Directorate Of Enforcement vs Appellate Tribunal For Foreign ...
2009 Latest Caselaw 2063 Del

16
*     IN THE HIGH COURT OF DELHI AT NEW DELHI
+     W.P.(C) 3963/2008

      DIRECTORATE OF ENFORCEMENT     .... Petitioner
                      Through  Mr. A.K.Panda, Sr. Advocate with Mr.
                               N.K. Matta, Advocate.

                 versus
APPELALTE TRIBUNAL FOR FOREIGN EXCHANGE THROUGH ITS REGISTRAR
& ANR             ....          . Respondent
                       Through  Mr. P.P. Malhotra, ASG with Ms.
                                Monica Garg, Advocate.
                                Ms. Sudha Chaudhary, Asst. Registrar,
                                Appellate Tribunal for Foreign
                                Exchange.
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
           ORDER

% 15.05.2009

This petition has been filed by the Directorate of Enforcement for

issue of mandamus and other relief including relief of quashing of

impugned order dated 9th November, 2005 passed by the Appellate

Tribunal for Foreign Exchange.

2. By order dated 9th November, 200, the Appellate Tribunal for Foreign

Exchange had disposed of the application of the appellant praying for

amendment of the cause title of the appeal from Ram Nath @ Mahinder

Singh Cheera to Ram Nath. By this order, the following directions were

given:-

"3. We have heard lengthy arguments from both sides but after due consideration, are of prima facie view that fraud, if any, to acquire benefit in judicial proceedings needs better proof than what is pleaded by Learned Senior Counsel. Hence, looking towards totality of the factual situation and the pleading made, we keep the applications for amendment undecided as yet we intend to decide the application for amendment along with the main appeal. Hence, we fix this latter for hearing on 20.1.2006 when parties may appear accordingly."

3. The Directorate of Enforcement thereafter had filed a review

application. The allegation made by Directorate of Enforcement is that

thereafter no further orders have been communicated and no decision has

been taken. It is further pointed that hearing was held before the third

member on account of the fact that there is difference of opinion between

the Chairman and member, who had heard the review application. Even

the order of third member had not been communicated or sent to the

petitioner or the person, who had filed the appeal. As a result of which, the

entire proceedings were kept in abeyance and appeal remains pending.

4. It is unfortunate that this situation has arisen and the Directorate of

Enforcement has been forced and compelled to move to High Court.

Original file of the appeal pending before the Appellate Tribunal produced

before me and has been examined by me. The original file reveals that

Chairman of the Appellate Tribunal had bent down and dispose of the

application dated 9.11.2006. He rejected the review application. However, there is no original signed copy of the order passed by the Chairman on the

record. There is typed copy of the said order with initial Sd above the words

" (O.P. NAHAR), Chairperson". There is another order available on record,

which allows the review application and holds that Ram Nath is an

independent person from Mohinder Singh Chera and Mohinder Singh Chera

has no locus standi to file the present appeal and therefore the appeal

should be dismissed. The signed order is, however, not available on record.

What is available is typed copy of the order with the initial Sd. What

happened to the signature is not known. Assistant Registrar, who is

present in Court states that when she was handed over charge, the original

signed order was not on record. Thereafter another order dated 20th

March, 2007 passed by Kumari Vijay Laxmi, member stating inter alia as

there is difference of opinion, the matter was referred to a third member.

The chair person, thereafter has passed a written order referring the

matter to Mr. R.N. Poddar, member. The date of the said order is not

indicated. Questions on points of difference of opinion have been framed in

the said order.

5. It is stated by the counsel for the petitioner, Directorate of

Enforcement that hearing was held before Mr. R.N. Poddar. The file reveals

that Mr. R.N. Poddar has passed a detailed order dated 8th August, 2007 and disposed of the points of differences referred to him. The lower portion

of the order dated 8th August, 2007 is signed by Mr. O.P. Nahar,

Chairperson, but has not been signed by Kumari Vijay Laxmi, member. This

order dated 8th August, 2007 records "In accordance with the majority

opinion, this Tribunal shall decide this appeal in a composite manner along

with application for amendment and the latter will not be decided as

preliminary issue. The matter is fixed for hearing on 25th October, 2007."

This order is not signed by Kumari Vijay Laxmi, member. She has bent down

reasons for not signing the said order in her order dated 13th August, 2007,

which reads as follows:-

"Hon'ble Member has observed in para 4 of the order dated 8.8.2007 that the question as to the locus standi of Ramnath @ M.S. Cherra is to be decided before other issued are examined and considered in this matter. It appear that Hon'ble Member wants this issue of locus standi to be decided as preliminary issue which is a question yet to be decided by the Hon'ble Member. The matter is returned for necessary action"

6. It is clear from the above that there is dispute between Chairperson

and the member on the interpretation of the order passed by third

member on 8th August, 2007. The controversy could have been resolved by

simply circulating the three orders passed by the Chairperson, the first

member and opinion given by the third member.

7. In view of the aforesaid facts, the following direction is passed:-

(i) The Appellate Tribunal will circulate the reasons and the decision of

the Chairperson, Kumari Vijay Laxmi, member and Mr. R.N. Poddar, third

member to the parties and accordingly fix the appeal for hearing in terms

of order passed by the third member on the points of differences.

8. Reference in this regard can be made to Section 52(6) of the Foreign

Exchange Regulation Act, 1973, which reads as under:-

"52(6). The powers and functions of the Appellate Board may be exercised and discharged by Benches consisting of two members and constituted by the Chairman of the Appellate Board:

Provided that if the members of the Bench differ on any point or points, they shall state the point or points on which they differ and refer the same to a third member (to be specified by the Chairman) for hearing on such point or points and such point or points shall be decided according to the opinion of that member:

Provided further that it shall be competent for the Chairman or any other member of the Appellate Board authorized by the chairman in this behalf to exercise the powers and discharge the functions of the Appellate Board in respect of any appeal against an order imposing a penalty of an amount not exceeding two lakhs and fifty thousand rupees."

9. Section 31 of the Foreign Exchange Management Act, 1999, however

provides in Section 31 that in view of Section 49 of the FEMA, 1999, the

Appellate Board constituted under Foreign Exchange Regulation Act stands

dissolved and appeals are allowed to be filed before alternative appellate forum.

10. Even for the sake of arguments, it is accepted that Section 31 of

Foreign Exchange Management Act, 1999 applies, I feel the review

application should be treated as disposed of on the basis of opinion given

by the third member, which in a way accepts the position that the question

of locus standi and the identity of the appellant will be examined first at the

time of hearing of the appeal itself.

The writ petition is accordingly disposed of.

SANJIV KHANNA, J.

MAY 15, 2009 NA