IQBAL SINGH SABHARWAL Vs. UNION OF INDIA

JUDGEMENT

(1.) THE instant petition filed under Article 226 of the Constitution prays for quashing order dated 17.11.2008 (P.8) passed by the Deputy Director of Enforcement and the corrigendum dated 2.12.2008 (P.9) issued by her. The petitioner has been found guilty of charge under Section 6(3)(i) of the Foreign Exchange Management Act, 1999 (for brevity 'the FEMA Act') read with Regulation 4 of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulation 2000 (for brevity 'the FEMA Regulations'). After declaring him guilty in pursuance of the powers conferred on the Deputy Director a penalty of rupees five lacs has been imposed on the petitioner.

(2.) BRIEF facts necessary for the disposal of the controversy raised are that the petitioner has been an Indian citizen, holding an Indian Passport. On 5.11.1999 he purchased a plot situated in Ludhiana at an open auction conducted by the Debt Recovery Tribunal, Jaipur. On 18.2.2003, the Enforcement Directorate, Jalandhar initiated investigation against the petitioner alleging that the plot purchased by him in the open auction is an agricultural plot which the petitioner had purchased by violating the provisions of FEMA Act. He was summoned and his statement was recorded. On 13.3.2003 during the course of investigation the respondent informed the petitioner that the plot purchased by him fell under industrial zone and hence there was no violation (P.1) of any penal law. In that regard reference has been made to the letter dated 5.2.2003 issued by the District Town Planner, Ludhiana.

(3.) IN the written statement filed by the respondents, the respondents have raised a preliminary objection that an alternative remedy of appeal under Section 17 of the FEMA Act is available to the petitioner. The other broad facts have however been admitted. It has been clarified that a reference was received from the Reserve Bank of India on 26.6.2003.The case was thereafter re-opened and re-investigated which resulted in filing of complaint on 28.7.2006 ( P.3) before the adjudicating authority and issuance of show cause notice to the petitioner which is based on the report dated 23.3.2005 of the Tehsildar, Ludhiana (E) informing the Directorate that the plot in question was an agricultural land and that there was no industry at the spot (R.1). The report sent by the Town Planning Department on 22.9.2005 showed that the land in question fell in industrial zone but the Tehsildar, Ludhiana vide his letter dated 11.10.2005 informed the Directorate that according to the revenue entries cultivation of the land in question at the time of auction i.e. 5.11.1989 was vacant but thereafter it has been used for agricultural purposes. No certificate of change of land use under the various provisions of the statute was obtained. Therefore, it continues to be agricultural land.