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2016 (4) TMI 782

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..... no remedy available against an order of the Adjudicating Authority, viz., Assistant Director and Deputy Director in the event of they passing illegal adjudication order. For eg., in the event the Assistant Director passes an order finding contravention of the provisions of Section 13 but rejects the application on technical ground whether there shall be no remedy against such an order. The right of appeal given to the person aggrieved has to be given meaning and purpose which may advance the object of the Act. Denying right of appeal against any order passed by the adjudicating authority shall be defeating the purpose and object of the Act. Hence we are inclined to take the view that the Assistant Director, who is also a complainant can file appeal before the Special Director under Section 17(2). When Officer of the rank of Assistant Director and above in the Directorate of Ministry of Finance has been empowered to file appeal under Section 35 of the 1999 Act in the High Court, we are not persuaded to accept the submission that Assistant Director was incompetent to file an appeal before the Special Director. More so, both in the memorandum of appeal as well as the counter affida .....

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..... thur for a direction to the police to handover the seized property. The Additional Civil Judge passed an order allowing the application, but put certain conditions. The 4th respondent had filed Crl.Revision No.119 of 2007 in the Court of District and Sessions Judge, Mangalore for removal of three conditions. The Principal Sessions Judge by order dated 1.8.2007 allowed the revision and removed the conditions. The Sessions Court directed the police to handover the seized Indian currencies and other properties to the 4th respondent. The 4th respondent Assistant Director, after completing the investigation, filed a complaint under Section 16(3) of 1999 Act before the Deputy Director (Adjudicating Authority), Directorate of Enforcement, Bangalore. The Adjudicating Authority issued show cause notice dated 20.12.2007 to the petitioners requiring to show cause as to why adjudication proceedings as contemplated under Section 13 of THE 1999 Act could not be held against them. Reply to the show cause notice was given by the petitioners. The Adjudicating Authority, the Assistant Director, heard the petitioners and passed an order on 03.07.2013 by which, the penalty of ₹ 5,25,000/- was im .....

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..... nd it was further prayed that the Appellate Authority may be directed to decide Ext.P8 review petition. The writ petition was heard by learned Single Judge. The learned Single Judge noticed that against the order passed by the Appellate Authority, an appeal is provided under Section 18 of 1999 Act to the Appellate Tribunal. The writ petitioners had challenged the order of the Appellate Authority on the ground of want of jurisdiction and denial of natural justice, hence, the learned Single Judge proceeded to consider the submission. The learned Single Judge held that appeal filed by Assistant Director was maintainable. The argument of violation of natural justice was rejected and the learned Single Judge dismissed the writ petition. Aggrieved by the order of the learned Single Judge, this writ appeal has been filed by the writ petitioners. 5. Sri.Joshi N. Thomas, learned counsel for the appellants in support of the writ appeal contends that the appeal filed before the Special Director (Appeals) i.e. the 5th respondent by the Assistant Director, Directorate of Enforcement, the 4th respondent, was not maintainable. He contends that the Assistant Director is the Adjudicating Authori .....

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..... reliance on the judgment of the Madras High Court in Director of Enforcement, Madras v. Rama Arangannal and another [AIR 1981 Madras 80], ADI Pherozshah Gandhi v. H. M. Seervai, Advocate General of Maharastra, Bombay [(1970) 2 SCC 484] and Mohtesham Mohd. Ismail v. Spl. Director, Enforcement Directorate and Another ([2007] 8 SCC 254). 9. We have considered the submissions of learned counsel for the parties and perused the records. 10. From the submissions of learned counsel for the parties and pleadings on record, the following issues arise for consideration in this appeal: (i) Whether the 4th respondent, Assistant Director, Directorate of Enforcement can be said to be an aggrieved person from the order dated 3.7.2013 of the Adjudicating Authority, the Assistant Director, Directorate of Enforcement so as to file an appeal under Section 17(2) of 1999 Act. (ii) Whether the appeal was decided in violation of the principles of natural justice? 11. The issue to be considered in this Writ Appeal is whether the appeal filed by the Assistant Director, Directorate of Enforcement, 4th respodent before the Special Director against the order dated 03.07.2013 by the Adjudicatin .....

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..... o (3) which are relevant are quoted below: 16. Appointment of Adjudicating Authority.-(1) For the purpose of adjudication under section 13, the Central Government may, by an order published in the Official Gazette, appoint as many officers of the Central Government as it may think fit, as the Adjudicating Authorities for holding an inquiry in the manner prescribed after giving the person alleged to have committed contravention under section 13, against whom a complaint has been made under sub-section (3) (hereinafter in this section referred to the said person) a reasonable opportunity of being heard for the purpose of imposing any penalty: Provided that where the Adjudicating Authority is of opinion that the said person is likely to abscond or is likely to evade in any manner, the payment of penalty, if levied, it may direct the said person to furnish a bond or guarantee for such amount an subject to such conditions as it may deem fit. (2) The Central Government shall, while appointing the Adjudicating Authorities under sub-section (1), also specify in the order published in the Official Gazette, their respective jurisdictions. (3) No Adjudicating Authority shall hold .....

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..... re in any particular case, the Appellate Tribunal is of the opinion that the deposit of such penalty would cause undue hardship to such person, the Appellate Tribunal may dispense with such deposit subject to such conditions as it may deem fit to impose so as to safeguard the realisation of penalty. Section 35 provides an appeal to the High Court. Section 35 provides as follows: 35.Appeal to High Court : Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law arising out of such order: Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days. Explanation.-In this section High Court means - (a) the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain; and (b) where the Central Government is the aggrieved party, the High Court within the ju .....

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..... Stated the following: ...It is said that any person aggrieved by any order of the Court is entitled to appeal. But the words person aggrieved do not really mean a man who is disappointed of a benefit which he might have received if some other order had been made. A person aggrieved must be a man who has suffered a legal grievance, a man against whom a decision has been pronounced which has wrongfully deprived him of something. Bramwell LJ in the above judgment expressed himself in the following manner: ...the general rule is that an appeal must be by the party who has endeavoured to maintain the contrary of that which has taken place. It is not so much that there is a disability on the part of the bankrupt to appeal, as that no one but the Comptroller is entitled to appeal. The passages extracted above from the judgment of James LJ was considered by the Court of Appeal in Ex p Official Receiver, re Reed Bowen Co. (1887) 19 QBD 174) by Lord Esher MR. Lord Esher MR made the following observations with regard to the above passage: This is not an exhaustive definition, but it is an affirmative definition of a person who may appeal, and at all events includes a .....

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..... djudication held that the said Aboobakar was not an evacuee. However, he issued a notice on the same day asking him to show why he should not be declared an intending evacuee. Tek Chand Dolwani filed an appeal being an informant and interested in the adjudication before the Custodian General of India praying for a declaration that Aboobakar was an evacuee. In the appeal, a submission was raised that Tek Chandr Dolwani was not a person aggrieved by the order passed by the Custodian and hence he has no locus standi to file the appeal under Section 24 of the 1949 Act. 17. Section 24 has been quoted in paragraph 14 of the judgment as follows: The tribunal constituted to hear appeals under section 24 has been constituted in these terms : Any person aggrieved by an order made under section 7, section 16, section 19 or section 38 may prefer an appeal in such manner and within such time as may be prescribed : (a) to the Custodian, where the original order has been passed by a Deputy or Assistant Custodian; (b) to the Custodian-General,, where the original order has been passed by the Custodian, an Additional Custodian or an Authorized Deputy Custodian. After elaborat .....

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..... 4 of the Act. In support of his contention, he has relied on a Single Judge decision of the East Punjab High Court in Messsers.Thakar Das Pyare Lal v. Custodian, Evacuees Property, East Punjab, Julundur, AIR 1950 EP 175 (A), in which in considering S.30 of the East Punjab Evacuees Property (Administration) Ordinance, which is equivalent to S.24 of the Act, it was held that no one has a right to appeal under S.30 of the Ordinance unless he can show that a decison has been pronounced against him, which has wrongfully deprived him of something, or wrongfully affected his title to something. In other words, the words aggrieved person in S.30 of the Ordinance do not really mean a man who is disappointed of a benefit which he might have received if some other order had been made. In my opinion, this decision has no application to the present case, because in that cse the appeal was not by the person in charge of the Custodian Department as is in the present case. In the Punjab case, an allotment made in favour of a person by the Provincial Government had been cancelled by the Custodian under S.10 of the Ordinance, and, therefore, it was held that it could not be said that such a person .....

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..... ved' in any one of a dozen other statutes, but what is its meaning in this part of this statute?' Accordingly, I only look at the cases to which we have been referred to see if there are general principles which can be extracted which will guide the Court in approaching the question as to what the words ''person aggrieved mean in any particular statute . If I may say respectfully I fully endorse this approach. I am now in a position to examine the Advocates' Act but before I do so I must refer to a case near in point to this case, than any case considered before. Analysing the provisions of the Advocates Act, 1961, the Apex Court held that the Advocate General is not a prosecutor on behalf of the Bar Council. The Apex Court after considering the role and function of the Advocate General in the case of disciplinary proceedings against the Advocate held that he cannot be a person treated to be aggrieved whether the decision is in favour or against him. In paragraphs 31 and 32 the following was stated: 31. In view of the common roll maintained by the Bar Council of India it appears to me that if anybody represents the Bar it would be the Bar Council of .....

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..... Lord Denning says that in these disciplinary proceedings the Attorney General is not a party as in a lis and after the decision, his duty ends. Lord Denning points this out clearly by saying that the Advocate General in that case could not have been aggrieved by the order of the Deputy Judge if he had acquitted the delinquent advocate in that case. The Attorney General's interest was found by Lord Denning in relation to the Crown and the Colony and that too for the special reason that appeal court had denied that the Deputy Judge possessed jurisdiction to hear the case. In our country the Advocate General does not represent the Executive or the Legislature or the Judiciary in disciplinary proceedings before the disciplinary committee. His function is advisory and more akin to an amicus curiae. He is not to take sides except in so far his arguments lend weight to the case of the one side or that of the other. Beyond that he is not interested in the dispute either in his personal capacity or in his capacity as an Advocate General. He does not represent the Government in these proceedings. If the Government was interested the notice would have gone to it. In other statutes, where .....

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..... n the High Court. Learned counsel for the respondent raised a preliminary objection that the appeal is not maintainable and that only Commissioner can file the appeal. Overruling the objections, the Division Bench of the High Court held that the Inspecting Assistant Commissioner was a person aggrieved. The following was held in page 729: In the case of Ebrahim Aboobakar v. Custodian-Genral of Evacuee Property, AIR 1952 SC 319), the person on whose information an enquiry was started by the custodian under the Evacuee Property Act was held to be an aggrieved person for the purpose of filing an appeal. When a person is given a right to raise a contest in a certain matter and his contention is negatived, then, he is certainly a person aggrieved by the order disallowing his contention. In the instant case, the IAC, the Competent Authority, had not only initiated the proceeding but he was made the sole respondent before the Appellate Tribunal to submit to a decision and when that decision went against him how can it be said that he is not a person aggrieved to file an appeal against that order. I, therefore, hold that the IAC, the Competent Authority, is an aggrieved person wit .....

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..... rovisions of Section 113 of the Companies Act defaulted in transfer of shares within the time specified in that Section. The Chief Judicial Magistrate dismissed the complaint on the ground that it was barred by limitation under Section 469 of the Code of Criminal Procedure. A revision was filed in the High Court which upheld the order of the Magistrate but Court also held the appellant incompetent to file appeal. A question arose as to whether the Registrar of Companies can be treated to be an aggrieved person . Facts of the case have been noted in paragraphs 3 and 4 which are as follows: 3. The issue to be decided in this appeal relates to an offence allegedly committed by the respondents under S.113 of the Companies Act, 1956 (referred to as the Act ). The complaint was filed by the appellant against the respondents on 28-8-1992 alleging that the respondents had, in violation of S.113 of the Act, defaulted in transfer of shares within the time specified in that section. The Chief Judicial Magistrate, Coimbatore by his order dated 30-3-1993 dismissed the complaint on the ground that it was barred by limitation under S.468 of the Code of Criminal Procedure (for short the Cod .....

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..... S.621 of the Act, we have no manner of doubt that the appellant would be a person aggrieved within the meaning of S.469(1)(b) of the Code in respect of offence (except those under S.545) against the Companies Act. 24. Now we come to the judgments which have been heavily relied on by the learned counsel for the petitioner, i.e. Director of Enforcement, Madras v. Rama Arangannal (AIR 1981 Madras 80) and Mohtesham Mohd.Ismail v. Spl.Director, Enforcement Directorate and Another (2007 [8] SCC 254). In the Madras case provisions of Sections 52 and 54 of the Foreign Exchange Regulation Act, 1973 came up for consideration. An order of adjudication was passed by the Director of Enforcement which was set aside by the Appellate Board. Appeal was filed by the Directorate of Enforcement against the order of the Appellate Board in the High Court. The Appellate Board has allowed the appeal filed by the respondent and set aside the order of adjudication dated 28.08.1972 by which the respondents were held guilty of the 1973 Act. The Director of Enforcement filed an appeal claiming himself to be the aggrieved person. A preliminary objection was raised that the appeal is not maintainable at th .....

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..... the appellant was prevented by sufficient cause from filing the appeal in time. Explanation.-In this section and in section 55, High Court means- (i) the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain; and ii) where the Central Government is the aggrieved party, the High Court within the jurisdiction of which the respondent, or in a case where there are more than one respodnent, any of the respondents, ordinarily resides or carries on business or personally works for gain. The Madras High Court held that since only the Central Government can file appeal under Section 54, the appeal by the Director of Enforcement is not maintainable. It was also observed that the Director of Enforcement cannot be treated as an aggrieved party since while passing the order he has acted only as a Quasi Judicial Tribunal and such Quasi Judicial Tribunal cannot have a grievance when the order is set aside by the higher authority. The following was stated in paragraph 4: 4. On the question as to the maintainability of the appeal, it is seen that the Explanation to Section 54 of the Foreign Exchange Regu .....

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..... he original order of assessment in his capacity as quasi judicial Tribunal, is enabled to file an appeal against the order of the Appellate Assistant Commissioner setting aside his orders, on the directions or at the instance of the Commissioner of Income-tax. Under Section 37 of the Tamil Nadu Central Sales-tax Act, power is given to the Deputy Commissioner of Commercial Taxes to file a revision to the High Court against the order of the Sales-tax Appellate Tribunal. We can cite many such instances where the statute specifically enables the initial quasi judicial authority to file an appeal against the reversal of its judgment by the appellate authority to a further appellate or revisional forum. Such a statutory provision is necessary for the reasons afore-stated as otherwise, it will lead to the inevitable conclusion that the initial authority had an interest in the dispute before it, and, therefore considers itself aggrieved when its judgment was reversed by an appellate forum. In this view of the mater, the Director of Enforcement, who is the appellant in this case cannot be said to be an aggrieved person. 25. In so far as the first observation of the Madras High Court tha .....

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..... ow: 4. At the outset it is submitted that the Assistant Director of Enforcement is both empowered to investigate cases and also act as quasi judicial authority for adjudicating contraventions of FEMA and also to file appeals on behalf of the Central Government. In this case, another Assistant Director and not the Adjudicating Authority himself has preferred an appeal and there is no bar under FEMA, 1999 any Assistant Director to file an appeal against the order of another Assistant Director (Adjudicating Authority) and Section 17(2) of FEMA states that any person aggrieved by an Order made by the Adjudicating Authority, being an Assistant Director of Enforcement or Deputy Director of Enforcement, may prefer an appeal to the Special Director (Appeals) . Hence, the appeal preferred by the Assistant Director of Enforcement before the Special Director (Appeals), is maintainable and the principles of natural justice have been followed at each and every stage. 27. Copy of the complaint filed by the Assistant Director, viz., Johnson K.George is Ex.P1 describing himself to be the complainant in the complaint. Adjudication order was passed by another Assistant Director, viz., M.Gan .....

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..... was empowered to prefer appeal on behalf of the Central Government. It was further held that the Central Government was not a party to the appeal. Further, appeal was filed in official capacity as Adjudicating Authority and not as delegate of the Central Government. The Apex Court further held that a Quasi Judicial Authority cannot prefer an appeal being aggrieved and dissatisfied with the judgment of the Appellate Authority. It is useful to quote paragraphs 8, 15 and 16 of the judgment: 8. Mr. Ashok Bhan, learned Counsel appearing on behalf of the respondents, however, relied upon a notification dated 22.09.1989, which reads as under : In exercise of the power conferred by subsection (1) of S.4, read with clause (e) of S.3 of the Foreign Exchange Regulation Act, 1973 (46 of 1973), the Central Government hereby appoints Shri S.S. Ranjhan to be an officer of Enforcement with the designation of Special Director of Enforcement, for the purpose of enforcing the provisions of the said Act; and in exercise of the powers conferred by S.51 of the said Act hereby empowers him to adjudicate cases of contravention of any of the provisions thereof, other than S.13, clause (a) of sub-se .....

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..... the Appellate Board. 29. Proposition laid down by the Apex Court in the aforesaid case is that the Special Officer who files an appeal is not entitled to file an appeal on behalf of the Central Government unless there is a specific or general order authorizing him to file the appeal. Further in the facts of the above case the Officer was appointed by Notification dated 22.09.1989 for the purpose of empowering him to adjudicate the cases of contravention of the provisions of the Act. Thus Central Government never authorized the Officer to file appeal on its behalf. It was further held that the Adjudicating Authority which exercised the Quasi Judicial power cannot challenge an order by which order of the Adjudicating Authority has been set aside. There cannot be any dispute to the proposition laid down by the Apex Court in the above case. However, the present is not a case where the appeal has been filed by the Assistant Director who was the Adjudicating Authority rather it has been stated that the appeal is by another Assistant Director. As noted above, another Assistant Director different from the Adjudicating Authority had conducted investigation and filed a complaint. The com .....

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..... s held that a person aggrieved within the meaning of Sec.17(2) cannot include the Assistant Director who is the complainant or Director of Enforcement who is empowered to enforce the provisions of the Act, there will be no remedy available against an order of the Adjudicating Authority, viz., Assistant Director and Deputy Director in the event of they passing illegal adjudication order. For eg., in the event the Assistant Director passes an order finding contravention of the provisions of Section 13 but rejects the application on technical ground whether there shall be no remedy against such an order. The right of appeal given to the person aggrieved has to be given meaning and purpose which may advance the object of the Act. Denying right of appeal against any order passed by the adjudicating authority shall be defeating the purpose and object of the Act. Hence we are inclined to take the view that the Assistant Director, who is also a complainant can file appeal before the Special Director under Section 17(2). (d) In the counter affidavit respondents have brought an order dated 6.3.2009 issued by the Government of India, Ministry of Finance (Annexure R1([b]) which is to the fo .....

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..... tion and imposed penalty however refused to confiscate the amount seized. No appeal was filed by the appellants against the order of the Adjudicating Authority imposing penalty. Thus the appellants were not allowed to raise submissions regarding finding of contravention. Scope of the appeal filed was as to whether the Adjudicating Authority has rightly refused to confiscate the amount seized or the amount deserves to be confiscated. We do not find any violation of principles of natural justice as contended by the learned counsel for the appellant. In the result, we find no merit in the appeal. Writ Appeal is dismissed. Parties shall bear their costs. ASHOK BHUSHAN, CHIEF JUSTICE. A.M. SHAFFIQUE, JUDGE . After we pronounced the judgment, learned counsel for the appellants made an oral prayer for grant of certificate under Article 134A of the Constitution of India. As per Article 134A r/w. Article 132(1), certificate under Article 134A may be given when a case involves substantial question of law as to the interpretation of the Constitution of India. In the present writ appeal, we don't find any such substantial question of law is involved as to the interpretation of .....

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