2018 (5) TMI 1841 - HC - FEMA

26-year delay in FERA case leads to quashing of notices; Violation of speedy trial rights and natural justice

SURENDRALAL GIRDHARILAL MEHTA Versus UNION OF INDIA

The court quashed the show cause notice and subsequent notices of hearing due to inordinate delay of 26 years in adjudication proceedings under FERA. The ... Proceeding under FERA - contravention of Section 8(1) of FERA read with Sections 64(2) and 51 - Penalty imposed - non specification of charge for violation of the provisions of FERA - Held that:- The prejudices that a charged person suffers by reason of undue long pendency of a proceeding against him are many fold as noted in some of the decisions discussed above. In the facts of the present case by no stretch of imagination it can be said that the delay that has been caused in the adjudication process is reasonable and absolutely no explanation has been furnished for such delay. The charges against the petitioner are of a quasi-criminal nature and the right of the petitioner to have a speedy disposal of the adjudication proceeding has been infringed by the respondents in the facts of this case. On this ground alone the impugned show cause notice is liable to be quashed. The show cause notice also does not give sufficient details on the basis of which the charge of violation of the provisions of FERA has been brought against the petitioner. No doubt economic offences are offences against the society at large and should be curbed. However, if the respondents had sufficient incriminating materials against the petitioner they would have surely supplied copies thereof to the petitioner in compliance with the principles of natural justice and would have proceeded with the adjudication process. The very conduct of the respondents raises a strong suspicion in mind that the respondents have no such material which would establish the charge levelled against the petitioner. This is one of the reasons why I am of the opinion that it will not be to the detriment of public interest or contrary to the interest of justice if the impugned show cause notice is quashed. ‘Justice delayed is justice denied’ is not a cliché. The impugned show cause notice dated 14 January, 1991 is quashed along with the notices of hearing. The adjudication proceeding stands dropped against the petitioner. Issues Involved:1. Quashing of show cause notice due to inordinate delay.2. Violation of the petitioner’s right to a speedy trial under Article 21 of the Constitution.3. Non-supply of documents relied upon by the authorities.4. Whether the delay in adjudication proceedings amounts to abuse of the process of law.Detailed Analysis:1. Quashing of Show Cause Notice Due to Inordinate Delay:The petitioner sought the quashing of a show cause notice dated January 14, 1991, issued by the Special Director, Enforcement Directorate, on the grounds of inordinate delay in adjudication proceedings under the Foreign Exchange Regulation Act, 1973 (FERA). The petitioner argued that the delay caused worry, anxiety, expenses, and disturbance to his vocation and peace of mind. The court noted that the show cause notice was issued in 1991 and replied to in 1991, but the first notice of hearing was only issued in 1999, and subsequent notices were issued in 2015, showing a clear delay of 26 years without any adjudication or hearing.2. Violation of the Petitioner’s Right to a Speedy Trial Under Article 21 of the Constitution:The petitioner argued that the prolonged delay violated his constitutional right to a speedy trial under Article 21. The court referenced several Supreme Court decisions emphasizing that the right to a speedy trial is an inalienable right under Article 21. The court concluded that the delay caused significant prejudice to the petitioner and amounted to a violation of his constitutional rights.3. Non-Supply of Documents Relied Upon by the Authorities:The petitioner repeatedly requested the supply of documents relied upon by the authorities to justify the show cause notice. Despite multiple requests, the authorities failed to provide these documents. The court found that the authorities' failure to supply the documents violated the principles of natural justice, as the petitioner could not meaningfully defend himself without access to the evidence against him.4. Whether the Delay in Adjudication Proceedings Amounts to Abuse of the Process of Law:The court observed that the authorities showed a lack of diligence and seriousness in proceeding with the adjudication. The petitioner’s requests for documents were ignored, and no hearings were held for 24 years. The court held that the delay and conduct of the authorities amounted to an abuse of the process of law and caused undue prejudice to the petitioner. The court emphasized that charges of a quasi-criminal nature should not hang indefinitely over an individual without resolution.Court’s Conclusion:The court quashed the show cause notice dated January 14, 1991, and the subsequent notices of hearing, thereby dropping the adjudication proceedings against the petitioner. The court emphasized that the delay was unreasonable and unexplained, and the authorities' conduct indicated a lack of incriminating material against the petitioner. The court held that justice delayed is justice denied and that the petitioner’s right to a speedy trial had been infringed.Final Order:The writ petition (W.P. 322 of 2015) was disposed of without any order as to costs. The court refused a subsequent prayer for a stay of the judgment's operation.