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TMI Blog2025 (3) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... actly the prejudice is being caused to their respective interest by denial of cross-examination other than the ground mentioned in the Appeal.
We find support from the three Judge Bench judgment of the Hon'ble Supreme Court in State of U.P. v. Sudhir Kumar Singh [2020 (10) TMI 746 - SUPREME COURT]
We also note that the list of relied upon documents to the Show Cause Notice dated 17.05.2002 has 61 serialised items which comprise of statements, retractions, letters, Bank Account opening forms, directives, postal covers, copies of invoices, summons, agreement and copies of Shipping Bills. It is on record that the Ld. Special Director issued directions to furnish the copies of relied upon documents to the Appellants.
Appellants have not even examined the merit of the documents which have been relied upon in the Show Cause Notice dated 17.05.2002 and have raised the issue of cross- examination without demonstrating the necessity for it.
Thus, we find that the two interlocutory orders cannot be intervened with. We therefore, dismiss the Appeals. X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the judgments of Calcutta High Court in Ajay Saraogi vs. Union of India, 2023 SCC Online Cal 2564; the judgment of Delhi High Court in Shahid Balwa vs. The Directorate of Enforcement in LPA No. 79/2013 dated 29.05.2013 to press his case. Besides these two judgments Ld. Counsel has relied upon the judgments of the Hon'ble Supreme Court in Civil Appeal No. 7728 of 2012 in the matter of Ayaubkhan Noorkhan Pathan vs. The State of Maharashtra & Ors., in Civil Appeal No. 5306 of 2008 in the matter of Rajiv Arora vs. Union of India & Ors. and in Civil Appeal No. 4228 of 2006 in the matter of M/s Andaman Timber Industries vs. Commissioner of Central Excise, Kolkata II. Ld. Counsel for the Appellants further relied upon the judgments of Punjab and Haryana High Court in CWP No. 12714 of 2016 in the matter of M/s Jindal Drugs Pvt. Ltd. & Anr. vs. Union of India & Anr; judgments of Hon'ble Delhi High Court in Writ Petition Civil Nos. 1854, 1895-1898 of 1992 in the matter of J & K Cigarettes Ltd. & Ors., M/s GTC Industries Ltd. & Ors. vs. Collector of Central Excise & Ors; and in CUSAA 229/2019 and CM No. 53877/2019 in the matter of Additional Director General (Adjudication) vs. M/s Its My ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia, 2023 SCC OnLine Cal 2564, wherein, the Hon'ble High Court had elucidated the contours of the cross- examination of witnesses. The relevant paragraphs have been extracted herein below: "50. Principles of natural justice have two primary facets, namely, no one should be the judge of his cause and hear the other side. The issues that have been raised in the three appeals pivot around the audi alteram partem rule of the principles of natural justice. 51. Principles of natural justice have been recognized to be a part of article 14 of the Constitution of India. It has also been recognized that, article 14 is not the sole repository of the principles of natural justice. Principles of natural justice stand attracted in every adjudicatory proceeding, be it judicial, quasi-judicial or administrative, unless specifically excluded by statute. An administrative action or a quasi- judicial decision has to conform with the principles of natural justice when such action or decision affects the rights or results in consequences for a party. Orders that have been assailed in these appeals have resulted in consequences for the appellants. Impugned orders have to pass the test of adherence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation as is sought by the appellants. 36. Though we have allowed the appellant to cross-examine the witnesses, we are conscious of the fact that the appellant may be intent on delaying the proceedings. We cannot help noting that the appellant has been filing one application or the other at various stages of adjudication as noted by the learned Single Judge. Keeping in view the nature of the matter, we direct that the appellant be permitted to cross-examine the three witnesses, namely, Shri Ahmad Shakir, Shri Pratap Ghose and Shri K. Vasudeva. The learned adjudicating authority shall fix an appropriate date for cross- examination of the said three witnesses. The said dates should be fixed within one month from today and steps for presence of the witnesses be taken. The cross-examination may be done on a day-to-day basis and may be concluded by the learned adjudicating authority preferably within a period of 10 working days from commencement. These directions are being made so that no unnecessary delay takes place in completion of the cross- examination of the said witnesses. Needless to add that the cross- examination would be confined to questions as permissible in law." 12. Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the adjudicating authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the adjudicating authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the adjudicating authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross-examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their ex- factory prices remain static. It was not for the Tribunal to have guesswork as to for what purposes the appellant wanted to cross-examine those dealers and what extraction the appellant wanted from them. 7. As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross- e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... U.O.I., 2002(143) ELT 25 (SC), Swadeshi Polytex v. Vollector, 2000 (122) ELT 641 (SC)." 16. Ld. Counsel for the Respondent has informed that the Hon'ble Supreme Court in Directorate of Enforcement vs. Shahid Balwa in SLP (Civil) No. 28231-28232/2013 vide Order dated 10.09.2013 stayed the judgment of Hon'ble Delhi High Court in Shahid Balwa vs. The Directorate of Enforcement in LPA No. 79/2013 dated 29.05.2013. The relevant paragraph has been extracted herein below: "Till the next date of hearing, the order under challenge shall remain stayed." 17. Ld. Counsel for the Respondent has informed that the Hon'ble Supreme Court in Directorate of Enforcement vs. Lalit Kumar Modi in SLP (Civil) No. 012840/2020 vide Order dated 27.10.2020 stayed the judgment of Hon'ble Bombay High Court in Lalit Kumar Modi vs. Special Director, Directorate of Enforcement (Western Region) 2018 SCC OnLine Bom 209. The relevant paragraph has been extracted herein below: "In the meanwhile, there shall be stay of operation of the impugned judgment and order of the High Court." 18. Ld. Counsel for the Respondent has relied on the Single Judge Bench decision of the Hon'ble High Court of Delhi in the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s relied on the decision of the Hon'ble High Court of Delhi in the matter of Arun Kumar Mishra vs. Union of India & Ors. in LPA No. 99/2014 to argue that higher judicial fora should not ordinarily interfere in the proceedings before Ld. Adjudicating Authority, especially, when the proceedings have not concluded. The relevant paragraph has been extracted herein below: "13. We are unable to agree. The Adjudicating Authority is currently seized of and in seisin of the complaints. We, at this stage, do not know as to which way the order of the Adjudicating Authority will go. It cannot also be said at this stage whether the Adjudicating Authority even if deciding against the appellants will rely upon the material before it qua which the appellants claim a right of cross-examination. All this can be known only when the Adjudicating Authority passes an order and qua which if the appellants are aggrieved, the appellants shall have their statutory remedy. Any interference by us at this stage in the proceedings of which the Adjudicating Authority is seized is thus uncalled for and would result in a situation which the Supreme Court has warned the High Courts to avoid. Reference may also be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Ld. Counsel for the Respondent, opined that law on natural justice has evolved and every violation of principles of natural justice need not result in setting aside an order, unless and until, prejudice has been established by the aggrieved party. The relevant paragraphs are extracted herein: "We are not concerned with these aspects in the present case as the issue relates to giving of notice before taking action. While emphasizing that the principles of natural justice cannot be applied in straight-jacket formula, the aforesaid instances are given. We have highlighted the jurisprudential basis of adhering to the principles of natural justice which are grounded on the doctrine of procedural fairness, accuracy of outcome leading to general social goals, etc. Nevertheless, there may be situations wherein for some reason - perhaps because the evidence against the individual is thought to be utterly compelling - it is felt that a fair hearing 'would make no difference' - meaning that a hearing would not change the ultimate conclusion reached by the decision-maker - then no legal duty to supply a hearing arises. Such an approach was endorsed by Lord Wilberforce in Malloc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of production in terms of Section 139 of the Evidence Act, where the witness producing the documents is not subjected to cross examination. Such being the case, the refusal of the Adjudicating Authority to permit cross examination of the witnesses producing the documents cannot even on the principles of Evidence Act be found fault with. At any rate, the disclosure of the documents to the appellants and the opportunity given to them to rebut and explain the same was a substantial compliance with the principles of natural justice. That being so, there was and could be no prejudice to the appellants nor was any demonstrated by the appellants before us or before the Courts below. The third limb of the case of the appellants also in that view fails and is rejected." 24. On perusal of these judgments cited from both the sides, it would be reasonable to make the following inferences: (a) There does not appear to be any straight-jacket framework as to when cross-examination can be granted. To lay down any rigid rules as to when in compliance of principles of natural justice, opportunity to cross-examine should be given is almost impossible. It all depends on the subject matter. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1962 and in statement dated 05.03.2002 under FERA admitted that certain firms including M/s Shivam International were opened by him. Ld. Special Director found it illogical that the Appellant Sh. Bimal Kumar Jain should have sought cross-examination of those individuals namely S/Shri Rajnish Agarwal and Sanjay Agarwal who were representing these firms. Ld. Special Director declined the request to cross-examine the Manager of Centurion Bank since the Appellant had failed to furnish the details of the Branch concerned and of the Manager concerned. It was also found that the Centurion Bank was no more in existence, making compliance of the request infeasible. We also observe, on perusal of the Show Cause Notice dated 17.05.2002, that large part of the statements S/Shri Rajnish Agarwal and Sanjay Agarwal have been corroborated by the statements of the Appellant Sh. Bimal Kumar Jain. 27. We note that in the Appeal prayer has been made to allow cross- examination of the investigators only on the ground that through such cross- examination the Appellants intend to establish that the statements recorded by them was under coercion. We observe that the tool of cross-examination is used so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to a person. 42.5. The "prejudice" exception must be more than a mere apprehension or even a reasonable suspicion of a litigant. It should exist as a matter of fact, or be based upon a definite inference of likelihood of prejudice flowing from the non-observance of natural justice." 29. We also note that the list of relied upon documents to the Show Cause Notice dated 17.05.2002 has 61 serialised items which comprise of statements, retractions, letters, Bank Account opening forms, directives, postal covers, copies of invoices, summons, agreement and copies of Shipping Bills. It is on record that the Ld. Special Director issued directions to furnish the copies of relied upon documents to the Appellants. In the Appeal Nos. FPA-PMLA-5226-5227/DLI/2022 in the matters of Abbeys Realcon LLP vs. Directorate of Enforcement, the Co-ordinate Bench of this Tribunal observed in judgment dated 19.12.2022 the following: "It is no doubt that a chance of cross examination is part of the principle of natural justice and it should be given in an appropriate case but there are exception and it would be when no reason exists for cross examination or if the intention of the parties is to make th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pends on the subject matter, the application for principles of natural justice, resting as it does upon statutory implication, must always be in conformity with the scheme of the Act and with the subject- matter of the case. In the application of the concept of fair play there must be real flexibility. There must also have been some real prejudice to the complainant: there is no such thing as a merely technical infringement of natural justice. The requirements of natural justice depend on the facts and the circumstances of the case, the nature of the enquiry, the rules under which the tribunal is acting, the subject-matter to be dealt with, and so forth." 30. From the perusal of the records it appears that the Appellants have not even examined the merit of the documents which have been relied upon in the Show Cause Notice dated 17.05.2002 and have raised the issue of cross- examination without demonstrating the necessity for it. The Co-ordinate Bench of this Tribunal in its judgment dated 31.01.2023 in the Appeal No. FPA-PMLA-5382/DLI/2023 in the matter of Dr. U.S. Awasthi vs. The Adjudicating Authority, PMLA & Anr. has observed the following: "In the light of the judgment refer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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