SPECIAL DIRECTOR Vs. MOHAMMAD GHULAM GHOUSE

JUDGEMENT

(1.) Leave granted.

(2.) The interim order passed by a Division Bench of the Bombay High Court is under challenge by the Union of India and the Special Director, Enforcement Directorate, Ministry of Finance, Govt. of India, Respondent No. 1 filed a writ petition before the Bombay High Court questioning legality of the show cause notice No. T-4/144/SDE/(AKB)/B/2002 dated 31st May, 2002 issued by the appellant No. 1 and prayed that the same may be quashed and set aside, for allegedly being illegal, null and void. A prayer for interim relief was made to the effect that pending hearing and final disposal of the writ petition, the Court be pleased to pass an order of injunction restraining the respondents i.e. present appellants before this Court and the State of Maharashtra (respondent No. 3 in the present appeal) and/or his subordinates or any other officer acting on his behalf from initiating any proceeding pursuant to the show cause notice referred to above, as issued by the present appellants. The High Court passed the following order on 11-9-2002 :

(3.) According to the appellants the writ petition is thoroughly misconceived as it challenges a show cause notice and in any event the final relief as sought for by respondent No. 1 writ petitioner in relation to the show cause notice should not have been granted by an interim order of the nature passed by withholding any further action in this regard. It was pointed out that respondent No. 1 is responsible for financial irregularities involving nearly Rupees 270 crores and documents have been forged, accounts have been manipulated; and in any event respondent No. 1 was free to canvass all the points that were taken in the writ petition before the authority issuing the notice. Instead of doing that he rushed to the High Court and unfortunately the High Court not only entertained the writ application but also granted interim relief which was in effect allowing the writ petition even before it was heard on merits. The final relief sought for itself, in substance, was granted by the interim order. There was clear violation of the provisions of Foreign Exchange Regulation Act, 1973 (in short the FERA) and Foreign Exchange Management Act, 1999 (in short the FEMA). The Enforcement Directorate has clearly indicated in the notice the various infractions which led to such large scale illegal transactions of more than Rupees 270 crores. Respondent No. 1 (writ petitioners) was clearly guilty of various provisions of FERA and FEMA. The High Court should have thrown out the writ petition at the threshold.