FISERV INDIA PRIVATE LIMITED Vs. ASSISTANT DIRECTOR

JUDGEMENT

(1.) By this petition the petitioner has sought quashing of a show cause notice dated 30th September 2020 issued by the Assistant Director, Directorate of Enforcement, Zonal Office, Lucknow (first respondent) thereby calling for an explanation from the noticee (the petitioner) as to why adjudication proceeding as contemplated in Section 13 of the Foreign Exchange Management Act, 1999 (for short FEMA) be not held against it in the manner as provided in Rule 4 of the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 (as amended), read with rules and regulations made thereunder and as to why penalty as provided under Section 13 (1) of FEMA be not imposed for the contraventions as brought under the complaint.

(2.) Before noticing and addressing the issues raised it would be apposite to briefly notice the background facts of the case, as could be elicited from the petition --

(3.) Sri Shashi Nandan, learned senior counsel, assisted by Sri Rahul Agarwal, appearing for the petitioner, urged that although section 7 of FEMA requires every exporter of goods to furnish certain information as specified therein and non furnishing of that information may result in a penalty under Section 13 of FEMA but for initiating proceeding for imposition of such penalty, a complaint has to be filed before the Adjudicating Authority, under Section 16(3) of FEMA, within a reasonable period of such contravention, even though no specific period of limitation for filing such complaint has been provided by FEMA. He submitted that the notice dated 17.08.2017 and the subsequent notice dated 05.12.2017 issued to the petitioner company by the first respondent does not disclose the date as to when the Directorate of Enforcement came to know of non-utilisation of export advances taken by the petitioner company. It has been urged that in absence of disclosure of the date as to when information with regard to non-utilisation of export advances taken by the petitioner company was received by the Directorate of Enforcement, the notice is defective as it fails to disclose as to when the cause of action arose to initiate the proceeding, under the circumstances, considering that the notice deals with alleged contravention that took place more than ten years ago, it is much beyond the reasonable period for commencement of the adjudication proceedings, resulting in serious prejudice to the right of the petitioner to defend itself, hence, the show cause notice, initiating penal proceeding, at such a belated stage, is liable to be quashed.