SELVEDGE Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner, a partnership firm, has filed this petition under Article 226 of the Constitution seeking a writ of mandamus or other appropriate writ, order or direction directing the respondents to return to the petitioner Rs.2,80,000.00 along with interest thereon from the date this amount was seized and till its payment and has also sought a direction to the respondents to pay to it a reward of 20% for giving information to the petitioner (respondents) pursuant to which the department unearthed under invoicing/over invoicing to the tune of over Rs.50 lakhs. The petitioner also wants a compensation of Rs.2 lakhs. There are three respondents. First respondent is the Union of India through the Secretary to the Government of India, Ministry of Finance, Department of Revenue; the second is the Director of Enforcement; and the third is the Assistant Director, Enforcement Directorate, both under the Foreign Exchange Regulation Act, 1973 (for short "F.E.R.A.")

(2.) Noise to show cause was issued to the respondents as to why rule nisi be not issued. This court also directed issuance of notice to Mr. Vinod Mahajan as well. As to how the notice to Mr. Vinod Mahajan came to be issued we shall see presently. It is not necessary to detail the facts except to note that there was some existing business dispute between Vinod Mahajan, proprietor of M/s. Joyline GMBH, Germany, and the petitioner who had exported some garments to Vinod Mahajan but did not receive the payment in time. Since the petitioner was unable to realise the sale proceeds for having exported the goods within a period of six months from the date of despatch which was 19 April 1991, the petitioner was served with a notice dated 4 February 1992 by the Reserve Bank of India to the effect that unless the export proceeds are realised action would be taken under the F.E.R.A. It would appear that in order to settle the problem faced by the petitioner from the Reserve Bank of India the petitioner made an arrangement with Vinod Mahajan for giving to it a draft in the sum of Rs.2,98,136.00 . In this connection we may refer to FAX message sent by Vinod Mahajan to the petitioner which has been brought on record by the petitioner itself :-

(3.) It will, thus, appear that the intention was that the petitioner would show this amount of Rs.2,98,136.00 as its export proceeds realisation to R.B.I, so that the R.B.I, may not take any action against the petitioner under F.E.R.A. The FAX message quoted above would also show that Vinod Mahajan was quite reluctant to part with this money because he too had a certain claim against the petitioner. This FAX message was taken by the petitioner to the third respondent, the Assistant Director, Enforcement Directorate. A letter dated 17 November 1992 was written by the petitioner in that connection. This letter is as under :-