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TMI Blog1990 (9) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... eement dated August 30, 1984, inter alia, provided that the consultancy fees would be remitted in Japanese yen to the account of the Bank of Credit and Commerce International (for short "BCCI"), London, on account of Eljay Consultants Incorporated (for short "Eljay"). The agreement also provides that, in case the contract is cancelled partially or totally due to reasons other than the fault of SC, the consultancy fees paid by SC to JH corresponding to the cancelled amount will be paid back by JH to SC. One of the terms of the agreement provides : "The consultancy fee hereunder constitutes full and sole compensation for all assistance, advice and other services to be rendered by JH and also for all costs and expenses which JH may incur in performing this agreement (including but not limited to communication or travel expenses, compensation for local correspondent, etc.). Accordingly, SC will not be required to make any further payment of commission, fee or compensation, whatsoever. JH further agrees that it will not be entitled to any fee or compensation, if the firm contract for total quantity of pipes as mentioned in page 1 of this agreement is not awarded to SC for any reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice was issued and personal hearing was afforded to the parties. By order dated January 6, 1989, Sh. Krishan Kant, Special Director, held that JH had contravened-the provisions of sections 8(1), 14 and 47 of the Foreign Exchange Regulation Act and imposed upon JH a penalty of Rs. 20 lakhs for contravention of sections 8(1) and 14 and penalty of Rs. 20 lakhs for contravention of section 47. In the order dated January 6, 1989, the contention put forth on behalf of JH that its right to receive consultancy fees came into existence for the first time on August 25, 1987, when SC wrote a letter of the same date confirming that full and final settlement of payments in reference to the agreements have been made and agreements have been fullfilled was rejected. It was, inter alia , held that whether JH got the payments of consultancy fees directly or through the account of Eljay, JH were the original owners of the foreign exchange representing consultant fees and they acquired this ownership not on August 25, 1987, as contended by them but on the dates as and when SC remitted the amounts in the account of Eljay in BCCI. The special director observed that the circumstances did not rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s). Further details with regard to receipt of advice of the Law Ministry have also been given in the application. It is averred that the matter is of great public importance ; the questions involved are serious questions of law and involved matters which are essentially for the preservation of the foreign exchange resources of the country and thus it is claimed that the delay of 122 days in filing the appeal be condoned. In reply, JH has raised various objections including that the appellant had taken a conscious decision not to prefer any appeal since no question of law arose from the Board's order. It has been claimed that a change of opinion by the new incumbent to an office in the Central Government can never be a legal or valid basis for undoing the decision taken by a competent person. According to the respondent, the application does not disclose any sufficient cause within the meaning of section 54 of the Foreign Exchange Regulation Act. The points involved in this case and in the case of R. R. Holdings Pvt. Ltd. are similar. A rejoinder has been filed to the renly of R P. Holdings Pvt. Ltd. in connected Appeal No. 12 of 1990. In the rejoinder, the appellant states that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Minister. ( viii )That the earlier Government had deliberately delayed giving other information about Jyotsna. For instance, the information about Mr. Bhalla was given only one day after the declaration of election results, i.e., on 27th November, 1989. ( ix )The above information was given on 30th April, 1987, to the CBDT but the Enforcement Directorate did not receive the said information from the taxation authorities till 10th August, 1987. Hence, show-cause notice could not be issued till 23rd September, 1988. ( x )The R. R. Holdings repatriated a sum of Rs. 1.83 crores from August 7, 1987, after the receipt of information in India from the National Tax Administration of Japan. ( xi )Within three weeks of issuance of show-cause notice, the Special Director of Enforcement gave a notice of hearing and a penalty of Rs. 12 lakhs was imposed on R. R. Holdings. This order in turn was reversed by the Foreign Exchange Regulation Appellate Board. ( xii )The aforesaid allegations were made in the debates in Parliament on 27th December, 1989, on which the appellants will rely. The debate clearly suggested that R. R. Holdings and Jyotsna had committed fraud and caused loss to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o lapse. Subsequently, on certain observations made by the High Court while considering a revision petition by one of the victims that it was a fit case where the State Government should file an appeal, the appeal was filed by the State Government. That appeal was filed three months after the limitation had expired. The Supreme Court held that the appeal was filed only because the High Court had made the observations. The High Court condoned the delay. The Supreme Court held that the High Court erred in condoning the delay. According to learned counsel for the respondents, the position in the present case is almost similar. I do not agree. The cited decision has no applicability to the facts and circumstances of the present case. The Supreme Court was not considering the plea of bad faith as is being contended here. If bad faith is shown in the decision of not filing the appeal, then the question whether the earlier decision was conscious or not would be irrelevant. An act tainted with bad faith is no act in the eye of law. It cannot be held that because a conscious decision was taken not to file an appeal, the delay cannot be condoned under any circumstances. It would also be nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1965 SC 1578, the Supreme Court held that the respondents had full notice of the plea of the appellant taken in the affidavit in rejoinder and the High Court was in error in assuming that the ground in question had not been taken at any stage by the appellant before the matter was argued before the High Court. In this view of the matter, there is no substance in the contention of the respondent that the plea taken by the appellant in the rejoinder should not be considered. Before reverting to the facts, I may notice two, decisions of the Supreme Court relevant on the approach the courts should adopt while considering applications seeking condonation of delay in filing appeals. In G. Ramegowda, Major v. Special Land Acquisition Officer [1988] 2 SCC 142 ; AIR 1988 SC 897, the Supreme Court, while opining that the law of limitation is, no doubt, the same for a private citizen as for the Government authorities, held that (pp. 900, 901 of AIR 1988 SC) : "In litigations to which Government is a party there is yet another aspect which, perhaps cannot be ignored. If appeals brought by Government are lost for such defaults, no person is individually affected ; but what, in the ultim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficers failed that trust." In the aforesaid case, substantial delay had been condoned by the High Court. Dealing with the criticism of the appellant that Government was admittedly put on notice of the award and the decree passed in the cases which were challenged and the subsequent delay of over a year thereafter in preferring the appeals, the Supreme Court, while observing that the criticism is not without substance, the Government could and ought to have moved with greater diligence and despatch consistent with the urgency of the situation, the conduct of the Government was close to such inaction as might perhaps have justified rejection of its prayer for condonation, held (p. 901 of AIR 1988 SC) : "While a private person can take instant decisions a 'bureaucratic or democratic organ' it is said by a learned judge 'hesitates and debates, consults and considers, speaks through paper, moves horizontally and vertically till at last it gravitates towards a conclusion, unmindful of time and impersonally.' Now at the end, should we interfere with the discretion exercised by the High Court 7 Shri Datar criticised that the delay on the part of the Government even after January 20, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, on sufficient cause being shown, discretion is conferred on the court in order that judicial power and discretion should be exercised to advance substantial justice. In recent years, courts have been adopting a liberal approach while considering applications for condonation of delay. I am not suggesting that, if sufficient cause is not made out even by adopting a liberal approach, the delay is liable to be condoned. I also agree that the term "liberal approach" used by the Supreme Court in various decisions cannot be used as a magic wand to be applied in all cases and situations (Smt. Shanti Devi v. Bhan Raj [1988] 2 Delhi Lawyer 27 ; AIR 1989 Delhi 276). In the instant case, the learned Solicitor-General's plea for condonation of delay, to advance substantial justice in public interest, is based mainly on the fact that huge amounts of foreign exchange are involved and the case involves substantial questions of law. According to the learned Solicitor-General, the undisputed features of this case are, that the exchange involved is over Rs. 8 crores ; the amount of penalty imposed is over Rs. 50 lakhs ; the decision of the Appellate Board is that of reversal of the order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Similarly, the observations in Royappa's case, AIR 1974 SC 555, that "secondly, we must not overlook that the burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demands proof of a high order of credibility" cannot be applied here. In Royappa's case, AIR 1974 SC 555, the challenge was to an order according sanction to creation of a temporary post of Officer on Special Duty in the grade of Chief Secretary to Government for a period of one year from the date of appointment or till the need for it ceased, whichever was earlier, and to the order transferring the petitioner and appointing him as an officer on Special Duty in the said sanctioned post. The petitioner had alleged mala fides against the Chief Minister in support of his challenge to the impugned orders. While rejecting the said plea, the aforequoted observations were made. Likewise, reliance on the observations made in Lila Krishan's case [1985] Suppl. SCC 179 ; AIR 1985 SC 1073, that "the credibility of public officers assigned a sacred trust should not be doubted on me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pleas is not necessary to be given in these cases. Strong proof as may be required in other branches of law like election cases or service cases need not be insisted upon. In Ramegowda's case, AIR 1988 SC 897, the long delay of one year even after the Government was put on notice was condoned in public interest owing to the acts of fraud and bad faith on the part of the Government officers or agents so as to do substantial justice between the parties. The expression "sufficient cause" is adequately elastic and is to be applied in a meaningful manner to subserve the ends of justice. The contention of counsel for the respondents that even the Special Director found that there was no guilty intention on the part of the respondents is on the merits of the appeal with which I am not concerned at this stage. The discrepancies pointed in the conclusion drawn from Parliament debates are minor and are of not much consequence. Taking into consideration the totality of circumstances placed before this court by the learned Solicitor-General as noticed hereinabove, the case cannot be thrown out without examination on the merits. On the facts, no negligence can be attributed to the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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