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TMI Blog2022 (2) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... th the facts and circumstances underlying the issuance of the LC s. These were in relation to the procedure for opening of LC s in WSBC Bank, identifying the persons involved, determining as to how the amended LC was issued, mode of dispatching the LC s, collection of documents and examination of witnesses - Since the proposed agreement was in the nature of a bilateral agreement between the two countries, the concurrence of the MEA and the Department of Legal Affairs (DoLA) was required. However, a lot of time was taken in receiving the requisite clearance from the Ministries despite regular follow ups made by the Respondent No. 1 at various levels. The final draft was approved on 06.07.2017. It is clarified that the stance of the petitioner that it is only a beneficiary who does not have the duty to check the authenticity of the LC s cannot preclude the Respondent No. 1 from interrogating the petitioner regarding the export made by the company and asking for the relevant documents in furtherance of the investigation. The further allegation that the bank advising the exporter and the bank advising the importer which have opened the LC and the importer have no quarrel with the LC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Dubai. b. For this purpose, on 21.06.2006, three irrevocable letters of credit [hereinafter LC ] were issued from the WSBC Bank to Karnataka Bank Limited in favor of the petitioner herein. The details of the LC s are as follows : i. LC No.: WSBC/LC/A1815/06 for an amount of USD 5,400,000/- expiring on 18.10.2006 ii. LC No.: WSBC/LC/A1814/06 for an amount of USD 6,300,000/- expiring on 17.12.2006. However, on the same date, WSBC sent another letter to Karnataka Bank Limited amending the above-mentioned letter and, thereby, extending the expiry date to 17.03.2007. iii. LC No.: WSBC/LC/A1813/06 for an amount of USD 6,300,000/- expiring on 17.12.2006. c. On 27.06.2006, the Ministry of Commerce and Industry through the Director General of Foreign Trade issued Notification No. 15 (RE-2006)/2004-2009 which prohibited the export of pulses, amongst other commodities, with immediate effect for a period of 6 months. Vide Notification dated 03.07.2006, the applicability of the notification was extended to 31.03.2007. Thereafter, on 04.07.2006, another notification was issued bearing number 19 (RE-2006)/2004-2009 that amended paragraph 3 of the earlier notification a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.04.2007 instructed Karnataka Bank not to part with the payments received against the bills submitted under LC s. h. However, the second interim order dated 24.07.2007 was set aside vide order dated 04.05.2007 by this Court in W.P.(C). 3124/2007 with the liberty to issue a fresh show cause notice. The instruction dated 25.04.2007 was set aside by the order dated 14.05.2009 passed by this Court in W.P.(C). 7543/2007. On 19.07.2007, a fresh show cause notice was issued by the Respondent No. 2 to which the petitioner gave its reply on 02.08.2007. i. On 07.07.2020, the Respondent No. 1 sent a letter to the petitioner herein as a notice under Section 91 Cr.P.C in relation to its investigation of case RC:RC:S18 E 2007 E 0004/EOU-IV, requesting for an original copy of WSBC s letter addressed to the Karnataka Bank Limited which pertained to the amendment of LC 1814 by which the expiry of the LC was extended to 17.03.2007. To this, the petitioner vide letter dated 21.07.2020 stated that the original letter addressed to the bank is not in their possession, and is likely to be in the possession of the bank. j. Vide Letter dated 06.08.2020, the Respondent No. 1 referred to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of fraud, forgery and manipulation against the petitioner was a result of a Registered Complaint which was instituted at the instance of the then Deputy Director General, DGFT in its letter dated 26.03.2007. He submits that the CBI mechanically registered a complaint without conducting a preliminary enquiry. He added that the investigation did not result in the filing of a chargesheet, as the respondent could not find any infirmity or inaccuracy in the exports made, or demonstrate with evidence the allegations levelled against the Petitioner and therefore the investigation is untenable. 6. He contends that this Court was approached on two separate occasions. This Court was pleased to intervene at both times. He contends that vide order dated 04.05.2007, this Court W.P.(C). 3124/2007 quashed the show-cause notice dated 9.04.2007 issued by DGFT and consequently set aside the order suspending the Importer-Exporter Code of the Petitioner, and directed it to issue a fresh show-cause notice, if it considered fit to do so, and hear the Petitioner in adherence to the principles of natural justice. The second was order passed by this Court was on 14.05.2009 in W.P.(C). 7543/2007, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distress in the Indian food market, the Petitioner contrived to earn more profits from exporting pulses out of the country. 10. Mr. Sharma argued that the amended LC s, which were claimed to have been issued on 21.06.2006 only to circumvent the notification banning export of pulses out of the country. He argues that the amended LC s were insufficiently stamped and did not bear the signature of the appropriate bank official, which is the bank manager, who is duly authorized to permit such an amendment. He submits that during the course of investigation, they approached Karnataka Bank and they found out that the bank had not received any intimation letter by WSBC Bank certifying the amended LC in June 2006. He submitted that the LC s given to the Petitioner were opposed to the usual practice of Letters of Credit issued for purposes of trade and commerce. 11. He submitted that the LC s did not contain the ports from which the goods could be exported to, in the countries mentioned therein and the ports from which the goods could be shipped from in India. He submits that the LC s are bereft of specifications and details. He submitted that the petitioners were known for exporting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontend that, the right to a speedy trial does not enjoin a time limit to be imposed on the investigating agency to complete investigation, especially in the present case where the personal liberty of the Petitioner has not been curbed or affected. 15. Heard the counsels for both the parties and perused the material on record. The petitioner is a public limited company engaged in the business of export of food related commodities. On 21.06.2021, for the petitioner to export pulses during the period of July 2006 March 2007 to Pan Global Trading LLC, Dubai, three irrevocable LC s were issued by the WSBC Bank to the Karnataka Bank Limited. The allegation against the petitioner is that it indulged in backdating, forgery and manipulation of the LC s to circumvent the export ban on pulses which was imposed vide notification dated 27.06.2006 read with notification dated 04.07.2006 for irrevocable LC s issued on or after 22.06.2006. However, the primary grievance of the petitioner, in addition to the allegation of baseless accusations as imposed by Respondent No. 2, is the delay in the investigation conducted by Respondent No. 1. 16. In response to the same, Respondent No. 1 has sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion were issued by a foreign bank, and therefore, a Letter Rogatory [hereinafter LR ] had to be issued by the Chief Metropolitan Magistrate under Section 166 CrPC to New Zealand through the Interpol to investigate and unearth the facts and circumstances underlying the issuance of the LC s. These were in relation to the procedure for opening of LC s in WSBC Bank, identifying the persons involved, determining as to how the amended LC was issued, mode of dispatching the LC s, collection of documents and examination of witnesses. 20. For ease of investigation and further assistance, it was suggested that the SFO, New Zealand and the CBI enter into an agreement. Accordingly, a draft of the proposed agreement was sent under Section 51 of the Serious Fraud Office Act, 1990 on 25.01.2012. Since the proposed agreement was in the nature of a bilateral agreement between the two countries, the concurrence of the MEA and the Department of Legal Affairs (DoLA) was required. However, a lot of time was taken in receiving the requisite clearance from the Ministries despite regular follow ups made by the Respondent No. 1 at various levels. The final draft was approved on 06.07.2017. 21. The ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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