2010 (1) TMI 516 - HC - FEMA

High Court rules against Department for re-opening case after 27-year delay. Prejudice cited.

The High Court ruled in favor of the petitioners, holding that the Department could not re-open proceedings after a prolonged delay of over 27 years. The ... - delay in adjudication – show cause notices issued but no reply was filed – for the period of 27 years – no action taken by department - No fault can be attributed to the petitioners for this delay - The absence of relevant record due to lapse of more than 30-35 years is also a factual aspect which needs to be taken into account - respondents cannot be allowed to re-open the proceedings. Issues:1. Petitioners seeking Writ of Prohibition or a Writ in the nature of Prohibition under Article 226 of the Constitution of India.2. Adjudication proceedings under various Foreign Exchange Acts for alleged acts in 1958, 1966, and 1970.3. Delay of over 27 years in revival of proceedings by the Department.4. Petitioners' contention of violation of Article 14 of the Constitution of India.5. Lack of jurisdiction due to prolonged delay.6. Legal precedents cited by both parties.Analysis:Issue 1: Writ of ProhibitionThe petitioners sought a Writ of Prohibition or a Writ in the nature of Prohibition under Article 226 of the Constitution of India to prevent the respondents from proceeding with adjudication based on show cause notices from 1973-74.Issue 2: Adjudication ProceedingsThe petitioners faced adjudication proceedings under various Foreign Exchange Acts for alleged acts in 1958, 1966, and 1970, with show cause notices issued in 1973-74.Issue 3: Delay in Revival of ProceedingsThe petitioners highlighted a delay of over 27 years in the revival of proceedings by the Department, with no action taken despite earlier show cause notices and subsequent calls for personal hearings in 2001 and 2003.Issue 4: Violation of Article 14Petitioners argued that the prolonged delay deprived them of their right of equality before the law, violating Article 14 of the Constitution of India, as no evidence was available after such a long period.Issue 5: Lack of JurisdictionThe main contention was whether the adjudication proceedings, due to the extended delay, had become stale and arbitrary, questioning the jurisdiction of the Adjudicating Authority after more than two decades.Issue 6: Legal PrecedentsBoth parties cited legal precedents to support their arguments. The petitioners relied on judgments emphasizing the injustice of inordinate delays, while the respondents cited cases where adjudication proceedings were upheld despite delays.In conclusion, the High Court held that the Department could not re-open proceedings after such a prolonged delay, as it would cause serious prejudice to the petitioners. The Court ruled in favor of the petitioners, stating that the Department's attempt to proceed with adjudication over 27 years later was arbitrary and without jurisdiction, emphasizing the need to consider the factual aspects and the detrimental impact on the petitioners. The rule was made absolute in favor of the petitioners.