Smt. Adarsh Kaur Gill vs Assistant Director & Ors.
2011 Latest Caselaw 3535 Del

              *IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                  Date of decision: 26th July, 2011

+                                  W.P.(C) 2008/2004

         SMT. ADARSH KAUR GILL                   ..... Petitioner
                      Through: Mr. Vivek Sood, Adv.

                                      Versus

    ASSISTANT DIRECTOR & ORS.                 ..... Respondents
                 Through: Mr. Sachin Datta & Mr. Manikya
                           Khanna, Advs. for R-2.
                           Mr. M.L. Bhargava, Adv. for R-3&4.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.       Whether reporters of Local papers may                 Not necessary
         be allowed to see the judgment?

2.       To be referred to the reporter or not?                Not necessary

3.       Whether the judgment should be reported               Not necessary
         in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The petition impugns the order dated 26th September, 2003 of the

Enforcement Directorate under the Foreign Exchange Regulation Act

(FERA), 1973 to the extent it exonerates the respondent No.3 Gurnir Singh

Gill and respondent No.4 Smt. S.K. Gill. The petitioner also seeks a

mandamus to the Enforcement Directorate to ensure fresh adjudication qua

the respondents No.3&4.

2. Notice of the petition was issued on 17th February, 2004 and Rule was

issued on 9th November, 2004. The counsel for the petitioner, the counsel

for the Enforcement Directorate and the counsel for the respondents No.3&4

have been heard.

3. The Enforcement Directorate had initiated the proceedings against

M/s Saz International Pvt. Ltd., petitioner and the respondents No.3&4 for

failure to take steps for realization of export outstanding to the tune of US$

1,37,475. The petitioner as well as the respondents No.3&4 were concerned

with the said Company M/s Saz International Pvt. Ltd. The order dated 26 th

September, 2003 (supra) finds that the export outstanding were due during

January, 1985 to June, 1985; that the petitioner was the Director of the

exporting firm and had admitted to the export of goods and found the

petitioner guilty of, instead of repatriating the sale proceeds of the sold

goods into India, utilizing the same in USA. It was further held that the

petitioner in the last week of December, 1984 had taken over the affairs of

M/s Saz International Pvt. Ltd. from the respondents No.3&4; that the

respondent No.4 had in April, 1985 filed a suit in this Court against M/s Saz

International Pvt. Ltd. and the petitioner and certain other persons for

recovery of dues and damages. The order dated 26th September, 2003

(supra) thus holds that the charge against the respondents No.3&4 did not

stand established under Section 68(1) of the Act as they were not the persons

incharge of and responsible for the day-to-day activities of M/s Saz

International Pvt. Ltd. and since they were removed from the said Company

in the year 1984. The respondents No.3&4 were accordingly held not liable

for the contravention.

4. The counsel for the respondents No.3&4 has today urged that the

petitioner had preferred an appeal to the Appellate Tribunal for Foreign

Exchange against the order aforesaid and which appeal was dismissed vide

order dated 28th May, 2010. It is contended that the challenge if any to the

exoneration of the respondents No.3&4 was to be in the said appeal and in

fact was so made in the appeal and has been negatived. It is yet further

contended that the petitioner if aggrieved from the order dated 28 th May,

2010 of the Appellate Tribunal has the remedy of second appeal to this

Court. It is thus contended that the remedy of this writ petition would in any

case be not maintainable and the writ petition is liable to be dismissed on

this ground alone.

5. The counsel for the Enforcement Directorate has also referred to Raj

Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement

(2010) 4 SCC 772 to contend that the Apex Court has in the said judgment

commented adversely to the entertaining of the writ petitions where the

alternative remedy of appeal is provided.

6. The counsel for the petitioner has also not controverted that the appeal

to the Appellate Tribunal was qua the exoneration of the respondents

No.3&4 also. He has however contended that the Appellate Tribunal has not

returned any findings in this regard.

7. The Appellate Tribunal in para 8 of the order dated 28 th May, 2010

has noticed the contention of the petitioner herein who was the appellant

therein that the respondents No.3&4 had been wrongly exonerated and the

penalty of `5,00,000/- imposed on the petitioner alone was excessive. It was

further the contention of the petitioner before the Appellate Tribunal that the

respondent No.4 continued to be the Managing Director of the Company and

continued to send letters to the RBI in the capacity of the Managing Director

of the Company. The Appellate Tribunal in para 11 of the order also

notices the contention of the petitioner that the petitioner is similarly placed

as the respondents No.3 & 4 and was also liable to be exonerated.

8. The Appellate Tribunal though has not returned any findings on the

argument of the petitioner of the respondent No.4 also being liable since he

also claimed to be the Managing Director, has negatived the argument of the

petitioner claiming equality with the respondents No.3&4 by observing that

no claim for negative equality can be made.

9. The counsel for the petitioner has urged that since notice of this

petition as well as the Rule therein was issued, the question of

maintainability cannot be gone into. The said argument is noted only to

reject the same. No such plea can be raised nor is there any basis for the

same. A perusal of the order sheet does not show that the question of

maintainability was gone into at any stage or any finding returned thereon.

Merely because notice of the writ petition is issued would not prevent the

respondents from taking all pleas available to them including that as to the

maintainability of the writ petition.

10. The counsel for the petitioner has next contended that though the

challenge was made to the exoneration of the respondents No.3&4 before

the Appellate Tribunal also but could not have been so made. It is

contended that no appeal lay against such exoneration.

11. There is some controversy as to the provision under which the appeal

was maintainable, with the counsel for the respondents contending that the

appeal was made under Section 52 of FERA 1973 and the counsel for the

petitioner contending that the appeal to the Appellate Tribunal was under

Section 19 of the Foreign Exchange Management Act (FEMA), 1999.

However, in my opinion the same would be of no avail inasmuch as the

provisions as to appeal under both the Acts are similar. The appeal to the

Appellate Tribunal under both Acts, lies at the instance of any person

aggrieved by the order. Thus the contention of the counsel for the petitioner

that the petitioner could not have appealed to the Appellate Tribunal against

the exoneration cannot be accepted.

12. The counsel for the petitioner however with reference to the proviso

of Section 19 of FEMA has sought to contend that the appeal under FEMA

lies only against orders of levy of penalty. The argument if fallacious.

Merely because the proviso provides for deposit of penalty while preferring

appeal against the order imposing penalty, cannot be said to limit the wide

amplitude of the main provision providing for appeal "by any person

aggrieved from any order made by the adjudicating authority". "Any order"

would include an order exonerating some of the noticees. Reference may

also be made to Section 49(4) of FEMA, being a transitory provision

providing for the cases governed by FERA to be continued to be governed

by the said Act notwithstanding the repeal thereof. In this regard, it may

also be noted that the order dated 26th September, 2003 of the Enforcement

Directorate also records the same to have been made under the provisions of

the FERA and not under the provisions of FEMA.

13. Once it is held that the grievance as raised in this petition is

appealable and once it is admitted that appeal indeed was preferred, this writ

petition would definitely be not maintainable. Moreover, the counsel for the

petitioner on enquiry is unable to state whether any remedy has been taken

by the petitioner against the order dated 28th May, 2010 of the Appellate

Tribunal. He merely states that he has not been engaged for the said

purpose. Even if the Appellate Tribunal has not returned any findings on the

grievances raised by the petitioner qua the exoneration of the respondents

No.3&4, the dismissal of the appeal indicates that the said grievance has also

been negatived. The petitioner has not challenged the order of Appellate

Tribunal in this petition. If the petitioner is aggrieved of the order of the

Appellate Tribunal, she has remedies thereagainst and cannot pursue this

petition qua the order which has been subject matter of appeal.

14. Need is therefore not felt to go into the challenge on merits. It may

however be observed that I have also raised the query as to the locus of the

petitioner to maintain the present petition. Though the counsel for the

petitioner has contended that any citizen can challenge any order of

exoneration but has been unable to show any case law thereon.

15. There is thus no merit in the petition. The same is dismissed with no

order as to costs.

RAJIV SAHAI ENDLAW (JUDGE) JULY 26, 2011 „gsr‟