Foreign exchange contravention notices and penalties upheld where charges were disclosed and partners failed to prove due diligence.

Show cause notices in a foreign exchange contravention proceeding were upheld where they specified the alleged violations and the partners were given an opportunity of hearing; the objection that the notices lacked particulars or were not properly served therefore failed. On the merits, the Tribunal accepted the documentary record and one partner's statement as proving contravention under the Foreign Exchange Regulation Act, 1947, and held that the partners had not shown absence of knowledge or due diligence. The penalties were found justified on the facts, and the appellate challenge was rejected with the adjudication orders affirmed.

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Issues: (i) whether the show cause notices and adjudication proceedings were vitiated for want of particulars or proper service on the partners; (ii) whether the finding of contravention and the penalties imposed under the Foreign Exchange Regulation Act, 1947 called for interference.

Issue (i): whether the show cause notices and adjudication proceedings were vitiated for want of particulars or proper service on the partners.

Analysis: The records showed that the notices set out the alleged contraventions and called upon the firm and its partners to answer the charges. The Tribunal found that the appellants had been given an opportunity of hearing and that the plea of absence of particulars or defective notice was not made out. The contention that certain partners were not in management or had ceased to be partners was also not accepted on the record placed before the Tribunal.

Conclusion: The challenge to the validity and service of the show cause notices failed.

Issue (ii): whether the finding of contravention and the penalties imposed under the Foreign Exchange Regulation Act, 1947 called for interference.

Analysis: The Tribunal accepted the reliance placed on the statement of one of the partners and the documentary material showing the transactions. It held that the firm and its partners had contravened the relevant provisions and that the partners had not established that the contravention occurred without their knowledge or despite due diligence. The penalties were also found to be justified on the facts.

Conclusion: The findings of contravention and the penalties were sustained.

Final Conclusion: The appellate challenge was rejected and the adjudication orders were affirmed, with the deposited amounts to be adjusted towards penalty and any balance to be recovered.

Ratio Decidendi: In adjudication for foreign exchange contraventions, where the notice discloses the charges and opportunity of hearing is afforded, the finding may rest on the documentary record and a partner's statement, and partners are liable unless they prove that the contravention occurred without their knowledge or despite due diligence.

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