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N. Pandu Ranga Versus The Asst. Director, Directorate of Enforcement & Another

2017 (8) TMI 423 - ANDHRA PRADESH HIGH COURT

Alternative remedy of appeal - Guilty for contravention of the provisions of Section 3(c) of the Foreign Exchange Management Act, 1999 - Held that:- When the statutory alternative remedy of appeal is available, the High Court should not entertain an application under Article 226 of the Constitution of India. When a right or liability is created by the statute, the High Court must insist that before availing remedy under Article 226 of the Constitution of India, a person must exhaust the remedies .....

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ate Forum shall consider the question of limitation having regard to the provision of Section 14 of the Limitation Act, 1963 and also having regard to the fact that petitioner Nos.2 to 4 were bona fidely pursuing their case under Article 226 of the Constitution of India before this Court. Along with the appeal, petitioner Nos.2 to 4 shall also make an application seeking interim order which shall also be dealt with. If an application seeking interim order is filed along with the appeal, the auth .....

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2 whereunder and whereby, the petitioner was found guilty for contravention of the provisions of Section 3(c) of the Foreign Exchange Management Act, 1999 (for short, FEMA ) and consequently, directed to pay penalty of ₹ 3,00,000/-. 2. The facts in issue are as under: On the basis of an information that Shri N.Pandu Ranga, who is the petitioner herein, received payment of ₹ 6 lakhs from a person in India, under the instructions of a person residing outside India, he was summoned unde .....

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m his friends and relatives; that during the last week of April/1st week of May, 2005, when his son called him on his residential telephone No.55177577, he reminded him of the commitment to repay the loans; that his son informed him that he would make arrangements and call back. Accordingly, during the 2nd week of May, 2005, his son called him again on his residential telephone number and informed him that he has arranged to send ₹ 6 lakhs which would be paid to him in Hyderabad by a perso .....

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to his residence and after verifying his name and also his daughter s name, paid him an amount of ₹ 6 lakhs in cash and told that the same was being paid under the instructions of Vijay of London. The person who paid the amount was tall, dark and thin and spoke in Hindi. After receiving the amount of ₹ 6 lakhs from the said person, he utilized a part of the amount towards repayment of the loans and the remaining amount for the renovation of his house. It was further stated that his .....

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tion, the writ petitioner died and his legal representatives are brought on record. 4. Though various grounds are raised more particularly, with regard to the jurisdiction of the authority in passing the impugned order and the missing link of transfer of money by foreign exchange, the learned counsel for the petitioners submits that in view of the objection raised by the learned Standing Counsel for the respondents as to the maintainability of the writ petition, in view of alternate remedy avail .....

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nt of Security Interest Act, 2002 (for short, SARFAESI Act ). Though an alternative remedy was available under both the Acts, the aggrieved person approached the High Court directly questioning the orders, which they obtained under Article 226 of the Constitution of India. Dealing with the same, the Apex Court, in para Nos.43, 44, 45, 46 and 55, held as under: 43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 2 .....

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ery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, the High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute. 44. While expressing the aforesaid view, we are conscious that t .....

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ich every High Court is bound to keep in view while exercising power under Article 226 of the Constitution. 45. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc .....

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rs, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Of course, if the petitioner is able to show that its case falls within any of the exceptions carved out in Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad (AIR 1969 SC 55 .....

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SARFAESI Act and exercise jurisdiction under Article 226 for passing orders which have serious adverse impact on the right of banks and other financial institutions to recover their dues. We hope and trust that in future the High Courts will exercise their discretion in such matters with greater caution, care and circumspection. 5. Similarly, in a decision reported in Raj Kumar Shivhare vs. Assistant Director, Directorate of Enforcement and another (2010) 4 Supreme Court Cases 772, the Apex Cou .....

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ent. Therefore, principle laid down in Ratan's case (2003)5 SCC 399 applies in the facts and circumstances of this case. If the appellant in this case is allowed to file a writ petition despite the existence of an efficacious remedy by way of appeal under Section 35 of FEMA this will enable him to defeat the provisions of the statute which may provide for certain conditions for filing the appeal, like limitation, payment of court fees or deposit of some amount of penalty or fulfillment of so .....

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s from today, the appellate forum will consider the question of limitation sympathetically having regard to the provision of Section 14 of the Limitation Act and also having regard to the fact that the appellant was bona fide pursuing his case under Article 226 of the Constitution before the Delhi High Court and then its appeal before this Court. 6. From the judgments referred to above, it is clear that when the statutory alternative remedy of appeal is available, the High Court should not enter .....

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