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Judgment
Ibrahim, the petitioner herein, has filed this writ petition seeking for the issue of a writ of mandamus directing the Special Director, Enforcement
Directorate, the respondent herein, to permit the petitioner to cross-examine the witnesses as requested by him in his reply to the show-cause
notice by issuing necessary summons to the witnesses for their appearance at the time of personal hearing before the adjudicating authority in T-
4/28-M/92/SDE.
The few facts which are necessary to understand the controversy which arises in this petition are as follows:-
A. On 12.8.1991, the officers of the respondent searched a person by name Sheriff who was about to board a flight bound for Singapore, as a
result of which, the officers-recovered certain documents. The said Sheriff also gave a statement implicating the petitioner Ibrahim to the effect that
those documents were handed over to him by the petitioner for handing over the same to a person at Singapore.
B. In a follow up action, the officers searched the room of the petitioner and seized the Indian and foreign currencies, gold chains and gold rings
etc. The petitioner also had given a statement that at the instance of one Allahudeen of Malaysia, he used to collect dollars from the persons
working in Malaysia and Singapore for the purpose of utilizing the same for buying the goods and selling the same in India for profit and as per the
arrangement, he sent several persons to Malaysia to collect Singapore dollars, purchase the goods and sell them in India and utilized the sale
proceeds for making payments to the persons as instructed by Allahudeen of Malaysia.
C. On the basis of the said statement, the respondent initiated adjudication proceedings against the petitioner under the provisions of the Foreign
Exchange Regulation Act, 1973. The respondent issued a show-cause notice dated 4.8.1992 to the petitioner asking him to show cause as to why
Indian Currency, foreign currency and gold chains under seizure should not be confiscated to the Government and as to why personal penalty
should not be imposed on the petitioner.
D. In response to the above show cause notice, the petitioner had sent a reply dated 10.3.1993 to the respondent denying the allegations
contained in the show cause notice and further requested to permit him to cross-examine the witnesses, namely, the Sheriff, the officers, who
effected the seizure and other persons, whose statements were recorded against the petitioner.
E. On consideration of the said request, the respondent sent a communication dated 23.3.1993 informing the petitioner that his request for cross-
examination of the witnesses had been rejected. He had also sent a notice on 22.4.1993 intimating the petitioner that the case was posted for
personal hearing on 21.5.1993. At that stage, the petitioner thought it fit to file this writ petition seeking for the mandamus.
The only contention urged by the learned counsel for the petitioner on the strength of the decision reported in Central Government v. Fr.Alfred
James Fernandez, 1987 (13) ECC 248 is that the petitioner has got a right to appear in the adjudication proceedings in person before the
Adjudicating Authorities and adduce evidence, which includes a right of cross-examination of the witnesses.
On the other hand, Mr.K.Kumar, learned Additional Central Government Standing Counsel appearing for the respondent would submit that
while the show-cause notice was served on the petitioner, he had been given all the records which were relied upon by the department for initiating
the adjudication proceedings, that in view of the Rule 3(5) of the Foreign Exchange Regulation Rules, 1974, the petitioner cannot claim as of right
for cross-examination of the witnesses, especially under Rule 3 of the said Rules, the evidence Act would not apply to the adjudication
proceedings and as such, the writ petition is liable to be dismissed. He would also point out that when there is a provision u/s 52(4) of the Foreign
Exchange Regulation Act, 1973 providing appeal against the orders, the petitioner ought not to have come before this Court by filing this writ
petition.
I have heard the counsel for the parties and carefully considered the submissions and I have also gone through the records.
As correctly pointed out by the learned counsel appearing for the respondent, the Rule 3 of the Adjudication Proceedings and Appeal Rules,
1974 would clearly state as follows:-
Rule 3(5): The adjudicating officer shall then give an opportunity to such person to produce such documents or evidence as he may consider
relevant to the enquiry and if necessary, the hearing may be adjourned to future date and in taking such evidence, the adjudicating officer shall not
be found to observe the provisions of the Indian Evidence Act, 1872 (1 of 1872).
Under those circumstances, the adjudicating officer shall give required particulars to the petitioner to put-forth his case by way of giving an
explanation to the show-cause notice and in view of the specific bar put on Rule 3, the petitioner cannot, as of right, compel the adjudicating
Authority to permit him to cross-examine the witnesses.
Further more, when the order rejecting the said request is appealable u/s 52(4), there is no reason for the petitioner to approach this Court by
filing the writ petition. Consequently, the adjudication proceedings have been stayed, as a result of which, the same have been stalled for about
seven years.
When the similar question had been raised before the Apex Court, the Supreme Court would hold as follows in the decision reported in
Kanungo and Company Vs. Collector of Customs and Others, :-
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 to
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 light of the above observation, I am of the view that the adjudicating authorities, in order to enable the petitioner to give a proper
explanation, have to issue show-cause notice to the petitioner. In the present case, the Authority had not only served show-cause notice on the
petitioner but also enclosed therewith all the documents relied upon by the Authority. Instead of giving suitable explanation, the petitioner did make
a request in the letter dated 10.3.1993 asking for the opportunity to cross-examine the witnesses. This approach, in my view, is not only
unwarranted, but also to make the Authority not to decide the issue in the quickest possible time.
When there is a Statute which requires the Authority to conduct the proceedings in a particular way, the petitioner cannot ask the Authority to
deviate from that way and to allow him to cross-examine the witnesses which is not permissible as per the aforesaid Rule. As such, I do not find
any infirmity in the order rejecting the prayer to permit the petitioner to cross-examine the witnesses. So, the writ petition is liable to be dismissed
as devoid of merits and accordingly, it is dismissed. No costs. Connected W.M.P.No.15141 of 1993 is also dismissed.