TMI Blog2019 (8) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... ering the materials on record, oral and written submissions of learned counsels and the relevant judgments in the present appeals, I do not find any materials to support that the present impugned orders in any way affects the rights and liabilities of the parties, hence in view of the discussions made in the preceding paras, it is held that these impugned orders are not covered within the scope of the words an order occurring in Section 19 (1) of FEMA, 1999 for the purpose of filing an appeal as required under the said section. Therefore, these appeals are not maintainable. Appeal not maintainable. - FPA-FEMA-87/KOL/2017, 88/KOL/2017 - - - Dated:- 26-7-2019 - SHRI G. C. MISHRA: MEMBER For the Appellants: Mr. Amit K. Desai, Senior Advocate, Mr. Rustam Mulla, Advocate, Mr. Shravan Sahney, Advocate, Mr. Utsav Trivedi, Advocate For the Respondent: Mr. Rajeev Awasthi, Advocate, Mr. Prashant Pandey, Legal Consultant JUDGMENT SHRI G. C. MISHRA: MEMBER FPA-FEMA-87/KOL/2017 FPA-FEMA-88/KOL/2017 These appeals were before the Division Bench. The appeals were fixed for or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ination of the submission of learned advocate for the appellant. The impugned order is reproduced below: IN THE OFFICE OF THE SPECIAL DIRECTOR OF ENFORCEMENT, MUMBAI RECORD OF PERSONAL HEARING HELD ON 30/10/2017 Show Cause Notice No. : T-4/01-B/SDE/(VA)/WR/2017 dt. 24.03.2017 Name of the Noticees : (i) M/s. Knight Riders Sports Pvt. Ltd. (Noticee No.1) (ii) Mrs. Gauri Shah Rukh Khan, (Noticee No.2) (iii) Mr. Shah Rukh Khan (Noticee No.3) Date Time of personal hearing : 30/10/2017 at 15:30 Hrs. Present : Mr. Rustam Mulla, Advocate and Smt. Saloni Ganesh, CFO, M/s. KRSPL representing all the noticees. In response to call notice dated 20.10.2017 issued for personal hearing Sh. Rustom Mulla, Advocate and Smt. Saloni Ganesh, CFO, M/s. KRSPL, appeared before the undersigned, on behalf of the noticees on 30.10.2017 at 15:30 hrs. 2. The Ld. Advocate has submitted a letter of M/s. KRSPL dated 30.10.2017, enclosing therewith a copy of an e-mail dated 30.10.2017 in the matter of Appeal no. 83/2017 filed by them before the Hon ble Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on 15.11.2017 sought for cross-examination of the Complainant and Investigating Officer, which was rejected by the Special Director as unjustifiable after due consideration of the submissions of learned advocate for the appellant. The impugned order is reproduced below: IN THE OFFICE OF THE SPECIAL DIRECTOR OF ENFORCEMENT, MUMBAI RECORD OF PERSONAL HEARING HELD ON 15/11/2017 Show Cause Notice No. : T-4/01-B/SDE/VA/WR/2017 dt. 24.03.2017 Name of the Noticees : 1. M/s. Knight Riders Sports Pvt. Ltd. (KRSPL) 2. Mrs. Gauri Shah Rukh Khan 3. Mr. Shah Rukh Khan Date Time of personal hearing : 15/11/2017 at 15.30 Hrs. Present : Shri Amit K. Desai, Senior Counsel along with Shri Rustam Mulla, Counsel from M/s. Desai Desai Carrimjee Mulla Shri Venkatesh Mysore, CEO MD of KRSPL and Mrs. Saloni Ganesh, CFO of KRSPL As per the intimation given in the earlier personal hearing held in this case on 30.10.2017, Shri Amit K. Desai, Senior Counsel along with Shri Rustom Mulla, Counsel from M/s. Desai Desai Carrimjee Mulla, representing all the thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e further submitted that there are questions which are required to be asked to Shri Mitil Chokshi on several glaring ambiguities and contrary statements noticed in the Opinion given by C C relating to the valuation, principles, methodology adopted by them in evaluating the shares of M/s. KRSPL. There are discrepancies noticed on various assumptions reflected in the work sheet vis- vis the discussion in the Opinion which include the prize money, revenue growth, capitalization rate, etc. The Ld. Counsel also submitted that he wanted to know about the terms of engagement of C C and the scope of work mandated to them by the ED. These questions, he wanted to raise because the letter of engagement given by ED showed the appointment of C C was only for giving their opinion on the valuation of KRSPL shares ‗Transferred , whereas, the Opinion provided by C C, was in respect of valuation of KRSPL shares ‗Issued . 6. It was submitted by the Ld. Counsel that certain clarifications are also required to be obtained from the said Shri Mitil Chokshi regarding the basis and source of assumptions made by C C in giving their Opinion on fairness of valuation of shares of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no guarantee for winning the prize money by KRSPL, year after year. 8. After a careful examination of the contents in the application filed by KRSPL and also the oral submissions made by the learned Counsel during the course of personal hearing, I find that the case laws cited by him and the arguments put forth by him are all related to the importance of allowing cross examination of witnesses, in the dispensation of justice. However, in this particular case, the request for cross examination of Mr. Mitil Chokshi was duly allowed, in the interest of natural justice. On 20.09.2017, the Counsel, representing M/s. KRSPL, Shri Dilip K. Sheth, was allowed to cross examine Shri Mitil Chokshi, partner of M/s. C C. In fact, as many as 45 questions were put to Mr. Mitil Chokshi and after 5 hours of exhaustive cross examination, the same was concluded and the same was duly noted in the record of cross examination, countersigned by both Shri Mitil Chokshi and Shri Dilip K. Sheth, Counsel of M/s. KRSPL. In fact, the record of cross examination clearly states that the cross examination was concluded at 6.00 p.m. today, 20th September, 2017 . I, therefore, find that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity regarding supply of engagement letter of C C to M/s. KRSPL. I, therefore, find that there is no merit in the application filed by M/s. KRSPL seeking inspection of the said letter/document. Accordingly, I reject the application made by the KRSPL on this count. 12. Also, the request made in the said application, seeking adjournment of the main matter till such time the appeal is filed by the company, in the event of rejection of their application by the Adjudicating Authority, is also rejected by me as the Hon ble Appellate Tribunal has already given a ruling on this issue in its order dated 13.11.2017, whereby, the Adjudicating Authority was directed to decide the said application as per its own merit. 13. The 3rd application dated 15.11.2017 filed by the Ld. Counsel relates to the intimation regarding the filing of appeal by KRSPL before the Appellate Tribunal under Section 19 of FEMA, 1999 against the rejection of the Adjudicating Authority of their request for cross examination of the complainant Mrs. V. Kalyani and Shri D.K. Sinha, Assistant Director, recorded during the course of personal hearing held on 30.10.2017. On a careful perusal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave now been disposed of by the Hon ble ATFE, New Delhi on 13.11.2017, the leaned Counsel, who appeared for the personal hearing on 15.11.2017, was directed to go ahead with the arguments, but he refused to proceed with the arguments by stating that he was not in a position to proceed with the arguments on the main issues, till the decision is taken by the Hon ble ATFE on the appeals now proposed to be filed by them before the Appellate Tribunal against the order of rejection of their application passed by the Adjudicating Authority. Thus, it is seen that in spite of giving numerous opportunities and granting many adjournments, the advocates of KRSPL are resorting to delaying tactics in spite of fore-warnings given to the effect that the decision will be taken on the basis of available evidence and material. In view of the above facts, I have decided to conclude the adjudicating proceedings in the matter in terms of the provisions of FEM (Adjudication Proceedings Appeal) Rules, 2000. Reserved for Orders. (VINEET AGARWAL) SPECIAL DIRECTOR Adjudicating Authority 6. The aforesaid impugned order dated 30.10.2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of Kandla Export Corporation Anr. v. OCI Corporation Anr. reported in 2018 (14) SCC 715). All such orders would be revisable by Appellate Tribunal in exercise of its power under Section 19 (6) if they affect valuable rights. v. The words any order in Section 19 (6) and an order in Section 19 (1) should be giving the same wide and liberal meaning. vi. Section 35 deals with Appeals to the High Court and provides for an Appeal to the High Court by a person aggrieved by any decision or order of the Appellate Tribunal. This section came up for interpretation by the Supreme Court in Rajkumar Shivhare v. Directorate of Enforcement (2010) 4 SCC 772. vii. No interpretation can be given to the first proviso to Section 19 (1), so as to restrict the wide of scope appeal provided and envisaged by Section 19 (1) of the Act. viii. Relied on the judgment passed by the Hon ble High Court of Delhi in the matter of Batool Dawood Ors. vs. Additional Director (2015) SCL (130) 390. In the said judgment the Hon ble High Court of Delhi has held as under: 11. In so far as Section 35 of the FEMA is concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Pvt. Ltd. Vs. Commissioner of Customs, Kandla (2014 [301] ELT 119 (CESTAT Ahmedabad)). 10. The contentions of the respondent, in support of their stand that the appeals are not maintainable. The sum and substance of the contentions are as below: i. That FEMA is a complete code which prescribes certain procedures for Adjudicating Authorities to follow. The procedure has been prescribed under Foreign Exchange Management (Adjudication Proceeding and Appeal) Rules 2000 under different Rules thereunder. ii. For the first time the word order mentioned under Rule 4(8). Rule 4(1) upto 4(7) does not contend the word order , therefore, the order passed at the stage of Rule 4 (8) is an appealable order before this Tribunal. This Tribunal is a creation of statute and it has to confine its power within four walls of statutory limitation provided under the act and therefore giving any such interpretation to the clear and unambiguous wording of the provision would result in miscarriage of justice. iii. The Hon ble Supreme Court in its various pronouncement has categorically held that the tribunals and the authorities which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the provisions under the Act. Under the Act only appeal is prescribed after the order of penalty is made and before that since proceedings are inquiry in nature cannot be termed as an order. x. There was conclusion of cross-examination of Mr. Mitil Chokshi on 20.09.2017 which was recorded by the authority and countersigned by the counsel for the appellants. xi. There is incorrect interpretation of Section 19 (6) of the Act. xii. The present appeals are filed with a view to delay the process of adjudication which is at the final stage by wrongly invoking the jurisdiction of this Tribunal. So, the appeal may be dismissed with exemplary costs. DISCUSSION: 11. Admittedly the appeals have been filed under Section 19 (1) of FEMA, 1999. Having regards to the aforesaid facts and circumstances, and keeping in view the term of reference, the undersigned is to take a decision on the issue of maintainability of these two appeals. 12. FEMA, 1999 prescribed two sections i.e., Section 19(1) and Section 35 for the purpose of appeals. Section 19 (1) deals with the appeal before the Appellate T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided that the High Court may, . The words an order appearing in Section 19(1), any order appearing in Section 19(6) and the words any decision or order appearing in Section 35 above are emphasized by the undersigned. 14. The word order has not been defined under FEMA, 1999 nor it has been defined under the general definitions provided in Section 3 of General Clauses Act, 1897. However, the word order has been defined under Section 2 (14) of CPC which reads as follows; (14) order means the formal expression of any decision of a Civil Court which is not a decree; 15. The Legislature in its wisdom has used the words any order and any decision and order in Section 19 (6) and Section 35 respectively, whereas the words an order has been used in Section 19 (1) of FEMA, 1999. 16. The word an used before the word order in Section 19 (1) is in singular form. According to Section 13 (2) of General Clauses Act, 1897 words in singular shall include the plural, and vice-versa. In the light of the aforesaid provision the word an order used in Section 19 (1) would inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting Authority shall explain to the person proceeded against or his legal practitioner or the chartered accountant, as the case may be, the contravention, alleged to have been committed by such person indicating the provisions of the Act or of rules, regulations, notifications, direction or orders or any condition subject to which an authorisation is issued by the Reserve Bank of India in respect of which contravention is alleged to have taken place. (5) The Adjudicating Authority shall, then, given an opportunity to such person to produce such documents or evidence as he may consider relevant to the inquiry and if necessary, the hearing may be adjourned to future date and in taking such evidence the Adjudicating Authority shall not be bound to observe the provisions of the Indian Evidence Act, 1872 (1 of 1872). (6) While holding an inquiry under this rule the Adjudicating Authority shall have the power to summon and enforce attendance of any person acquainted with the facts and circumstances of the case to give evidence or to produce any document which in the opinion of the Adjudicating Authority may be useful for or relevant to the subject matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds any decision or order appearing in Section 35 of FEMA, 1999. If it is concluded that the word an order is the same as any order than whether the impugned orders are covered within the meaning of the word an order . 21. In Prem Singh Vs. Special Director, Directorate of Enforcement case, before the Hon ble High Court of Delhi in the matter of CRL.A. 276 of 2008, the question of maintainability of the appeal, in the given circumstances, before the Appellate Tribunal was neither raised nor decided. 22. The appellants have relied on the judgment of the Hon ble High Court of Punjab Haryana in the matter of Sandeep Singh Sandhu Vs. Debt Recovery Tribunal, [1998 SCC OnLine P H 1844 : (1999) 2 BC 556]. In the said judgment the Hon ble High Court had considered the question of the meaning of the words any order and the words an order occurring in Section 17 (2) and Section 20 (1) respectively of Debts Recovery Tribunal Act. The relevant portion of the said judgment is reproduced below: 13. The contention of Mr. Mittal, learned Counsel for the petitioner, that the powers of this Court under Article 227 of the Constitution are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlocutory order which affects the rights or liabilities of any party is an appealable order. 23. The appellants have also relied on the judgment passed by the Hon ble High Court of Madhya Pradesh in the matter of M/s. P.C.C. Construction Co. Ors. Vs. Debts Recovery Tribunal Anr. in W.P. No. 705 of 2002 (J). In this case Hon ble High Court of Madhya Pradesh has categorically held that an appeal against an order, which substantially affects the rights and liabilities of a party, shall lies to the Appellate Tribunal. The most important thing that has been held in the said judgment was that the order to be questioned before the Appellate Tribunal should have substantially affected the rights and liabilities of the party. 24. The appellants have also relied on the judgment of Hon ble Supreme Court passed in the matter of Kandla Export Corporation Anr. v. OCI Corporation Anr. reported in 2018 (14) SCC 715). The Hon ble Supreme Court has dealt with the Arbitration and Conciliation Act, 1996 and Commercial Courts Act. The fact and circumstances and the languages of these acts are different and the legal issues raised therein is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 jurisdiction of which the respondent, or in a case where there are more than one respondent, any of the respondents, ordinarily resides or carries on business or personally works for gain. 17. A reading of Section 35 makes it clear that jurisdiction has been clearly conferred on the High Court to entertain an appeal within 60 days from any decision or order of the appellate authority. But such appeal has to be on a question of law. The proviso empowers the High Court to entertain such an appeal after 60 days provided the High Court is satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... request or demand and which is refused by the other party [see Ellerine Bros. (Pty) Ltd. vs. Klinger, [(1982) 1 WLR 1375 : (1982) 2 AII ER 737 (CA)]. 23. Bachawat, J. while in the Calcutta High Court, in Satyanarain Biswanath v. Harakchand Rupchand, [AIR 1955 Cal 225], interpreted the word any in Rule 10 of Bengal Chamber of Commerce, Rules of the Tribunal of Arbitration. Construing the said Rule, the learned Judge held that the word any in Rule 10 means one or more out of several and includes all and while doing so the learned Judge relied on an old decision of the Calcutta High court in Jokhiram Kaya v. Ganshamdas Kedarnath, [AIR 1921 Cal 244]. This Court is in respectful agreement with the aforesaid view of the learned Judge. 24. In Black s Law Dictionary the word any has been explained as having a diversity of meaning and may be employed to indicate all or every as well as some or one and its meaning in a given statute depends upon the context and subject-matter of statute . The aforesaid meaning given to the word any has been accepted by this Court in LDA vs. M.K. Gupta [(1994) 1 SCC 243 : (AIR) 1994 SC 787]. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been made clear that no second appeal from such order will lie [See Section 104 sub-section (2) of the Code]. But in Debt Recovery Tribunal Act, as in FEMA, an appeal lies from an interlocutory order and this has been made clear in Section 20(1) of the Act. 29. By referring to the aforesaid schemes under different statutes, this Court want to underline that the right of appeal, being always a creature of a statute, its nature, ambit and width has to be determined from the statute itself. When the language of the statute regarding the nature of the order from which right of appeal has been conferred is clear, no statutory interpretation is warranted either to widen or restrict the same. The judgment of the Hon ble Supreme Court in the aforesaid matter is exclusively regarding the interpretation of words any decision or order appearing in Section 35. In the said judgment it is held that any order , any decision of the Appellate Tribunal would mean all decisions or orders of the Appellate Tribunal, and all such decisions are, subject to limitation, appealable to the High Court on the question of law. In the aforesaid judgment, no question was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicating Authority. (d) It is seen from the record that the appellants have shoot up several letters to the Adjudicating Authority till 30.10.2017, but except in their letter dated 30.10.2017 they did not ask for cross-examination of Mrs. Kalyani and Shri D.K. Sinha. (e) As it appears from the record that no cogent and justifiable reasons have been cited by the appellants before the Adjudicating Authority in their letter to Adjudicating Authority asking for cross-examination of Mrs. Kalyani and Mr. D.K. Sinha. So also did not justify how their rights and liabilities are violated or how there is violation of principle of natural justice? Even during the course of argument before the undersigned the learned counsel for the appellants could not be able to justify as to how the appellants rights and liabilities are substantially affected by the impugned order. (f) The learned counsel for the appellants contended that this Tribunal in the matter of Knight Riders Sports Pvt. Ltd. Vs. Special Director, Enforcement Directorate in appeal no. 83/2017 by its order dated 13.11.2017, has inter alia already decided the scope and interpretation of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ude interlocutory orders, which were merely procedural and did not affect the rights or liabilities of the parties. The relevant portion of the said judgment is reproduced below: R.S. Bachawat, J. 1. This appeal raises a question of construction of s. 38(1) of the Delhi Rent Control Act, 1958 (Act 59 of 1958). The appellant is a tenant of premises No. 7, Sriram Road, Delhi, under the respondent. The respondent made an application to the Controller for eviction of the appellant on the ground that he bona fide required the premises for his occupation. The respondent resides at No. 17, Alipur Road, Delhi. The appellant filed an application before the Controller alleging that the accommodation in premises No. 17, Alipur Road consisted of more than three rooms and consequently, the respondent did not bona fide require the premises in dispute for his own occupation and praying for the issue of a commission to go to No. 17, Alipur Road and to prepare a plan of the premises. By his order dated May 29, 1965 the Controller rejected the application. He said : The petitioner came into the witness box and the respondent ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (hereinafter referred to as the Tribunal) consisting of one person only to be appointed by the Central Government by notification in the Official Gazette. 4. The object of s. 38(1) is to give a right of appeal to a party aggrieved by some order which affects his right or liability. In the context of s. 38(1), the words every order of the Controller made under this Act , though very wide, do not include interlocutory orders, which are merely procedural and do not affect the rights or liabilities of the parties. In a pending proceeding, the Controller may pass many interlocutory orders under Sections 36 and 37, such as orders regarding the summoning of witnesses, discovery, production and inspection of documents, issue of a commission for examination of witnesses, inspection of premises, fixing a date of hearing and the admissibility of a document or the relevance of a question. All these interlocutory orders are steps taken towards the final adjudication and for assisting the parties in the prosecution of their case in the pending proceeding; they regulate the procedure only and do not affect any right or liability of the parties. The legislature could not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. If the present type of orders are allowed to be agitated than there will be no end to litigation and the very purpose of the relevant provisions and intention of the legislature would be defeated. In my considered view that, the scope of the words an order of Adjudicating Authority is not as wide as any order or every decision or order in the context of Sections 19 (1), 19 (6) Section 35 respectively of FEMA, 1999. As held by Hon ble Supreme Court, in many judgments, only those orders which affect the rights and liabilities of the parties can only be appealable. After considering the materials on record, oral and written submissions of learned counsels and the relevant judgments in the present appeals, I do not find any materials to support that the present impugned orders in any way affects the rights and liabilities of the parties, hence in view of the discussions made in the preceding paras, it is held that these impugned orders are not covered within the scope of the words an order occurring in Section 19 (1) of FEMA, 1999 for the purpose of filing an appeal as required under the said section. Therefore, these appeals are not maintainable. It may b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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