Cross-examination in foreign exchange adjudication is not absolute where relied-upon material is supplied and no prejudice is shown.

In adjudication proceedings under foreign exchange law, refusal of cross-examination does not vitiate the order where the relied-upon statements and documents were supplied, opportunities of hearing were given, the material is corroborated by seized documents and statements, and no prejudice is shown. The tribunal therefore maintained the finding of contravention under section 9(1)(f)(i) of FERA. It also considered that the penalty could not remain in full in view of the long pendency of the appeal and the pre-deposit already made, and reduced the monetary liability substantially, granting only partial relief.

---

---

Issues: (i) whether denial of cross-examination vitiated the adjudication on the charge under section 9(1)(f)(i) of the Foreign Exchange Regulation Act, 1973; (ii) whether the penalty imposed on the appellant could be sustained in full.

Issue (i): whether denial of cross-examination vitiated the adjudication on the charge under section 9(1)(f)(i) of the Foreign Exchange Regulation Act, 1973

Analysis: The noticee had been supplied with the relied-upon statements and documents and had been given several opportunities of hearing, which were not availed. Cross-examination is not an absolute right in adjudication proceedings and is to be allowed only where the circumstances so warrant. In the facts of the case, the materials relied upon by the adjudicating authority were supported by seized documents and corroborative statements, and no prejudice was shown from the refusal to permit cross-examination.

Conclusion: The denial of cross-examination did not vitiate the adjudication and was not a ground to set aside the finding of contravention.

Issue (ii): whether the penalty imposed on the appellant could be sustained in full

Analysis: The adjudicating authority's finding of contravention was upheld, but the appeal had remained pending for a long period and the appellant had already made the required pre-deposit. Taking into account the overall circumstances, including the prolonged pendency and the fact of pre-deposit, the penalty was considered fit for reduction.

Conclusion: The penalty was reduced from Rs. 50,00,000/- to Rs. 10,00,000/-.

Final Conclusion: The finding of contravention was maintained, but the monetary liability was substantially reduced, resulting in only partial relief to the appellant.

Ratio Decidendi: In adjudication proceedings, refusal of cross-examination does not invalidate the order where the relied-upon material has been supplied, opportunities to respond have been given, and no prejudice is demonstrated.

---