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TMI Blog2018 (3) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajeev Awasthi, Advocate Shri Prashant Pandey, Legal Consultant JUDGMENT ORDER BY JUSTICE MANMOHAN SINGH : CHAIRMAN FPA-FE-87 88/MUM/2017 1. It is settled law that discovery of the truth is the essential purpose of any trial or enquiry and what people expect is that the court should discharge its obligation to where in fact the truth lies. It is held in many judgments delivered by the Apex Court that right from inception of the judicial system, it was accepted that discovery, vindication and establishment of truth are the main purposes underlying the existence of the courts of justice. 2. By this common order, we propose to decide the above referred two appeals between the parties. (i) Appeal no. 88/2017 was filed against the order dt. 15.11.2017 passed by adjudicating authority where by the application for recalling of witness Mr. Ckokshi whose cross examination was already conducted on 20/09/2017 was rejected. (ii) Appeal no. 87/2017 was filed against the order dt. 30/10/2017 passed by adjudicating authority whereby the application for cross examination of two witness was dismissed. 3. My extreme brother who is learned Member has handed over the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts (including Form FC-GPR) were filed with Citibank N.A. the AD of the Appellant. 9. The Appellants have received a noticee under the show cause notice dated 24th March 2017 issued by the Respondent. The Special Director of Enforcement issued a Show Cause Notice bearing No. T-4/01-B/SDE (VA)/WR/2017/1434 to the Appellant on 24th March 2017 (hereinafter referred to as the said Show Cause Notice ). The said Show Cause Notice is based upon a complaint dated 9th December 2016 filed by one Mrs. V. Kalyani (Assistant Director). The said complaint mainly relies upon the Investigation report dated 10th August 2012 of Mr. D. K. Sinha (Assistant Director). While issuance of such shares it was required that the valuation be done in line with the applicable provisions of the Act; being Regulation 5 (1) of the Foreign Exchange Management, (Transfer or Issue of Security by a Person Resident Outside India), Regulations 2000. 10. The independent chartered accountant's report dated 28th February 2009, was obtained about the valuation of the shares issued to the non- resident. The case of the appellants is that they have issued such shares at a price of ₹ 10/- per share based o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... okshi and his cross examination recorded on 20/09/2017 of the fully in order to test the veracity of the Opinion as against the said Valuation Report dated 28th February 2009. 16. The case of appellants is that the cross examination of Mr. Mitil Chokshi remained incomplete on 20th September 2017, notwithstanding the word 'concluded' as appearing in the cross-examination transcript of that date. 17. It is submitted that upon not hearing further from the Respondent, it was the Appellant who by their letter of 5th October 2017 sought a further date of hearing and inter alia also recorded that the cross examination of Mr. MitilChokshi had remained incomplete. It is submitted that, other than the word 'concluded' as appearing in the said transcript, there is no Order Sheet and/or Roznama of 20th September 2017, which conclusively establishes that cross-examination was completed on 20th September 2017. 18. It is submitted by the appellant that the cross-examination had inter alia remained incomplete on 20th September 2017, by reason of the fact that the witness, Mr. MitilChokshi throughout the process took long intervals when responding to any question, during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the source of assumptions used by Chokshi and Chokshi in forming their Opinion. 23. It is stated by the appellant on 20th September 2017 the Appellant had no opportunity to analyze such 11 Income and 61 Expenditure line item statement nor the opportunity to cross-examine Mr. MitilChokshi on the assumptions contained in the said Statement at page 191 paragraph 15 (a) and 15 (c) refer to various contrary statements as contained in the Opinion as juxtaposed with data in the supporting documents to the Opinion, (which work sheets were separately handed over to the Appellant much after a copy of the Opinion was made available). in also paragraph 5 of the Impugned Order dated 15th November 2017 which paraphrases some of the submissions in context of these discrepancies as made to the Adjudicating Authority at the time of hearing on 15th November 2017 as under: 5. .. There are discrepancies noticed on various assumptions reflected in the work sheet vis- -vis the discussion in the Opinion which include the prize money, revenue growth, capitalization rate, etc. The Ld. Counsel also submitted that he wanted to know about the terms of engagement of C C and the scope of work manda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, that the cross-examination of the witness Mr. Mitil Chokshi was concluded on 20th September, 2017 and that the matter was now fixed for the purpose of recording your oral arguments/written submissions on 23rd October, 2017. As per appellant, the said communication and order was passed without giving the appellant an opportunity to complete the cross-examination of the witness Mr. Mitil Chokshi. 30. On 23.10.2017, the matter was adjourned to 30th October, 2017, the appellant with counsel on their behalf, appeared before the learned Special Director, and submitted a letter dated 30th October, 2017 inter alia informing than, an appeal had been filed by the appellant being Appeal No. 83 of 2017 challenging the order dated T-4/01-B/SDE(VA)/WR/2017/2418 before the Appellate Tribunal for Foreign Exchange Management Act, 1999 and appeal being no. 84 of 2017 challenging the said order. 31. By the said letter the learned Special Director of Enforcement was also requested that, prior to proceeding any further with the hearing in the matter, the complainant Mrs. V. Kalyani and the Investigating Officer Mr. D.K. Sinha should also be produced for the purpose of cross-examination. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein. The Respondent's counsel at the time of hearing on 22nd November 2017 submitted that, the said document appearing at page 191 had been furnished to the Appellant with other documents under cover of letter dated 14th August 2017. The line item/assumption sheet at page 191 was never a part of the enclosures to the letter of 14th August 2017 it was first time handed over to the Appellant on 20th September 2017, upon culmination of the day's proceedings. 38. As already stated, no replies to both appeals were filed on behalf of respondent. Oral submissions were addressed on behalf of respondent. The first objection of Mr. Rajiv Awasthi appearing on behalf of respondent is that the appeal is not maintainable under Foreign Exchange Management Act, 1999. The appeal can only be filed before this Tribunal once the Adjudicating Authority passes the final order imposing penalty as contemplated under Section 19(1). The proceedings before the Adjudicating Authority are in the nature of enquiry as per under Section 16 of the Act. Thus, the impugned order cannot be termed as an order. Therefore the appeal is not maintainable. 39. Mr. Awasthi submits that the Hon ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant to Cooper Engineering Ltd. Vs. P.P Mundhe (1995) 2 SCC 661 laying down that there is no justification for a party to stall the final adjudication of the dispute by questioning the decision on preliminary issues and to S.K. Verma Vs. Mahesh Chandra (1983) 4 SCC 214 deprecating the practice of raising preliminary issues/ objections, to delay and defeat adjudication on merits and to D.P. Maheshwari Vs. Delhi Administration (1883) 4 SCC 293 also laying down that all issues whether preliminary or otherwise should be decided together so as to rule out the possibility of any litigation at interlocutory stage. Attention of the senior counsel for the appellants is also invited to National Council for Cement Building Materials Vs. State of Haryana (1996) 3 SCC 206 noticing the appalling situation created due to challenge to the decision on preliminary issues in the High Court and during which time the reference is stayed and lies dormant and laying down that the High Court should refuse to intervene in the proceedings before the Tribunals at an interlocutory stage. 42. In nut- shell in his first submission is that the appellant must wait for final outcome of the Adjudication p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person aggrieved by any decision or order of the Appellate Tribunal. This section came up for interpretation by the Supreme Court in Rajkumar Shivare v. Directorate of Enforcement (2010) 4 SCC 772, where the Hon ble Supreme Court inter alia held that: 19. The word any in this context would mean all . .. Whenever such limitations are imposed, they are to be strictly followed. But in a case where there is no limitation on the nature of order or decision to be appealed against, as in this case, the right of appeal cannot be further curtailed by this Court on the basis of an interpretative exercise. 20. Under Section 35 of FEMA, the legislature has conferred a right of appeal to a person aggrieved from any order or decision of the Appellate Tribunal. Of course such appeal will have to be on a question of law. In this context the word any would mean all . 24. In Black's Law Dictionary the word any has been explained as having a diversity of meaning and may be employed to indicate 'all' and 'every' as well as 'some' or 'one' and its meaning in a given statute depends upon the context and subject-matter of statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was, therefore, right in not entertaining the writ petition. [Emphasis Added]. 49. Similarly, the Hon ble Punjab and Haryana High Court has also upheld the interpretation that the words an order is not limited to final orders as erroneously submitted by the ED and in fact, includes any order that affects the rights and liabilities of a party. In Sandeep Singh vs. Debt Recovery Tribunal; 1998 SCC Online P H 1844, the Hon ble High Court held: 13 .The next question is whether the words any order occurring in Section 17(2) of the Act and the words an order occurring in Section 20(1) of the Act includes every order passed by the Tribunal under the Act which affects the rights or liabilities of the parties, or these relate to only final order passed by the Tribunal. In the context of Sections 17(2) and 20(1) of the Act, I am of the opinion that the words any order made, or deemed to have been made, by a Tribunal under this Act occurring in Section 17(2) of the Act and the words an order made, or deemed to have been made by a Tribunal under this Act occurring in Section 20(1) relate to every order of the Tribunal made under the Act which affects the rights or liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder would mean interlocutory orders which substantially affect the rights of the parties. The Court presided by the learned Chief Justice M. Jagannatha Rao (as His Lordship then was) has also referred to the term an orders and held that the same would convey that an appeal lies against the interim order which substantially affects the rights of the parties and those words are not confined to an order which finally disposes an application before the Tribunal. We are in respectful agreement with the meaning given to the terms an order and any order in the said judgement. In view of our premised reasons, we pigeon-hole and itemise our conclusions as under: (a) An appeal against an order which substantially affects the rights or liabilities of a party lies to the Appellate Tribunal. [Emphasis Added]. 51. The Hon ble Securities Appellate Tribunal, Mumbai in Bharat Jayantilal Patel vs. Sebi: 2010 SCC Online SAT 284, has in relation to an appeal under Section 15T of SEBI Act (which also contains the words an order ), held: 6. We may now notice an objection raised by the learned senior counsel appearing for the Board. He contended that the present appeal was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 2014. This AT while rejecting the ED s submissions, held as under: 16. The learned counsel for the respondent has alleged that an appeal against an order dismissing the application under section 11of PMLA shall not be maintainable under section 26 of the Act. He has placed reliance on Rule 2 (g) of The Prevention of Money Laundering (Appeal) Rules, 2005 which is as under: (g) order means an order passed by the Director under sub-section (2) of section 13 of the Act or by the Adjudicating Authority under section 8 of the Act as the case may be; Mr. Saud s contention is that the appeal shall be maintainable against the orders passed under section 8 of the Act and since the impugned order is passed under section 11 of the Act, the appeal is not maintainable. The plea of the learned counsel for the respondent is to be rejected. Section 26 of the Act stipulates that any person aggrieved by an order made by the Adjudicating Authority may prefer an appeal to the Appellate Tribunal. An order has not been restricted by the said section and consequently the scope of the section cannot be restricted by the rule. In the circumstances, the appeal from an order made by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appealable under the letters patent. It seems to us that the word judgment has undoubtedly a concept of finality in a broader and not a narrower sense. In other words, a judgment can be of three kinds: (1) A final judgment.- A judgment which decides all the questions or issues in controversy so far as the trial Judge is concerned and leaves nothing else to be decided. This would mean that by virtue of the judgment, the suit or action brought by the plaintiff is dismissed or decreed in part or in full. Such an order passed by the trial Judge indisputably and unquestionably is a judgment within the meaning of the letters patent and even amounts to a decree so that an appeal would lie from such a judgment to a Division Bench. (2) A preliminary judgment.-This kind of a judgment may take two forms-(a) where the trial Judge by an order dismisses the suit without going into the merits of the suit but only on a preliminary objection raised by the defendant or the party opposing on the ground that the suit is not maintainable. Here also, as the suit is finally decided one way or the other, the order passed by the trial Judge would be a judgment finally deciding the cause so far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o defend the suit in which case although the plaintiff is adversely affected but the damage or prejudice caused to him is not direct or immediate but of a minimal nature and rather too remote because the plaintiff still possesses his full right to show that the defence is false and succeed in the suit. Thus, such an order passed by the trial Judge would not amount to a judgment within the meaning of clause 15 of the letters patent but will be purely an interlocutory order. Similarly, suppose the trial Judge passes an order setting aside an ex parte decree against the defendant, which is not appealable under any of the clauses of Order 43 Rule 1 though an order rejecting an application to set aside the decree passed ex parte falls within Order 43 Rule 1 clause ( d) and is appealable, the serious question that arises is whether or not the order first mentioned is a judgment within the meaning of letters patent. The fact, however, remains that the order setting aside the ex parte decree puts the defendant to a great advantage and works serious injustice to the plaintiff because as a consequence of the order, the plaintiff has now to contest the suit and is deprived of the fruits of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutes is entirely different. As aforesaid, the Appellant has filed detailed Written Submissions in the matter relating to the maintainability of the present Appeal under Section 19 of FEMA. (b) The appeal provisions of PMLA cannot simplicitor be made applicable to the appeal provision of FEMA which are different as Section 19(6) of FEMA empowers the Appellate Tribunal to suomoto examine the legality, propriety or correctness of any order made by an adjudicating authority under Section 16 and make such order as it thinks fit. The phrase any order in Section 19(6) once again clearly indicates that it is not restricted and limited to the final order. Section 16(3) requires the adjudicating authority to hold an enquiry under Section 16(1). Section 16(5) deals with the powers of the adjudicating authority during such enquiry. Section 16(6) provides for the enquiry to be disposed of within a timeframe, failing which reasons are to be recorded in writing for not disposing of the complaint within the said period. Thus, there are a variety of orders that could be passed under Section 16 and not only a final order. All such orders would be revisable by the Appellate Tribunal in exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itten submissions are read as under: 6. That the order dated 13.11.2017 passed by this Hon ble Tribunal allowing the appellants to move application for recall of witness and directing the Adjudicating Authority to dispose of the same in accordance with law. The said order was passed by Hon ble Chairperson sitting singally and as per the mandate of the Foreign Exchange Management Act, 1999, Section 20 clearly states that if the penalty is more than ₹ 5 lacs then the matter should be heard Division bench as the Act at that time provides bench by Single Member or Chairperson but in the present case the case under enquiry involves crores of rupees, therefore, the matter could not have been heard by a Single Member or Chairperson as the case may be. 7. That the order dated 13.11.2017 is without jurisdiction because Section 20 have been omitted by Finance Act, 2017 w.e.f. 01.04.2017, therefore, now the matter cannot be heard by a Single Member or Chairperson hence the order dated 13.11.207 itself is without any jurisdiction and the present appeal is an outcome of the order dated 13.11.2017, therefore, are not maintainable as against the order which is nullity in law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same very issue was raised as to whether the matters of these nature can be heard by the Single Member of the Adjudicating Authority and Appellate Board. 67. After discussing various provisions of the Act, the following finding in paras Composition of AA and AT 79. The Court next takes up the question of the composition of the AA on which extensive arguments were advanced by the learned counsel for the Petitioners. In this context, it must be noticed that under Section 6 PMLA, the AA is supposed to consist of the Chairperson and two other members one of whom shall be a person having experience in the field of law. Section 6(3) further sets out what the qualifications for appointment as a member of an AA should be. One of those qualifications is that the person has to be qualified for appointment as a District Judge or a person in the field of law or a member of an Indian Legal Service. The other qualification is possession of a qualification in the field of finance, accountancy or administration as may be prescribed. It is, therefore, not the case that all the members of the AA should be judicial members. 80. It is seen that under Section 5 PMLA, the jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 8 PMLA. It is only to provide an internal judicial review of the orders passed by the authorities under Section 5(1) PMLA. The AA under Section 8 PMLA cannot, therefore, be equated with an Administrative Tribunal under the Administrative Tribunals Act 1985 (ATA). The Central Administrative Tribunal under the ATA was vested with the powers originally with a High Court under Article 226 of the Constitution. Those were Tribunals under Article 323-B of the Constitution of India. The AA is not that kind of a Tribunal at all. The Court is, therefore, unable to agree with judgements of the learned Single Judges of the Sikkim and Gujarat High Courts in this context. There are other reasons why the Court finds that the aforementioned decisions of the learned Single Judges of the Sikkim and Gujarat High Courts cannot be concurred with. They fail to notice that under Section 25 PMLA, an appeal is provided for from the order of the AA before the AT. Even so, such an AT is not the equivalent to the High Court since an appeal against the order of the AT is provided to the High Court itself. Thus, the hierarchy of judicial review authorities under the PMLA presents a very differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... single-member benches need not mandatorily have to be JMs and can be AMs as well. 88. As already pointed out, the challenge to the maintainability of the writ petitions on other grounds, and to the ECIR and to the OCs, the SCNs, the provisional attachment orders and to all further proceedings arising therefrom which have been challenged in the individual writ petitions, shall be decided by the learned single Judge of this High Court. It will be open to the Respondents to raise all pleas, including that of maintainability, before the learned Single Judge. No opinion is expressed with regard thereto. 68. In view of above referred Judgement and the provisions of Section 12(6A) it is not fair on the part of the Respondent to contend that the Chairman sitting in this Tribunal was not empowered and have jurisdiction to hear the appeal no. 83 of 2017. 69. Despite of specific provisions and settled law, the objection was raised by the respondent in its written submission as well as the time of hearing of appeal no. 87/2017 hold on 09.01.2018. I am of the view that in the manner in which the respondent castigated, humiliated the warning system of this Tribunal in a selective way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, presumably they had been in touch with one another. No explanation however has been afforded as to how that influenced each other in the preparation of the said report and/or complaint. In these circumstances, amongst others, it becomes very relevant that the appellant be given an opportunity to cross-examine the complainant, Mrs. V. Kalyani and the said Investigation Officer, Mr. D.K. Sinha. 74. The appellant filed an appeal before Appellate Tribunal, Foreign Exchange Management Act, 1999 against the said two orders dated 12.10.2017 under Section 19 of the FEMA Act, wherein this Tribunal vide orders dated 13.11.2017 granted liberty to the appellant to move two independent applications (i) for further cross-examination or recall of witness Mitil Chokshi and (ii) towards production of documents and directed that the above mentioned application to be adjudicated by the Adjudication Authority on their merits. The order also stated that the Adjudicating Authority should not proceed with the main matter until the said applications were first decided on merits. 75. In view of the order dated 13.11.2017 passed by the Appellate Tribunal, Foreign Exchange Management Act, the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shi were already part of the cross-examination transcript of 20.09.2017 and have already been addressed and there are no new issues being suggested on which cross-examination is now sought and (ii) that the copy of the engagement letter dated 26.06.2016 had already been supplied by the Enforcement Directorate on 14.08.2017 and that there is no scope of any ambiguity regarding supply of engagement letter of C C to the appellant. 79. After dismissing both applications, Special Director asked the counsel for the appellant to argue the main matter. Upon counsel stating that he was not in a position to do so since, cross-examination according to the appellant was incomplete and in any event, the appellant be given an opportunity to challenge the order of rejecting the applications until such time the matter should be adjourned. 80. The Special Director had decided to closing the opportunity for personal hearing and treating conclude the hearing of the main matter. Thereafter reserved the main matter for orders. 81. It is evident from the order dated 15.11.2017 that the Special Director has the said order imputed dilatory and delay tactics to the appellant and its advocates. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20th September, 2017 and not on any date prior thereto and the fact is also clearly confirmed in the said affidavit of Mr. Joseph George. 87. It is evident that in the present appeal as well as in the application in the body of the application dated 14th November, 2017 filed by the appellant before the Adjudicating Authority; it has been clear contended by the appellant that it is only the document appearing at page 191, Folder III of the Memo of Appeal. (the said Assumption Sheet), which was handed over on 20th September, 2017, and not any other document. 88. The text of both the application and appeal are reproduced. In the application dated 14th November, 2017, the following submission appears at paragraph 15 (e) at internal page 5 of the Application (appearing at page 170 of Folder III of the Memo of Appeal): 15 (e) Questions are to be asked about the basis and source of assumption made by C C in forming its opinion in as much as on 20th September, 2017 at the culmination of that day s proceedings, Mr. Chokshi handed over a Valuation Assumption/Line item Sheet (which sheet is attached as the last page to the witnesses transcript- Annexure 2 above). The Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items of Expenditure mentioned in the said Sheet. Also, the Question No. 45 has a reference to Sl. No. 42 of the 61 line items of Expenditure mentioned in the said sheet. It is thus seen that Question Nos. 41 to 45 were all linked to the entries figured in the line items of Income Expenditure listed in the Sheet provided by Shri Chokshi during the course of cross examination and the counsel did not their after asked any question relating to that sheet (Page 191) hence the cross examination concluded as recorded by the Adjudicating Authority at the end of the cross examination and counter singed by the counsel of the appellants without making any request for further cross examination. 7. I sate that as far as the contention of the appellant that further cross examination is necessary/required as certain documents were produced by the witness at the end of recording the cross examination including the document available at page No.191 which has been filed in the Appeal and is available in the document file, it is to submit that page No.191 refers to in appeal records is the sheet containing the details of 11 line items of Income and 61 lined items of Expenditure submitted by S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cross examination was concluded. The issue is raked-up again for the purpose of delaying the adjudication process. 94. Learned counsel for the appellant has submitted that on perusal of the Working Sheets and the Assumption Sheet would show that of the 11 income/revenue line items appearing in the said Assumption Sheet, other than line item No. 11 other non-operating income ; no specific amounts attributable to any of the other line item Nos. 1 to 10 can be discerned and/or individually identified from the Working Sheets and the percentage variation attributable to none of these 11 income/revenue items is mentioned/indicated in the Working Sheets and 61 expenditure line items, appearing in the said Assumption Sheet other than line item Nos. 1 (Franchise Fee), 2 (Cost of Players) and 61 (Depreciation/Amortization); no specific amounts attributable to any of the other 58 items can be discerned and/or individually identified from the Working Sheets and the percentage variation attributable to none of these 61 expenditure items is mentioned/indicated in the Working Sheets. 95. It is denied on behalf of the appellant that Q. 41 to 45 of the cross- examination of Mr. Mitil Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is apparent from the same that the appellant did not have any opportunity to question the witness about the contents of the said Assumption Sheet, as per appellant it was handed over at the Culmination of proceedings on 20th September, 2017. 98. The only issue in hand is whether the witness can be recalled for further cross examination or not in view of contents mentioned in the application. 99. Order 18 Rule 17 reads as under: 17. Court may recall and examine witness:- The Court may at any stage of a suit recall any witness who has been examined and may (subject to the law of evidence for the time being in force) put such questions to him as the Court thinks fit. 100. It is not denied on behalf of respondent that as per provisions of Act that all cases will have to be considered in the manner as civil court. It is also not denied that the cross examination of witness can be allowed if serious controversy of issue is involved though code of civil procedures is not applicable but its principals are applicable. It is also not in dispute that the doors of natural justice can never be closed. In the present case the authority itself felt the cross examination is nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with regard to the manner in which it should be exercised. It is not only the prerogative but also the plain duty of a Court to examine such of those witnesses as it considers absolutely necessary for doing justice between the State and the subject. There is a duty cast upon the Court to arrive at the truth by all lawful means and one of such means is the examination of witnesses of its own accord when for certain obvious reasons either party is not prepared to call witnesses who are known to be in a position to speak important relevant facts. The object underlying Section 311 of the Code is that there may not be failure of justice on account of mistake of either party in bringing the valuable evidence on record or leaving ambiguity in the statements of the witnesses examined from either side. The determinative factor is whether it is essential to the just decision of the case. The section is not limited only for the benefit of the accused, and it will not be an improper exercise of the powers of the Court to summon a witness under the Section merely because the evidence supports the case of the prosecution and not that of the accused. The section is a general section which applie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is that the Court should discharge its obligation to find out where in fact the truth lies. Right from inception of the judicial system it has been accepted that discovery, vindication and establishment of truth are the main purposes underlying the existence of the courts of justice. 16. We are conscious of the fact that recall of the witnesses is being directed nearly four years after they were examined in chief about an incident that is nearly seven years old. Delay takes a heavy toll on the human memory apart from breeding cynicism about the efficacy of the judicial system to decide cases within a reasonably foreseeable time period. To that extent the apprehension expressed by Mr. Rawal, that the prosecution may suffer prejudice on account of a belated recall, may not be wholly without any basis. Having said that, we are of the opinion that on a parity of reasoning and looking to the consequences of denial of opportunity to cross-examine the witnesses, we would prefer to err in favour of the appellant getting an opportunity rather than protecting the prosecution against a possible prejudice at his cost. Fairness of the trial is a virtue that is sacrosanct in our judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Smt. V. Kalyani and the Investigating Officer, Mr. D. K. Sinha. 110. By the Impugned Order dated 30th October 2017, the Ld. Adjudicating Authority summarily rejected the application of the Appellant towards cross- examining the said Smt. V. Kalyani and Mr. D. K. Sinha. The impugned order of rejection was passed without giving any reasons. 111. In the Order dated 15th November 2017, (which is the Impugned Order in Appeal No. 88 of 2017), by and under paragraph 13 thereof, the Ld. Adjudicating Authority inter alia recorded that in his view, the application/request towards cross-examination of the said Smt. V. Kalyani and Mr. D. K. Sinha was a delaying tactic adopted by the Appellant and therefore the Ld. Adjudicating Authority had decided to proceed with the main matter without granting to the Appellant the right to cross-examine the said two officers. 112. It is submitted on behalf of the respondent that the foundation for the cross-examination of Mr. D. K. Sinha was laid in question nos. 19 21 of the cross-examination of Mr. Mitil Chokshi 113. It is submitted on behalf of the appellant that the primary foundation of the present adjudication proceedings is the Investig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of shares to a non-resident. This statement is not incorrect as the concerned Chartered Accountant, Mr. R. Ajgaonkar who issued the Valuation Report, (dated 28th February 2009), during his statement given to the Enforcement Directorate on 10th January 2012 has clearly stated that he had reviewed a copy of the Franchise Agreement in making his valuation report. 116. Thus on the face of report, there are discrepancies that the Investigating Officer, Mr. D. K. Sinha, and he is to be cross-examined to explain his Investigation Report, particularly since the Opinion of M/s. Chokshi Chokshi relies on this Investigation Report. 117. Law on the issue of cross-examination of relevant witnesses (if the serious issues are involved) before the Adjudicating Authority. The Hon ble Supreme Court of India in the case of Ayaaubkhan Noorkhan Pathan v. State of Maharashtra others reported in (2013) 4 SCC 465, has inter alia held that not only should be opportunity of cross-examination be made available, but it should be one of effective cross-examination, so as to meet the requirement of the principles of natural justice. In the absence of such an opportunity, it cannot be held that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vashis Bhattacharya Vs. Union of India 159 (2009) DLT 780, while deciding a case under Foreign Exchange Regulation Act, 1973 had observed that: 18. It is well settled that where an action under the statute entails civil consequences, then even if an opportunity of being heard may not be explicitly set out in the applicable legal provisions, the adherence to the principles of natural justice has to be read into such a statute. 19. There can be no dispute that the action permitted under section 61 of the FERA, 1973 certainly results in drastic penal consequences (iv) The Hon ble Supreme Court of India in Ramesh Ahluwalia Vs. State of Punjab Ors. 2012 (10) SCALE 46 had observed that: 18. This is in conformity with the principle that justice must not only be done. Actual and demonstrable fair play must be the hallmark of the proceedings and the decisions of the administrative and quasi judicial courts. In particular, when the decisions taken by these bodies are likely to cause adverse civil consequences to the persons against whom such decision are taken. IV-A The Hon ble Supreme Court of India in Ashiwin S. Mehta and Anr. Vs. Union of India (UOI) and Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 SCC 634, the Apex Court, while dealing with a case under the Central Excise Act, 1944, considered whether to grant permission for cross-examination of a witness. In that case, the assessee had specifically asked to be allowed to cross-examine the representatives of the concerned firm, in order to establish that the goods in question had been accounted for in the firm s books of accounts and excise duty had been paid thereof. The Court held that such a request could not be turned down, as the denial of the right to cross-examine, would amount to a denial of the right to be heard i.e. audi alteram partem. (vii). In K.L. Tripathi v. State Bank of India Ors., AIR 1984 SC 273, the Hon ble Supreme Court has held that in order to sustain a complaint of violation of the Principles of Natural Justice on the ground of denial of opportunity to cross- examine, it must be established that some prejudice has been caused to the party by the procedure followed. A party which does not want to controvert the veracity of the evidence on record or does not want to controvert the testimony gathered behind its back cannot expect to succeed in any subsequent grievance raised by him on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le dealing with a case under the Foreign Exchange Regulation Act, 1973, decided the appeal in favour of the Appellants on the short ground that the applications made to the Director of Enforcement and before the Appellate Board during the pendency of the appeal to summon four witnesses for cross-examination, were not dealt with by the authorities below. It was held: 5. Non-summoning of the said witnesses for purposes of cross-examination has resulted in miscarriage of justice. 119. From the entire gamut of the matter, I am of the considered opinion that where the results in penal consequences and where an action under the statue entails civil consequences, the plea of delay by civil not allowing the request in order to finalizing the proceedings get the truth is not tainable or justified and particularly in a matter where indeed injustice would cause to the party in view of severe prejudice. 120. The refusal may amount to violation of the principles of fair hearing and affecting the rights of the appellants. The argument of the respondent can be accepted simply saying that cross-examination was un-necessary particularly. 121. There is no material in record to show t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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