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TMI Blog2013 (8) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... ious provisions of FEMA and it was further stated that the statements made by the said complainant in the complaint were inherently false. Cross-examination of witnesses had been held to be an integral part and parcel of the principles of natural justice - Refusal to grant permission to cross-examine witnesses would normally be an exception - The legal position that would follow is that normally if the credibility of a person who has testified or given some information is in doubt or if the version or the statement of the person who has testified is in dispute normally right to cross-examination would be inevitable - If some real prejudice was caused to the complainant, the right to cross-examine witnesses may be denied - it was not possible to lay down any rigid rules as to when in compliance of principles of natural justice opportunity to cross-examine should be given - In the application of the concept of fair play there had to be flexibility. - LPA No.79/2013 & CM No.2310/2013, LPA No.80/2013 & CM No.2332/2013 - - - Dated:- 29-5-2013 - Hon'ble The Chief Justice Hon'ble Mr. Justice Jayant Nath,JJ. For the Petitioner : Mr. Rakesh Tiku, Sr. Adv. along with Mr. Vijay A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. It is further stated that M/s Swan Telecom Pvt. Ltd issued shares to M/s Etisalat Mauritius and indulged in over-valuation of its three shares issued to said Etisalat Mauritius so as to remain within the stipulated threshold of 49% equity prescribed for the automatic route. Hence the said M/s Swan Telecom Pvt. Ltd violated the provisions of para 3 of the Schedule 1 of Regulation (5) (1) of the Foreign Exchange Management (Transfer of Issue of Security by a Person Resident outside India) Regulations 2000 read with sections 6(3) (b) of FEA, 99 for the amount of Rs.316.22 crores because the facility of automatic route was already exhausted by the said M/s Swan Telecom Pvt. Ltd in issuing shares to Foreign Investors without FIPB approval. 6. Pursuant to receipt of the said complaint dated 01.07.2011 a show cause notice dated 08.07.2011 was issued against the said M/s Etisalat Mauritius and its Directors including the appellant herein. 7. The appellant thereafter filed a preliminary reply dated 18.02.2012 to the aforesaid show cause notice and reserved the right of filing a detailed reply after receiving the documents as prayed for. On 25.05.2012, the appellants filed three appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure B which gives the list of documents relied upon by the complainant. The said Annexure B gives a list of 16 documents including various agreement letters and the statements of said three persons. It is claimed that cross examination is an integral part and parcel of principle of natural justice and that on a fair reading of the provisions of FEMA Act and Rules, it is permissible to cross-examine the aforesaid persons and the same would be an indefensible right. Reliance is placed on Section 16(1) of FEMA that provides that for the purposes of adjudication under Section 13, the Central Government may appoint such officers of the Central Government as it may think fit as Adjudicating Authority for holding an enquiry in the manner prescribed after giving the persons alleged to have committed contravention, a reasonable opportunity of being heard for the purpose of imposing a penalty. Reliance is also placed on Rule 4 of the Foreign Exchange Management (Adjudication Proceedings and Appeals) Rules, 2000. It is stated that right of cross examination in the present case would have to be read into the aforesaid statutory provisions. It is pointed out that the respondents are relying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a High Court in the case of Central Govt. represented by the Director, Enforcement Directorate, Foreign Exchange Regulation Act, New Delhi v. Alfred James Fernandes (supra), said evidence cannot be taken into account. 13. It is argued that as the Provisions of the Rules under FERA are identical to the Foreign Exchange Management Rules 2000, the appellants in view of the said judgments is entitled to cross examine the said witnesses and the impugned orders have wrongly denied them the said opportunity. 14. He further relies on the following judgments to submit that in the given facts, he would have a right to cross-examine. (i) State of Kerala vs. K.T. Shaduli Grocery Dealer Etc (1977) 2 SCC 777; (ii) Khem Chand, vs. Union of India and others AIR 1958 SC 300; (iii) Ayaaubkhan Noorkhan Pathan vs. State of Maharashtra, AIR 2013 SC 58; It is also submitted by the learned senior counsel for the appellant that the judgments relied upon in the impugned order by the learned Single Judge also support such contention of the appellant that cross-examination should have been allowed. He refers to the following judgments (iv) K.L.Tripathi vs- State Bank of India, (1984) 1 SCC 43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Etc (1977) 2 SCC 777, the facts of the case related to the assessment of the assessee for sales tax for three assessment years where the return filed by him on the basis of his books of accounts appeared to the sales tax officer to be incorrect and incomplete since certain sales appearing in the books of account of one Haji Usmankutty were not accounted for in the books of accounts maintained by the assessee. The assessee applied to the sales tax officer for an opportunity to cross examine Mr. Haji Usmankutty. The Hon ble Supreme Court in para 5, held as follows:- The question is what is the content of this provision which imposes an obligation on the Sales Tax Officer to give and confers a corresponding right on the assessee to be afforded, a reasonable opportunity "to prove the correctness or completeness of such return". Now, obviously "to prove" means to establish the correctness or completeness of the return by any mode permissible under law. The usual mode recognised by law for proving a fact is by production of evidence and evidence includes oral evidence of witnesses. The opportunity to prove the correctness or completeness of the return would, therefore, necessarily c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tunity to defend himself by cross-examining the witnesses produced against him and by examining himself or any other witnesses in support of his defence, and finally 18. The latest judgment of the Hon ble Supreme Court in this regard is in the case of Ayaaubkhan Noorkhan Pathan vs. State of Maharashtra, AIR 2013 SC 58. The said case pertains to a Caste Certificate issued to the appellant. On the basis of his being a member of the Scheduled Tribe, the appellant was appointed as a Senior Clerk in the Municipal Corporation of Aurangabad. The Scrutiny Committee to whom the matter was referred to revoked the Caste Certificate. It was the submission of the appellant before the Hon ble Supreme Court that he was denied the opportunity to cross-examine witnesses which resulted in grave miscarriage of justice. The Hon ble Supreme Court after noting the various previous judgments rendered on this issue recorded as follows:- 28. The meaning of providing a reasonable opportunity to show cause against an action proposed to be taken by the government is that the government servant is afforded a reasonable opportunity to defend himself against the charges, on the basis of which an inquiry is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... residing therein. This object would be wholly defeated if a right in confront to cross-examine these witnesses was given to the suspect. 22. The said judgment pertains to an order of externment passed against the petitioner under the City of Bombay Police Act. The action of externment was done to protect the general public against the dangerous and bad characters, and in view of the purpose of the statute, the Court disallowed cross-examination. 23. Learned counsel also relied upon the judgement in the case of Union of India vs- Delhi High Court Bar Association, (2002) 4 SCC 275. This matter pertains to right of cross-examination before the Debt Recovery Tribunal wherein in paragraph 23 it was held as under:- When the High Courts and the Supreme Court in exercise of their jurisdiction under Article 226 and Article 32 can decide questions of fact as well as law merely on the basis of documents and affidavits filed before them ordinarily, there should be no reason as to why a Tribunal, likewise, should not be able to decide the case merely on the basis of documents and affidavits before it. It is common knowledge that hardly any transaction with the bank would be oral and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iry leading to dismissal of the employee. The Hon ble Supreme Court in paragraph 32 held as follows:- The basic concept is fair play in action administrative, judicial or quasi-judicial. The concept of fair play in action must depend upon the particular lis, if there be any, between the parties. If the credibility of a person who has testified or given some information is in doubt, or if the version or the statement of the person who has testified, is, in dispute, right of cross-examination must inevitable form part of fair play in action but where there is no lis regarding the facts but certain explanation of the circumstances there is no requirement of cross-examination to be fulfilled to justify fair play in action. When on the question of facts there was no dispute, no real prejudice has been caused to a party aggrieved by an order, by absence of any formal opportunity of cross-examination per se does not invalidate or vitiate the decision arrived at fairly. This is more so when the party against whom an order has been passed does not dispute the facts and does not demand to test the veracity of the version or the credibility of the statement. 27. The right to cross-exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of each case. 30. Now, coming to the facts of this case. In the complaint that has been filed, the statements of three witnesses have been extensively relied upon. Regarding Shri Pratap Ghosh, CFO of M/s.Etisalar DB Telecom Pvt.Ltd. his statement is relied upon in paragraph 10.2 of the complaint which para reads as follows:- 10.2. Shri Pratap Ghosh, CFO of M/s. Etisalat DB Telecom Pvt.Ltd. in his statement dated 08.04.2011 under the provisions of FEMA, 1999 inter-alia stated that he had joined this company in August, 2009 and before tht he was working in Etisalat Group head office as Director (financial consolidation and reporting) based in Abu Dhabi, that so far three investments from abroad has been received by the company totaling Rs.3543 crores approximately during the period since December, 2008 to May, 2010; that these FDI were received by the company as pr agreement(s) dated 23.09.2008; tht it is a fact that shares to M/s. Genex Exim, Chennai were allotted in December, 2008 pursuant to the agreement(s) dated 23.09.2008; that on 17.12.2008 company had issued shares to M/s.Etisalat Mauritius, M/s.Genex Exim and M/s.Tiger Trustees, that shares were allot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson who is sought to be cross-examined is Shri Rajeshwar Singh, Assistant Director i.e. the complainant as according to the appellant it intends to cross-examine the said person with intent to controvert the veracity of the complaint regarding contraventions of various provisions of FEMA and it is further stated that the statements made by the said complainant in the complaint are inherently false. 34. Keeping in view the facts of the present case and the nature of allegations being raised against the appellant the judgments of the Supreme Court in the case of K.T.Shaduli (supra), Khem Chand vs. UOI (supra) and Ayaaubkhan Noorkhan Pathan vs. State of Maharashtra(supra) would in our view apply to the facts of this case. The respondent has failed to place on record any fact to show that prejudice would be caused to it if the appellant is permitted to cross-examine the said witness. In fact a query was posed to the learned counsel for the respondent about whether any prejudice would be caused to the respondent if the cross-examination is allowed. The learned counsel could not specify any prejudice. In our view the present appeal should be allowed to the extent that the appellants s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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