2019 (6) TMI 637 - HC - FEMA

Maintainability of petition - Petitioner's alternate and efficacious remedy against the impugned order made by the Enforcement Directorate, to the Appellate Tribunal for Foreign Exchange, Ministry of Law, Justice and Company Affairs, Government of India - violation of principles of natural justice as certain statements made by some buyers and these statements have been acted upon without afford of any opportunity or cross examination to the Petitioners - HELD THAT - In the present case, after the show cause notice dated 6th September, 2017 was served upon the Petitioners, the Petitioners chose to file reply through their Chartered Accountant. Neither in the reply nor at any stage of the proceedings before the impugned order came to be made, the Petitioners objected to taking into consideration the statements of the buyers on the ground that the same were not tested in the cross examination. There was no request made for examination of such buyers in the presence of the Petitioners or their legal representatives and thereafter for opportunity to cross examination of such buyers In any case, all the contentions including the contention with regard to the alleged breach of principles of natural justice can always be raised before the Appellate Authority. Accordingly, we uphold the preliminary objection raised and dismiss the present petition. However, we leave it open to the Petitioners to avail alternate remedy available under the statute. None of the observations in this order should be used to foreclose any contentions which any of the parties may have, in case the Petitioners, choose to avail of an alternate remedy available under the statute.

Summary

Issues: Maintainability of the petition due to alternate remedy, Violation of principles of natural justice, Opportunity for cross-examination denied, Distinction from previous case, Dismissal of the petition with liberty to avail alternate remedy, Restraint on coercive steps, Direction to refrain from execution for four weeks.

Maintainability of the petition due to alternate remedy:
The petitioners challenged an order by the Enforcement Directorate, arguing that the order was based on statements by buyers without affording any opportunity for cross-examination. The respondents contended that an alternate and efficacious remedy existed before the Appellate Tribunal for Foreign Exchange. The petitioners acknowledged the alternate remedy but claimed a violation of natural justice principles, arguing that such a violation would render the alternate remedy insufficient. The court, citing a previous case, noted that denial of cross-examination was a crucial factor in determining the maintainability of the petition. Ultimately, the court upheld the preliminary objection regarding maintainability but allowed the petitioners to pursue the alternate remedy available under the statute.

Violation of principles of natural justice and denial of cross-examination:
The petitioners raised concerns about the violation of natural justice principles due to the lack of opportunity for cross-examination regarding statements made by buyers. They argued that this lack of cross-examination constituted a breach of fair play and statutory rules. The court highlighted the importance of the right to cross-examination in ensuring a fair process, distinguishing the present case from a previous case where repeated requests for cross-examination were denied. Despite acknowledging the significance of natural justice contentions, the court emphasized that such issues could still be raised before the Appellate Authority.

Dismissal of the petition with liberty to avail alternate remedy:
While recognizing the petitioners' concerns regarding natural justice, the court ultimately dismissed the petition on grounds of maintainability due to the existence of an alternate remedy. However, the court granted the petitioners the liberty to pursue the alternate remedy available under the statute, ensuring that none of the observations in the order would prevent the parties from raising contentions during the alternate proceedings.

Restraint on coercive steps and direction to refrain from execution for four weeks:
During the proceedings, the petitioners requested a restraint on coercive actions by the respondents for four weeks to allow time for instituting an appeal. The court directed the respondents to refrain from executing the impugned order for the specified period, clarifying that the decision was not based on merits but aimed to provide the petitioners with an opportunity to appeal and seek interim relief. Any application for interim relief before the Appellate Authority would be considered on its own merits and in accordance with the law.