Proper service and fair hearing are essential before foreign exchange penalty orders can stand; ex parte adjudication was quashed.

An ex parte adjudication order under foreign exchange law was set aside because proper service of the show cause notice and a meaningful opportunity of hearing were not established. The court found no material to show deliberate avoidance of service or a conscious waiver of participation, and held that penal proceedings with serious civil consequences require fair procedure before liability is confirmed. The adjudication was therefore quashed and the matter directed to be reconsidered afresh after notice and hearing.

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Issues: Whether the ex parte adjudication order passed under the foreign exchange law was liable to be set aside for failure of proper service and denial of an effective opportunity of hearing.

Analysis: The impugned order proceeded on the footing that the show cause notice had been duly served, but the record did not establish that the petitioner had deliberately avoided service or that he was afforded a meaningful opportunity to contest the proceedings. On the undisputed factual position, the absence of a reply or appearance could not be treated as a conscious waiver of participation. Since the penalty proceedings under the foreign exchange statute have serious civil consequences, adherence to fair procedure was necessary before confirming liability.

Conclusion: The ex parte order was unsustainable and was set aside, and the matter was directed to be adjudicated afresh after notice and hearing.

Final Conclusion: The petitioner succeeded in obtaining quashing of the adjudication order, with a direction for fresh adjudication of the concerned show cause notice in accordance with law.

Ratio Decidendi: An adjudication order imposing penal consequences cannot stand where proper service and a fair opportunity of hearing are not established and the denial of participation causes prejudice.

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