RAFIQ, J. - (1.) THE petitioner in this writ petition has prayed for mandamus to the effect that the respondents be restrained from continuing with the departmental proceedings initiated against him under Sections 50 and 51 of the Foreign Exchange Regulation Act 1973 (for short "the FERA" ).
(2.) FACTUAL background giving rise to this petition is that the petitioner had set up a business of garment export and he for that purpose incorporated a firm on 17. 3. 1994 with his nephew, Shri Mukesh Moolrajani. This firm was engaged in the business of exporting garments to foreign countries. The firm however ran into trouble on account of the fact that it failed to realise the remittances of five consignments sent to Hongkong in Nov. & Dec. , 1994. The firm had to therefore abandon the business after December 1994 and ultimately it was dissolved in the year 1996. According to the petitioner, the said firm was duped into exporting said goods to certain company in Hongkong by one Shri Ashok Ramchandani who told the petitioner that he was importer having business interests in Hongkong and Philippines and that the payments would be received in India within 90 days of the dispatch. When the remittance was not realised the petitioner even tried to take the goods back. In that process, to his utter dismay, he found that the address of the buyers supplied by Shri Ashok Ramchandani were not correct and the buyer was a fake entity with no real existence. The firm became defaulter only because it could not secure the receipt of full value of the goods exported form the country within the prescribed period of time. This was taken by the respondent department as violation of section 18 (2) of the FERA. The Enforcement Officer (respondent No. 3) therefore filed a complaint against the petitioner u/s. 56 of the FERA in the court of Special Judge (Economic Offences), Jaipur and that court has taken cognizance against the petitioner as well as others on 31. 5. 2002. Case now set up by the petitioner is that apart from the various provisions of FERA providing for criminal liability, there are also provisions for departmental adjudication of penalty. Such provisions find place in sections 50 and 51 of the FERA. Section 50 provides that if any person contravenes the provisions of FERA, then he shall be liable to such penalty not exceeding five times the amount or value involved in any such contravention or Rs. 5,000/-, whichever is more, as may be adjudged by the Director of Enforcement or any other officer of Enforcement not below the rank of an Assistant Director of Enforcement specially empowered in this behalf by order of the Central Government. Section 51 of the FERA provides that the adjudicating officer shall hold an enquiry in the prescribed manner after giving that person a reasonable opportunity for making a representation in the matter and if, on such enquiry, he is satisfied that the person has committed the contravention, he may impose such penalty as he thinks fit. The petitioner is basically aggrieved by the memorandum for adjudication proceedings under the FERA vide Memo No. T-4/94-A/d2/2000-DD dated 5. 10. 2000 which was served upon him by Deputy Director, Delhi Zonal Office of the Enforcement Directorate. The petitioner is seeking a mandamus for stay of adjudicatory proceedings till completion of the trial in criminal case against him. I have heard Shri S. S. Hora, learned counsel for the petitioner and Shri Kamlakar Sharma, learned counsel for the respondents and perused the material on record. Shri S. S. Hora, learned counsel for the petitioner argued that section 56 of the FERA, as it is, provides for a very stringent penalty. In the case of an offence wherein amount or value involved exceeds one lakh of rupees, the offence is punishable with imprisonment for a term which shall not be less than six months, but which may extend to seven years and with fine. The petitioner was himself a victim of circumstances because he had been cheated by Shri Ashok Ramchandani. Neither could the petitioner get payment of the consignment by him nor could be get the goods back. The petitioner was therefore not responsible for non-receipt of the value of the goods supplied. In order to substantiate his innocence, he would have to make out his defence and therefore would have to rely on the documentary as well as oral evidence. Tendering of evidence by the prosecution in a criminal case has to precede the own evidence of the prosecution. This is so because the accused is not expected to prove his innocence but the burden of proving guilt of the accused beyond reasonable doubt lies on the prosecution. If at this stage, the petitioner is compelled to disclose his defence and reveal the material he wants to rely on in criminal case, there is every likelihood of his defence being prejudiced because it shall then give an opportunity to the prosecution to fill up the lacunae in their case so as to improve its version to fasten the criminal liability on the petitioner. In order to buttress his arguments, Shri S. S. Hora, learned counsel for the petitioner, relied on the judgments of the Hon'ble Supreme Court in Kendriya Vidyalaya Sangathan & Others vs. T. Srinivas - (2004) 7 SCC 442, Capt. M. Paul Anthony vs. Bharat Gold Mines Ltd. & Another - (1999) 3 SCC 679 and Tata Oil Mills Co. Ltd. vs. The Workmen - AIR 1965 SC 155. Shri S. S. Hora, learned counsel for the petitioner further argued that the FERA has now been repealed by the Foreign Exchange Management Act, 1999 (for short "the FEMA" ). Section 8 of the FEMA provides that save as otherwise provided in that Act, where any amount of foreign exchange is due or has accrued to any person resident in India, such person shall take all reasonable steps to realise and repatriate to India such foreign exchange within such period and in such manner as may be specified by the Reserve Bank. According to him, the departmental proceedings under FERA are not maintainable after coming into the force of FEMA and the same are now required to be conducted in accordance with the provisions of FEMA. He therefore submitted that the continuation of departmental proceedings under FERA suffer from lack of jurisdiction being de hors any statutory sanction. It is argued that what is required of an exporter is to take reasonable steps to realise the sale proceeds. The expression "reasonable steps" requires the examination of facts and circumstances of each case and their dispassionate evaluation as to what caused delay in repatriation of export proceeds. Even a single step towards realisation of export proceeds can amount to taking reasonable steps. Whether reasonable steps were taken by the petitioner or not is a mixed question of law and facts since reasonable steps would be such as are in conformity with statutory provisions. Now that there are complex questions of law and facts which are to be adjudicated upon, for this reason also, the adjudicatory proceedings should remain halted till completion of the criminal trial. Even otherwise, section 13 of the FEMA provides that any person who contravenes the provisions shall upon adjudication be liable to a penalty up to thrice the sum involved or up to two lacs rupees, whichever is more. Law on the subject has undergone sublet yet definite changes. The powers under erstwhile Section 18 (2) of the FERA are no longer available under the FEMA whose section 8 of the FEMA shall apply to this kind of offence. Even the maximum penalty under FEMA stands reduced from 5 times under FERA to three times of the amount involved in contravention. Continued departmental proceedings may entail penalty as well as the criminal prosecution may also lead to conviction and imprisonment. This would amount to double jeopardy against which protection under Article 20 (2) of the Constitution is available to the petitioner. Departmental proceedings are therefore liable to be stayed till conclusion of the criminal trial. Shri S. S. Hora, learned counsel for the petitioner argued that this court can take judicial notice of the fact that the provisions in FEMA are far less striker as compared to those in FEMA, there being lessor penalty in the later and in this connection he relied upon the judgment of the Hon'ble Supreme Court in Dale & Carrington Invt. (P.) Ltd. & Another vs. P. K. Prathapan & Others (2005) 1 SCC 212 and argued on the authority of the said case that requirement of the FERA in any case, when FEMA replaced it, would stand diluted.
(3.) ON the other hand, Shri Kamlakar Sharma, learned Assistant Solicitor General appearing for respondents opposed the writ petition and argued that the proceedings before the departmental authorities are only adjudicatory in nature and so far as the criminal liability of the petitioner is concerned, they shall be decided by the court of competent jurisdiction where complaint under Section 56 of the FERA has been filed. Present writ petition which has been filed merely against the show cause is not maintainable because the authority issuing such notice has not been shown to be lacking in authority. The writ petition is therefore liable to be dismissed as misconceived. Pendency of criminal case is not a bar to the initiation of departmental proceedings which are adjudicatory in nature. Scope, nature and effect of the two proceedings is entirely different from one another. ONe cannot be stalled on account of pendency of the other. He therefore argued that the criminal proceedings cannot operate as a bar for initiation or continuation of adjudicatory proceedings. Both the proceedings are independent from one another. In fact, the petitioner in spite of being served with show cause notice and reminder failed to respond to the same. Various judgments of the Supreme Court relied on by the learned counsel for the petitioner are all relating to service jurisprudence on the question whether disciplinary proceedings can be continued simultaneously with the criminal trial. Those judgments cannot be applied to the proceedings under the FERA. Even otherwise, the Hon'ble Supreme Court in State of Rajasthan vs. B. K. Meena & Others - AIR 1997 SC 13 held that there is no legal bar for both disciplinary proceedings and criminal prosecution to go on simultaneously. However, in certain situations, it may not be `desirable', `advisable' or `appropriate' to proceed with the disciplinary enquiry when a criminal case is pending on identical charges. Shri Kamlakar Sharma, learned counsel for the respondents, relied on a recent judgment of the Hon'ble Supreme Court in Standard Chartered Bank & Others vs. Directorate of Enforcement & Others - (2006) 4 SCC 278 and argued that the Supreme Court in that case has conclusively held that adjudication under the FERA need not precede prosecution because both are independent of each other and each subserves a purpose. Both of these proceedings can be launched and pursued simultaneously. Shri Kamlakar Sharma, learned counsel for the respondents submitted that the argument that in view of section 8 of the FEMA now the authority was denuded of its powers to issue the impugned notice with reference to the provisions of FERA is wholly misconceived because such argument proceeds on the ignorance of the provisions relating to repeal and saving as contained in FEMA. He therefore prayed that the writ petition be dismissed. I have given my thoughtful consideration to the arguments advanced by learned counsel for the parties and perused the material on record. Sheet anchor of the arguments advanced by the learned counsel for the petitioner is that the adjudicatory proceedings should be stayed till completion of the criminal trial because continuation of the former would require the petitioner to disclose his defence in the later which in all probability is likely to prejudice his defence in criminal trial. According to him, since the prosecution in the criminal trial is required to record its evidence prior to recording of evidence by the defence, compelling the petitioner to participate in the adjudicatory proceedings would essentially require him to disclose his defence which would then be available to the departmental authorities and accordingly they shall be prepared beforehand to fill up the lacunae and improve the prosecution case during trial. Reliance in this connection was placed on the judgments of the Hon'ble Supreme Court in Tata Oil Mills case, supra, Cap. M. Paul Anthony's case, supra, and Kendriya Vidhyalay Sangthan, supra. Apart from the fact that all these judgments pertain to disciplinary proceedings against the employees by their respective employers, the fact remains even those judgments have not conclusively laid down the law of universal application that disciplinary proceedings in every case shall have to be necessarily stayed to await outcome of the criminal trial. Their lordships of the Hon'ble Supreme Court in Delhi Cloth and General Mills Ltd. vs. Kushal Bhan- AIR 1960 SC 806 held that if the case is of grave nature or involves questions of fact and law, which are not simple, it would be advisable for the employer to await the decision of the trial court so that defence of the employee in the criminal case may not be prejudiced. This law was later reiterated by their lordships in Kusheshwar Dubey vs. M/s. Bharat Coking Coal Limited- 1988 (4) SCC 319. But then, their lordships of the Supreme Court later succinctly clarified the law in State of Rajasthan vs. B. K. Meena & Others - (1996) 6 SCC 417 in which it was held that `advisability', `desirability' or `propriety' of staying the departmental enquiry would have to be determined in each case taking into consideration all the facts and circumstances of the case. One such consideration may be that staying the disciplinary proceedings to await the conclusion of the criminal trial because the criminal cases are known to drag on inasmuch as especially where high officials or persons of high public office are involved. In fact, the last judgment of the Hon'ble Supreme Court in Kendriya Vidhayala Sangthan's case supra, which has been cited by the learned counsel for the petitioner reiterated the same law which the Hon'ble Supreme Court propounded in B. K. Meena, supra. Cap. M. Paul Anthony, supra, however has struck a different note because of the peculiar facts of that case in which employee had not only been subjected to criminal trial but was acquitted. ;