Calcutta High Court (Appellete Side)
Renu Devi Banka & Ors vs Union Of India & Ors on 29 November, 2022
Item No.3.
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
HEARD ON: 29.11.2022
DELIVERED ON:29.11.2022
CORAM:
THE HON'BLE MR. JUSTICE T. S. SIVAGNANAM
AND
THE HON'BLE MR. JUSTICE HIRANMAY BHATTACHARYYA
FMA 1156 of 2022
With
I.A. No.CAN 1 of 2022
Renu Devi Banka & Ors.
Vs.
Union of India & ors.
Appearance:-
Mr. Sudhasatta Banerjee,
Mr. Aditya Garodia,
Mr. Pintu Ghosh,
Mr. Shaswat Nayak,
Mr. Ushm Garodia ... for the appellant.
Mr. Arijit Chakraborty .... for the E.D.
JUDGMENT
(Judgment of the Court was delivered by T.S. SIVAGNANAM, J.)
1. This intra-Court appeal filed by the writ petitioners
against the order dated 12th July, 2022 in W.P.A. No.8539 of
2022. The said writ petition was filed for issuance of a writ
of certiorari to quash the show cause notice dated 3rd February,
2022 and complaint case dated 21st October, 2021 insofar as it
relates to seizure of a sum of Rs.11.50 lakhs; for issuance of a
writ of mandamus to rescind the show cause notice and the said
complaint insofar as it relates to seizure of the said sum of
Rs.11.50 lakhs and for issuance of a writ of mandamus to direct
the official respondents to return the sum of Rs.11.50 lakhs to
the appellants / writ petitioners, which according to them, were
illegally seized.
2. The learned Single Bench dismissed the writ petition
holding that the challenge to the show cause notice is not
maintainable at the instance of the appellants / writ
petitioners as they are not noticees to the show cause notice.
Secondly, the learned Writ Court held that in exercise of the
jurisdiction of the Court under Article 226 of the Constitution
of India, dispute regarding ownership of the cash could not be
decided. Thirdly, the learned Writ Court was of the view that
the writ petition before this Court is not maintainable on
account of lack of territorial jurisdiction as the respondents
were all situated outside the State of West Bengal. Challenging
the correctness of the order, the appellants are before us by
way of this appeal.
3. We have heard Mr. Sudhasatta Banerjee, learned Advocate
appearing for the appellants and Mr. Arijit Chakraborty, learned
Advocate appearing for the Enforcement Directorate.
4. So far as the first ground on which the writ petition was
dismissed, in our considered view, the decision of the learned
Writ Court cannot be faulted. The appellants being not noticees
to the show cause notice could not have maintained a challenge
to the show cause notice and the complaint though they
restricted their relief only to the extent of a sum of Rs.11.50
lakhs, which was seized by the official respondents. Secondly,
the learned Writ Court was also right in arriving at a
conclusion that disputed question of fact cannot be adjudicated
in a writ proceeding under Article 226 of the Constitution of
India, more particularly, when the claim of the appellants /
writ petitioners is that the said amount of Rs.11.50 lakhs,
which have been seized by the authorities is the property of the
appellants. On the third issue regarding territorial
jurisdiction, we partly agree with the finding of the learned
Single Bench to the extent that a writ of certiorari or a writ
of mandamus cannot be issued to an authority, who is situated
outside the State over which the High Court exercises
territorial jurisdiction but there is an exception to this Rule,
if the litigant is able to show that part of the cause of action
arose within the territorial jurisdiction of the Court in which
the proceedings are initiated.
5. Be that as it may, we are of the view that the appellants /
writ petitioners cannot be left remediless. For which purpose,
we have gone through the statutory provisions of the Foreign
Exchange Management Act, 1999 (for short, "the Act") and the
Foreign Exchange Management (Adjudication Proceedings and
Appeal) Rules, 2000 (for short, "the Rules").
6. Section 13 which occurs in Chapter IV of the Act deals with
penalties. In terms of sub-Section (1) of Section 13, if any
person contravenes any provision of this Act, or contravenes any
rule, regulation, notification, direction or order issued in
exercise of the powers under this Act, or contravenes any
condition subject to which an authorisation is issued by the
Reserve Bank of India, he shall, upon adjudication, be liable to
a penalty up to thrice the sum involved in such contravention
where such amount is quantfiable, or up to two lakh rupees where
the amount is not quantifiable, and where such contravention is
a continuing one, further penalty which may extend to five
thousand rupees for every day after the first day during which
the contravention continues.
7. Sub-Section (2) of Section 13 states that any adjudicating
authority adjudging any contravention under sub-Section (1) of
Section 13 may, if he thinks fit in addition to any penalty
which he may impose for such contravention direct that any
currency, security or any other money or property in respect of
which the contravention has taken place shall be confiscated to
the Central Government and further direct that the foreign
exchange holding, if any, of the persons committing the
contraventions or any part thereof, shall be brought back into
India or shall be retained outside India in accordance with the
directions made in this behalf.
8. The explanation in Sub-Section (2) of Section 13 states
that for the purposes of sub-Section 2, property in respect of
which contravention has taken place shall include deposits in a
bank, Indian currency and any other property, which has resulted
out of the conversion of the property. Thus, in terms of
Section 13(1) read with sub-Section (2) empowers the
adjudicating authority not only to impose penalty but also
direct the money to be confiscated to the Central Government.
9. The case of the appellants / writ petitioners is that the
sum of Rs.11.50 lakhs, which has been seized is the individual
property of the appellants and it has got nothing to do with the
noticees and during the seizure operations, though a higher sum
was supposed to be seized, on satisfactory explanation being
given by the appellants / writ petitioners, an amount of
Rs.11.50 lakhs was only seized and not balance amount. The
appellants' further case is that they have enough evidence to
establish that the said sum of Rs.11.50 lakhs is not the
property of any of the noticees as presumed in the complaint
lodged by the adjudicating authority.
10. The learned standing counsel appearing for the respondent
authorities would submit that the cash, which was not seized was
based upon the documents, which were produced by one of the
noticees and upon the authority being satisfied that the said
sum, which was not seized does not belong to the said noticee.
In any event, we are not here to adjudicate these disputed
questions, which are best left to the adjudicating authority to
consider.
11. As pointed out earlier, the appellants cannot be left
remediless, therefore, we have scanned the relevant rules and we
find that Rule 4 of the said Rules given enough power to the
adjudicating authority to take note of the factors such as the
case of the appellants.
12. On a reading of sub-Rule (6) of Rule 4, we find that while
holding an enquiry under the said Rule, the adjudicating
authority shall have the power to summon and enforce attendance
of any person acquainted with the facts and circumstances of the
case to give evidence or to produce any document, which in the
opinion of the adjudicating authority, may be useful for or
relevant to the subject matter of enquiry. This Rule, in our
opinion, would empower the adjudicating authority to even summon
the appellants for the purpose of conducting an enquiry as
required to be done under Rule 4 of the said Rules.
13. Therefore, we are of the view that the appellants should be
relegated to the adjudicating authority by granting liberty to
them to make a representation / application before the
adjudicating authority setting out the facts and as to how and
on what basis, they claim that the sum of Rs.11.50 lakhs is
their property and not the property of any one of the noticees.
Since the adjudication proceedings is at the very nascent stage,
no prejudice would be caused to the adjudicating process if such
course is adopted.
14. For the above reasons, this Court would be empowered to
issue such a direction regardless of the fact that the
adjudicating authority is situated outside the State of West
Bengal and beyond the jurisdiction of this Court as the search
and seizure operations had been done in the State of West
Bengal, namely, at Kolkata and the seizure of the cash was done
at Kolkata. The appellants are permanent residents of Kolkata
and therefore, they would be entitled to ventilate their
grievances before this Court to the extent indicated by us in
the preceding paragraphs.
15. In the result, the appeal filed by the appellants is partly
allowed while affirming the order passed by the learned Single
Bench that challenge to the show cause notice at the instance of
the appellants is not maintainable and the Writ Court cannot
adjudicate disputed questions of facts especially with regard to
the ownership rights of the property either movable or immovable
and so far as the territorial jurisdiction is concerned, subject
to what we have said in the preceding paragraphs, this Court
would be entitled to exercise jurisdiction by issuing the
appropriate directions to enable the appellants to go before the
adjudicating authority.
16. In the result, there will be a direction to the appellants
to submit an application / representation before the
adjudicating authority clearly setting out all facts accompanied
by documents and such application be filed within three weeks
from the date of receipt of the server copy of this judgment and
order before the adjudicating authority, who shall consider the
said representation / application, hear the noticees, if
required and pass an order on merits and in accordance with law
and communicate the same to the appellants.
17. Since the appellants are third parties to the complaint and
the show cause notice, the adjudicating authority can consider
the claim independently, if permissible or in the absence take
it up along with the adjudication process of the show cause
notice.
18. There shall be no order as to costs.
19. Urgent photostat certified copy of this order, if applied
for, be furnished to the parties expeditiously upon compliance
of all legal formalities.
(T. S. SIVAGNANAM, J)
I agree,
(HIRANMAY BHATTACHARYYA, J.)
NAREN/PALLAB(AR.C)
