Aadik Exports vs Directorate Of Enforcement & ...
2009 Latest Caselaw 3203 Del

13.
*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+      W.P.(C) 5086/2008

                                    Date of decision: 17th August, 2009

       AADIK EXPORTS                            ..... Petitioner
                          Through Mr. Rajesh Yadav, Advocate.

                     versus

       DIRECTORATE OF ENFORCEMENT & ANR            ..... Respondents
                      Through Ms. Rajdipa Behura, Advocate.

       CORAM:
       HON'BLE MR. JUSTICE SANJIV KHANNA

       1. Whether Reporters of local papers may be
       allowed to see the judgment?
       2. To be referred to the Reporter or not ?
       3. Whether the judgment should be reported
       in the Digest ?

                                 ORDER

%

1. The petitioner, Aadik Exports, by way of present writ petition has

challenged order dated 2nd July, 2008 passed by the Appellate Tribunal for

Foreign Exchange disposing of the application for waiver of pre-deposit of

penalty amount of Rs.3,00,000/- with the condition that the petitioner will

deposit 50% of the penalty amount within thirty days.

2. In 1992, the petitioner had supplied garments to a buyer in Finland

vide two invoices of US$ 11279.50 and US$ 5642.50. It is the case of the

petitioner that the foreign buyer did not take delivery of the consignment

due to alleged defects and the shipment was stored in the bonded W.P. (C) No. 5086/2008 Page 1 warehouse at Helsinki, Finland. It is the case of the petitioner that a new

foreign buyer could not be located and the agent of the foreign buyer later

on exercised right of lien on the cargo. The petitioner had no option but

to write off the two invoices as legal expenses involved for initiating

litigation were substantial, while value of the two consignments was

marginal. Learned counsel for the petitioner in this regard has also relied

upon certificate issued by the American Express Bank to write off the

outstanding export proceeds and close the file of the petitioner.

3. It is admitted that the Reserve Bank of India has granted approval

to waiver/ write off the export proceeds of one of the consignments valued

at US$ 5642.50. However, no waiver or write off in respect of the other

assignment of US$ 11297.50 has been granted by the Reserve Bank of

India.

4. By adjudication order dated 27th October, 2004, the petitioner was

condemned to be guilty of charges under Sections 18(2) and 18(3) of the

Foreign Exchange Regulation Act, 1973 and penalty of Rs.3,00,000/- has

been imposed. The petitioner has filed an appeal before the Appellate

Tribunal for Foreign Exchange. By the impugned order dated 2nd April,

2008, the application for waiver of pre-deposit was disposed of with the

direction that the petitioner will deposit Rs.1,50,000/-, i.e., 50% of the

penalty amount within thirty days.

W.P. (C) No. 5086/2008 Page 2

5. By the interim order passed by this Court on 18th July, 2008, the

operation of the order dated 2nd April, 2008 was stayed, subject to the

petitioner depositing Rs.75,000/- within four weeks. The petitioner has

deposited the said amount.

6. The two consignments of different values were exported to the

same foreign buyer. It is the case of the petitioner that the buyer did not

lift the consignments due to alleged defects and the same remained at the

shipment bonded warehouse at Helsinki, Finland. It is also the contention

of the petitioner that keeping in view the legal expenses involved, the

petitioner did not initiate any legal proceedings against the foreign buyer

in Finland. The petitioner in this connection has also drawn my attention

to the write off/waiver granted by the Reserve Bank of India in respect of

one consignment accepting the case of the petitioner. It is stated that the

petitioner was entitled to waiver in respect of the second consignment to

the same buyer. It is stated that there is no difference in the two cases.

7. Learned counsel for the petitioner during the course of hearing

states that the petitioner will furnish security to the satisfaction of the

Enforcement Directorate for the balance penalty amount of Rs.2,25,000/-.

8. Keeping in view the aforesaid facts, the impugned order dated 2nd

April, 2008 is modified with the direction that the petitioner will deposit

Rs.75,000/- towards the penalty amount and will also furnish security of

Rs.2,25,000/- to the Enforcement Directorate towards balance penalty

W.P. (C) No. 5086/2008 Page 3 amount. The petitioner has already deposited Rs.75,000/-. The petitioner

will also file an affidavit with the Enforcement Directorate disclosing his

personal assets and assets of his wife and dependent children including

their bank accounts and immovable properties. The security and the

affidavit will be filed within a period of four weeks.

The writ petition is accordingly disposed of.

DASTI.

SANJIV KHANNA, J.

       AUGUST 17, 2009
       VKR




W.P. (C) No. 5086/2008                                                  Page 4