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TMI Blog2024 (7) TMI 1319X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 16 of the Foreign Exchange Management Act 1999, has been filed before the competent authority. With reference to the alleged violations committed under FEMA Act, the Show Cause Notice was issued by the Special Director (Adjudicating Authority) vide proceeding dated 23.2.2018. 3. In response to the said Show Cause Notice, the petitioners admittedly submitted reply on 11.03.2020 and 04.05.2020. 4. Thereafter, the Additional Directorate of Enforcement has taken up inquiry proceedings in view of the subsequent notification issued by the Government of India on 27.09.2018. By virtue of the notification issued, the Additional Director became the adjudicating authority under the provisions of the FEMA Act and therefore, the impugned notice was issued fixing personal hearing, enabling the petitioner to appear and defend their case by availing opportunities to be provided under the provisions of the Act and Rules. 5. The learned Senior Counsel Mr.Jayant Mehta, appearing on behalf of the writ petitioners would contend that the Show Cause Notice is untenable in view of the specific provisions under the FEMA Act and the Foreign Exchange Management (Adjudication Proceedings and Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Supreme Court in the case of Tata Chemical Ltd. vs. Commissioner of Customs (2015)11 SCC 628, so as to establish that "there can be estoppal against the law. If the law requires that something to be done in a prescribed manner, and if not done in that manner, it has no existence in the eyes of law" and further contended that he have no quarrel on the proposition since the question raised would be the authority competent who has to conduct further inquiry under the provisions of the FEMA Act. 10. The case of Cannon India Vs. Commissioners of Customs, (2021) 18 SCC 563, is relied upon, wherein the Hon'ble Supreme Court held as follows: "11. There are only two articles "a (or an)" and "the". "A (or an)" is known as the indefinite article because it does not specifically refer to a particular g person or thing. On the other hand, "the" is called the definite article because it points out and refers to a particular person or thing. There is no doubt that, if Parliament intended that any proper officer could have exercised power under Section 28(4), it could have used the word "any". 11. The Bombay high Court in the case of Shashank Vyankatesh Manohar Vs. Union o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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-matter of the inquiry. (7) If any person fails, neglects or refuses to appear as required by sub-rule (3) before the Adjudicating Authority, the Adjudicating Authority may proceed with the adjudication proceedings in the absence of such person after recording the reasons for doing so. (8) If, upon consideration of the evidence produced before the Adjudicating Authority, the Adjudicating Authority is satisfied that the person has committed the contravention, he may, by order in writing, impose such penalty as he thinks fit, in accordance with the provisions of Section 13 of the Act. (9) Every order made under sub-rule (8) of Rule 4 shall specify the provisions of the Act or of the rules, regulations, notifications, direction or orders or any condition subject to which an authorization is issued by the Reserve Bank of India in respect of which contravention has taken place and shall contain reasons for such decisions. (10) to (12)......." 12. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuance of notification. In the present case, the case was transferred from Special Director to Additional Director after publication of the notification on 27.09.2018 and thus, the grounds raised regarding the retrospective application has no relevance in the present case. 14. Considering the arguments as advanced between respective learned Senior Counsel and learned Central Government Standing Counsel, let us first consider Section 2(b) of the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000, which defines "Adjudicating Authorities" means "an officer appointed by the Central Government under Sub Section (1) of Section 16 of the Act". Section 16 of the Act provides appointment of the Adjudicating Authority. Sub Section 1 stipulates that "for the purpose of adjudication under Section 13, the Central Government may, by an order published in the Official Gazette, appoint as many officers of the Central Government as it may think fit, as the Adjudicating Authorities for holding an inquiry in the manner prescribed after giving the person alleged to have committed contravention under Section 13, against whom a complaint has been made under Sub Section (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xceeding rupees twenty five crore (4) Additional Director of Enforcement Cases involving amount upto rupees twenty five crore but not less than ten crore (5) Joint Director of Enforcement Cases involving amount upto rupees ten crore but not less than five crore (6) Deputy Director of Enforcement Cases involving amount upto rupees five crore but not less than two crore (7) Assistant Director of Enforcement Cases involving amount not exceeding rupees two crore." 18. Enhancement of the pecuniary jurisdiction for the purpose of appointing an adjudicating authority cannot be said to be illegal or contrary to the provisions of the Act since the power of appointment of an adjudicating authority is conferred on the Central Government under Section 16 (1) of the FEMA Act. The Central Government is empowered to publish in the official gazette and appoint as many officers of the Central Government as it may think fit as the adjudicating authority for holding an inquiry. Enhancement of pecuniary jurisdiction is inevitable for public institutions. Even in judiciary, pecuniary jurisdictions are enhanced periodically considering the volume of cases pending ..... X X X X Extracts X X X X X X X X Extracts X X X X
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