Court invalidates show cause notice and memorandum, ruling in favor of petitioners due to lack of proper authorization.

The court set aside the show cause notice dated 28th February 2002 and the subsequent memorandum, ruling in favor of the petitioners. It found that the Adjudicating Officer who issued the notice was not properly authorized, rendering the proceedings invalid. The court also determined that the petitioners had complied with Section 18(2) of FERA and dismissed the argument of the need for exhausting alternative remedies. Consequently, the court held that the lack of proper authorization of the Adjudicating Officer deprived the proceedings of jurisdiction and procedural compliance.

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Issues: (i) Whether the notice initiating proceedings under the repealed exchange control law was issued by a duly authorised adjudicating officer within the time prescribed by the saving provision; (ii) Whether the petitioners had contravened the export-realisation obligations by failing to take reasonable steps to receive back the goods or recover the export proceeds.

Issue (i): Whether the notice initiating proceedings under the repealed exchange control law was issued by a duly authorised adjudicating officer within the time prescribed by the saving provision.

Analysis: The saving provision required initiation by a properly authorised adjudicating officer within the stipulated period. The record did not contain the notification authorising the officer who issued the original memorandum, and the respondents did not comply with the direction to produce it. The absence of such authorisation meant the initiation itself was vitiated.

Conclusion: The issue was decided in favour of the petitioners, and the initiation of proceedings was held to be without proper authority.

Issue (ii): Whether the petitioners had contravened the export-realisation obligations by failing to take reasonable steps to receive back the goods or recover the export proceeds.

Analysis: The statutory presumption of contravention was rebuttable if the exporter showed that all reasonable steps had been taken to receive back the goods or recover payment. The correspondence showed persistent efforts by the petitioners to have the goods returned and to secure payment, and the carrier's communications were inconsistent regarding custody and delivery. On those facts, the petitioners discharged the burden of rebutting the presumption.

Conclusion: The issue was decided in favour of the petitioners, and no contravention was found.

Final Conclusion: The impugned notices could not be sustained either for want of proper authorisation or on merits, and the writ petition succeeded.

Ratio Decidendi: Where the statute creates a rebuttable presumption of contravention for non-realisation of export proceeds, the exporter avoids liability by showing reasonable steps taken to receive the goods or recover payment; proceedings initiated without proof of the requisite authorisation are invalid.

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