S MOHAN Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner herein challenges Rules 3 of the Adjudication Proceedings and Appeal Rules, 1974 framed by the first respondent herein under S. 79 of the Foreign Exchange Regulation Act, 1973 as illegal, arbitrary, ultra vires and void.

(2.) The petitioner herein is a practising Chartered Accountant in Madras since 1978. A search was made at the petitioner's office and residence and on the same day another search was made at Hotel Savera by the officers of the respondents and the petitioner alleges that he has nothing to do with the same. It is stated in the affidavit that later the petitioner was summoned by the officers of the third respondent for enquiry and on 10-l2-1991 the petitioner attended the enquiry. Subsequently, the second respondent issued a memorandum against 11 persons including the petitioner as accused charging of offences under the Provisions of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as "FERA") and the petitioner was charged under Ss. 8(1) and 64(2) of FERA, 1973. The petitioner was called upon to show cause as to why adjudication proceedings under S. 50 of the FERA should not be instituted against him. 25 documents were relied upon by the respondents Department. It is also stated that those documents were available for inspection at the office of the third respondent at Madras. It seems the petitioner on 5-2-1992 wrote to the second respondent stating that he has not committed any offence, that he had acted only in the professional capacity as Chartered Accountant. It seems the petitioner requested the second respondent to furnish copies of some documents and by letter dated 4-3-1992, the petitioner was replied that the petitioner can make inspection of the documents in the office of the third respondent at Madras. It seems that the petitioner wrote a letter on 19-3-1992 stating that inspection of documents would be insufficient and that authenticate copies of the same were very essential for him to defend his case and a copy of the said letter was marked to the second respondent. The petitioner alleges that with the available records he sent a reply on 30-4-1992 stating that he has not violated any provision of FERA and that he is neither a necessary nor a proper party to the adjudication proceedings. However, by order dated 25-6-1992 the second respondent has stated that the second respondent is of the opinion that adjudication proceedings as contemplated u / S. 51 of the FERA would be held and the hearing was fixed on 14-8-1992 at 11 a. m. The petitioner seems to have objected to the notice of the second respondent and requested for the hearing to be conducted at Madras. This letter is dated 27-7-1992. However, by another notice dated 25-8-1992, the secnd respondent fixed the second hearing at Delhi on 25-9-1992. It seems respresentations were made by the accused persons stating that they are unable to attend the enquiry at New Delhi and requesting that the enquiry be held at Madras. The reasons they have stated for such request are that the alleged offence has been committed at Madras, that almost all the accused reside at Madras, that all documents relied upon were admittedly kept at the office of the third respondent at Madras, that all the officers who investigated the case are at Madras and that all witnesses mentioned in the memorandum are all permanent residents of Madras. It is also stated that however, the second respondent sent a notice dated 7-10l992 stating that the enquiry will be held at New Delhi at 4-00 p. m. on 2-11-1992 and that hearing cannot be fixed at Madras. It seems some of the accused persons challenged the said notice in W.P. Nos.14923, 16941 and 16942 of 1992 and they have been admitted and interim stay was also granted therein by Srinivasan, J. by orders dated 16-10-1992 and 29-10-1992. Subsequently, it seems the respondents have filed counter affidavits in the said writ petitions. Subsequently, a notice was issued on 21-1-1993 holding the enquiry at 4-00 p.m. on 8-3-1993 and when it was brought to the notice of the respondents that 8-3-1993 is a holiday on account of 'holi' festival, the second respondent by notice dated 2-3-1993 fixed the hearing on 23-3-1993 at 4-00 p.m. at New Delhi. At this stage, the writ petitioner came up before this Court with this writ petition.

(3.) The petitioner mainly alleges in the affidavit that Rule 3 of the adjudication proceedings and Appeal Rules 1974 does not prescribe a manner and the procedure by which an accused person is given a reasonable opportunity for making his representation in this matter and as such it is violated of Art. 14 of the Constitution of India. It is also alleged in the affidavit that the adjudication proceedings should be conducted within the jurisdiction of the High Courts where the right of appeal is given under S. 54 of FERA. It is also stated that when all the witnesses reside at Madras, and the entire investigation were conducted at Madras and when an appeal against the order of the Foreign Exchange Regulation Appellate Board lies exclusively within the jurisdiction of this Court, Rule 3 of FERA is invalid since it does not provide reasonable opportunity as contemplated u / S. 54 of the FERA. Various decisions of the Apex Court as well as by this Court are relied upon in the affidavit to show that Rule 3 of the Adjudication Proceedings and Appeal Rules 1974 are not in consonance of S. 51 of the FERA and as such it has got to be struck down. It is also stated that Rule 3 of the Adjudication Proceedings and Appeal Rules, 1974 gives unfettered powers to the adjudicating officer and that there is no procedure at all, and as such it should be quashsed.