A.P.Parekh vs Special Director Enforcement ...
2010 Latest Caselaw 675 Del

$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI


7
+        W.P.(C) 9161/2007 & CM APPL No. 17251/2007 (for stay)



 A.P.PAREKH                                              ..... Petitioner
                          Through: Mr. R.K. Handoo, Advocate


                                  versus


 SPECIAL DIRECTOR
 ENFORCEMENT DIRECTORATE                    ..... Respondent
               Through: Mr. Abhishek Agarwal, proxy counsel for Mr.
               Jatan Singh, Advocate


                                  And

8
+        W.P.(C) 9218/2007 & CM APPL No. 17351/2007 (for stay)


 NAVIN R. KAMANI                             ..... Petitioner
              Through: Mr. R.K. Handoo, Advocate

                 versus


 SPECIAL DIRECTOR
 ENFORCEMENT DIRECTORATE                   ..... Respondent
                  Through: Mr. Abhishek Agarwal, proxy counsel
                  for Mr. Jatan Singh, Advocate

 CORAM:
 HON'BLE DR. JUSTICE S.MURALIDHAR

                            ORDER

% 05.02.2010

1. These two writ petitions are directed against the common order dated 19 th

September 2007 passed by the Appellate Tribunal for Foreign Exchange

(„Appellate Tribunal‟) in Appeals Nos. 688/2000 and 657/2000 respectively.

By the impugned order the Appellate Tribunal rejected the prayer for waiver

of pre-deposit and directed each of them to deposit within 30 days their entire

respective penalty amounts as determined by the order dated 20th September

2000 of the Special Director of the Directorate of Enforcement.

2. When WP (Civil) No. 9161/2007 was first heard by this Court on 10 th

December 2007 the following order was passed:

"W.P.(C) 9161/2007 & CM APPL No. 17251/2007

Issue notice, returnable on 18th March 2008. The applicant‟s grievance is that the respondent despite being made aware that all the documents had been supplied to him, proceeded to club his case with those of the others and concluded that the adjudication proceedings were being unduly delayed deliberately. Mr. Handoo, learned counsel for the Petitioner submitted that the Petitioner replied to the show cause notice given by the respondent which also sought for personal hearing. It was submitted, inter alia, that the continuation of proceedings and passing of an ex parte order, in the circumstances, was not supportable in law and that the adjudication order was ex parte bad.

I have considered the materials on record. The notices were apparently issued November 1983. The Petitioner‟s reply to the show cause notice does indicate that he did not want to make any grievance about the non-supply of documents. In these circumstances, prima facie, there is merit in the applicant‟s grievance that clubbing of his case with the others was apparently a non-application of mind.

The impugned order was decided the application for waiver of pre-deposit. The Tribunal declined the application which has resulted a liability of one Rs.67 lakhs as penalty amount which the Petitioner is now

required to deposit.

In view of the above observations and having considered the materials on record, I am of the opinion that limitation protection needs to be granted. The Tribunal is permitted to proceed with the hearing of the appeal on its merit; but shall not make any final order till the next date of hearing. Subject to the petitioner depositing 15% of the penalty amount within eight weeks from today."

3. In the second Petition being WP (Civil) No. 9218/2007, the same order was

passed on 11th December 2007. It is stated that both Petitioners have since

deposited 15% of the penalty amount as directed.

4. The submissions of Mr. R.K. Handoo, learned counsel for the Petitioners

and Mr. Abhishek Aggarwal, learned counsel for the Respondents have been

heard.

5. Learned counsel for the Petitioners made several submissions touching on

the merits of the case to show that the order of the Special Director itself

suffered from serious irregularities and illegalities. It was, therefore,

submitted that more than prima facie case has been made out by each of the

Petitioners herein in their appeals before the Appellate Tribunal. It is

submitted that these contentions have not been addressed by the Appellate

Tribunal in the impugned order. Also the financial condition of each of the

Petitioners has not been considered except surmising that since they had been

dealing in a substantial amount of wealth, it was difficult to believe that they

did not have sufficient assets to make a pre-deposit of the entire penalty.

6. Having considered the submission of learned counsel for the parties, it

appears that the interests of justice would be served if the impugned order of

the Appellate Tribunal is modified, and it is directed that the Petitioners‟

appeal should be heard on merits now that each of them has deposited 15% of

the penalty amount as directed by this Court. The impugned order of the

Appellate Tribunal will stand modified accordingly. The Appellate Tribunal

will proceed with the final hearing of the Petitioners‟ appeals and pass a final

order thereon within a period of six months from today.

7. It is made clear that no observations made in the impugned order of the

Appellate Tribunal will influence its final decision in the appeals pending

before it. Further it would be open to the Petitioners to urge the points raised

in these petitions before the Appellate Tribunal. Each of the points will be

considered by the Appellate Tribunal on merits and a reasoned order passed

thereon.

8. These petitions and the pending applications are accordingly disposed of. A

certified copy of this order be delivered to the Appellate Tribunal within a

period of five days from today.

S. MURALIDHAR, J FEBRUARY 05, 2010 rk