2021 (11) TMI 1207 - HC - FEMA

Writ Petition Dismissed: Court Upholds Adjudication Order, Emphasizes Statutory Appeal Procedures for Confiscated Money Disputes.

D. Naresh Kumar Versus The Deputy Director, Directorate of Enforcement, Chennai

The HC dismissed the writ petition challenging the Adjudication Order under the Foreign Exchange Management Act, 1999, regarding confiscated money. The ... Validity of Adjudication Order passed under FEMA - real owner of confiscated money - petitioner made a submission that the money confiscated belongs to the petitioner and he made a claim for return of property - respondent has categorically stated that an appeal against the adjudicatory order shall lie with the Special Director (Appeals) HELD THAT:- Perusal of the adjudicatory order reveals that the money was confiscated from the Manager of the petitioner and therefore, opportunity was given to the person from whom, the money was confiscated. Under these circumstances, if at all, the petitioner claims that he is the owner of the money, it is for him to initiate appropriate steps before the authority. Contrarily, this Court cannot issue a direction to provide an opportunity to the writ petitioner in the adjudicatory process, wherein admittedly the money was not confiscated from the petitioner, but from his Manager. The story narrated by the petitioner in detail requires no merit consideration as all those facts are to be established with reference to the documents and evidences including oral evidences. The various statements, cases registered and the adjudicatory process would reveal that the facts are to be investigated and a trial is required for the purpose of culling out the truth behind these allegations. However, such an elaborate adjudication cannot be done in a writ proceedings under Article 226 of the Constitution of India and merely based on the affidavit, return of property, which were confiscated by the Enforcement Directorate, cannot be released nor in an adjudicatory process, where the authorities forming an opinion that opportunity is to be given to the person from whom the confiscation is made, should not be interfered with this by this Court in the writ petitions. Petitioner made a submission that there is a provision for appeal and even in the impugned order, it is stated that the petitioner if aggrieved, may file an appeal. If so, it is for the petitioner to prefer an appeal in a prescribed format and complying with the procedures as contemplated. However, the relief sought for in the present writ petition cannot be granted and consequently, the writ petition stands dismissed. Issues:1. Challenge to Adjudication Order under Foreign Exchange Management Act, 1999.2. Claim for return of confiscated money.3. Consideration of disputed facts in writ petition.4. Ownership of confiscated money.5. Evidence required for establishing facts.6. Statements made before Enforcement Directorate.7. Need for investigation and trial.8. Availability of appeal process.9. Relief sought in the writ petition.Analysis:1. The judgment deals with a writ petition challenging an Adjudication Order issued under the Foreign Exchange Management Act, 1999. The petitioner contested the order on the grounds that the confiscated money belonged to them and sought its return. However, the court noted that the order provided for an appeal process with the Special Director (Appeals) as per the Act and Rules, emphasizing the need for compliance with statutory procedures within the specified timeline.2. The petitioner claimed ownership of the confiscated money, arguing that it belonged to them and not the manager from whom it was seized. The court observed that the petitioner needed to initiate appropriate steps before the authority to establish ownership, as the adjudicatory process could not be directed to provide an opportunity to the petitioner when the money was confiscated from the manager. The court declined to intervene in the process based on ownership claims in the absence of proper documentation or evidence.3. The court highlighted that disputed facts and circumstances, including criminal cases pending against involved parties, could not be adjudicated in the writ petition. It emphasized the importance of factual verification through documents and evidence, stating that such detailed considerations were beyond the scope of writ proceedings under Article 226 of the Constitution of India.4. Referring to statements made before the Enforcement Directorate by the petitioner and others regarding the confiscated money, the court noted the need for investigation and trial to ascertain the truth behind the allegations. It emphasized that the release of confiscated property or interference in the adjudicatory process was not appropriate in a writ petition, as these matters required thorough examination and legal proceedings.5. The judgment underscored the availability of an appeal process for aggrieved parties, highlighting that the petitioner could pursue relief through the prescribed appeal format and procedures. Despite the petitioner's submissions, the court concluded that the relief sought in the writ petition could not be granted, leading to the dismissal of the petition without costs. The decision reaffirmed the limitations of writ proceedings in addressing complex factual disputes and the importance of following statutory appeal mechanisms in such cases.