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TMI Blog2024 (6) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... sappa, learned Senior Counsel appearing on behalf of the petitioner would submit that the petitioner/Bank responded to the show cause notice. Thereafter, a personal hearing note was issued on 06.10.2022. The personal hearing was conducted on 22.12.2023 and on that day, Mr.Harish Narasappa, learned Senior Counsel appeared on behalf of the noticee no.5 and advanced arguments that a copy of the reasoned opinion formed under Rule 4 (3) of the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules 2000 (hereinafter referred to as "Act") has not been provided. Since, the impugned personal hearing notice was issued on 04.04.2024, without providing reasoned opinion formed under Rule 4 (3) of the said Rules, the writ petition came to be instituted. 5. Learned Senior Counsel for the petitioner would further submit that it is mandatory on the part of the respondent to furnish the reasoned opinion recorded for the purpose of proceeding with the case. Thus, fixing date for personal hearing without furnishing the reasoned opinion is in violation of the Rules and the Judgment of the Bombay High Court and the consequential circular issued by the Directorate of Enforcement on 26.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra. By relying upon the observations of the Bombay High Court in the above two judgments, the learned Senior Counsel would contend that a duty is cast upon the adjudicating authority to record its reasons for arriving at an opinion to proceed with the enquiry and communicate such reasons to the noticee to enable the noticee to put forth his defence. In the absence of strict compliance of the provisions of sub-Rule 3 of Rule 4, the Authority cannot proceed with the enquiry. The learned Senior Counsel would further submit that the learned Single Judge erred in not following the ratio of the decisions of the Division Benches of the Bombay High Court. 12. Mr.P.R.Raman,learned Senior Counsel would also point out that the Special Leave Petition filed by the Union of India challenging the judgment in Shashank Vyankatesh Manohar v. Union of India and another referred to supra was rejected by the Hon'ble Supreme Court on 04.07.2014. A downloaded record of the proceedings of the Hon'ble Supreme Court has also been produced before us. .................... 23. This Court had in fact disagreed with the interpretation of the Division Bench of the Bombay High Court in Shashank Vyank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue a notice fixing a date for the appearance of that person either personally or through his legal practitioner or a chartered accountant duly authorised by him. (4) On the date fixed, the Adjudicating 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 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. ...." 9. Rule 4(3) unambiguously stipulates that after considering the cause, if any, shown by such person, the Adjudicating Authority is of the opinion that an inquiry should be held, he shall issue a notice fixing the date of appearance of that person either personally or through his legal practitioner or Chartered Accountant duly authorised by him. 10. Plain reading of the Rule reveals that there is no express provision or intention to communicate such reasons to the person against whom the proceedings are initiated by the Enforcement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the opinion that an inquiry should be held, he shall issue a notice fixing the date of appearance of that person. Therefore, the Rule contemplates for forming an opinion by the competent Authority to his satisfaction, which is to be recorded in writing in the file. It is a check and balance contemplated on the competent Authority to proceed with the case and such a check provided under the Rules cannot be expanded for the purpose of furnishing the reason to the person against whom the proceedings are initiated. 15. Act and Rules contemplate check and balance to ensure that a person subjected to the proceedings get fair opportunity. However, expanding scope of the Rule under the guise of fair opportunity would defeat the purpose of the Rule and the procedures contemplated therein. Therefore, judicial expansion of scope of the Rule, if causes prejudice to the interest of the proceedings, the same need not be adopted. The plain reading of the Rule would indicate that the Adjudicating Authority has to form an opinion for the purpose of issuing a show cause notice by fixing the date for appearance of the person either personally or through his legal practitioner or a Chartered Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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