1986 (11) TMI 328 - HC - Companies Law

Summary

Issues:
Violation of natural justice in not allowing cross-examination of witnesses, jurisdiction of the Board in quashing and remanding the case, fairness of remanding the case after a significant delay, consideration of evidence on record by the Board instead of remanding.

Analysis:
The judgment involves an appeal by the Central Government against the Foreign Exchange Regulation Appellate Board's decision to quash a penalty imposed on the respondent for alleged violations of the Foreign Exchange Regulation Act, 1973. The respondent contended that rules of natural justice were breached as he was not given the opportunity to cross-examine persons whose statements were relied upon by the department. The Board accepted this contention and set aside the order, remanding the case for fresh disposal after allowing the appellant to cross-examine the relevant persons. The Act mandates a personal hearing with the right to adduce evidence, including examining and cross-examining witnesses.

The sections 39 and 40 of the Act are analogous to sections of the Customs Act, empowering officers to investigate and summon persons for evidence and documents. In this case, the respondent was not allowed to cross-examine the persons who had given statements against him, despite his request for such an opportunity. The Board found that this lack of cross-examination rendered the enquiry unfair, leading to the order being set aside and remanded for proper consideration by the concerned officer after affording both parties a fair opportunity to be heard.

The appellant argued that the Board exceeded its jurisdiction by remanding the case, but the Court disagreed, finding the Board's decision justified in ensuring a fair opportunity for the respondent. Cross-objections were filed, contending that remanding the case after a significant delay was unfair, especially considering the respondent's advanced age and health condition. The Board was directed to consider the matter on merits with reference to the evidence on record and any additional evidence the parties may wish to present, instead of remanding the case.

The Court dismissed the appeal, confirming the Board's decision in all respects except for the remand, which was set aside. The Board was instructed to provide both parties with a fair opportunity to be heard and present fresh evidence for the appeal's disposal. The appellant's counsel undertook to ensure the appeal's disposal within six months from the date of the judgment. The cross-objections were disposed of accordingly, with no costs awarded.