Fair adjudication and jurisdictional limits: withholding relied-upon documents and confiscating currency beyond the notice were impermissible.

Adjudication under the Foreign Exchange Regulation Act was held unsustainable where relied upon documents were not supplied before the hearing, leaving the noticee without an effective opportunity to reply and defend. The proceedings were therefore required to be redone after disclosure of the requested materials and grant of reasonable time. Confiscation of Indian currency of Rs. 14,440 was also set aside because that amount related to a different search and was already covered by another show-cause notice, so the adjudicating authority lacked jurisdiction to order confiscation in the impugned proceedings.

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Issues: (i) whether the adjudication proceedings were vitiated for non-supply of relied upon documents and denial of an effective opportunity to reply and be heard; (ii) whether the confiscation of Indian currency amounting to Rs. 14,440 could be sustained in the impugned proceedings.

Issue (i): whether the adjudication proceedings were vitiated for non-supply of relied upon documents and denial of an effective opportunity to reply and be heard.

Analysis: The proceedings were initiated on a show-cause notice founded on alleged contraventions under the Foreign Exchange Regulation Act, 1973. The appellant repeatedly sought the documents referred to in the notice before filing a reply. The adjudicating authority proceeded to fix personal hearing without first ensuring supply of the requested materials, and the appellant was left without a meaningful opportunity to submit a complete defence. Such a course was inconsistent with the requirement of fair adjudication and the procedural safeguards governing adjudication proceedings.

Conclusion: The proceedings were vitiated and required fresh adjudication after supply of the requested documents and grant of reasonable time to reply.

Issue (ii): whether the confiscation of Indian currency amounting to Rs. 14,440 could be sustained in the impugned proceedings.

Analysis: The confiscation in the impugned order related to currency said to have been recovered in a different search and was already the subject of another show-cause notice. In the proceedings arising from the impugned notice, the adjudicating authority had no jurisdiction to pass a confiscation order in respect of that amount.

Conclusion: The confiscation order regarding Rs. 14,440 was without jurisdiction and was set aside.

Final Conclusion: The adjudication order could not stand and the matter was sent back for reconsideration after compliance with the requirements of notice, disclosure and opportunity of defence, while the confiscation of the seized currency in the impugned proceedings was annulled.

Ratio Decidendi: An adjudication order is unsustainable where relied upon documents are withheld so that no effective opportunity to answer the charge is afforded, and confiscation cannot be sustained in proceedings that do not confer jurisdiction over the property in question.

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