2024 (9) TMI 938 - AT - FEMA

SAFEMA Tribunal quashes order for denying hearing opportunity after case separation, remands matter for proper proceedings

The Appellate Tribunal under SAFEMA allowed the appeal, finding violation of natural justice where the appellant was denied opportunity of hearing after ... Contraventions of FERA - request for separate hearing due to non-membership in Kamani family - Violation of natural justice in passing the order - Denial of opportunity of hearing to A.P. Parekh - HELD THAT:- The perusal of the record does not show that the appellant was ever given an opportunity of hearing subsequently. It is in a given case where his case was separated thus we find that the plea taken by the appellant in his appeal is partly corroborated by the impugned order. A case is made out to remand the matter back to the Adjudicating Officer/Authority for hearing of the case afresh so that the appellant may get appropriate opportunity of hearing. It is necessary to clarify that the Show Cause Notice was in reference to FERA 1947 and FERA 1973 which have been repealed by FEMA 1999 thus the issue would be that who can provide an opportunity of hearing. It is required to be clarified to avoid any complications and accordingly while remanding the case back after quashing the order dated 20.09.2000 in regard to the appellant A.P. Parekh, the Department is directed to place the matter of the appellant before the appropriate authority of equivalent rank either under FERA or FEMA for providing him an opportunity of hearing which may be even the Adjudicating Authority under FEMA for which Notification has been issued by the Government of India. Issues:1. Challenge to order imposing penalty under FERA, 1947.2. Allegations against A.P. Parekh regarding FERA contraventions.3. Request for separate hearing due to non-membership in Kamani family.4. Violation of natural justice in passing the order.5. Denial of opportunity of hearing to A.P. Parekh.6. Clarification on who can provide an opportunity of hearing post-repeal of FERA.Analysis:1. The judgment pertains to two appeals challenging an order imposing a penalty under the Foreign Exchange Regulation Act, 1947 (FERA). The first appellant, Mrs. A.A. Parekh, did not press the appeal due to the age of the matter, resulting in the dismissal of her appeal with a specific observation that the order would not be used adversely against her. The second appeal was by A.P. Parekh, who was served multiple Show Cause Notices (SCNs) related to FERA contraventions involving the Kamani family. A request for separate hearing was made by A.P. Parekh, which was initially accepted, but the subsequent order was passed without providing him with an opportunity of hearing, raising concerns of a violation of natural justice.2. A.P. Parekh's appeal highlighted the issue of denial of an opportunity of hearing by the Adjudicating Officer who passed the order. The appellant had requested a separate hearing, which was granted by the Special Director in 1986. However, the subsequent order in 2000 was passed without affording A.P. Parekh the opportunity for a personal hearing, leading to allegations of procedural irregularities and a lack of natural justice.3. The judgment discusses the request for separate hearing made by A.P. Parekh, who was not a family member of the Kamani family but was implicated in the FERA contraventions along with them. While the request for separate hearing was initially accepted, subsequent procedural lapses resulted in the order being passed without providing A.P. Parekh with a fair opportunity to present his case individually, raising concerns about due process and fairness in adjudication.4. The legal counsel for A.P. Parekh argued that the order passed without affording him a proper opportunity of hearing violated the principles of natural justice and the prescribed rules for adjudication. The appellant contended that the order, issued after a significant delay and without a hearing, failed to adhere to the procedural safeguards essential for a fair and just adjudication process.5. The judgment acknowledges the appellant's claim regarding the denial of an opportunity of hearing and the subsequent passing of the order without proper consideration of his case. It concludes that the matter warrants a remand back to the Adjudicating Officer/Authority for a fresh hearing to ensure that A.P. Parekh receives a fair and adequate opportunity to present his defense and address the allegations against him.6. In light of the repeal of FERA and the enactment of FEMA, the judgment clarifies the need to determine the appropriate authority to provide A.P. Parekh with an opportunity of hearing post-repeal. It directs the Department to refer the matter to the equivalent authority under either FERA or FEMA for a fair hearing, emphasizing the importance of procedural fairness and compliance with the relevant legal framework.In conclusion, the judgment highlights the significance of procedural fairness, natural justice, and the right to a fair hearing in adjudicatory proceedings, emphasizing the need for a remand to ensure that the appellant is accorded due process and a proper opportunity to present his case effectively.