1995 (3) TMI 332 - HC - Companies Law

Summary

Issues Involved:
1. Jurisdiction of the Deputy Director to issue the memorandum.
2. Validity of service of the memorandum.
3. Alleged violation of principles of natural justice due to non-supply of documents.

Detailed Analysis:

1. Jurisdiction of the Deputy Director to Issue the Memorandum:
The petitioner contended that the memorandum was issued by a Deputy Director of the Enforcement Directorate, who was not designated as an adjudicating officer, thereby rendering the memorandum without jurisdiction. The court examined the relevant notifications and found that the Deputy Director, Sri A. K. Banerjee, was authorized under section 50 read with section 3 of the Foreign Exchange Regulation Act, 1973, to issue the show-cause notice as an adjudicating officer. The court concluded that the notifications dated September 22, 1989, and September 17, 1993, empowered the Deputy Director and the Special Director to adjudicate cases under the Act. Therefore, the memorandum was validly issued, and the challenge on jurisdictional grounds was rejected.

2. Validity of Service of the Memorandum:
The petitioner argued that the memorandum was not served personally on him but on his wife, which was contrary to rule 10 of the Adjudication Proceedings and Appeal Rules, 1974. The court noted that the memorandum was sent by registered post with acknowledgment due, and the postal acknowledgment card was signed by the petitioner's wife. Rule 10 allows service by registered post to the address of the person concerned. The court held that the service was valid, as the rule does not require personal receipt by the addressee. Additionally, the petitioner confirmed receipt of the memorandum by sending a telegram to the Deputy Director. Thus, the court found no irregularity in the service of the memorandum.

3. Alleged Violation of Principles of Natural Justice Due to Non-Supply of Documents:
The petitioner claimed that two of the four categories of documents listed in the annexure to the memorandum were not supplied, causing grave prejudice and violating the principles of natural justice. The court noted that the respondent denied this claim in their counter-affidavit. The court emphasized that the memorandum itself disclosed that the original documents were available for inspection by the petitioner or his representatives. The court held that at the show-cause notice stage, the petitioner could request copies of the documents, and the department was obliged to provide them. The court concluded that the non-supply of documents at this stage did not constitute a violation of natural justice and rejected this ground of challenge.

Additional Observations:
The court advised that to avoid technical contentions that delay proceedings, it is advisable for the show-cause notice to clearly state the order under which the officer or authority is empowered to issue such notice and to issue the notice under the same designation as authorized.

Conclusion:
The court dismissed both the writ petition and the writ appeal, finding no merit in the contentions raised by the petitioner. The connected W.M.P. and C.M.P. in the writ petition and writ appeal were also dismissed. No order as to costs was made.