- (1.) THE petitioner has challenged the show cause notice dated 12th of April 2002 issued by the Deputy Director, Enforcement Directorate, Government of India, Kolkata, Respondent No. 1 and has prayed for quashing further proceedings which may be initiated on the basis of the said notice.
(2.) WE have heard Sri Dilip Kumar, learned Counsel for the petitioner and Sri Vivek Mathur, Additional Standing Counsel appearing for the respondents. The petitioner is a Group 'B' Officer in the Department of Customs and Central Excise, Ministry of Finance, Government of India and is presently posted as Superintendent Central Excise at Headquarters Allahabad. On 23rd October, 2002 C.B.I., Lucknow had lodged a First Information Report showing the recovery of foreign exchange and illegal Indian currency from the possession of the petitioner and other custom staff members on duty. Thereafter, a show cause notice dated 12th April 2002 was issued to the writ petitioner, which was allegedly received by him on 6th June 2002. The said notice required the petitioner to show cause in writing within thirty days of the receipt thereof as to why the adjudication proceedings as contemplated under Section 13 of the Foreign Exchange Management Act, 1999 (hereinafter referred to as the Act) be not taken against him for contravention of the provisions of Section 4 of the Act. The contention of the learned Counsel for the petitioner is that this show cause notice is not in accordance with the provisions of Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2002 (for short the Rules). Section 13 of the Act contemplates that the person, who contravenes any provision of the Act or contravenes any rule, regulation, notification, direction etc. issued under the Act shall be punished and penalty can be imposed on such person. The section itself does not provide the procedure for imposing penalty. The procedure is provided for holding enquiry under. Rule 4 of the Rules. Rule 4 so far as it is relevant for the purposes of controversy involved here is being quoted below : 4. Holding of inquiry (1) For the purpose of adjudicating under Section 13 of the Act whether any person has committed any contravention as specified in that section of the Act, the adjudicating authority shall issue a notice to such person requiring him to show cause within such period as may be specified in the notice (being not less than ten days from the date of service thereof) why an inquiry should not be held against him. (2) Every notice under sub -rule (1) to any such person shall indicate the nature of contravention alleged to have been committed by him. (3) After considering the cause, if any, shown by such person, the Adjudicating Authority is of the opinion that an inquiry should be held, he shall issue a notice fixing a date for the appearance of the person either personally or through his legal practitioner or a chartered accountant duly authorized by him. (4) On the date fixed, the Adjudicating Authority shall explain to the person proceeded against or his legal practitioner or the chartered accountant, as the case may be, the contravention, alleged to have been committed by such person indicating the provisions of the Act or of rules, regulations, notifications, direction or orders or any condition subject to which an authorization is issued by the Reserve Bank of India in respect of which contravention is alleged to have taken place.
(3.) THE contention of the learned Counsel for the petitioner is that under sub -rule (1) of Rule 4, the Adjudicating Authority should have issued a notice to such person requiring him to show - cause within such period as may be specified in the notice (being not less than ten days from the date of service thereof) why an inquiry should not be held against him. Under sub -rule (3), if a reply/explanation is submitted by such person and after considering the cause, if any, shown by such person, if the Adjudicating Authority is of the opinion that inquiry should be held, he shall issue a notice fixing the date for the appearance of the person either personally or through his legal practitioner or a chartered accountant duly authorized by him. Learned Counsel for the petitioner submitted that the first notice as envisaged under sub -rule (1) and thereafter second notice under sub -rule (3) ought to have been given and in any case, a composite notice is not contemplated under the provisions of the Act or Rules.;