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TMI Blog2024 (8) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the very purpose and object of inserting Section 37A is to seize value equivalent situated within India of such foreign exchange, foreign security or immovable property during pendency of the adjudication proceedings and such seizer proceedings initiated under Section 37A, undoubtedly cannot stand as a bar to proceed with the adjudication proceedings under Section 16 of the FEMA by the Adjudicating Authority. As noted under the definition, the functions of the Adjudication Authority, Authorised Officer and Competent Authority are distinguishable and each Authority is conferred with powers under the Act to carry out certain actions. Therefore, the contention on behalf of the appellants that the Authorised Officer is below the Competent Authority has no relevance as far as Section 37A of FEMA is concerned. In fine, we could arrive at an irresistible conclusion that a writ against a show cause notice is not entertainable. The adjudication proceedings have completed and the final order is about to be passed by the Adjudicating Authority. Regarding an interim seizer under Section 37A is concerned, it may not have any implication in respect of the final order to be passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d procedures contemplated therein. In the present case, the appellants raised grounds regarding the jurisdiction and therefore it becomes necessary for this Court to interpret the scope of the provisions of the Foreign Exchange Management Act, 1999 [hereinafter referred as FEMA ]. 4. Section 2(a) defines Adjudicating Authority means an officer authorised under Sub-Section (1) of Section 16. 5. Sub Section (1) to Section 16 contemplates For the purpose of adjudication under Section 13, the Central Government may, by an order published in the Official Gazette, appoint as many officers of the Central Government as it may think fit, as the Adjudicating Authorities for holding an inquiry in the manner prescribed after giving the person alleged to have committed contravention under Section 13, against whom a complaint has been made under Sub-Section (3), a reasonable opportunity of being heard for the purpose of imposing any penalty . Therefore, Section 16 confers power on the Adjudicating Authority to hold an inquiry in the manner prescribed after affording opportunity to the person against whom contravention under Section 13 are noticed. 6. Section 2 (cc) defines Authorised Officer mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the Competent Authority, appointed by the Central Government, who shall be an officer not below the rank of Joint Secretary to the Government of India by the Authorised Officer within a period of thirty days from the date of such seizure . Sub Section 3 provides The Competent Authority shall dispose of the petition within a period of one hundred eighty days from the date of seizure by either confirming or by setting aside such order, after giving an opportunity of being heard to the representatives of the Directorate of Enforcement and the aggrieved person . Sub Section 4 stipulates The order of the Competent Authority confirming seizure of equivalent asset shall continue till the disposal of adjudication proceedings and thereafter, the Adjudicating Authority shall pass appropriate directions in the adjudication order with regard to further action as regards the seizure made under Sub-Section (1) . 12. The Scheme of Section 37A which is a special provision unambiguously and in unequivocal terms speaks about an interim seizer to be made and the procedures to be followed for effecting such seizer value equivalent situated within India of such foreign exchange, foreign security or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petition with a finding that the appellants should participate in the process of adjudication to be conducted under the provisions of the Acts and Rules and thereafter exhaust the remedy as contemplated under the scheme of the enactment. 18. Mr.C.Manishankar, Mr.Abudu Kumar Rajarathinam, Mr.Sricharan Rangarajan, respective learned Senior Counsels and Mr.M.R.Venkatesh, learned counsel appearing on behalf of the appellants made their respective arguments mainly on the ground that an action was initiated under Section 37A of the Act and the order of seizer passed was rejected by the competent authority appointed by the Central Government under Sub Section (2) to Section 37A of the Act. Once the competent authority under Sub Section (2) has rejected the order of seizer passed by the Authorised Officer, there cannot be any further actions by the Adjudicating Authority. Therefore, the show cause notice impugned and the consequential corrigendum are untenable and without jurisdiction. 19. In order to substantiate the said points, the respective learned Senior Counsels and the learned counsels would contend that Section 37A cannot be read in isolation, since the order of the Authoris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Petitioner was that he had a fundamental right under Article 19 of the Constitution and by issuing a notice calling upon him to show cause as to why he should not be dealt with for the breach of the privilege of the House his fundamental right has been affected. This was repelled. Even in the majority opinion of the Supreme Court it has been held that the observations in the case of AIR 1959 SC 395 were confined to the case of a fundamental right under Article 19 of the Constitution. Once it is found that the House has got a right to deal with its own contempt or breach of privilege, the notice issued by the Privileges Committee cannot be said to be without jurisdiction and thus the Petitioners will not be entitled to any writ of prohibition. In our opinion thus the Petitioners are not entitled to any relief at this stage of the proceedings both on the ground that the quashing of the notice will amount to the quashing of the proceedings of the House which the courts of the land are precluded from doing in view of the provisions of Articles 212 and 194(2) of the Constitution and also on the ground that the House having the power to take action for the breach of its privileges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to initially decide the matter and ensure that ultimate relief which may or may not be finally granted in the writ petition is accorded to the writ petitioner even at the threshold by the interim protection, not granted. 24. In the case of Union of India and Another vs. Kunisetty Satyanarayana [(2006) 12 SCC 28], the Hon'ble Supreme Court reasoned out as to why a Writ Petition is normally not entertained against a 'SCN'. The relevant portion of the Judgement is extracted below: 14 . The reason why ordinarily a writ petition should not be entertained against a mere show-cause notice or charge-sheet is that at that stage the writ petition may be held to be premature. A mere charge-sheet or show-cause notice does not give rise to any cause of action, because it does not amount to an adverse order which affects the rights of any party unless the same has been issued by a person having no jurisdiction to do so. It is quite possible that after considering the reply to the show-cause notice or after holding an enquiry the authority concerned may drop the proceedings and/or hold that the charges are not established. It is well settled that a writ petition lies when some right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been conferred is clear, no statutory interpretation is warranted either to widen or restrict the same. 30. ..... 31. ..... 32. ..... 33. ..... 34. .... 35. ..... 36. ...... 37. ..... 38. The learned counsel for the respondents relied on a judgment of this Court in Seth Chand Ratan v. Pandit Durga Prasad [(2003) 5 SCC 399] . The learned counsel relied on para 13 of the said judgment which, inter alia, lays down the principle, namely, when a right or liability is created by a statute, which itself prescribes the remedy or procedure for enforcing the right or liability, resort must be had to that particular statutory remedy before seeking the discretionary remedy under Article 226 of the Constitution. However, the aforesaid principle is subject to one exception, namely, where there is a complete lack of jurisdiction of the tribunal to take action or there has been a violation of rules of natural justice or where the tribunal acted under a provision of law which is declared ultra vires. In such cases, notwithstanding the existence of such a tribunal, the High Court can exercise its jurisdiction to grant relief. 26. In the context of the above interpretations of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age on which the writ petitions filed, raising certain grounds would be the consideration deliberated by the Writ Court for dismissing the writ petition. There is no other additional ground raised for the purpose of entertaining the present Intra-Court Appeal. Thus, the appeals are to be rejected. 30. Learned Additional Solicitor General of India would submit that the Authorised Officer passed the seizer order and sent the same to the competent authority, who in turn rejected the order of the Authorised Officer. Appeal has been preferred by the respondents before the Tribunal, which is pending. However, pendency of the appeal against an order passed under Section 37A(1) is not a bar for the Adjudicating Authority to proceed with the adjudication under Section 16(1) of FEMA and therefore, the grounds raised by the appellants are untenable. 31. We concur with the learned Additional Solicitor General of India, in view of the fact that the special provision under Section 37A is all about an interim seizer value equivalent situated within in India of such foreign exchange, foreign security or immovable property. In the event of seizer during the pendency of the adjudication proceedings, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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