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TMI Blog2017 (4) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... nt as against the allegations raised against the petitioners. Such communications, in my considered opinion, are also in compliance of the principles of natural justice. By the communications dated 04.11.2016, the second respondent has not determined the case against the petitioners or passed an order adverse to their interest. Therefore, the writ petitions are only liable to be dismissed and the petitioners are not entitled for any relief in these writ petitions. The second respondent is hereby directed to issue a fresh notice to the petitioners indicating the date, time and venue for the personal hearing to be given to the petitioners and if any such notice is received, the petitioners are at liberty to appear before the second respondent either in person or through an authorised representative to putforth their defence. - Writ Petition Nos. 1748 to 1751 of 2017, Writ Miscellaneous Petition Nos. 1735 to 1738 of 2017 - - - Dated:- 2-3-2017 - B. Rajendran, J. For Petitioners : Mr. P.S. Raman, Senior Advocate for Mr. P.R. Raman For Respondents : Mr. M. Dhandapani ORDER In all these writ petitions, the petitioners have challenged a communication dated 04.11.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrangements for conducting the IPL matches in the year 2009 in association with Cricket South Africa (CSA). Eventually, according to the petitioner company, they have incurred additional expenses for undertaking the trip to South Africa. 4. In this context, alleging infraction of the provisions of Foreign Exchange Management Act (FEMA), the directorate of Enforcement has given a complaint on 23.02.2015 against the petitioners herein and appointed the second respondent as the adjudicating authority under Section 16 of FEMA for having allegedly contravened the provisions of the Act. A show cause notice dated 27.02.2015 was issued by the second respondent to the petitioner company and their officers calling upon them to show cause as to why they cannot be made vicaciously liable for the infractions committed by the company. On receipt of such show cause notice, the petitioners have sent a detailed reply dated 19.06.2015. On receipt of the reply sent by the petitioners, the impugned communication dated 04.11.2016 has been sent to the petitioners calling upon them to appear for a personal enquiry on 04.11.2016. 5. Mr. P.S. Raman, learned Senior counsel appearing for the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned communications. Thus, according to the learned Senior counsel for the petitioners, the impugned communications are contrary to the well established principles of natural justice and he prayed for allowing the writ petitions. 6. Even though the respondents have not filed any counter affidavit, the learned counsel for the respondents would only contend that the petitioners were only called upon to attend a personal hearing on a date fixed by the second respondent. The second respondent has not finally adjudicated the complaint against the petitioners. In order to clarify certain aspects, the communications dated 04.11.2016 have been sent. It is well settled proposition of law that as against a show cause notice, a writ petition is not maintainable. The communication dated 04.11.2016 is only a notice calling upon the petitioners to appear for an enquiry and therefore, the writ petitions filed by the petitioners is pre-mature. The learned counsel for the respondents therefore prayed for dismissal of the writ petitions. 7. I heard the learned Senior counsel for the petitioners and the learned counsel for the respondents. I had carefully examined the records made available, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers that the reasons are the heart-beat for any conclusion and in the absence of assigning any reason, the petitioners are not in a position to know as to whether the second respondent has applied his mind to the explanation already given by them or the explanation given by the petitioners have been considered by the second respondent. According to the learned Senior counsel for the petitioners, the petitioners are groping in the dark without knowing the fact as to whether the second respondent has arrived at a subjective satisfaction to proceed against them or to drop the proceedings against them. The learned Senior counsel for the petitioners would therefore contend that the communications dated 04.11.2016 are not only in violation of the principles of natural justice but without any reasons and it is a cryptic order. I am unable to accept such submission of the learned Senior counsel for the petitioners. What is challenged in these writ petitions is only a communiation dated 04.11.2016 calling upon the petitioners to appear for a personal hearing, as sought for by them in their reply dated 14.06.2015. Further, for issuing a notice of this nature calling upon the petitioners to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by this Court in WP No. 20592 of 2014 (Ramakrishna Settu vs. The Special Director, Directorate of Enforcement, Southern Region, Sastri Bhyavan, Chennai - 600 006) wherein this Court had an occasion to consider the manner in which an enquiry has to be conducted and the several stages encompassed in such administrative or quasi-judicial enquiry. Useful reference can be made to para Nos. 9 to 11 of the order, which is usefully extracted hereunder:- 9. A careful look at the provisions of sub-rules (1) to (12) of Rule 4 would show that the enquiry by the respondent, comprises of five stages, which are as follows:- 1. The issue of show caue notice of a duration of not less than ten days, calling upon the person to show cause as to why an enquiry should not be held, for any contravention. 2. The issue of a notice fixing the date for the appearance of the person, if after considering the cause shown by the person to the show cause notice, the adjudicating authority is of the opinion that an enquiry should be held. 3. The explanation of the adjudicating authority in person, either to the noticee or to his authorised representative, the contravention committed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the complaint. Therefore, the petitioner was required to submit reply to the show cause notice in writing within thirty days from the date of notice as to why adjudicating proceedings as contemplated under Section 13 of FEMA should not be held against them for contravention of the provisions of Section 3 (c) of FEMA as mentioned in the complaint, which was enclosed along with the show cause notice. The attention of the petitioners was invited to Rule 4 of the Rules. Further, the petitioners were directed to appear either in person or through their legal practitioners/Chartered Accountants duly authorised by them to explain and produce such documents as may be useful or relevant to the subject matter of enquiry. There is nothing to indicate that the adjudicating authority has straight away proceeded to the stage contemplated under sub rule (4) of Rule 4. The show cause notice does not indicate any such conclusion nor it may be stated that the respondent has violated the procedure under Rule 4 of the Rules. In fact, the attention of the petitioners has been drawn to Rule 4 of the Rules. Therefore, the plea raised by the petitioner that the show cause notice is vitiated for having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions which would otherwise never be a subject matter of discussion/debate before the Adjudicating Authority is also a part of the order to be passed by the Adjudicating Authority. In the absence of the above, the preliminary objections would be dealt with by the Adjudicating Authority possibly only in his mind while deciding to proceed further with the notice and the reasons would never be recorded to evidence consideration of the objections. This would result in great prejudice to the noticee for more than one reason. Firstly, the noticee would have no clue as to what were the consideration which weighed with the Adjudicating Authority to reject the preliminary objections. It is also very clear from the provisions of the Act and the Rules that an Appeal which is provided would not lie from an order recording an opinion of the Adjudicating Authority to proceed further with the adjudication of the notice, but the appeal would only be against the final order. 21. Thus, in view of the above discussion, we are of the view that Adjudicating Authority, after issuing show cause notice and receiving objections to the notice from the noticee is required to apply his mind to the objecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s against the allegations levelled against them are required to be considered further and for such consideration, the petitioner must appear in person to putforth their case. Therefore, the reliance placed by the learned Senior counsel for the petitioners on the Division Bench decision of the Bombay High Court will not lend support to his case. 19. For all the above reasons, I hold that the communications dated 04.11.2016, which are impugned in these writ petitions, are intended for carrying out an indepth examination by the second respondent as against the allegations raised against the petitioners. Such communications, in my considered opinion, are also in compliance of the principles of natural justice. By the communications dated 04.11.2016, the second respondent has not determined the case against the petitioners or passed an order adverse to their interest. Therefore, I am of the view that the writ petitions are only liable to be dismissed and the petitioners are not entitled for any relief in these writ petitions. 20. At this stage, the learned Senior counsel for the petitioners brought to the notice of this Court that by the communications dated 04.11.2016, the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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