TMI Blog2015 (8) TMI 1381X X X X Extracts X X X X X X X X Extracts X X X X ..... e findings of the Hon’ble High Court shall prevail over the findings of Adjudicating Authority unless a distinction on some factual and legal grounds can be made to show that the findings of the Hon’ble High Court are not applicable and have no effect at all, in other words our interpretation is that the order of the Hon’ble High Court will have definite persuasive and binding effect in the matter of interpreting the findings of adjudicating proceedings based exactly on the same set of facts subject to being clearly not being distinguished on facts or law. In view of the above, we are of the view that no contravention of Sections 18(2) and 18(3) of FERA, 1973 r/w notifications of Central Government dated 1-1-1974 is made out against the appellants and since the appellants appear to have taken all reasonable steps to receive or recover the payments for goods and they cannot be presumed to have contravened the said provisions r/w Central Government notifications. - Appeal Nos. E/215-216 & 219/2006 - - - Dated:- 7-8-2015 - Vinay Kumar Mathur, Chairperson and Dr. H.K. Mudgil, Member Shri R.K. Handoo, Advocate, for the Appellant. Shri Rahul Meena, Legal Consultant, for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AB 963078, AD 769081, AD 769158, AD 554914, AD 554987 and AD 554952 for U.S. $ 2400, US $ 3210, U.S. $ 2800, U.S. $ 28,000, U.S. $ 18,720 and U.S. $ 24,528 respectively stood unrealized and the company had initiated legal action against the buyers, namely, M/s. Amber International, New York. It further stated that a cheque of US $ 28,000 issued by a buyer as part payment was dishonoured and on failure to realize the proceeds, the company has filed suit No. 2995 of 1995 in Hon ble Delhi High Court for recovery of ₹ 41,12,960 and the appellant company in the mean time has also applied to the RBI for extension of time. 5. The appellant company further stated that goods worth US $ 1,34,352 had been exported under the cover of GR Form Nos. AJ 212449, AJ 212450, AL 633715, AJ 212448, AM 617885, AM 617886, AM 617887 and AM617883 to Ms. Ken Wright Ltd., Moscow, Russia and the buyer had cleared the goods but had remitted only a payment of US $ 20,000 and the company had issued a legal notice for recovery of ₹ 61,62,000 to it. 6. The appellant company further informed that with regard to realization of export proceeds in relation to GR Nos. AB915874, AJ735776, AJ212407, AJ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime to submit replies. No replies were filed and 28-8-2002 was fixed for personal hearing by the Adjudicating Authority on which date Shri M.K. Monga, Director appeared. It was also informed subsequently by the appellants that necessary applications for extension/write off to RBI have been moved and are being pursued through the authorized dealer. Copies of letters addressed to the bank and RBI were filed. The RBI through a letter dated 14-5-2002 advised the appellant company to approach the authorized dealer and provide details of realization of GRs in which the appellants claimed to have realized the proceeds and also to apprise the developments of legal proceedings for recovery. The company submitted statement dated 3-10-2002 of Bank of Maharashtra certifying total outstanding dues of ₹ 1,40,45,882/- in respect of 32 GRs. Personal hearing took place on 27-1-2004 and 6-4-2004. It was submitted before the Adjudicating Authority that matter of non-realization of the proceeds was being dealt by the RBI under the provisions of FEMA, 1999. It was also informed by the appellant company that the company had filed suits before the competent Courts against the buyers for realization ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty of ₹ 15 lakhs has been imposed against appellant against A. Soni, Director while a penalty of ₹ 10 lakhs has been imposed against appellant M.K. Monga, Director. Aggrieved from the impugned order the instant appeals have been filed. 13. Shri R.K. Handoo, ld. Counsel for the appellants has submitted that the appellant company was incorporated under the Companies Act and carried business of manufacture and export of leather garments from 1990 to 1997. During financial year 1991 the export sales of the erstwhile partnership firm which was subsequently incorporated on 19-4-1995 were ₹ 22,94,642/- out of which an amount of ₹ 40,28,799.10 was realized. In financial year 1991-92 the firm exported goods worth ₹ 28,21,455/-and realized a sum of ₹ 23,90,294/-. Likewise in financial year 1992-93 the firm exported goods worth ₹ 1,50,14,786/- and realized amount of ₹ 1,46,88,809/-. While in 1993-94 out of exports of ₹ 3,43,93,977.50 the firm realized ₹ 3,17,78,175.50 and in financial year 1994-95 the firm against exports of ₹ 3,22,35,805/- realized ₹ 2,51,56,989/- and during financial year 1995-96 against exports of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quashed. 15. Submission is that doctrine of Estoppel is applicable in the instant appeals as the judgment of the Hon ble Delhi High Court based on the similar facts and interpretation which are in issue in the instant appeals will prevail over the decision of the Adjudicating Authority. The Adjudicating Authority in Paragraphs 33, 34, 35 and 37 of the impugned judgment has wrongly interpreted the law and has misunderstood the facts and thus has failed to exercise the jurisdiction properly, vested in it. The impugned order has been passed without due application of judicial mind. Principles of natural justice have been violated by holding the appellants guilty under FERA proceedings and imposing penalties arbitrarily. Submission is that Paragraphs 4, 7, 8, 9, 14, 16 to 26 and Para 28 of the judgment of Hon ble Delhi High Court, clearly lead to one and the only conclusion that the efforts made to realize and repatriate the export proceeds were, bonafidely made and were sufficient. It has been prayed that the appeals be allowed. Reliance has been placed upon S. Bhaskar Reddy Anr. v. Superintendent of Police Anr. - (2015) 2 Supreme Court Cases 365, G.M. Tank v. State of Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olice officers and the panchas who raided the house and effected recovery and where same set of witnesses were examined in both the proceedings but the Criminal Court on examination of the evidences came to the conclusion that no recovery was made from the house and hence, the raid was not proved, it would be unjust, unfair and oppressive to allow the findings recorded by the enquiry officers to stand against acquittal by judicial pronouncement. The Hon ble Court further observed that it would be unjust, unfair and oppressive to allow the decision of the authorized officer in confiscation proceedings to stand against acquittal by the competent criminal court which acquittal was confirmed by the High Court and by Hon ble Supreme Court. In Para 22 of the said judgment the Hon ble Supreme Court has observed that the adjudication proceedings under Section 70(1) concluded before the criminal case. The judgment of the criminal court was not before the authorized officer. However, the basic controversy of the authorized officer was whether the entire primary gold (bars) was recovered from the ornament top of the cupboard in the eastern bedroom as alleged by the appellants or whether some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. A.K. Maurya and Others, the Hon ble Delhi High Court while disposing of criminal MC No. 1757/2005 on 5-11-2007 [2008 (221) E.L.T. 501 (Del.)] in Para 14 has observed that in view of law laid down by Apex Court and High Courts there can be no recitation to hold that if the Government employee/public servant has been punished departmentally on his misconduct earlier and later on criminal case ended in acquittal and if the acquittal is clean and honourable, wherein accused has been completely exonerated from the offence alleged against him and the prosecution case has been found totally false with positive finding that the accused did not commit the offence in question and acquitted is not on account of benefit of doubt or lack of sufficient evidence, lack of sanction for prosecution or any other technical grounds he may be reinstated back in service with other consequential benefits including arrear and salary or other pensionery benefit admissible to him if retired earlier, by treating him in service. In other consideration where the acquittal is based on benefit of doubt or lack of sufficient evidence or lack of sanction for prosecution or any other technical ground, disciplina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproach and burden of proof would not be applicable in the instant case. Though finding recorded in the domestic enquiry was found to be valid by the Courts below, when there was an honourable acquittal of the employee during the pendency of the proceedings challenging the dismissal, the same requires to be taken note of and the decision in Paul Anthony s case (supra) will apply. We, therefore, hold that the appeal filed by the appellant deserves to be allowed. 22. In Narendra Mohan Arya v. United India Insurance Company Ltd. Ors. also relied upon by ld. Counsel for the appellants in which matter of termination of the appellant on the basis of disciplinary proceedings and the effect of findings in civil matter were involved on the basis of some facts were considered facts by the Hon ble Supreme Court it was held that the departmental proceedings was quasi criminal in nature and when approached by the appellant ought to have applied his mind to the subsequent event namely the decision of the civil court rendered in the suit filed by the firm. 23. We may point out at this stage that the case laws discussed herein before mostly relate to matters in which disciplinary proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived out of which one cheque of US $ 10,000 got bounced due to insufficiency of funds and the buyers had expressed his inability to pay the balance. It has also observed that in respect of consignment sold to M/s. Om Imports a part had been received and further payments were not received due to financial problems being faced by the buyer and the RBI bad been approached in this matter. In Paragraph 14 of the judgment, the Hon ble High Court has mentioned the communication dated 14-5-2002 issued by the RBI to the petitioner according to which the Reserve Bank of India was considering the case of the petitioner and had advised it (company) to apply for export/write off to the authorized dealer. In Paragraph 16 of the judgment the Hon ble Delhi High Court has dealt with the requirement of showing reasonable steps having been taken by the appellant for the recovery of the export proceeds and after considering the steps taken by the petitioner before the Hon ble High Court (appellant herein) has observed in last portion of the Paragraph 16 that regarding reasonable efforts that the test being the adequacy of step and not the number of steps. It has also been observed that even if one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards the ground taken by ld. Legal Consultant that the Adjudicating Authority could not have anticipated the results of criminal proceedings and decided the adjudication proceedings independently. We are of the view that the Adjudicating Authority was at liberty to appreciate the evidence on record in accordance with law according to its wisdom independently. However, as a principle of law it cannot be said that judgments in all criminal appeals will ipso facto result in quashing the adjudication proceedings under FERA alike disciplinary proceedings in matter in which the accused (employee) is honourably acquitted. There cannot be any jacket cast formula in this respect. However, we are of the view that findings of the Hon ble High Court even in a criminal matter on the same set of facts as involved in adjudication proceedings cannot be ignored or overlooked and brushed aside causally and will carry weight and in the eventuality of the Hon ble High Court recording either clean acquittal in appeal or quashing of the complaint/proceedings on the ground of insufficiency of evidence or failure to establish the contraventions, the findings of the Hon ble High Court shall prevail over th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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