KIBS HOISERY MILLS PVT. LIMITED Vs. THE SPECIAL DIRECTOR DIRECTORATE OF ENFORCEMENT FOREIGN EXCHANGE MANAGEMENT ACT

JUDGEMENT

(1.) THE petitioners have filed this Writ Petition praying for issuance of a writ of certiorari to quash the proceedings issued by the respondent dated 15.7.2010.

(2.) THE impugned proceedings is an interlocutory order passed by the respondent in and by which the respondent rejected the application made by the petitioner for cross examination of the witnesses to the magazer, officers who carried out investigation and recorded statements, the General Manager and Export Manager of the 6th petitioner Company and the officers of customs who assessed the export establishments of the notices. The request for seeking copies of the shipping bills and invoices which have been tendered to the customs officers were also rejected by same order.

(3.) MR .B.Kumar, learned Senior Counsel appearing for the petitioner after elaborately referring to the statutory provisions and the scheme of 'FEMA' submitted that the entire adjudication proceedings right from the stage of commencement is vitiated for not following the procedure under FEMA. It is submitted that the manner in which the adjudication has to be done is stipulated under the provisions of the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 and Rule 4 prescribes the procedure for holding of enquiry. It is submitted that the adjudication proceedings under the Act is differently structured and for which purposes, reference was made under Rule 4 of the Rules. It is submitted that as per Rules, the complaint is given by the Enforcement Officers to the Special -Director who issues the show cause notice. On reply being given by the noticee, the adjudicating authority in terms of Sub Rule 3 of Rule 4 of the Rules has to form an opinion whether the enquiry should be held or not, he may also accept the reply and drop the proceedings. Further such opinion must be in writing and without recording opinion, the adjudicating authority is not entitled to proceed to the next stage.