Reasoned adjudication and company liability are essential where serious foreign exchange penalties rest on contested defence material.

An adjudication imposing a serious foreign exchange penalty must deal expressly with the defence, the replies to the show-cause notices, and the basis for fastening company liability for acts attributed to its chairman or executives. Where those objections are not properly examined and the order lacks reasoned findings commensurate with the penalty, the adjudication is legally vulnerable and cannot stand on the existing record. The matter therefore requires fresh consideration after due evaluation of the liability issue, the factual objections, and the justification for penalty.

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Issues: (i) Whether the finding of contravention and penalty against the company could stand when the adjudicating authority did not properly consider the defence, the replies to the show-cause notices, and the question of the company's liability for acts attributed to its chairman and executives. (ii) Whether the impugned adjudication required interference because the relevant factual and legal objections were not dealt with and the penalty was imposed without adequate reasons.

Issue (i): Whether the finding of contravention and penalty against the company could stand when the adjudicating authority did not properly consider the defence, the replies to the show-cause notices, and the question of the company's liability for acts attributed to its chairman and executives.

Analysis: The order proceeded substantially on the statements of the chairman and one other witness, but the core defence that the company could not be fastened with liability for individual acts of its chairman or other executives was not properly examined. The replies to the show-cause notices were lengthy and raised substantial legal and factual objections, yet the adjudicating authority did not deal with them in a satisfactory manner. In a matter of this complexity, the question whether the company itself could be held guilty for contravention required a clear and reasoned finding based on evidence.

Conclusion: The finding against the company could not be sustained on the existing adjudication.

Issue (ii): Whether the impugned adjudication required interference because the relevant factual and legal objections were not dealt with and the penalty was imposed without adequate reasons.

Analysis: The adjudicating authority did not properly address the substantial grounds raised in reply to the show-cause notices and did not assign reasons commensurate with the heavy penalty imposed. The omission affected the legality of the order and justified fresh consideration of the matter in accordance with law.

Conclusion: The order called for interference and remand for fresh adjudication.

Final Conclusion: The matter was sent back for fresh adjudication after due consideration of the replies and the issues of liability and penalty.

Ratio Decidendi: Where an adjudication imposing serious penalty fails to address the material defence and the question of liability with reasoned findings, the order cannot be sustained and the matter must be reconsidered afresh.

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