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TMI Blog2023 (1) TMI 1420X X X X Extracts X X X X X X X X Extracts X X X X ..... ould have been sought. Appellant is seeking cross examination of the witnesses who did not appear before the Adjudicating Authority for examination pursuant to the Regulation 21 of the Adjudicating Authority (Procedure) Regulation 2013 - In the instant case, the Appellant has failed to state that if cross examination is not permitted, it will cause serious prejudice to him. The case in hand does not show violation of principle of natural justice when Appellant failed to make statement on the contents of the statement of three persons despite supply of copies of the documents before passing Provisional Attachment Order. The Appellant did not avail the opportunity to submit explanation to the documents provided to him before passing Provisional Attachment Order and now wants to cross examine the witnesses. The default and failure of the Appellant therein is now sought to be corrected by seeking cross examination of three co-accused. Reference to the Regulation 21 of the Adjudicating Authority (Procedure) Regulation 2013 has been given to indicate powers of the Adjudicating Authority for summoning of the witnesses for examination. It can be exercised when appropriate case is made out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2002 ( in short Act of 2002) the Adjudicating Authority is to guide itself by the principle of natural justice and otherwise shall have power to regulate its own procedure subject to other provisions of the Act. The said provision further provides that the Adjudicating Authority shall not be bound by the procedure laid down in the Code of Civil Procedure however Regulation 21 of the Adjudicating Authority (Procedure) Regulation, 2013 provides for application of the provision of Code of Civil Procedure relating to the issuance of commission for examination of witnesses and documents and also for summoning and enforcing attendance of any persons as witness and issuance of commission for examination of such witness. Since the Regulation permits issuance of commission for examination of witness by the Adjudicating Authority, it ought to have allowed the application to call for the witnesses for cross examination. Ignoring the aforesaid, the Adjudicating Authority dismissed the application without proper appreciation of fact. The application was not moved with a view to delay the proceedings, to be completed by the Adjudicating Authority within 180 days. The application was moved immed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed the impugned order dated 13th December, 2022. The Learned Counsel for the Appellant further submitted that if cross-examination is permitted, they will complete it at the earliest so that the Adjudicating Authority may pass the order within the period of 180 days. The Appeal is seriously contested by the Learned Counsel for the Department and submitted that Adjudicating Authority has not committed any error or illegality in dismissing the application. The facts on record show involvement of the Appellant in money-laundering. The principles of natural justice does not warrant cross-examination in all the cases. She has cited judgments of the Apex Court to substantiate her arguments and it was more specifically referring to the nature of proceeding involved in passing Provisional Attachment Order under the Act of 2002. The Learned Counsel for the Respondent further submitted that application to seek cross examination was nothing but to delay the proceedings before the Adjudicating Authority so that it may lapse with the expiry of 180 days. The Learned Counsel for the Respondent referred the application to submit that no reasons for cross-examination of the witnesses has been g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of money laundering and accordingly after registration of the case by CBI, ECIR was registered. The prayer is accordingly to dismiss the appeal. She has relied on the following judgments: (i) Shri Kishanlal Agarwalla V/s. the Collector of Land Customs Ors. 1965 SCC OnLine Cal 141, (ii) State of Jammu and Kashmir Ors. V/s. Bakshi Gulam Mohammad Anr. AIR 1967 SC 122 (iii) Chairman, State Bank of India and Anr. V/s. M.J. James (2022) 2 SCC 301 (iv) Kanungo Co. V/s. Collector of Customs and Ors. 1973 2 SCC 438 (v) Shri Arun Kumar Mishra V/s. Union of India. We have considered the rival submissions of the parties and perused the records. Before addressing the issue raised by the Learned Counsel for the parties, it would be appropriate to refer to brief facts of the case given in the Provisional Attachment Order dated 22nd September, 2022. Para 3 of the Provisional Attachment Order is quoted hereunder for ready reference:- As per FIR No RC221/2021/E/0009 dated 17.05.2021 registered by CBI, two complaints were forwarded to CBI with the approval of the Hon'ble Minister for Chemical Fertilizers, Govt. of India. Both the complaints contained almost similar allegations again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany beneficially owned by Vivek Gahlaut) and M/s. Terra Firma Commodities DMCC, Dubai (company beneficially owned by Amol Awasthi and Vivek Gahlaut) received commission from group companies of Rajiv Saxena without any genuine transaction and such transfers were actually receipt of illegal commission generated out of import of fertilizers and raw materials by IFFCO and IPL on inflated prices. Thus Rajiv Saxena and his associates received a total sum of US$ 114.32 million (Rs. 685 crores approx. @ 1 USD= Rs. 60) of illegal commission in the bank accounts of his group companies and individual accounts of Pankaj Jain, Vivek Gahlaut, Amol Awasthi and A.D. Singh. It has been revealed that a total amount of USD 80.18 million (Rs. 481 crores approx.) have been channelized through Rare Earth Group of Pankaj Jain and remaining USD 34.14 million (Rs. 204 crores approx.) has been received by Awasthi Brother/Vivek Gahlaut either in the accounts of the firm/ companies owned by them or in cash. It has also been alleged that entities beneficially owned by Pankaj Jain have supplied Fertilizers to IFFCO IPL. It is pertinent to mention here that none of these entities have any manufacturing capacity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cross-examine is against the mandate of law. The correctness of the contents made in the statements and Provisional Attachment Order are denied and thus, in accordance with the principle of natural justice, the maker of the documents including original complaint should be allowed to be cross-examined because the right to cross-examine is an indivisible right. Perusal of the para quoted above shows that in first part it is contended that no documentary evidence exists against the Appellant. The complainant has solely relied upon hearsay statements of Shri Rajiv Saxena, the retracted statement of Shri A.D. Singh some vague and irrelevant statement of Shri Sushil Kumar Pachisia and thus those witnesses need to be cross examined in reference to various aspects of the matter. In the second part of the application, the cross examination has been sought in reference to the documents relied by the ED after questioning the correctness of the statements and Provisional Attachment Order. According to the learned Counsel for the Respondent, there exists contradiction in para 6 of the application. The Appellant has denied any documentary evidence against him rather complainant said to have reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 1908, (5 of 1908) but shall be guided by the principles of natural justice and, subject to the other provisions of this Act, the Adjudicating Authority shall have powers to regulate its own procedure. Regulation 21 Examination of witness and the issue of commissions.- The provision of the Code of Civil procedure, 1908, (5 of 1908) relating to the issuing of commissions for examination of witnesses and documents shall, as far as, may be applicable, apply in the matters of summoning and enforcing attendance of any person as witness and issuing a commission for examination of such witnesses. Section 6(15) makes it clear that Adjudicating Authority would not be bound by the procedures laid down by the Code of Civil Procedure but shall be guided by the principles of natural justice. It would be open for the Adjudicating Authority to regulate its own procedure subject to other provisions of Act. Regulation 21 of the Adjudicating Authority (Procedure) Regulation 2013 quoted above however provides for application of Code of Civil Procedure for issuance of commission for examination of witnesses and documents etc. As per Regulation 21, the Adjudicating Authority has power to issue commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the proceedings for attachment. It is considered to be summary proceedings and to be completed within time frame. The attachment of the property remains subject to final outcome of the trial by the Special Court. In such proceedings, cross examination has not been recognized as a rule. We have already recorded our opinion that the cross examination is part of principle of natural justice but not in all the circumstances therefore we are not required to elaborately discuss the judgment referred by the learned Counsel for the Appellant. However we record our clarification that a chance of cross examination cannot be sought as a rule and in all the circumstances, rather it can be in a given case. In the case of Shri K.L. Tripathi v/s. State Bank of India Ors, Supra the Apex Court has referred to the basic concept of fair play in administrative, judicial or quasi-judicial proceedings. Para 32 33 are quoted hereunder:- 32. The basic concept is fair play in action administrative, judicial or quasi-judicial. The concept fair play in action must depend upon the particular lis, if there be any, between the parties. If the credibility of a person who has testified or given some informa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 SCC 438, the same issue was dealt with by the Apex Court. Para 12 of the said judgment is quoted hereunder:- 12. We may first deal with the question of breach of natural justice. On the material on record, in our opinion, there has been no such breach. In the show-cause notice issued on August 21, 1961, all the material on which the Customs Authorities have relied was set out and it was then for the appellant to give a suitable explanation. The complaint of the appellant now is that all the persons from whom enquiries were alleged to have been made by the authorities should have been produced to enable it to cross-examine them. In our-opinion, the principles of natural justice do not require that in matters like this the persons who have given information should be examined in the presence of the appellant or should be allowed lo be cross-examined by them on the statements made before the Customs Authorities. Accordingly we hold that there is no force in the third contention of the appellant. In the judgment quoted above, it was held that in the proceedings referred therein, chance of cross examination cannot be sought as a matter of right in the name of principle of natural just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f that rule was necessary for a just decision in the facts of the case. 29. Legal position on the importance to show prejudice to get relief is also required to be stated. In State Bank of Patiala and Others v. S.K. Sharma, a Division Bench of this Court distinguished between adequate opportunity and no opportunity at all and held that the prejudice exception operates more specifically in the latter case. This judgment also speaks of procedural and substantive provisions of law embodying the principles of natural justice which, when infracted, must lead to prejudice being caused to the litigant in order to afford him relief. The principle was expressed in the following words: (SCC p. 389, para 32) 32. Now, coming back to the illustration given by us in the preceding para, would setting aside the punishment and the entire enquiry on the ground of aforesaid violation of sub-clause (iii) be in the interests of justice or would it be its negation? In our respectful opinion, it would be the latter. Justice means justice between both the parties. The interests of justice equally demand that the guilty should be punished and that technicalities and irregularities which do not occasion fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Constitution this Court has interpreted the quality and amplitude of the opportunity to be extended to an affected public servant. Certainly we agree with 'the principles expounded therein. But then we cannot look at law in the abstract or natural justice as a mere artifact. Nor can we fit into a rigid would the concept of reasonable opportunity. Shri Gambhir cited before us the decisions in Teredesai MANU/SC/0509/1969 : [1970] 1SCR 251 Management of DTU MANU/SC/0605/1972 : (1973) ILLJ 76SC and Tandon MANU/SC/0370/1974 : AIR 1974 SC 1589 and one or two other rulings. The ratio therein hardly militates against the realism which must inform reasonable opportunity' or the rule against bias. If the authority which takes the final decision acts mechanically and without applying its own mind, the order may be bad, but if the decision-making body, after fair and independent consideration, reaches a conclusion which tallies with the recommendations of the subordinate authority which held the preliminary enquiry, there is no error in law. Recommendations are not binding but are merely raw material for consideration. Where there is no surrender of judgment by the Board to the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice to a person involved in money laundering which affects the economy of the country. One of the witness sought to be cross examined is Shri A.D. Singh who is an accused and against whom prosecution complaint has already been filed. He has retracted his statement recorded by the Income Tax Officer. If cross examination of the co-accused is allowed in the attachment proceedings, he would suffer in reference to the defence in the criminal case and that too at a pre mature stage. The right of accused in regard to the defence cannot be affected in the nature of proceedings before us. It is more so when Special Court is trying the case and therein prosecution would lead its evidence first with a chance of cross examination of witness and thereupon accused would have chance of defence. It would be in reference to the same set of allegation and arising out of the same ECIR. The trial of case by Special Court may result in serious consequence of even conviction thus cross examination is permitted there. The prayer to allow cross examination in this case is of the co-accused who was not even been examined before the Adjudicating Authority. This is the peculiarity of the case in hand. The r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umar Pachisia. He did not know these persons at all and have never met them so he did not want to read their statements. He was once again requested to go through those statements as those may contain some facts relating to him and/or his family members. He stated that he had no interactions with them and his family consisted of his wife and himself only. That he did not want to read those statements as he did not know these two persons namely Rajiv Saxena and Sushil Kumar Pachisia. He denied having any interaction with Sh. Amarendra Dhari Singh @A. D. Singh after he had tendered his statement before Income Tax authorities. He also denied having any communication by any mode with Sh. Amarendra Dhari Singh@ A. D. Singh after June 2019. On being asked about communication by any mode with Sh. Amarendra Dhari Singh@ A. D. Singh prior to that, he stated that he used to come and visit his office after taking appointment and also he used to meet him at various conferences and dinners. He also used to come and visit him on festivals like Holi, Diwali etc. for extending festive greetings. He admitted that Sh. Amarendra Dhari Singh used to come and discuss mainly about the visits of supplier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cused. Reference to the Regulation 21 of the Adjudicating Authority (Procedure) Regulation 2013 has been given to indicate powers of the Adjudicating Authority for summoning of the witnesses for examination. It can be exercised when appropriate case is made out. If a witness is called to make statement before the Adjudicating Authority, an opportunity of cross examination can be prayed but in the instant case, the Appellant did not make an application to summon the witness to record his statement but was only for cross examination in reference to the statement made by them before Income Tax Officer or under Section 50 of Prevention of Money Laundering Act, 2002. The cross examination can be sought when the witnesses is examined by the Adjudicating Authority and not in reference to statement made before other Authority. In the light of the aforesaid, we do not find a case for acceptance of the application for cross examination. The Learned Counsel for the Appellant has made a reference to the affidavit filed by the E.D. in the Criminal Miscellaneous petition before Delhi High Court. According to the Appellant, the statement of Shri Rajeev Saxena was declared untrustworthy by the E.D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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