Dismissed

FPA-FE-460/DLI/2005 of Shri Keshav Bangur v. The Special Director, Directorate of Enforcement, Delhi

ATFP6 Mar 2024FPA-FE-460/DLI/2005

Case brief

AI extract

What is this about?

This appeal under the FEMA 1999 was dismissed. The Tribunal held the substantive issues were fully adjudicated by the Calcutta High Court in a writ petition filed simultaneously against the same penalty order. The court applied the principle of constructive res judicata, stating that since the High Court dismissed the writ petition addressing all raised issues, the subsequent appeal could not surv

What did the court decide?

Appeal dismissed after being covered by the judgment of the Calcutta High Court in WP No. 1163/2005 on the basis of constructive res judicata.

FPA-FE-460/DLI/2005 of Shri Keshav Bangur Vs. The Special… — Cheque Dishonour | ATFP (2024)

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APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

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FPA-FE-460/DLI/2005

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Shri KeshavBangur … Appellant

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Versus

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The Special Director, Directorate of Enforcement, Delhi … Respondent

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Advocates/Authorized Representatives who appeared

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For the appellant : Ms. SalevinoChale, proxy counsel For the Respondent : Mr. VivekGurnani, Advocate

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CORAM JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI BALESH KUMAR : MEMBER

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FINAL ORDER 06.03.2024

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FPA-FE-460/DLI/2005

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This appeal has been filed under Section 19 of the Foreign Exchange Management Act, 1999 (in short “the Act of 1999) against the order dated 13.12.2005 passed by the Special Director, Enforcement Directorate, Govt. of India imposing the penalty of Rs.50 lakhs on the appellant.

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An order on the application to waive the condition of predeposit was passed by this Tribunal on 02.09.2005. The order aforesaid was challenged before Calcutta High Court also in Writ Petition No. 1163 of 2005.

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The writ petition of the petitioner has been dismissed by the High Court after considering all the issues raised before it for FPA-FE-460/DLI/2005 Page 1 of 9

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challenge to the order impugned herein. Calcutta High Court took note that the impugned order is appealable andpetitioner has not filed an appeal rather filed a writ petition. In view of the above, it becomes clear that the appellant had suppressed the fact about the pendency of the appeal before this Tribunal. In any case, after the judgement of the High Court in Writ Petition No. 1163/2005, nothing would survive in this appeal.

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The judgment dated 06.04.2016 was specifically brought to our notice by the respondent. The learned counsel for the respondent submitted that the appellant has pressed the writ petition on the issues argued before the High Court and thereby those issues cannot be pressed in the present appeal rather by way of constructive res judicata he cannot now urge any other issue, if was available at the time of filing of the writ petition and had not been taken.

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The further fact is about the conduct of the appellant who had throughout suppressed pendency of the appeal from the High Court. In the light of the aforesaid, nothing would survive in this appeal rather it should be governed by the judgment of the High Court and deserves to be dismissed.

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The proxy counsel for the appellant appeared and prayed for the pass over in the first round which was granted by this Tribunal. In the second round again, pass over was sought and as an exception, it was granted so that the matter pending for the last 19 years before this Tribunal may be decided without further delay. FPA-FE-460/DLI/2005 Page 2 of 9

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In the third round again, counsel had shown her inability to argue the appeal. The last order sheet of this Tribunal reflected over the pendency of the application for waiver of pre-deposit though it was already decided. In fact, appeal was ripe for final argument for last many years. The appeal would not have been adjourned by this Tribunal for years together and at least after a detailed judgment of Calcutta High Court on 06.04.2016. We find no reason to keep this appeal pending any more. It is more so when the High Court had addressed all the issues raised before it and otherwise the perusal of judgment shows conduct of the appellant who even misled the High Court by suppressing the fact about pendency of appeal.

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The judgment of the High Court in Writ Petition No. 1163/2005 is quoted hereunder for ready reference:

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“The petitioner has assailed an order dated December 13, 2004 passed by the Special Director of the Enforcement Directorate. A sum of Rs.50 lakhs has been imposed as penalty against the petitioner after returning a finding that the charges of violation of the provisions of Foreign Exchange Regulation Act, 1973 stood established.

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Mr. Bhaskar Sen, learned senior advocate appearing for the petitioner has submitted that, the impugned order is vitiated by the breach of the principles of natural justice. The petitioner was not afforded a reasonable opportunity to present his case. Notice of the hearing of the proceedings was not served on him. He was not heard prior to the impugned order being passed. The petitioner was unwell and was hospitalised continuously from January 27, 2003 to June 4, 2004 and again from June 8, 2004 to December 21, 2004. In support of such contention he has relied upon paragraph 7 of the supplementary affidavit affirmed on behalf of the petitioner on May 19, 2005. He has relied upon a medical report dated May 2, 2003 as well as two other discharge certificates appearing at pages 38 and 46 of the writ petition.

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FPA-FE-460/DLI/2005

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Page 3 of 9

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Mr. Sen has submitted that the petitioner was not made available all the documents on which the authorities had relied upon at the hearing. There was a raid in the Mumbai residence of the petitioner and the documents were taken into custody. The documents if allowed to be produced would show that the petitioner did not have any complicity in the subject matter.

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Mr. Sen has further submitted that in the interim reply to the show cause notice, his client had made a request for cross-examination of the witness on behalf of the authorities. Such request has also not been kept. The petitioner has not been allowed the right of crossexamination.

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In such circumstances, he submits that the impugned order should be set aside. The parties should be remanded to the appropriate authority for fresh trial. His client is ready to participate in the trial.

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I have not called upon the respondent to address.

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A proceeding was initiated by the Enforcement Directorate against the petitioner alleging contravention of various provisions of the Foreign Exchange Regulation Act, 1973 (FERA, 1973) for dealing with foreign exchange in a manner not authorized by law.

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A show cause notice dated December 16, 1998 was issued to the petitioner. The same was replied to on behalf of the petitioner on November 30, 2001. The reply runs into eleven pages of foolscape paper with the typing therein less than double space. This the petitioner claims to be an interim reply.

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The impugned order dated December 13, 2004 shows that the proceedings were fixed and taken up for hearing on November 11, 2003; November 27, 2003; November 26, 2004; September 29, 2004; October 27, 2004 and November 19, 2004.

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The hearing therefore took place for over a period of time spanning from November 11, 2003 to November 19, 2004. Hearing commenced after two years from the date of the reply to the show cause.

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The petitioner claims that he was not served notice of the hearing for the final date. The petitioner admits to have received notices of the earlier dates of hearing in paragraph 10 of the writ petition. In support of the contention that notice of hearing was not served upon the petitioner, reliance has been placed on the report of the process server that the petitioner was not found at his address. The petitioner has explained his absence from

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FPA-FE-460/DLI/2005

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Page 4 of 9

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his known address on the alleged hospitalisation of the petitioner for the period from January 27, 2003 to June 4, 2004 and June 8, 2004 to December 21, 2004. Consequently, according to the petitioner, no notice of hearing could be served on the petitioner as the petitioner was in hospital.

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The factum of hospitalisation is pleaded at paragraph 11 of the writ petition and at paragraph 6 of the supplementary affidavit. At paragraph 11 of the writ petition, the petitioner claims to have annexed the discharge certificates for the aforesaid periods of hospitalisation.

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Two discharge certificates have been annexed to the writ petition. In fact, these are the only discharge certificates in the entirety of the pleadings and the records available to Court. The discharge certificate at page 38 of the writ petition relates to the period from January 27, 2003 to May 6, 2003. The other discharge certificate at page 46 of the writ petition relates to the period from June 8, 2004 to December 21, 2004. The dates of hearing are for the period from November 11, 2003 to November 19, 2004. The petitioner has not produced any documents to substantiate paragraph 11 of the writ petition or paragraph 6 of the supplementary affidavit. The petitioner has not been able to substantiate that he was hospitalised for the period January 27, 2003 to June 4, 2004 and again from June 8, 2004 to December 21, 2004. The medical report also does not assist the petitioner. The medical report apparently is dated May 2, 2003. It finds that the petitioner was declared fit for discharge from a cardiological view point.

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The petitioner has, therefore, knowing fully well of the pendency of the proceedings has sought to take shelter under a so-called medical ground. The documents do not support the claim of the petitioner. The petitioner had knowledge of the proceedings. The petitioner chose not to participate in the proceedings.

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In such circumstances, I am not in a position to accept the contention on behalf of the petitioner that no notice of the proceedings or of the date of hearing of the proceedings was served upon the petitioner. Since the petitioner chose not to participate in the proceedings, the question of making over documents by the authorities relied upon at the hearing of the petitioner does not arise. Had the petitioner participated in the proceedings he would not have been made over the documents at the hearing. The request for cross-examination also is of no assistance as the petitioner was not present in the hearing

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FPA-FE-460/DLI/2005

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Page 5 of 9

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to undertake the cross-examination of the witness on behalf of the authorities.

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The impugned order is appealable. It gives reasons. The petitioner has chosen not to prefer an appeal. The petitioner has chosen to file a writ petition. The scope of enquiry in a writ jurisdiction is limited. The contention of breach of principles of natural justice cannot be accepted in the facts and circumstances of this case. No other ground has been canvassed at the hearing.

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In such circumstances, there is no infirmity in the order impugned.

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WP No.1163 of 2005 is dismissed. The authorities are at liberty to proceed in accordance with law as expeditiously as possible to implement the impugned order”.

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The perusal of the judgment quoted above shows a decision on all the issues raised by the appellant and finding no merit, the writ petition was dismissed. The appellant was having an opportunity to raise all the issues before the High Court and if they were not raised, then precluded by constructive res judicata now .

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A party cannot take two remedies simultaneously against one and same order and that too in a litigation between the same parties. It is no doubt that a statutory remedy of appeal was available to the appellant and had been exhausted thus he could not have filed writ petition simultaneously. The writ petition having been dismissed by the Calcutta High Court, now the appellant cannot press this appeal when the order of the High Court has attained finality. The issue of constructive res judicata would also come in picture and for which reference of the judgment of Apex Court in the case of Forward Construction Co. &Ors. Vs. Prabhat

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FPA-FE-460/DLI/2005

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Page 6 of 9

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Mandal (Regd.), Andheri &Ors. reported in 1986(1)SCC 100 would

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be relevant. Para 20 of the said judgment is quoted hereunder:

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“So far as the first reason is concerned, the High Court in our opinion was not right in holding that the earlier judgment would not operate as res judicata as one of the grounds taken in the present petition was conspicuous by its absence in the earlier petition. Explanation IV to Section 11 CPC provides that any matter which might and ought to have been made ground of defence or attack in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit. An adjudication is conclusive and final not only as to the actual matter determined but as to every other matter which the parties might and ought to have litigated and have had it decided as incidental to or essentially connected with the subject-matter of the litigation and every matter coming within the legitimate purview of the original action both in respect of the matters of claim or defence. The principle underlying Explanation IV is that where the parties have had an opportunity of controverting a matter that should be taken to be the same thing as if the matter had been actually controverted and decided. It is true that where a matter has been constructively in issue it cannot be said to have been actually heard and decided. It could only be deemed to have been heard and decided. The first reason, therefore, has absolutely no force”.

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Another judgment is in the case of SatyadhyanGhosal&Ors. Vs. Deorajin Debi (Smt) and Anr. reported in 1960(3)SCR 590. Para 7 of the said judgment is quoted hereunder:

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“The principle of res judicata is based on the need of giving a finality to judicial decisions. What it says is that once a res is judicata, it shall not be adjudged again. Primarily it applies as between past litigation and further litigation. When a matter – whether on a question of fact or a question of law – has been decided between two parties in one suit or proceeding and the decision is final, either because no appeal was taken to a higher court or because the appeal was dismissed, or no appeal lies, neither party will be

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FPA-FE-460/DLI/2005

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Page 7 of 9

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allowed in a future suit or proceeding between the same parties to canvass the matter again. This principle of res judicata is embodied in relation to suits in Section 11 of the Code of Civil Procedure; but even where Section 11 does not apply, the principle of res judicata has been applied by courts for the purpose of achieving finality in litigation. The result of this is that the original court as well as any higher court must in any future litigation proceed on the basis that the previous decision was correct”.

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In the light of the objection raised by the counsel for the respondents and the judgments quoted above, we do not find that the appellant can press this appeal after exhausting the remedy before the High Court and having lost therein. It may be clarified that if a ground available to the appellant raised in appeal was not argued while pressing the writ petition, would not give an opening to the appellant to press those issues in the appeal when they were available while pressing the writ petition. The judicial process cannot be taken by a party by exhausting different remedies simultaneously against one and same order. In case of simultaneous remedy, there can be a serious consequence of the conflicting order which needs to be avoided and to give sanctity to the order passed at the first instance.

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In the light of the aforesaid, we do not find that the appeal would survive after the judgment of the High Court and accordingly it fails and is dismissed after covering it by the judgment of Calcutta High Court in the case of appellant himself.

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(JUSTICE MUNISHWAR NATH BHANDARI) CHAIRMAN

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FPA-FE-460/DLI/2005

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Page 8 of 9

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(BALESH KUMAR) MEMBER

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New Delhi 6^th March, 2024 „SRD‟

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FPA-FE-460/DLI/2005