Dismissed

FPA-FE-49/DLI/2017 of v. K. Sasikala v/s The Special Director Directorate of Enforcement, Delhi

ATFP12 Oct 2018FPA-FE-49/DLI/2017

Case brief

AI extract

What is this about?

The Appellate Tribunal addressed condonation of delay applications filed over eight years late in four appeals under FEMA. The appellant claimed non-service and recent incarceration. The court found service via advocate and pasting at last known addresses was effective, rejected the delay plea, and dismissed the appeals as time-barred.

What did the court decide?

All four appeals dismissed on grounds of limitation. No condonation of delay allowed.

FPA-FE-49/DLI/2017 of v. K. Sasikala v/s The Special… — Writ and Judicial Review | ATFP (2018)

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APPELLATE TRIBUNAL FOR SAFEMA, FEMA, PMLA, NDPS & PBPT ACT AT NEW DELHI

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DATE OF DECISION: 12.10.2018

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MP-FE-271/DLI/2017 (COD)
&
In FPA-FE-48/DLI/2017
V. K. Sasikala	… Appellant
MP-FE-270/DLI/2017 (COD) &
In FPA-FE-49/DLI/2017
V. K. Sasikala	… Appellant
MP-FE-9/DLI/2017 (COD) & In FPA-FE-50/DLI/2017
V. K. Sasikala	… Appellant
MP-FE-12/DLI/2017 (COD) &
In FPA-FE-51/DLI/2017
V. K. Sasikala	… Appellant
Versus
The Special Director
Directorate of Enforcement, Delhi	... Respondent

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Advocates/Authorized Representatives who appeared

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For the Appellants	:	Shri B. Kumar, Sr. Advocate Shri Naveen Malhotra, Advocate
For the Respondent	:	Shri Rajeev Awasthi, Advocate
CORAM
SMT. ANANYA RAY	:	MEMBER
JUDGMENT

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FPA-FE-48-51/DLI/2017

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Page 1 of 11

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FPA-FE-48-51/DLI/2017

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The present proceedings are with regard to the condonation of delay applications filed by the appellant in all the above four appeals. The details are as under:

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i. Appeal No. 48/DLI/2019 Order in original No. 14/2009 dated 20.08.2009 (impugned order) Appeal filed on 12.06.2017

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Delay of more than 7 and a half years.

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ii. Appeal No. 49/DLI/2017

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Order in original No. 10/2008 dated 19.03.2008 (impugned order) Appeal filed on 11.07.2017

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Delay of around 9 years.

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iii. Appeal No. 50/DLI/2017

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Order in original No. 9/2008 dated 19.03.2008 (impugned order) Appeal filed on 14.07.2017.

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Delay of around 9 years.

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iv. Appeal No. 51/DLI/2017

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Order in original No. 8/2008 dated 25.02.2008 (impugned order) Appeal filed on 14.07.2017.

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Delay of around 9 years.

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All the appeals have been filed under the provisions of the Foreign Exchange Management Act, 1999. As per Section 19 of FEMA every appeal shall be filed within a period of 45 days from the date on which a copy of the order made by the adjudicating authority is received by the aggrieved person provided that the Appellate Tribunal may entertain an appeal after the expiry

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FPA-FE-48-51/DLI/2017

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Page 2 of 11

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of 45 days, if it is satisfied that there was sufficient cause for not filing it within that period.

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I have heard the appellant as well as the respondent and also gone through their written submissions.

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Broadly, the argument of the appellant is:

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a. That the adjudication orders (the order in originals) in all the above four appeals was not served on them when they were passed,

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b. That they were served on them in prison where the appellant was lodged,

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c. That the appellant has been in jail since February, 2017,

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d. That the orders were earlier served by pasting the same on the premises which as per the respective mazhar of the witnesses states that the appellant was not residing in the said premises.

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e. That as per Rule 9 of the Foreign Exchange Management (Adjudication Proceedings and Appeal Rules 2000). “A notice, requisition or an order issued under these rules shall be served on any person in the following manner, that is to say,—

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(a) by delivering or tendering the notice or requisition or order to that person or his duly authorised person;

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(b) by sending the notice or requisition or order to him by registered post with acknowledgment due to the address of his place of residence or his last known place or residence or the place where he carried on, or last carried on, business or personally works or last worked for gain; or

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(c) by affixing it on the outer door or some other conspicuous part of the premises in which the person resides or is known to have last resided or carried on business or personally works or last worked for gain and that written report thereof should be witnesses by two persons; or

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(d) if the notice or requisition or order cannot be served under clause (a) or clause (b) or clause (c), by publishing in a leading newspaper (both in vernacular

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FPA-FE-48-51/DLI/2017

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Page 3 of 11

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and in English) having vide circulation of area or jurisdiction in which the person resides or is known to have last resided or carried on business or personally works or last worked for gain.)”

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f. That without complying with the provisions of Rule 9(a) and 9(b), Rule 9(c) cannot be resorted to as has been done in the present case. That the department/respondent has not clarified whether the order copy was sent by the Registered Post with AD or not. Hence, Rule 9(b) was not followed. With regard to Rule 9(a), the appellants during the hearing and also in their written submissions dated 17.09.2018 has accepted that the copy of the orders were served on the advocate Mr. A. Navaneetha Krishnan who had appeared during the adjudication proceedings, but insisted that it was of no consequences.

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g. As per the judgment of the Hon‟ble Supreme Court in Tirumalai Chemicals Ltd. [(2011) 6 SCC 739] , the proceedings should be under FEMA (and not FERA).

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h. Relied on the judgment of the Delhi High Court in Crl. M.C. 2668/2004 dated 19.04.2012.

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The respondents in response have argued as follows:

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a) The adjudication orders (except order No. 14/2009 dated 20.08.2009) meant for the appellant was sent by RPAD to 36, Poes Garden, Chennai- 86, which were returned by postal authorities after redirecting to No. 18, East Abhirampuram, IIIrd Street, Chennai-04, with postal remarks „No Such Addressee‟. This was communicated by the Deputy Director, ED, Chennai to the Special Director, ED, New Delhi vide their letter dated 08.09.2008.

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FPA-FE-48-51/DLI/2017

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Page 4 of 11

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b) That at the time of the passing of the order in original, all these orders were served on the appellant through the advocate who was appearing in the personal hearings before the adjudicating authority, which is a normal procedure and even the appellants have accepted the said fact.

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c) Therefore, the provisions of Rule 9(a) and 9(b) of FEMA (Adjudication Proceedings and Appeal Rules 2000) have been fulfilled.

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d) Ultimately the orders were pasted on the last known addresses of the appellant under „mazhars‟ before witnesses. The details are as under;

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i. Order in original 14/2009 dated 20.08.2009 pasted under Mazhar dated 19.07.2010 at No. 18, East Abhirampuram, IIIrd Street, Chennai (Appeal NO. 48/DLI/2017).

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ii. Order in original 10/2008 dated 19.03.2008 pasted under Mazhar twice on 29.01.2009 and again on 06.03.2009 at the above said address and at 68/69, Habibula Road, T. Nagar, Chennai-17 (Appeal No. 49/DLI/2017).

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iii. Order in original 9/2008 dated 19.03.2008 pasted under the above said two mazhar dated 29.01.2009 and 06.03.2009 at the above said addresses as at (b) above.

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iv. Order in original 8/2008 dated 25.02.2008 pasted twice on the same day i.e. 29.01.2009 but in the two addresses i.e. No. 18, East Abhirampuram, IIIrd Street, Chennai and No. 68/69, Habibula Road, T. Nagar, Chennai.

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FPA-FE-48-51/DLI/2017

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Page 5 of 11

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e) That all the procedures that have been laid down as per law has been followed and hence the impugned order were served on time to the appellant. They also argued that while the show cause notices and the notices for personal hearing were sent to the above said addresses, the appellants at that time did not raise any objection and in fact had not denied at any time that these were not the addresses. Hence, the plea that the appellant did not receive the adjudication orders is an afterthought in order to tide over the immense delay that is there in filing the appeal.

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f) That at no stage have the appellant informed the respondent/department that they had changed the address nor the new address were ever communicated to the department.

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g) Therefore, the huge delay in filing the appeal cannot be condoned, and the appeals deserved to be dismissed.

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I have carefully considered the case, heard both the parties and have gone through the written submissions. The limited question before me is whether the delay in filing of each of the four appeals as brought out in para 1 supra is condonable as per Section 19 of FEMA as quoted above. SubSection (2) proviso of Section 19 of FEMA states that the appeal filed after the due period can be entertained if the Tribunal is satisfied that there were sufficient cause for not filing it within that period. So it needs to be seen whether „sufficient cause‟ has been given by the appellants to condone the huge delay in each of the appeals above.

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The appellant through its lawyer Shri Naveen Malhotra have accepted in their written submission dated 17.09.2018 that the advocate who had appeared before the adjudicating authority had received copies of the orders. But their stating that he was not „duly authorised person‟ is a proposition

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FPA-FE-48-51/DLI/2017

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Page 6 of 11

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which is little difficult to understand and accept since the said advocate was appearing before the adjudicating authority in all the hearings. Obviously, he was a duly authorised person otherwise neither could he appear in the adjudication proceedings nor would the adjudicating authority entertain him. This goes on to prove that the orders have been received by the authorised person.

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Notwithstanding the above, the respondent‟s effort to again serve it through Registered Post AD to the last known addresses of the appellant as available on record so that the penalty levied in each of the impugned order could be recovered, is also brought out by the postal authorities endorsement „No Such Addressee‟ (at two addresses). Thirdly, the orders were ultimately pasted on the last known addresses/premises under proper mazhar as mentioned above, which are all on record.

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I do not find any evidence given by the appellant to disprove the above, while they have fairly accepted that the orders were served on the advocate of the appellant at the relevant time.

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It is also a fact that the appellant has not made any effort, once the adjudication procedure was complete to intimate to the respondent/department about any change of address, which they were duty bound to do in case they had left residing at the earlier addresses which was there at the time of adjudication. This raises a suspicion about the intention of the appellant, since huge amount of penalty in each of the case was levied on them and it is a fact that till today they have not paid the same to the Government even after lapse of 9-10 years.

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The appellant‟s reliance on Tirumalai case is acceptable and the proceedings are being conducted under the provisions of FEMA only. The reliance on the other case of the Delhi High Court in Crl. M.C. 2668/2004 FPA-FE-48-51/DLI/2017 Page 7 of 11

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dated 19.04.2012 as mentioned at para No. 3 (h) above is not found to be relevant as in that case the facts were totally different. In that case the show cause notice was not served since the petitioner was under detention under COFEPOSA. That in the present case the appellant was not under any detention and she was jailed, as per the learned counsels own admission in some other case only in February, 2017 whereas all the orders were passed during the period 2008 and 2009, is an apparent fact. Moreover, as discussed above, provisions of Rule 9(a) and 9(b) of FEMA (Adjudication Proceedings and Appeal Rules 2000) have been followed before resorting to Rule 9(c).

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The Hon‟ble Supreme Court had in Civil Appeal Nos. 8183-8184 of 2013 dated 13.09.2013 in the case of Esha Bhattacharjee vs. Managing

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Committee of Raghunathpur Nafar Academy &Ors. in the case of a condonation of delay made the following observations;

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“(i) There should be a liberal, pragmatic, justice-oriented, nonpedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice.

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(ii) The terms "sufficient cause" should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact-situation.

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(iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis.

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FPA-FE-48-51/DLI/2017

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(iv) No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of.

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(v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact.

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(vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice.

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(vii) The concept of liberal approach has to encapsule the conception of reasonableness and it cannot be allowed a totally unfettered free play.

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(viii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation.

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(ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach.

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FPA-FE-48-51/DLI/2017

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(x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation.

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(xi) It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of law of limitation.”

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The Hon‟ble Supreme Court further observed that „the increasing tendency to perceive delay as a non-serious matter and hence lackadaisical propensity can be exhibited in a non-challant manner requires to be curbed…….” Quoting from its earlier judgment in the case of N. Balakrishnan vs. M. Krishnamurthy (AIR 1998 SC 3222) it stated “time is precious and wasted time would never revisit………… unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. The law of limitation is thus founded on public policy. It is enshrined in the maxim interest reipublicae up sit finislitium (it is for the general welfare that a period be put to litigation). ………. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly.”

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In this case, the facts as discussed above make it clear that they were in receipt of the adjudication order, that notwithstanding that efforts were again made by the respondent to serve the copies in person on the appellant, but because of the appellant leaving her residence/premise without any notice could not enable the said service and the postal endorsement is a proof of the same, and that way back in 2009 and 2010, they were pasted on the last known addresses of the appellant. However, in spite of that the appellant failed to file any appeal, and suddenly in 2017 she filed the FPA-FE-48-51/DLI/2017 Page 10 of 11

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appeals and took the plea that she was in jail and hence the delay, while by their own admission, she was sent to jail only in February, 2017, while the impugned order are of 2008 and 2009. I do not find any cause having being given to explain the delay. Following the Hon‟ble Supreme Court‟s decision in Esha Bhattacharjee case ( supra), and in the facts of the case as discussed in previous paras I see no reason for condoning the delay. Justice is for both the sides- the appellant and the respondent and such huge delay and thereafter attempts to cover it up would lead to denial of justice to the other side.

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On the basis of above, I do not find any ground to condone the delay running into number of years in all the four appeals. The appellant has not been able to give/prove any sufficient cause to do the same. Accordingly, I dismiss all the four appeals on the grounds of limitation.

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(Ananya Ray) Member

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New Delhi, 12^th October, 2018

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„A‟

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FPA-FE-48-51/DLI/2017

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FPA-FE-49/DLI/2017 of v. K. Sasikala v/s The Special Director Directorate of Enforcement, Delhi

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