TaxTMI 
TaxTMI 
2013 (2) TMI 39
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....t. It may also be relevant to record that, this is a second round of litigation before this court. In the first round, the petitioner had approached this court, by way of two separate writ petitions bearing nos.6358/2012 and 6360/2012, seeking copies of final replies filed by other noticees apart from the petitioners herein; who are arrayed as respondents in the complaint filed by DOE. The said writ petitions were disposed of by an order dated 05.10.2012, directing respondents to give replies, if any, filed by other noticees after the petitioners had filed their final reply. It is not disputed before me that the respondents have complied with the said direction and have supplied copies of replies of other noticees. 3. Before I deal with the contentions of the petitioners raised before me, I may briefly touch upon the circumstances which have led to the institution of the present petitions:- 3.1 On 01.07.2007, the Assistant Director, DOE filed a complaint under Section 16(3) of the Foreign Exchange Management Act, 1999 (in short FEMA) for alleged contravention of Section 6(3)(b) of the FEMA read with Regulation 5(1) and paragraph 2, 3 and 9(1)(A) and (B) of Schedule 1 of the F....
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.... Industrial Approvals (in short SIA) and / or the Foreign Investment Promotion Board (in short FIPB) in Swan (now known as Etisalat). 3.5 In order to establish the allegations, apart from statements of employees of Genex and Etisalat, several documents have been filed to establish the charge. These include, inter alia, subscription agreement dated 23.09.2008 to which amongst others Swan and petitioners are parties; Put and Call Option agreements arrived at between Etisalat International India Ltd. (EIIL) and Genex; letter dated 09.03.2011 issued by one of the Directors of Etislat Mauritius Ltd (EML) to DOE alongwith relevant enclosures; amendment dated 04.12.2008 to the subscription agreement; assignment deed dated 29.10.2008 executed between EIIL and EML; deed of amendment dated 12.11.2008 between EIIL and EML, minutes of Board of Directors meeting dated 27.10.2008, 25.02.2009 and 09.09.2009; letter of FIPB dated 29.09.2010 issued to Etisalat; letters dated 01.09.2010 and 13.02.2010 issued by Etisalat to DOE alongwith relevant enclosures; letter dated 05.03.2011 of Registrar of Companies, Mumbai (ROC) to DOE alongwith relevant enclosures; letter dated 29.03.2011 of RBI, Mumbai ....
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....orementioned applications, apparently were followed by a request, made on, 06.09.2012, to the Special Director, DOE for a decision on the said applications. 4.1 According to the petitioner, the Special Director, DOE by an order dated 17.09.2012 dismissed the applications filed by the petitioners. 4.2 It is against the order dated 17.09.2012, that the petitioners had approached this court by way of two writ petitions (WP(C) Nos. 6358/2012 and 6360/2012) which were disposed of vide order dated 05.10.2012, with a direction that, after a final reply was filed by the petitioners, copies of replies of other noticees be furnished to them. 4.3 As indicated above, the petitioners admittedly were provided copies of replies of other noticees on 12.11.2012 after the petitioners had filed their final replies on 05.10.2012 and made, requisite request to the respondents. 4.4 Undoubtedly, even in the final reply dated 05.10.2012 filed by the petitioners, there is no assertion to the effect that respondents could not place reliance on the statement of persons referred to in Annexure B as they were not recorded in their presence. There was significantly, absence of assertion that the pet....
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.... from the date on which notice for payment of such penalty was served, could result in civil imprisonment, under Section 14 of the FEMA. 5.1 In support of his submission that cross-examination was a vital right available to the petitioner; the denial of which would lead to the breach of principles of natural justice, reliance was placed on the following judgments: (a) Ayaaubkhan Noorkhan Pathan Vs. The State of Maharashtra & Ors., Civil Appeal NO.7728/2012 decided on 08.11.2012 by the Supreme Court; (b). Mehar Singh Vs. Appellate Board Foreign Exchange, Crl. A. 109/1975, decided on 18.09.1985; (c). Central Govt. represented by the Director, Enforcement Directorate, Foreign Exchange Regulation Act, New Delhi Vs. Fr. Alfred James Fernandez, AIR 1987 Kerala 179; (d); Natwar Singh Vs. Director of Enforcement, 2010 (13) SCC 255; (e). State of Kerala Vs. K.T. Shaduli Grocery Dealer etc. (1977) 2 SCC 777; (f). S.C. Girotra Vs. United Commercial Bank (UCO Bank) and Others, 1995 Supp (3) SCC 212. 6. On the other hand, Mr. Garg, who appeared for the respondents largely relied upon the impugned order to defend the position of the respondents. It was also submitted by M....
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.... which, no objection was taken that the complainant/ respondents could not rely upon the statements of persons which accompanied the complaint as they were not recorded in their presence. This was the same position which obtained even qua the preliminary reply. 7.1 The aforesaid undoubtedly leads to a conclusion that the petitioners are attempting to derail the adjudication of the proceedings by filing one application after the other at various stages of the adjudication. It is not the case of the petitioners before me that they were not furnished with the material which is relied upon or that they were not issued notice or, even that, they were not given an opportunity to file their defence. It is not the case of the petitioners that they are not being heard in the matter. Therefore, the argument raised in their application for grant of request for cross-examination, which according to them, has been erroneously rejected and would thus, constitute a breach of principles of natural justice, requires to be examined in the background of the aforementioned circumstances, the position which obtains in law, and the stage at which a writ court can be called upon to intervene in ....
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....pplied to the petitioners, which are essentially those, which are executed between the noticees including the petitioners, to demonstrate that there is yet no final evaluation or appreciation of the material, which is placed on record before the adjudicating authority, by the complainant. Whether the complainant is able to establish the allegations made against the petitioners and other noticees based on the material supplied or not and, to the extent the statements become necessary to support or explain the remaining material on record, can become known, only after a final order is passed by the adjudicating authority. It cannot but be contended by the petitioners that prejudice, if any, caused can be assessed only after the adjudicating authority has finally appraised the material placed on record. 7.6 I may only add here that neither the provisions of FEMA i.e., Section 16 which requires a reasonable opportunity to be given to the party against whom a complaint is instituted or the Adjudication Rules, in particular Rule 4 (5), oblige the adjudicating authority to grant as of right the opportunity to the noticees to cross-examine the persons who may have given statements expla....
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.... no evidence that the watches had not been brought into India lawfully. He urged, secondly, that the impugned order wrongly placed the burden on the appellant, thirdly, that the impugned order was made in contravention of natural justice; and fourthly, that there was no evidence that watches had been imported in contravention of law. 12. We may first deal with the question of breach of natural justice. On the material on record, in our opinion, there has been no such breach. In the show-cause notice issued on August 21, 1961, all the material on which the Customs Authorities have relied was set out and it was then for the appellant to give a suitable explanation. The complaint of the appellant now is that all the persons from whom enquiries were alleged to have been made by the authorities should have been produced to enable it to cross-examine them. In our opinion, the principles of natural justice do not require that in matters like this the persons who have given information should be examined in the presence of the appellant or should be allowed to be cross-examined by them on the statements made before the Customs Authorities. Accordingly, we hold that there is no force in ....
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....ssed in this case. In respect of an order involving adverse or penal consequences against an officer or an employee of Statutory Corporations like the State Bank of India, there must be an investigation into the charges consistent with the requirements of the situation in accordance with the principles of natural justice as far as these were applicable to a particular situation. So whether a particular principle of natural justice has been violated or not has to be judged in the background of the nature of charges, the nature of the investigation conducted in the background of any statutory or relevant rules governing such enquiries. Here the infraction of the natural justice complained of was that he was not given an opportunity to rebut the materials gathered in his absence. As has been observed in "On Justice" by J. R. Lucas, the principles of natural justice basically, if we may say so, emanate from the actual phrase "audi alteram partem" which was first formulated by St. Augustine (De Duabus Animabus, XIV, 22, J. P. Migne, PL. 42, 110). 30. In dealing with particular situation we must formulate the actual principles to be applied in a particular situation. Hence it may be i....
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.... is no requirement of cross-examination to be fulfilled to justify fair play in action. When on the question of facts there was no dispute, no real prejudice has been caused to a party aggrieved by an order, by absence of any formal opportunity of cross-examination per se does not invalidate or vitiate the decision arrived at fairly. This is more so when the party against whom an order has been passed does not dispute the facts and does not demand to test the veracity of the version or the credibility of the statement. 33. The party who does not want to controvert the veracity of the evidence from or testimony gathered behind his back cannot expect to succeed in any subsequent demand that there was no opportunity of cross-examination specially when it was not asked for and there was no dispute about the veracity of the statements. Where there is no dispute as to the facts, or the weight to be attached on disputed facts but only an explanation of the acts, absence of opportunity to cross-examination does not create any prejudice in such cases. 34. The principles of natural justice will, therefore, depend upon the facts and circumstances of each particular case. We have set out....
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....aken against him cannot be condemned as bad being in violation of the principles of natural justice. Had he, however, denied any of the facts or had questioned the credibility of the persons who had given information against him, then different considerations would have applied and in those circumstances, refusal to give an opportunity to cross-examine the persons giving information against him or to lead evidence on his own part to rebut the facts would have been necessary and denial of such opportunity would have been fatal. But such is not the case here as we have mentioned hereinbefore....." (emphasis supplied) 8.3 Similarly, another three judge bench judgment of the Supreme Court, in the case of Union of India & Anr. v. Delhi High Court Bar Association & Ors. (2002) 4 SCC 275, while dealing with a challenge to the constitutional validity of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (in short the RDB Act), was called upon to inter alia consider as to whether it was incumbent upon the Debt Recovery Tribunal, under Rule 12(vi) read with Rule 12(vii) of the Rules framed under the RDB Act, to summon a deponent of an affidavit, in a recovery proce....
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.... to do so and there is no desire to prolong the case that it shall require the witness to be present for cross-examination and in the event of his not appearing, then the affidavit shall not be taken into evidence. When the High Courts and the Supreme Court in exercise of their jurisdiction under Article 226 and Article 32 can decide questions of fact as well as law merely on the basis of documents and affidavits filed before it ordinarily, there should be no reason as to why a Tribunal, likewise, should not be able to decide the case merely on the basis of documents and affidavits before it. It is common knowledge that hardly any transaction with the Bank would be oral and without proper documentation, whether in the form of letters or formal agreements. In such an event the bona fide need for the oral examination of a witness should rarely arise. There has to be a very good reason to hold that affidavits, in such a case, would not be sufficient..." (emphasis supplied) 8.4 In the case of Hira Nath Mishra and Others Vs. The Principal, Rajendra Medical College, Ranchi and Others, (1973) 1 SCC 805, the Supreme Court was dealing with the case where the appellants before it were ....
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....elevant statement prejudicial to their view. More recently in Russell v. Duke of Norfolk 1949 1 All ER 109 at page 118 Tucker, L.J. observed: "There are, in my view, no words which are of universal application to every kind of inquiry and every kind of domestic tribunal. The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry the rules under which the tribunal is acting, the subject-matter that is being dealt with, and so forth. Accordingly, I do not derive much assistance from the definitions of natural justice which have been from time to time used, but, whatever standard is adopted, one essential is that the person concerned should have a reasonable opportunity of presenting his case." More recently in Byrne v. Kinematograph Renters Society Ltd. 1968 2 All ER 579 Harman, J. observed "what, then, are the requirements of natural justice in a case of this kind? First, I think that the person accused should know the nature of the accusation made; secondly that he should be given an opportunity to state his case; and thirdly, of course, that the tribunal should act in good faith. I do not think that there really is anything mo....
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....de to the request of the Respondent to cross-examine the deponent, it could have, in the appeal preferred by it, assailed the decree/final order on that ground and the appellate authority would have passed appropriate orders. The mere fact that the Respondent had not been given an opportunity to cross-examine the deponent did not enable the Respondent to by-pass the provision for appeal and approach the High Court directly by a writ petition under Articles 226 and 227 of the Constitution of India, challenging the decree/final order on the ground that the order earlier passed, refusing to permit the cross-examination of the deponent, was erroneous....." (emphasis supplied) 11. I may only indicate that each of the judgments relied upon by the petitioners, while acknowledging the right of the parties concerned in those cases to cross-examine the witnesses have taken into account the factum of prejudice caused, the conduct of the aggrieved party, the provisions of the statute and the rules under which the right is demanded and the nature of the enquiry. The principles therefore are not in issue. It is the application of the principles enunciated which is important. 12. This is cl....
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....y statement of persons had not been supplied to the petitioners. 14. In the case of Ayaaubkhan Noorkhan Pathan the Supreme Court was dealing with an appeal wherein the judgment of the Bombay High Court was challenged which had ordered a re-examination by the Scrutiny Committee of a caste certificate issued in favour of the appellant based on a challenge to it by a person who was found to be a complete stranger to the proceedings. As a matter of fact, the Supreme Court labeled him as a meddlesome inter lopper. The Supreme Court in the said judgment carefully examined the law on the subject and observed that once a caste certificate is issued after due verification by the vigilance cell, a presumption is raised with regard to its veracity, therefore, strong material evidence would be required to rebut such presumption. The respondent before the Supreme Court, who chose to challenge the caste certificate on the ground that he was raising a public cause, according to the judgment, ought to have acted with responsibility by bringing relevant material before the Scrutiny Committee. It is in this context that the court held that, a mere averment made in the petition impugning the verac....