Sujana Steels Ltd & Others vs Special Director Of Enforcement & ...
2009 Latest Caselaw 4904 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                     W.P.(C) 6695/2008

       SUJANA STEELS LTD. & ORS.                              ..... Petitioner
                           Through           Mr. Amit Chadha, Sr. Advocate with Ms.
                                             Naina Kejriwal, Advocates.

                      versus

       SPECIAL DIRECTOR OF ENFORDEMENT & ANR.              ..... Respondent
                          Through    Mr. Sachinb Datta and Ms. Poorva
                                     Nanwati, Advocate.

       CORAM:
       HON'BLE MR. JUSTICE SANJIV KHANNA

                            ORDER

% 30.11.2009

1. By the impugned order dated 3rd July, 2008, the Appellate Tribunal for Foreign

Exchange has disposed off the applications of the petitioners for waiver of pre deposit

of penalty amount with a direction that the petitioners should deposit 50% of the

penalty amount.

2. The petitioner admittedly is a company, which is in operation and functioning.

Counsel for the petitioner submits that the cash deposit of Rs. 4,00,000,00/- is likely to

have adverse impact on the cash flow and crush them. It is also pointed that the

petitioner had obtained stay order from Court against invocation of letter of credits

but the banks concerned made payments. He further states that an application has

been made to the Reserved Bank of India for waiver of import.

3. Counsel for the respondent Enforcement Directorate has drawn my attention

to the allegations and the findings recorded in the order dated 25 th March, 2008,

passed by Special Director, Enforcement Directorate. It is pointed out that the civil

suits filed by the petitioners were dismissed as not pressed and contempt applications

were not filed. It is submitted that in the present case, the cargo never reached India

and the foreign exchange was not repatriated.

4. The allegations and findings against the petitioners are serious. It cannot be

said that the petitioners are entitled to complete waiver of pre deposit. Admittedly,

payment in foreign exchange was made but the cargo never reached India. The

question relates to involvement of the petitioner and their directors. Further the

petitioner No.1 is a running company and penalty of Rs.4,00,000,00/- has been

imposed on the petitioner No.1 and Rs.1,00,000,00/- each has been imposed on the

petitioner Nos.2 and 3 Chairman and Managing Director. A penalty of Rs.30,00,000/-

has also been imposed on the petitioner No.3 Chief Executive of the petitioner No.1

company. Thus, the penalty imposed is about Rs.6,30,000,00/-. The penalty amounts

are substantial and even deposit of 50% of the penalty amount will certainly have

adverse impact on the cash flows and working. The petitioners have filed first appeals

and have to be heard both on merits as well as quantum of penalty. By the interim

order passed by this Court, the petitioners have been asked to deposit Rs. 25,00,000/-

only.

5. Keeping in view the fact that the petitioner is a running company, it is directed

that the petitioner No.1 will deposit a further sum of Rs. 50,000,00/- (total

Rs.75,00,000/-) and the Chairman and the Managing Director of the petitioner No.1

company will deposit Rs.11,00,000/- each. The petitioner No.4 will deposit

Rs.3,000,00/-. The said deposits will be made by the petitioners in two equal

installments. The first installment will be paid on or before 15 th January, 2010 and the

second installment will be paid on or before 1st April, 2010. The petitioners will file an

affidavit within four weeks before the Appellate Tribunal for Foreign Exchange giving

details of the immovable properties owned by them including immoveable properties

owned by their family members i.e. spouse and children. The petitioners will also give

details of their bank accounts. The petitioners will not sell, dispose or encumber the

immovable properties except with prior permission of Appellate Tribunal for Foreign

Exchange. The petitioners will update details of their bank accounts and inform the

learned Tribunal in case they or their family members i.e. spouse or children acquire

any new immovable properties.

The writ petition is accordingly disposed of.

SANJIV KHANNA, J.

NOVEMBER 30, 2009 NA