1995 (3) TMI 238 - HC - FEMA

Issues Involved:

1. Jurisdiction of the Deputy Director and Special Director to issue the memorandum.
2. Method of service of the memorandum.
3. Alleged non-supply of annexures causing prejudice and violation of natural justice.

Detailed Analysis:

1. Jurisdiction of the Deputy Director and Special Director to Issue the Memorandum

The primary issue was whether the Deputy Director and Special Director of the Enforcement Directorate had the authority to issue the memorandum under the Foreign Exchange Regulation Act, 1973. The petitioner contended that the impugned memorandum issued by the Deputy Director did not indicate his role as an Adjudicating Officer, thus rendering the proceedings without jurisdiction. The respondent countered that the Deputy Director was authorized under Section 50 read with Section 3 of the Act and the relevant Central Government notifications.

The court held that the notifications dated 22-9-1989 and 17-9-1993 empowered the Deputy Director and Special Director to adjudicate cases of contravention under the Act. The court found that the absence of explicit mention of their designation as Adjudicating Officers in the memorandum did not undermine their authority. The court concluded that the notifications constituted sufficient authority for the officers to issue the memorandum and pursue adjudication proceedings.

2. Method of Service of the Memorandum

The petitioner argued that the memorandum was served on his wife, which was unauthorized and contrary to Rule 10 of the Adjudication Proceedings and Appeal Rules, 1974. The respondent maintained that the memorandum was sent by registered post with acknowledgment due, and the petitioner's wife had signed the acknowledgment card, thus constituting valid service.

The court held that Rule 10 allows for service by registered post with acknowledgment due. The court noted that the postal authorities delivered the memorandum to the petitioner's wife, who acknowledged receipt. The court found that this method of service was in accordance with the rules and did not vitiate the proceedings. Additionally, the petitioner had confirmed receipt of the memorandum via telegram, further validating the service.

3. Alleged Non-Supply of Annexures Causing Prejudice and Violation of Natural Justice

The petitioner contended that two of the four annexures listed in the memorandum were not supplied, causing grave prejudice and violating principles of natural justice. The respondent denied this claim, stating that all documents were provided.

The court did not delve into the factual dispute regarding the non-supply of annexures, as the proceedings were at the show-cause notice stage. The court observed that the memorandum informed the petitioner that the original documents were available for inspection. The court held that the petitioner could request copies of any missing annexures, and the department was obliged to provide them. The court concluded that any grievance regarding the denial of an effective opportunity could only be raised if the department failed to provide the requested documents and proceeded to pass final orders.

Conclusion:

The court dismissed both the writ petition and the writ appeal, finding no merit in the contentions raised. The court upheld the jurisdiction of the Deputy Director and Special Director to issue the memorandum, validated the method of service, and found no violation of natural justice at the show-cause notice stage. The court emphasized that technical contentions should not delay proceedings and advised that show-cause notices should clearly state the authority under which they are issued.

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