NARENDER SINGH Vs. ENFORCEMENT DIRECTORATE

JUDGEMENT

(1.) BY these proceedings under Article 226 of the Constitution of India, the petitioners seek a quashing order, against the Show -cause Notice/Memorandum for adjudication, dated 21 -5 -2002 issued under Section 51 of Foreign Exchange Regulation Act, 1973 ('FERA') issued by respondents.

(2.) THE allegations in the impugned show -cause notice, in brief, proceed on the premise that Nestle World Trading Corporation (NWTC) acted so as to raise suspicion that coffee exported by Nestle India Ltd. ('NIL'), was subsequently resold by it (NWTC) and that the petitioners herein being directors/in -charge of NIL, during the relevant period were responsible for the conduct of the said company. It was alleged, therefore, that they rendered themselves liable to be proceeded against and punished along with the Company for the contravention committed by the NIL, in terms of Section 68 of FERA, 1973.

(3.) THE petitioners contend that the Directorate of Revenue Intelligence (DRI), on 19 -11 -1996, searched NIL's premises and, again repeatedly, yet they did not find any instance of diversion of exported goods or under invoicing by it (NIL). Further, NIL and its officers fully co -operated with investigations initiated by the DRI and Enforcement Directorate. The petitioners submit that NIL shipped the coffee CIP Russia after arranging for and paying freight till Russia, and handed over documents of shipping/export in terms of conditions of LC opened by the Russian buyer. It is submitted that upon delivery of documents to Indian Bankers, duly authorized by the RBI, NIL had no control over the goods as the property in them passed to the buyers. The value of goods had been received in full through banking channels. Thus, it was submitted that the NIL has not committed any violation of any provision of FERA.