Procedural fairness and proprietary concern liability under FERA: ex parte order set aside, fresh adjudication ordered.

An ex parte adjudication order made before the scheduled hearing date was unsustainable because the party had not been given the fixed opportunity to present its defence, and the order was set aside for fresh adjudication after adequate hearing. Section 68(1) of the Foreign Exchange Regulation Act, 1973 could not be invoked against a proprietary concern as though it were a separate legal person, because a proprietary business has no legal existence independent of its proprietor. The appeal succeeded and the matter was remanded for reconsideration in accordance with procedural fairness and the correct legal status of a proprietary concern.

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Issues: (i) Whether the adjudication order, passed ex parte before the date fixed for hearing, could be sustained; (ii) Whether section 68(1) of the Foreign Exchange Regulation Act, 1973 could be invoked against a proprietary concern as if it were a separate legal entity.

Issue (i): Whether the adjudication order, passed ex parte before the date fixed for hearing, could be sustained.

Analysis: The record showed that a call notice had been issued fixing the matter for oral hearing on a later date, while the impugned adjudication order had already been made earlier. The appellant was thus not afforded the hearing fixed in the proceedings, and the order was found to have been passed before the scheduled opportunity to present the defence.

Conclusion: The ex parte adjudication order could not be sustained and was set aside.

Issue (ii): Whether section 68(1) of the Foreign Exchange Regulation Act, 1973 could be invoked against a proprietary concern as if it were a separate legal entity.

Analysis: A proprietary concern has no separate legal existence independent of its proprietor. On that footing, liability under section 68(1) could not be fastened on the proprietary business as though it were an independent juridical person.

Conclusion: Section 68(1) was held inapplicable to the proprietary concern in the manner invoked.

Final Conclusion: The appeal succeeded, the impugned order was set aside, and the matter was remanded for fresh adjudication after giving adequate opportunity of hearing.

Ratio Decidendi: An adjudication order made before the fixed hearing date, without affording the party the scheduled opportunity to defend, violates procedural fairness, and a proprietary concern cannot be treated as a separate legal entity for fastening liability under section 68(1).

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