CENTRAL GOVERNMENT Vs. FR ALFRED JAMES FERNANDEZ

JUDGEMENT

(1.) This appeal by the Central Government is brought from the order of the Foreign Exchange Regulation Appellate Board (the Board) quashing the order of the, Additional Director of Enforcement dated 29.10.1977, whereby a penalty of Rs. 1,18,000/- was imposed upon the respondent in this appeal for the alleged violation of the provisions of Sections 8 (1) and 9(1) (f) (i) of the Foreign Exchange Regulation Act, 1973. The main contention of the respondent before the Board was that rules of natural justice were breached by the officer at first instance for the reason that the respondent was not given an opportunity to, cross-examine persons who had, pursuant to summons under Section 40, given statements to the department. This contention was accepted by the Board. Accordingly the Board held: 3. We, therefore, set aside the order of the adjudicating officer and remand the case for fresh disposal after giving the appellant an opportunity to cross-examine the persons whose statements were relied upon by the Department for substantiating the charges.

(2.) Section 51 of the Act, which deals with the power to adjudicate in respect of the matter provided under Section 50, that is, the imposition of penalty, provides for an enquiry to be conduced in the manner prescribed by rules. The relevant provisions are those, which are contained in rule 3 of the Adjudication Proceedings and Appeal Rules, 1974. That rule says that the person proceeded against in an enquiry under Section 51 has to be heard: T1either personally or through his lawyer or other authorised representative. The rule thus postulates Ii personal hearing, which implies a right to appear in person and to adduce evidence. This Includes a right to examine and cross. examine witnesses.

(3.) Sections 39 and 40 are analogous to Sections 107 and 108 of the Customs Act, 1962. Section 39 empowers the concerned officer to conduct Investigation or other proceeding, and, in the course of any such investigation or proceeding, to require any person to produce or deliver any document relevant to such investigation or proceeding, or to examine any person acquainted with the facts and circumstances of the case. Section 40 confers on the officer power to summon persons to give evidence and produce documents. While Section 39 gives the concerned officer power to investigate into matters which may ultimately result to an enquiry under Section 51. Section 40 deals with the power to summon persons in connection with the enquiry for giving evidence or making statements and producing documents.