2018 (2) TMI 762 - HC - FEMA

Right to cross-examine - Cross examine the witnesses whose statements were recorded under Section 37 of FEMA and whose statements have been relied upon in the complaint - complaint alleges that the provisions of section 3(b) of the FEMA have been contravened by the petitioner by making a payment to Cricket South Africa (CSA) a person residing outside India without permission of the Reserve Bank of India (RBI) and that is inter alia apparent from an agreement dated 30th March 2009 executed between the BCCI and Cricket South Africa - Held that - (i) The impugned order dated 10th July 2015 and the contents of the communication are quashed and set aside. (ii) We direct respondent no. 1 to issue summons to the persons whose statements have been recorded and permit the advocates for the petitioner to cross-examine them. However we are of the firm view that neither the petitioner nor the respondents can delay the proceedings any further. (iii) We are indeed surprised that the show cause notice issued way back on 25th November 2011 remains unadjudicated till date. We do not see how even the respondents agreed to the postponement of the proceedings before this court and in a petition filed on 21st August 2015. Since this petition was pending for more than two years the adjudication has been delayed further. Hence to ensure that the adjudication proceedings come to an end expeditiously we direct that the petitioner will appear before the adjudicating authority on 14th February 2018 at 10.30 a.m. and the adjudicating authority shall issue summonses in the requisite forms to the persons whose statements have been recorded and are being relied upon to appear before it for cross-examination and such cross examination shall be held on or before 2nd March 2018. (iv) The cross-examination shall be conducted and concluded in two or three sittings and positively by 13th March 2018. (v) After the cross-examination is conducted and further opportunities as envisaged by the rules are provided we direct that the adjudication proceedings shall be concluded as expeditiously as possible and in any event by 31st May 2018. No extension shall be granted in any circumstances. (vi) We clarify that we have not expressed any opinion on the rival contentions as far as the merits of the allegations in the show cause notices. We also clarify that each of them are kept open for being raised at an appropriate stage before appropriate forum. We must indicate that it is because of the acts and deeds of the BCCI in relation to a tournament styled as IPL that all these proceedings had to be initiated and now conducted in accordance with the FEMA. If IPL has led to serious breaches and violations of the FEMA then it is high time the organisers realise that after 10 years of holding such tournaments what we have achieved can be termed as a gain or advantage or benefit for they are outweighed completely by the resultant illegalities and breaches of law which are projected in several courts consuming a lot of precious judicial time. If the IPL has resulted in all of us being acquainted and familiar with phrases such as Betting fixing of matches then the RBI and the Central Government should at least now consider whether holding such tournaments serves the interest of a budding cricketer the sport the game itself. There is a auction and buying and selling of young cricket players by business houses and chubs. Apart from huge money involved the tournament has brought with it crimes and casualties in the form of ban on clubs and players allegedly involved in wrong doing and breaching of rules and regulations

Issues Involved:
1. Refusal to allow cross-examination of witnesses whose statements were recorded under Section 37 of FEMA.
2. Request for issuance of summons to specific individuals for cross-examination.
3. Request for supply of replies filed by other co-noticees.
4. Request for conducting proceedings for all noticees at the same time and venue.
5. Preliminary objections to the maintainability of the writ petition.
6. Denial of the right to cross-examine as a violation of principles of natural justice.

Detailed Analysis:

1. Refusal to Allow Cross-Examination:
The petitioner sought to cross-examine witnesses whose statements were recorded under Section 37 of FEMA and relied upon in the complaint. The adjudicating authority refused this request, stating that the statements were recorded under oath and contained true facts given voluntarily. The authority concluded that the request for cross-examination did not hold justification.

2. Request for Issuance of Summons:
The petitioner requested the issuance of summons to specific individuals, including N. Srinivasan, Prasanna Kannan, Sundar Raman, Chirayu Amin, Shashank Manohar, Ratnakar Shetty, Ravi Shankar Shastri, M.P. Pandove, and Peter Griffiths, for cross-examination. The adjudicating authority denied this request but agreed to the cross-examination of the complainant, D.K. Sinha.

3. Request for Supply of Replies Filed by Co-Noticees:
The petitioner sought copies of replies filed by other co-noticees in response to the show cause notices. The adjudicating authority did not address this request in the impugned communication.

4. Request for Conducting Proceedings for All Noticees at the Same Time and Venue:
The petitioner requested that the proceedings for all noticees in the eleven show cause notices be held simultaneously at the same venue. This request was not addressed in the impugned communication.

5. Preliminary Objections to the Maintainability of the Writ Petition:
The respondents raised preliminary objections to the maintainability of the writ petition, arguing that the petitioner had evaded the process of law and that the petition should be dismissed on this ground. The court overruled this objection, stating that the adjudicating authority could proceed with the adjudication in the absence of the petitioner, given his undertaking that he would not insist on his presence.

6. Denial of the Right to Cross-Examine as a Violation of Principles of Natural Justice:
The petitioner argued that the denial of the right to cross-examine the witnesses violated the principles of natural justice. The court agreed with this contention, emphasizing that the statements were expressly relied upon in the show cause notices. The court held that it was incumbent upon the adjudicating authority to allow the petitioner to cross-examine the persons whose statements were being used against him.

Conclusion:
The court quashed the impugned order dated 10th July 2015, directing the adjudicating authority to issue summons to the individuals whose statements were recorded and permit the petitioner's advocates to cross-examine them. The court emphasized the need for expeditious adjudication, setting specific deadlines for the completion of cross-examination and the conclusion of adjudication proceedings. The court also highlighted the broader implications of the IPL and similar tournaments, urging the Central Government and administrators to consider their impact on sports and related legal issues.

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