeal. .....

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ered Accountant assisted by Ms. Natasha Sarkar, Legal Consultant, for the Respondent. ORDER [Order per : V.K. Mathur, Chairperson]. - The appellant has moved an application for amendment in the Memo of appeal contending that the appeal filed by the appellant against the Adjudication order, dated 31-3-2010 is pending adjudication and has not been heard so far. Against the common impugned/adjudication order, the Managing Director, Directors and Vice-President have also preferred connected appeal N .....

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Exchange Management (Export of Goods and Services) Regulations, 2000. It has been contended that significant developments have taken place after the filing of the appeal which are relevant and necessary to be placed on records. Therefore, the proposed amendment is essential. 2. Through the proposed amendment the details of incorporation of the company and details of agreement are proposed to be added. It has been contended that the appellant pursued with GIT to realize the export proceeds .....

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that since the STPI could not provide information and certification for some other bills and forms, the RBI did not provide ex post facto approval for the same. The details of financial status of the company and the difficulty and hardship in making the payment have also been explained in proposed paragraph 3.19 of the amendment application. Auditors report is also proposed to be placed as Annexure A-14. In addition to it fresh grounds for challenge from paragraphs capital R to capital X are als .....

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lication has been filed by the appellant in 2013, claiming to have realized the un-realized export proceeds. However, the appellant had not realized the export proceedings in time nor had taken reasonable steps for realization, therefore appellant has clearly contravened the provision of Sections 7 & 8 of FEMA, 1999. It has also been stated that invoking the remedy of amendment under order VI R 17 of the Civil Procedure Code does not help the petitioner as the real question remain unaltered .....

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the purpose of determining the real question in controversy between the parties. The rules are framed by the Central Government under Section 46 of the Act and smuggling through the provision of order VI Rules 17 CPC would be ultra vires. 4. It has also been contended that the motive behind moving the application is to ask the Tribunal to examine and weigh evidence submitted, regarding alleged realization which is beyond the scope of Section 19 and Section 28. It has also been contended th .....

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erson committing the contravention from the consequences thereof. Therefore, the impugned order is correct. It has also been contended that the appellant has failed to take necessary approval during the course of investigation and prior to passing of the impugned order. Subsequent regularization letters only regularize the export proceeds brought into the country belatedly but in no way this absolve the appellant of the contravention of Sections 7 & 8 read with Regulation 8, 9 and 13 and Sec .....

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ip will be caused to the appellant. 5. Rejoinder to the objection has been filed by the appellant reiterating the contentions of the amendment application. Affidavit of Shri A.S. Seshagiri Rao, Managing Director has also been filed in support of the rejoinder. It has been pleaded in the rejoinder that the objections have been filed without any authorization from the respondent. The contentions of the objection have been refuted. It has been reiterated that the applicant had sought approval .....

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ition of the applicant has to be brought on record. The contentions of paragraph 8 of the objection have been denied and it has been pleaded that the provision of Section 28 of FEMA 1999 do not restrict this Tribunal or Special Director (Appeals) from following procedure under CPC. The provisions of CPC are in consonance with the principles of natural justice. The contentions of paragraph 9 of the objection have also been denied and it has been pleaded that the entire chain of events which have .....

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matter for writing off was pending before the RBI and the impugned order could not have been passed by the Special Director. The contentions of paragraph 12 have also been denied. In reply to paragraph 13 of the objection it has been stated that the reliance placed on the applicability of the Section 19 FEMA which is misplaced as no statutory period is prescribed either under the FEMA or rules to bring the additional or subsequent information on record. The contentions of paragraphs 14 and 15 of .....

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that to bring subsequent developments which have taken place after the institution of the appeal, the application for amendment has been moved so that the Tribunal after taking into account the subsequent developments which are very material and relevant, may decide the appeal on merits. The Adjudicating officer did not afford sufficient time or opportunity to the appellant to place the details of the efforts being made for realization by the appellant of the unrealized export proceeds. After t .....

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ppellant and there was nothing more left which could be attempted by the appellant. 8. Further submission is that under order 6 Rule 17 CPC the amendment may be moved and allowed at any stage of the proceedings including at the appellate stage and appeal is treated to be continuation of the original proceedings. To impart justice to the parties it is necessary that the Tribunal must have correct facts and the legal position before it. Though the provisions of CPC are not directly applicable .....

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the merits of the case that comes before them and consequently may allow all the amendments that may be necessary for determining the real question in controversy. It has also been held in the judgment that the role of amendment is essential and role of justice, equity and good conscience and the power of amendment should be exercised in the larger interest of doing full and complete justice to the parties. 10. Reliance has also been placed on Pasupuleti Venkateshwarlu v. The Motor & Ge .....

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, decided on 5-4-1974 by Hon ble Delhi High Court wherein principles of allowing the amendment application have been laid down. Lastly, it has been submitted that the application has been made in good faith and the appellant has come with clean hands and his bona fides cannot be doubted. Therefore, the application deserves to be allowed. 12. Ld. Presenting Officer/CA has vehemently opposed the application and has contended that adequate opportunity was afforded to the appellant to bring on .....

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pellant has failed to show that the proposed amendment is necessary for the purpose of determination of the real question in controversy between the parties as is contemplated under order 6 Rule 17 of CPC. The realization of some of the export proceeds do not alter or change the real question involved in the appeal. The fact remains that the appellant has failed to realize the same in time and also failed to take reasonable steps for its realization. The Tribunal is not bound by the procedure la .....

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a delay in moving the amendment application. The regularization letter by RBI was issued on 2-1-2013 and the application was filed in June, 2013 which is beyond the statutory limit of 45 days as mandated under sub-section (2) of Section 19. 13. Reliance has been placed on the judgment of Subrata Roy Sahara v. Union of India in WP (Criminal) No. 57/2014, decided on 6-5-2014. It has been submitted that the Hon ble Supreme Court framed a question as to whether it was imperative for the Hon ble .....

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8(1) of FEMA, 1999. 14. We have considered the submissions of ld. counsel for the appellant as well as ld. Presenting Officer/CA. 15. It is true that Section 28 FEMA, 1999 which prescribes the procedure and powers of the Appellate Tribunal and Special Director (Appeals) does not specifically mention under sub-section (2) power to allow amendment . Further it has been provided under sub-section (1) of Section 28 that the Appellate Tribunal and the Special Director (Appeals) shall not be .....

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equently allow all the amendments that may be necessary for determining the controversy between the parties, provided it does not cause injustice or prejudice to the other side. In para 18 of the said judgment relied upon by the ld. counsel for the appellant it has been observed by Hon ble Supreme Court that It is settled by catena of decisions of this Court that the rule of amendment is essentially a rule of justice, equity and good conscience and the power of amendment should be exercised in t .....

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t in para 4 it has been observed that the procedure is a hand made and not a mistress of the judicial process. If a fact, arising after the lis has come to court and has a fundamental impact on the right to relief or the manner of mounding it is brought diligently to the notice of the Tribunal, it cannot blink at it or be blind to events which stultify or render inept the decretal remedy. Equity justifies bending the rules of procedure where no specific provision or fairplay is violated…& .....

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evelopment in the matter will not be in conflict with the principles of natural justice. Further, though the provisions of order 6 Rule 17 CPC have not been made applicable directly under FEMA 1999, however, very the object of permitting amendment in pleadings and the requirement of bringing material/substantial subsequent developments in proceedings which are of quasi civil nature have not been put to judicial scrutiny by the Highest Court of the land in the matter of Subrata Roy Sahara. The ba .....

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ur view is not an appropriate stage to consider the merits of the arguments that since, prima facie a technical violation is made out the amendment application should be rejected. In Pasupuleti Venkateswarlu's case the Hon ble Supreme Court has gone to the extent of observing that equity justifies bending of the rules of procedure where no specific provision or fairplay is violated. 21. As far as, the judgment of the Hon ble Supreme Court in WP (Cri.) 57/2014 Subrata Roy Sahara v. Union .....

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