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TMI Blog2018 (6) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... to appear for a personal hearing on 24.11.2016 at 14.00 hours. It is this notice that is challenged by the appellant before the Writ Court. 3. The sum and substance of the contentions of the appellant before the Writ Court were that the Authority viz., the 2nd respondent chose to issue a notice for personal hearing dated 04.11.2016 without adhering to Rule 4 of the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000. According to the appellant, Rule 4 requires the 2nd respondent to form an opinion on the objections raised by the petitioner in its explanation dated 19.06.2015 and record his reasons for taking further proceedings. It is the further contention of the petitioner that the reasons so recorded should be communicated to the petitioner to enable him to understand the scope of the impending enquiry. According to the petitioner, the non-recording of reasons and its non-communication is fatal to the proceedings, hence the impugned proceedings dated 04.11.2016 should be quashed by issue of a Writ of Certiorari. 4. The claim in the Writ Petition was resisted by the respondents, contending that the interpretation placed by the petitioner on Rule 4 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants and Mr.G.Rajagopal, learned Senior Counsel, learned Additional Solicitor General of India appearing for the respondents. 8. Mr.P.R.Raman, learned Senior Counsel appearing for the appellant would vehemently contend that furnishing of reasons for the opinion after consideration of the explanation of the petitioner is mandatory in view of the provisions of Rule 4(3) of the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000. Referring to the language of sub-Rule 3 of Rule 4 which reads as follows: (3) After considering the cause, if any, shown by such person, the Adjudicating Authority is of the opinion that an inquiry should be held, he shall issue a notice fixing a date for the appearance of that person either personally or through his legal practitioner or a chartered accountant duly authorised by him. Mr.P.R.Raman, would contend that the words after considering the cause, if any, shown by such person, the Adjudicating Authority is of the opinion that an inquiry should be held, the learned Senior Counsel would contend that the Rule requires the adjudicating Authority to form an opinion on the basis of the explanation submitted by the noticee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and communicate such reasons to the noticee to enable the noticee to put forth his defence. In the absence of strict compliance of the provisions of sub-Rule 3 of Rule 4, the Authority cannot proceed with the enquiry. The learned Senior Counsel would further submit that the learned Single Judge erred in not following the ratio of the decisions of the Division Benches of the Bombay High Court. 12. Mr.P.R.Raman, learned Senior Counsel would also point out that the Special Leave petition filed by the Union of India challenging the judgment in Shashank Vyankatesh Manohar Vs. Union of India and another referred to supra was rejected by the Hon'ble Supreme Court on 04.07.2014. A downloaded record of the proceedings of the Hon'ble Supreme Court has also been produced before us. 13. Contending contra Mr.G.Rajagopal, learned Additional Solicitor General of India would submit that the language of sub-Rule 3 does not impose an obligation on the adjudicating Authority to communicate the reasons that weighed with him in forming an opinion to proceed further with the enquiry. He would point out that even in Shashank Vyankatesh Manohar Vs. Union of India and another cited supra, the Bom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bank of India in respect of which contravention is alleged to have taken place. the learned Additional Solicitor General of India would contend that sub-Rule 4 provides enough safeguards to the noticee, inasmuch as the adjudicating Authority is bound to explain to the noticee or his legal practitioner or his chartered accountant as the case may be, the contravention alleged to have committed by such persons with reference to the provisions of the Act or of the Rules, Regulations, notifications etc., Therefore, according to him, the claim of the petitioner that there should be a preliminary conclusion on the basis of the explanation submitted and the same should be communicated to the noticee before conduct of the enquiry cannot be countenanced. 16. We have considered the rival submissions. The only question that arises in this appeal is as to whether the adjudicating Authority is bound to record his reasons for formation of an opinion under sub-Rule 3 of Rule 4 of the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 in writing and also communicate the same to the noticee if required by the noticee before proceeding with an enquiry. 17. No doubt tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of the Act. The consequences of a factual finding relating to contravention that may be reached by the adjudicating Authority after a full fledged enquiry, cannot, in our considered opinion, form the basis for the Court to read into the provision something more than what is required on a plain reading of the provision. Even the Bombay High Court in paragraph 14 has said that the adjudicating Authority can dispose of the objections by stating that the same would require detailed consideration, which would be done at the disposal of the notice by the final order. 21. A perusal of the proceedings of the 2nd respondent dated 04.11.2016, a copy of which has admittedly been handed over to the petitioner/ appellant would show that the adjudicating Authority has done precisely this, postponing the consideration of the objections to be taken up at the time of the final enquiry as the objections in his opinion would require detailed consideration. 22. The reasonings of the Bombay High Court in Shashank Vyankatesh Manohar Vs. Union of India and another cited supra were substantially followed by another Division Bench of the same Court in Lalit Kumar Modi Vs. Special Director, Directorate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to reopen completed assessments and while doing so, the Hon'ble Supreme Court has held that the Authorities are bound to disclose the reasons for reopening a completed assessment. From the Rules framed under the Foreign Exchange Management Act, 1999, we find that such a requirement comes in at a later point of time and sub-Rule 4 of Rule 4 casts a duty on the adjudicating Authority to explain the nature of the contraventions with reference to the legal provisions etc., to the noticee or his legal practitioner or his chartered accountant as the case may be. When such a provision has been made in the very Rules, reading into those Rules, something which is not contemplated, in our considered opinion may not be just and proper. 25. A learned Single Judge of this Court in Ramakrishna Settu Vs. The Special Director, Directorate of Enforcement, Southern Region, Sastri Bhavan, Chennai -600006 cited supra has explained the scheme of an enquiry under the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000. The said observations are as under: "9. A careful look at the provisions of sub-rules (1) to (12) of Rule 4 would show that the enquiry by the respondent, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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