TaxTMI 
TaxTMI 
2013 (8) TMI 584
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....fer or Issue of Security by a Person Resident Outside India) Regulations, 2000 and Para 2, 3 and 9(1) (A) & (B) of Schedule 1 of the said Regulation read with Press Note no. 3 (2007 series) issued by Ministry of Commerce and Industry, Department of Industrial Policy and Promotion (SIA) (FC Division) by M/s Etisalat DB Telecom Pvt. (formerly, M/s Swan Telecom Pvt. Ltd.). 3. According to the complaint, it is alleged that M/s Swan Telecom Pvt. Ltd , (M/s Etisalat DB Telecom Pvt. Ltd.) contravened the condition of clause (vi), (vii) and (xxi) of Para-B of Press Note No. 3(2007 series) as aforesaid and thereby contravened the provisions of para 2 of Schedule 1 of Regulation (5) (1) of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations 2000 read with section 6(3)(b) of FEMA, 1999 in issuing shares to M/s Etisalat Mauritius under automatic route facility to the tune of Rs.3228.44 Crores. 4. It was further stated in the complaint that M/s Swan Telecom Pvt. Ltd. (M/s Etisalat DB Telecom Pvt. Ltd) chose to issue 5.27% equity shows to M/s Genex Exim Ventures Pvt. Ltd and 44.73% equity to M/s Etisalat Mauritius without any FIPB appr....
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....reply dated 05.10.2012 before the Adjudicating Authority. 8. On 12.12.2012 the appellants filed another application seeking permission to cross-examine certain persons for effective disposal of the matter. The cross-examination was requested of Sh. Rajeshwar Singh, Assistant Director of Enforcement, Sh. Ahmed Shakir, Director of M/s/ Genex Exim Venture Pvt. Ltd., Sh. Pratap Ghosa, CFO of M/s Etisalat DB Telecom Pvt. Ltd. and Sh. K. Vasudeva, Vice President Finance of M/s Etisalat DB Telecom Pvt. Ltd. Vide order dated 03.01.2013 the Adjudicating Authority rejected the applications of the appellants. Thereafter the appellants filed the said writ petition. The learned Single Judge dismissed the said writ petitions vide order dated 24.01.2013. Hence the present appeal has been filed. 9. The learned Single Judge dismissed the writ petition. The impugned order held that the stage for leading cross examination had not been reached and that further one would be slow to interdict proceedings before the adjudicating authority on the grounds raised in the writ petition. The learned Single Judge also observed that the appellants were attempting to derail the adjudication proceedings by filin....
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.... under the Foreign Exchange Regulations Act 1973, the enquiry was conducted in exercise of power under "The Adjudication Proceeding and Appeal Rules 1974". He states that the procedure as prescribed for adjudication of the proceedings in Rule 3 of the said Rules is almost identical as Rule 4 of the Foreign Exchange Management Rules 2000, (adjudication proceedings and Appeal) Rules 2000 (hereinafter called the „Rules of 2000')] and the present proceedings are being conducted under the said Rules of 2000. 12. He relies upon the judgment of Division Bench of the Kerala High Court in the case of Central Govt. represented by Directorate, Enforcement Directorate, Foreign Exchange Regulation Act, New Delhi vs. Fr. Alfred Iames Fernandez, AIR 1987 Kerala 179 and the judgment of the Single Bench of this Court in the case of Mehar Singh v. Appellate Board Foreign Exchange 1986(10) DRJ 19 to argue that under the Adjudication Proceedings and Appeal Rules, 1974" these judgments have held that the Rules in question under FERA provide for a personal hearing which includes the right to examine and cross examine the witnesses. He has also relied upon Gurmeet Kaur Dhillon -vs- Tribunal for Fo....
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....o. v. Collector of Customs (1973) 2 SCC 438, where the Hon'ble Supreme Court held that principles of natural justice do not require that in the matter like this, the person who has 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. Relying on the said judgment, he submits that the appellant has no right to cross-examine. In the written synopsis, the learned counsel for the respondent also relies upon the judgments cited by the learned Single Judge of this Court in his order dated 24.01.2013 which are reproduced as under:- (i) M/s. Kanungo and Company vs. Collector of Customs and others, (73) 2 SCC 438; (ii)Balumal Jamnadas Batra vs. State of Maharashtra (1975) 4 SCC 645; (iii) Collector of Customs, Madras & Ors, vs. D.Bhoormall (1974) 2 SCC 544; (iv) K.L.Tripathi -vs- State Bank of India and ors, (1984) 1 SCC 43; (v) Union of India & Anr. -vs- Delhi High Court Bar Association & Ors., (2002) 4 SCC 275; (vi)Hira Nath Mishra and others -vs- The Principal, Rajendra Medical College, Ranchi and Others (1973) 1 SCC 805; (vii)Gurcharan Singh -vs- State of Bomba....
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....i Usmankutty and other whole- sale dealers were false, bogus or manipulated and that the return submitted by the assessee should not be disbelieved on the basis of such entries, and this obviously, the assessee could not do, unless he was given an opportunity of cross-examining Haji Usmankutty and other wholesale dealers with reference to their accounts. Since the evidentiary material procured from or produced by Haji Usmankutty and other wholesale dealers was sought to be relied upon for showing that the return submitted by the assessee was incorrect and incomplete, the assessee was entitled to have Haji Usmankutty and other wholesale dealers summoned as witnesses for cross-examination. It can hardly be disputed that cross-examination is one of the efficacious methods of establishing truth and exposing falsehood." 17. Reference next may be had to the case of Khem Chand, vs. Union of India and others AIR 1958 SC 300. This matter related to the appellant therein who was appointed as Sub-Inspector in the Co-operative Societies Department and posted as Sub-Inspector in the Milk Scheme. A charge sheet was issued upon him formulating several charges. An Enquiry Officer was appointed. T....
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....h an opportunity, it cannot be held thät the matter has been decided in accordance with law, as cross-examination is an integral part and parcel of the principles of natural justice." 20. In view of the above judgement of the Hon'ble Supreme Court especially in the latest judgment of Ayaaubkhan Noorkhan Pathan(supra) it would clearly follow that cross-examination of witnesses has been held to be an integral part and parcel of the principles of natural justice. Refusal to grant permission to cross-examine witnesses would normally be an exception. 21. Learned counsel for the respondent has relied on various judgments to try and submit that there is no inherent right for cross-examination. The first judgment relied upon by him is Gurcharan Singh -vs- State of Bombay, AIR 1952 SC 221. Relevant paragraph 7 is reproduced as under:- "The only point which Mr.Umrigar attempts to make in regard to the reasonableness of this procedure is that the suspected person is not allowed to cross-examine the witnesses who deposed against him and on whose evidence the proceedings were stated. In our opinion, this by itself would not make the procedure unreasonable having regard to the avowed int....
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....city of enquiry committee constituted on account of the complaint received from some girl students regarding certain acts by the male students. In paragraph 13 the Hon'ble Court has held as follows:- "Rules of natural justice cannot remain the same applying to all conditions. We know of statutes in India like the Goonda Acts which permit evidence being collected behind the back of the goonda and the goonda being merely asked to represent against the main charges arising out of the evidence collected. Care is taken to see that the witness who gave statements would not be identified. In such cases there is no question of the witnesses being called and the goonda being given an opportunity to cross-examine the witnesses. The reason is obvious. No witness will come forward to give evidence in the presence of the goonda. However, unsavoury the procedure may appear to a judicial mind, these are facts of life which are to be faced. The girls who were molested that night would not have come forward to give evidence in any regular enquiry and if a strict enquiry like the one conducted in a court of law were to be imposed in such matters, the girls would have had to go under the constant fe....
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....otice issued on August, 21, 1961 all the material on which the Custom 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 Authority. Accordingly, we hold that there is no force in the third contention of the appellant." The aforesaid judgment was rendered on the facts of the said case. 29. The legal position that would follow is that normally if the credibility of a person who has testified or given some information is in doubt or if the version or the statement of the person who has testified is in dispute normally right to cross-examination would be inevitable.If some real prejudice is caused to the complainant, the right to cross-examine witnesses may be denied. No doubt,....
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....shares by Genex Exim Ventures Pvt. Ltd. was in fact a foreign investment disguised as domestic investment. 11.3 of the complaint reads as under:- "11.3 It is thus clear that purchase of shares by Genex Exim Ventures Pvt. Ltd. From the overseas funds received under well conceived design was foreign investment disguised as domestic investment. It is also substantiated by the statement of Shri Ahmad Shakir, Promoter/Director of M/s. Genex Exim Ventures Pvt. Ltd. He in his statement dated 07.04.2011 under FEMA stated that he had already tendered full facts regarding investment in Swan & agreement with Etisalat etc. in his statements dated 02.02.11, 17.03.11 and 07.04.11 under PMLA." Similarly, in paragraphs 8.2 and 8.3 of the complaint again the complaint relies upon the statement of the said Shri Ahmad Shakir. 32. Further alongwith the complaint is annexure B with the heading "List of relied upon documents to complaint" at Sl.No.9 of the said annexure is the statement dated 2.2.2011, 17.3.2011 and 7.4.2011 of Shri Ahmad Shakir, at serial No.10 is the statement dated 08.04.2011 of Mr.Pratap Ghose and at serial No.11 is the statement dated 06.04.2011 of Mr.K.Vasudeva. 33. In the ap....