TMI Blog2016 (7) TMI 1341X X X X Extracts X X X X X X X X Extracts X X X X ..... r is non-speaking without reasons and violative of the principles of natural justice and the liability has been fastened arbitrarily against the appellant, who appears to have no concern with the business activities of the company relating to disputed transactions and was looking after the Indore project only. No evidence to prove that the appellant was in any way associated with the incharge Managing Director or Director for exports or his role is available and no such allegation specifically has been imputed. The Adjudication Order is improper, unjust and based on surmises and is not sustainable and is liable to be set aside. The appeal has merits and deserves to be allowed. The appeal is allowed and the impugned adjudication order is set aside. The amount of pre-deposit if any shall be refunded by the respondent after the expiry of period of limitation for filing appeal. No order as to costs. - Appeal No. 3/2011 - - - Dated:- 27-7-2016 - Mr. Vinay Kumar Mathur, Chairperson and Dr. H.K. Mudgil, Member Shri Ratnil Chauhan, Advocate, for the Appellant. Ms. Natasha Sarkar, Legal Consultant, for the Respondent. ORDER [Order per : Justice V.K. Mathur, Chairpe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived the Special Director decided to proceed with the Adjudication and call notices for personal hearing were issued. The company, co-noticees Rais Ahmed, R.K.T. Das, Ravindra B. Wadher and Yezdi B. Khambatta only filed replies while no reply on behalf of the appellant was filed. None of the noticees appeared before the Adjudicating Authority. In this view of the matter he held ex parte proceedings and on the basis of available evidences concluded that the noticee company has failed to realize the export proceeds in respect of 6 GRs negotiated through the Bank of Punjab Ltd. He also held that the noticee company is one of the company in group of export companies managed by Rais Ahmed (co-noticee) and others and huge amount of export proceeds are outstanding to the entire group as accepted by them in their reply to SCN. He also recorded that RBI has refused further extension as it was felt that noticee was not making sincere efforts to realize the proceeds and, therefore, RBI had put them under caution. The Adjudicating Authority also observed that the writ petition against the foreign buyer was filed before the Hon ble Bombay High Court so that it could be conveniently withdrawn. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 2000-01. 7. It has been submitted by the ld. counsel for the appellant that on 10-10-2005 almost five years after the appellant left the company, the SCN was allegedly issued to the company and all its directors on the basis of a complaint dated 30-9-2005. However, the appellant had no knowledge about the SCN and the proceedings were initiated by the Adjudicating Authority against the company and its directors. Neither the respondent nor the company served copy of the impugned order upon the appellant nor any information was given to him in this regard. It was only when the appellant s brother Samir Gupta visited the office of the Director of Enforcement Directorate in connection with another SCN in Geekay Exim matter, he learnt about the impugned order and applied for certified copy on 7-7-2010. The original copy was supplied by the office of the Enforcement Directorate on 29-11-2010 which is a proof of the fact that the impugned order was never served upon the appellant and the proceedings were held behind the back of the appellant without any information having been given to him. Submission is that the appellant s brother Samir Gupta along with his counsel in Geekay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant had full knowledge of the proceedings but deliberately avoided the proceedings, therefore, he cannot claim any benefit by stating that SCN was not served or he had no knowledge of the proceedings. Submission is that the appellant was director and as such was liable for the business activities of the company. No proof has been filed to substantiate the plea that the appellant was appointed director only to look after the establishment at Indore. There is no specific evidence in support of the contention that the appellant was a non-executive director and had no concern with the routine business activities of the company. The case laws relied upon are inapplicable as the impugned order is a reasoned just and a speaking order. The grounds of appeal are not tenable and the appeal deserves to be dismissed. 9. The appellant has contended that he is a qualified engineer and was serving with Sahara Industrial Services Pvt. Ltd. which used to provide man-power assistance to various projects conceived by the group companies of Geekay Exim India Ltd. including Sashak Noble Metals Ltd., registered office of which is located in Fort, Mumbai. The copies of Form-16 for the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e buyer before Hon ble Bombay High Court and the copies were submitted to RBI. It was also contended that the foreign buyers have never denied their liability and gave reasons for non-payment as liquidity problems at their end resulting from global recession and curtailments of business activities. In the replies it has also been contended that the legal suits were also filed in various courts in London and the proceedings before the Hon ble Bombay High Court were withdrawn. The noticees had made genuine efforts for realization of the outstanding dues but due to reasons beyond their control they could not repatriate the sale proceeds. 12. In the impugned order it has come that when the matter was posted for personal hearing before the earlier Adjudicating Authority on several occasions the noticees requested for adjournment and call notices were issued thereafter which were accepted, however no one appeared before the Adjudicating Authority, therefore, the Adjudicating Authority proceeded ex parte against the noticees. It is pertinent to mention that it has not come clearly whether any notice to the appellant was also served upon him or not. The findings of the Adjudicating Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginal copy was supplied to him by the Enforcement Directorate on 29-11-2010 which is a proof of the fact that the impugned order was not communicated to him. His brother was exonerated in the other matter on the basis of reply on almost identical grounds as have been taken by the appellant in the memo of appeal of the present appeal. It is clear from the perusal of the record that the SCN was issued on 10-10-2005 and the address of all the noticees including the company has been shown to be Rahimtola House, Homji Street, Fort, Mumbai while in the complaint dated 30-9-2005 the address given is different. Copies of application for obtaining certified copy dated 7-10-2010 on behalf of the appellant has been filed along with the photocopy of the original Adjudication Order. Supply of the copy of the original order to the appellant meant to be sent to him in 2010 implies that the original order had not been served upon to the appellant. 14. In Sudeep Jain v. M/s. ECE Industries Ltd. (supra) relied upon by the appellant in Paragraph 6 while dealing the case under Negotiable Instruments Act, 1881 the Hon ble Delhi High Court has referred to the judgment of S.M.S. Pharmaceuticals Ltd. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for personal hearing or the service of impugned order upon the appellant. The appellant has taken a specific plea that he had resigned much prior to initiation of the Adjudication Proceedings and was non-executive director and was not involved in any activity relating to export or day to day affairs of the company and had been made non-executive director for the Indore project only for saving expenditure and convenience in seeking clearance from various departments. It is established that the services of the appellant were lent to the company M/s. Sashak Noble Metals Ltd. by its employee Sahara Industrial Services Pvt. Ltd. The ex parte order is non-speaking without reasons and violative of the principles of natural justice and the liability has been fastened arbitrarily against the appellant, who appears to have no concern with the business activities of the company relating to disputed transactions and was looking after the Indore project only. No evidence to prove that the appellant was in any way associated with the incharge Managing Director or Director for exports or his role is available and no such allegation specifically has been imputed. The Adjudication Order is imprope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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