A ABDUL SAMATH Vs. UNION OF INDIA

JUDGEMENT

(1.) IT is contended on behalf of the petitioner that the officers of the respondent Department have conducted a search at the residence of the petitioner which resulted in seizure of (a) US Dollar 1,92,493/-; (b)Saudi Riyals 5,44,000/-; (c) Qatar Riyals 12,000/-; (d) UAE Dirhams 70,500/-and (e) Singapore Dollars 11/ -. By a show cause notice dated 29. 12. 1993, the special Director, Enforcement Directorate, New Delhi required the petitioner to show cause in writing as to why the adjudication proceedings as contemplated under Section 51 of the Foreign Exchange Regulation Act, 1973 (hereinafter called as the'act') should not be held against him for the alleged contravention of Section 8 (1) of the Act and as to why the above foreign currencies should not be confiscated under Section 63 of the Act. IT is further contended that as per Section 41 of the Act, if no proceedings are initiated within a period of six months, the document should be returned. IT is further contended that the proceedings said to have been initiated under Section 51 of the Act, have not commenced within the period of six months. The learned counsel for the petitioner further contended that the notice issued by the special Director cannot be termed as proceedings initiated under Section 51 of the Act. According to the learned counsel, any notice issued under Rule 3 (4)of the Adjudication Proceedings and Appeal Rules, 1974 (hereinafter called as 'rules') alone should be construed as the actual commencement of the enquiry proceedings under Section 51 of the Act and what was served upon the petitioner is only a notice for initiation of enquiry proceedings under Rule 3 (3) of the rules. Accordingly, the learned counsel contended that the notice served upon him cannot be termed as the actual commencement of the proceedings. The learned counsel further contended that even the said notice was served only on 15. 4. 1994, viz. , which is beyond the period of six months and as such, the petitioner is entitled to the relief as stated in the petition. The learned counsel for the petitioner placed reliance upon the decisions of the Supreme Court and other High Courts in support of his contention.

(2.) PER contra, the learned Senior Counsel for Central government contended that the commencement of the adjudication proceedings is actually from the date of issuance of show cause notice vide proceedings dated 29. 12. 1993 issued by the Special Director and not the date of service of the notice. The learned counsel further contended that the respondent Department has made every effort to serve upon the petitioner initially by registered post which was later on returned undelivered, and thereafter, the service was effected through Police Department, since the petitioner was working as an inspector of Police. The learned counsel further contended that the reliance placed upon by the counsel for the petitioner about the reference in the objections submitted in the connected proceedings pending before the Additional chief Metropolitan Magistrate Court in C. C. No. 1164 of 1994 with regard to the actual date of service of the said proceedings as 15. 4. 1994 is only a reply to the contentions raised by the petitioner therein, and that would not mean that the Department has not made any attempt to serve the show cause notice dated 29. 12. 1993 immediately thereafter. The learned counsel further contended that the petitioner was adopting delaying tactics to avoid the service of show cause notice, and as such, he cannot take any advantage for the alleged delay in the service of notice. The learned counsel also relied upon the various decisions of this Court wherein the law has been clearly settled to the effect that the date of show cause notice should be construed as the commencement of proceedings under Section 51 of the Act.

(3.) AS regards the submission with regard to the commencement of proceedings is concerned, the contention of the learned counsel for the petitioner to the effect that the notice issued under Rule 3 (3) of the adjudication Proceedings and Appeal Rules, 1974 cannot be construed as the commencement of proceedings of the enquiry under Section 51 of the FERA of 1973 and only a notice under Rule 3 (4) of the said Rules can be construed as the commencement of the proceedings cannot be accepted. To appreciate the above contention, it is relevant to extract the relevant Rule of Adjudication proceedings and Appeal Rules, 1974, which is extracted here-under:- "the Adjudication Proceedings And Appeal Rules, 1974 Rule 3. Adjudication Proceedings.- (1) In holding an inquiry under Sec. 51 for the purpose of adjudging under Sec. 50 whether any person has committed contravention as specified in Sec. 50, the adjudicating officer shall, in the first instance, issue a notice to such person requiring him to show cause within such period as may be specified in the notice (being not less than ten days from the date of service thereof), why adjudication proceedings should not be held against him. (2) Every notice under sub rule (1) to any person shall indicate the nature of offence alleged to have been committed by him. (3) If after considering the cause, if any, shown by such person, the adjudicating officer is of the opinion that adjudication proceedings should be held, he shall issue a notice fixing a date for appearance of that person either personally or through his lawyer or other authorised representative. (4) On the date fixed, the adjudicating officer shall explain to the person proceeded against or his lawyer or authorised representative, the offence alleged to have been committed by such person indicating the provisions of the Act or of the rules, directions or orders made thereunder in respect of which contravention is alleged to have taken place. "