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2023 (6) TMI 249 - HC - FEMAOffence under FEMA - Investigation initiated under FEMA Act initiated - maintainability of the present writ petitions - complainant and Adjudicating Authority being officers of the same rank - As alleged that the Petitioners received foreign direct investment from three foreign companies and one Non-Resident Indian as consideration for issuance of shares in exchange for such investment in M/s Teleonto Tecnologies Pvt. Ltd. - HELD THAT - Supreme Court has time and again reiterated that a writ petition is not maintainable when an efficacious alternative remedy is available. It is only in certain limited circumstances that a writ petition can be entertained, despite there being an alternative remedy. Petitioners have raised only two issues which need consideration by this Court to decide the maintainability of the writ petition. It was contended that the impugned order is violative of principles of natural justice as the same authority which filed the complaint also passed the impugned order. Therefore, the principle of no one can be a judge in his own case is violated. Whether the impugned order was passed in violation of principles of natural justice on account of the complainant and Adjudicating Authority being officers of the same rank/designation? - The maxim nemo judex in causa sua states that a person who has interest either personal or pecuniary in an outcome of a particular lis, he/she shall not act as an adjudicator in the said lis. In other words, a person authorized to decide a dispute between the parties shall refuse decide such dispute, if he/she is connected to any of the party to such dispute either professionally, personally or monetarily. The connection should give rise to strong probable apprehension of bias in favour of one party. Whether the maxim nemo judex in causa sua is violated in the present case merely because the complainant and the Adjudicating Authority happen to be the same ranked officials/authority ? - Merely because an officer is also the complainant, he/she will not be barred from performing other duties as prescribed under a statute. Bias cannot be presumed and a party alleging or attributing bias shall establish reasonable grounds for apprehension for such bias. In the present case, merely because the complaint was lodged by an officer of the rank of Deputy Director of Enforcement and subsequently the impugned order was also passed by the same rank officer, bias cannot be presumed in the absence of any material attributing such bias to the officer. As stated above, though of the same rank, both the officers i.e., one who filed the complaint and one who passed the impugned order were different. Therefore, the maxim nemo judex in causa sua does not apply in cases where the designation/rank of the authority is the same but members heading them are different. Therefore, Issue No.1 is decided by holding that the impugned order was not passed in violation of principles of natural justice. Whether the Deputy Director of Enforcement had jurisdiction to pass the impugned order in light of the contention that the case before the Adjudicating Authority involved an amount more than Rs. 10,00,00,000/-? - A case involving an amount between Rs. 10,00,00,000/- and Rs. 25,00,00,000/- can only be decided by an Additional Director of Enforcement. Further, cases involving an amount between Rs. 2,00,00,000/- and Rs. 5,00,00,000/- have to be decided by the Deputy Director of Enforcement. Petitioner s reliance of the alleged value of shares worth Rs. 8,46,90,000/- to calculate the monetary limit cannot be accepted for the simple reason that the said transfer was done in lieu of a loan arrangement worth Rs. 2,70,00,000/- The alleged amount violative of the pricing guidelines is Rs. 2,70,00,000/- Therefore, the amount involved in the case is the sum of Rs. 1,32,38,364/, Rs. 85,45,184/- and Rs. 2,70,00,000/- which comes down to Rs. 4,87,83,548/-. Therefore, Issue No.2 is decided by holding that the Deputy Director of Enforcement was competent to pass the impugned order as the amount involved in the case was Rs. 4,87,83,548/-. Maintainability of appeal - This Court holds that the present writ petitions are not maintainable as the impugned order dated 05.09.2022 was passed in compliance with the principles of natural justice and within the jurisdiction prescribed under the Act, 1999. Petitioners have raised other contentions regarding forged and fabricated documents, the issue of delay in filing the complaint and the issue of quantum of penalty. This Court being bound by the decision in M/S COMMERCIAL STEEL LIMITED 2021 (9) TMI 480 - SUPREME COURT holds that the said issues cannot be decided by this Court in view of an efficacious alternative remedy available under Section 17(2) of the Act, 1999. Present writ petitions are liable to be dismissed and are accordingly dismissed. Liberty is granted to the Petitioners in both the writ petitions to raise all their grounds in appeal under Section 17(2) of the Act, 1999, if any preferred.
Issues Involved:
1. Violation of principles of natural justice. 2. Jurisdiction of the Deputy Director of Enforcement. Summary: Issue No. 1: Violation of Principles of Natural Justice The Petitioners contended that the impugned order violated the principle of "nemo judex in causa sua" (no one can be a judge in his own case) because the complainant and the Adjudicating Authority were officers of the same rank. The Court found that the complaint dated 20.06.2019 was filed by Mrs. Sowmya Nuthalapati, Deputy Director of Enforcement, and the impugned order dated 05.09.2022 was passed by Mr. Rahul Singhania, Deputy Director of Enforcement. The Court held that merely having the same rank does not constitute a violation of natural justice principles. Citing precedents, the Court emphasized that bias cannot be presumed merely because the complainant and adjudicator hold the same rank. Therefore, the impugned order was not passed in violation of principles of natural justice. Issue No. 2: Jurisdiction of the Deputy Director of Enforcement The Petitioners argued that the Deputy Director of Enforcement lacked jurisdiction to pass the impugned order as the case involved an amount exceeding Rs. 10,00,00,000/-, which should have been adjudicated by the Additional Director of Enforcement. The Court referred to the Ministry of Finance notification dated 27.09.2018, which specifies the monetary limits for authorized officers. The Court found that the amounts involved in the case were Rs. 1,32,38,364/-, Rs. 85,45,184/-, and Rs. 2,70,00,000/-, totaling Rs. 4,87,83,548/-. Therefore, the Deputy Director of Enforcement was competent to pass the impugned order as the amount involved was within his jurisdiction. Main Question of Maintainability: The Court held that the writ petitions were not maintainable as the impugned order dated 05.09.2022 was passed in compliance with the principles of natural justice and within the jurisdiction prescribed under the Act, 1999. The Court noted that the Petitioners have an efficacious alternative remedy under Section 17(2) of the Act, 1999, and thus, the issues regarding forged documents, delay in filing the complaint, and the quantum of penalty should be raised in an appeal. Conclusion: The writ petitions were dismissed, granting liberty to the Petitioners to raise all their grounds in an appeal under Section 17(2) of the Act, 1999. Consequently, miscellaneous petitions, if any, pending shall stand closed.
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