2018 (2) TMI 333 - HC - FEMA

Offence under FEMA - reject the petitioner s application for cross-examination - Held that - A plain reading of the application filed by the petitioner seeking cross-examination of certain individuals named above also indicates that the petitioner had reiterated its contention that the material or evidence on record does not substantiate the allegation made against him. At the outset, the petitioner had denied all the allegations made against him in the complaint filed against him. The only reason provided by the petitioner for seeking cross-examination of Mr. Manoj Garg, Investigation Officer and the complainant is that they can be confronted with the documents in question. According to the petitioner, the documents do not implicate or establish any offence on the part of the petitioner. The documents referred to by the petitioner are not documents that have been created or initiated by the investigating officer or the complainant; the documents have been found during the search and seizure operations conducted by the concerned officers. In the circumstances, this Court is not persuaded to accept that there is any ground to permit cross-examination as sought for by the petitioner. Similarly, there is also no ground to permit cross-examination of signatories to the Panchnama and the Panch witnesses either. In the facts of the present case, it is apparent that the case set up against the petitioner is not based on any testimony of the investigating officer but on documents. In the aforesaid circumstances, this Court finds no infirmity with the decision to reject the petitioner s application for cross-examination.

Summary

Issues:
1. Denial of cross-examination of witnesses in a FEMA case.

Analysis:
The petitioner challenged the order rejecting their application for cross-examination of witnesses in a FEMA case. The respondent, Special Director of Enforcement, denied the request based on the nature of transactions revealed during the investigation, which were document-based and would be considered during adjudication proceedings. The petitioner argued that cross-examination is a fundamental aspect of natural justice, citing a Division Bench decision. However, the respondent contended that the Division Bench decision was stayed by the Supreme Court and was not precedent. The court noted the complaint under FEMA and the Show Cause Notice issued, emphasizing the lack of evidence implicating the petitioner. The petitioner sought cross-examination to confront witnesses with documents, claiming innocence based on the material on record. The court found no grounds to permit cross-examination as the documents were seized during search operations and did not establish any offense by the petitioner.

In the case of Shahid Balwa v. The Directorate of Enforcement, the Division Bench highlighted the importance of cross-examination when the credibility of a witness is in doubt. However, in the present matter, the case against the petitioner relied on documents rather than witness testimony. The court concluded that since the case was document-based, there was no need for cross-examination of witnesses. Therefore, the court dismissed the petition and the pending application, upholding the decision to reject the petitioner's request for cross-examination in the FEMA case.