TaxTMI 
TaxTMI 
TaxTMI 
2010 (10) TMI 79
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...., the appellant preferred an appeal before the Appellate Tribunal of Foreign Exchange (for short 'the Tribunal') whereby the Tribunal, on 2-1-2006, while considering the application for a pre-deposit, passed an order on 7-2-2006 requiring the appellant to furnish an unconditional bank guarantee of Rs. 25 lakhs in favour of the Special Director, ED within 45 days as the condition precedent for hearing of the appeal. The appellant, as set forth, filed an application for modification of the order relating to pre-deposit which was dismissed and eventually, the appeal was dismissed by the Tribunal on 19-1-2007. 3. Before the writ court, it was contended that the initiation of the proceeding under the FERA on 22-8-2002 was after the expiry of the 'sunset' period on 31-5-2002 as envisaged under section 49(3) of the Foreign Exchange Management Act, 1999 ('the FEMA') and, therefore, the whole proceeding was vitiated in law and, hence, the condition of pre-deposit as imposed by the Tribunal was totally unjustified. It was urged before the learned Single Judge that a notice to show cause was issued on 28-2-2000 by the Special Director, ED requiring the appellant to explain why the adjudicati....
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....ficer in communicating on 22nd August, 2002 that the proceedings would continue under FERA, 1973. The contention of the learned counsel for the petitioner on this aspect is accordingly rejected." 6. After so holding, the learned Single Judge directed that if the appellant deposits a sum of Rs. 1 lakh within four weeks from the date of the order, the appeal shall be heard by the Tribunal on merits. 7. We have heard Mr. C. Mukund, learned counsel for the appellant, and Mrs. Rajdeepa Behura, learned counsel for the respondents. 8. Mr. Mukund, learned counsel, assailing the defensibility of the order, submitted that the learned Single Judge has fallen into error by relying on the concept of cognizance though the controversy pertained to the commencement of proceedings for contravention. It is urged by him that the interpretation placed by the learned Single Judge on section 49(3) of the FEMA is fundamentally fallacious since it has to have nexus with section 51 of the FERA which deals with adjudication. Pyramiding the said submission, it is canvassed by him that mere issue of notice to show cause would not tantamount to commencement of adjudication process. It is his further submiss....
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....rules has been framed which has been called the 1974 Rules. Rule 3 of the said Rules reads as follows : "3. Adjudication proceedings.-(1) In holding an inquiry under section 51 for the purpose of adjudging under section 50 whether any person has committed contravention as specified in section 50, the adjudicating officer shall, in the first instance, issue a notice to such person requiring him to show cause within such period as may be specified in the notice (being not less than ten days from the date of service thereof) why adjudication proceedings should not be held against him. 2. Every notice under sub-rule (1) to any such person shall indicate the nature of offence alleged to have been committed by him. 3. If, after considering the cause, if any, shown by such person, the adjudicating officer is of the opinion that adjudication proceedings should be held, he shall issue a notice fixing a date for the appearance of that person either personally or through his lawyer or after authorised representative. 4. On the date fixed, the adjudicating officer shall explain to the person proceeded against or his lawyer or authorised representative, the offence alleged to have been comm....
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....tion and in the case at hand, the adjudication had commenced after the sunset period. In essence, the proponement of Mr. Mukund is that there is a mandatory command prescribing a cut-off date by way of limitation and after the expiry of the said period no action is envisaged and in the case at hand, the adjudicating officer in actuality took action on 22-8-2002 which is beyond the prescribed period. 14. It is worth noting that section 49(3) of FEMA uses the words "no adjudicating officer shall take notice of any contravention under section 51 of the repealed Act". The words used 'shall take notice of' has its own signification. Section 51 postulates holding of an enquiry in the prescribed manner. Rule 3 of this Rule deals with adjudication proceedings. The rule stipulates various stages in the adjudication proceeding. Rule 3 lays down that in holding an enquiry under section 51 for adjudication, the adjudicating officer is required, in the first instance, to issue a notice to such person requiring him to show cause within such period as may be specified in the notice. Thereafter, the adjudicating officer after considering the show cause/reply, as required under sub-rule (4) of the....
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....ssue notice under rule 3(1) or decide whether or not to accept the cause shown by the person and pass consequential orders, either dropping the proceedings or continuing the proceedings." 15. In Videocon International Ltd.'s case (supra ), the Apex Court was dealing with the term (cognizance) and in that context, Their Lordships expressed the view as follows : "19. The expression "cognizance" has not been defined in the Code. But the word (cognizance) is of indefinite import. It has no esoteric or mystic significance in criminal law. It merely means "become aware of" and when used with reference to a Court or a Judge, it connotes "to take notice of judicially". It indicates the point when a Court or a Magistrate takes judicial notice of an offence with a view to initiating proceedings in respect of such offence said to have been committed by someone. 20. "Taking cognizance" does not involve any formal action of any kind. It occurs as soon as a Magistrate applies his mind to the suspected commission of an offence. Cognizance is taken prior to commencement of criminal proceedings. Taking of cognizance is thus a sine qua non or condition precedent for holding a valid trial. Cogniza....
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....ance means application of mind by the Magistrate to the suspected commission of an offence and the same is done prior to commencement of criminal proceeding and further taking cognizance is the sine qua non or the condition precedent for holding a valid trial. Quite apart from the above, Their Lordships have held that initiation of proceeding must precede commencement of proceeding. Section 51 of FERA deals with holding an enquiry. The enquiry, we are disposed to think, has insegregable nexus with the issue of a show cause as the rule so mandates. Thus, the reliance placed on by the learned Single Judge on the decision rendered in Videocon International Ltd.'s case (supra) cannot be found fault with. 17. We have already referred to the decisions in Bhaskaran Pillai's case (supra) and Naina Maricair's case (supra) and we are in agreement with the said view. As the language employed in the rule deals with various steps and section 49(3) employs the terms 'shall take notice of' the period prescribed has to be computed from the date the contravention is taken notice of by the adjudicating officer. If the said words are not given their requisite meaning and not read in the real context....
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....very word, every section and every provision. We examine the Act as a whole. We examine the necessity which gave rise to the Act. We look at the mischiefs which the Legislature intended to redress. We look at the whole situation and not just one-to-one relation. We will not consider any provision but of the framework of the statute. We will not view the provisions as abstract principles separated from the motive force behind. We will consider the provisions in the circumstances to which they owe their origin. We will consider the provisions to ensure coherence and consistency within the law as a whole and to avoid undesirable consequences." 21. In Sri Jeyarama Educational Trust v. A.G. Syed Mohideen [2010] 2 SCC 513, the Apex Court has held thus - "It is now well settled that a provision of a statute should have to be read as it is, in a natural manner, plain and straight, without adding, substituting or omitting any words. While doing so, the words used in the provision should be assigned and ascribed their natural, ordinary or popular meaning. Only when such plain and straight reading, or ascribing the natural and normal meaning to the words on such reading, leads to ambiguity,....