Case Note & Summary
The petitioners, Cambata Industries Pvt. Ltd. and three individuals, filed a writ petition under Article 226 of the Constitution of India seeking a writ of prohibition to restrain the respondents from proceeding with adjudication pursuant to letters dated 3rd July 2001 and 29th August 2001. The petitioners were facing adjudication proceedings under the Foreign Exchange Regulation Act, 1947, Foreign Exchange Regulation Act, 1973, and Foreign Exchange Management Act, 1999 for alleged acts and omissions committed in 1958, 1966, and 1970. Show cause notices were issued in September 1973 and June 1974, requiring the petitioners to appear on 10th April 1974. The petitioners failed to appear, and no reply was filed. Despite this, no action was taken by the respondents for 27 years. In 2001, the respondents revived the proceedings and called the petitioners for a personal hearing on 17th July 2001. The petitioners did not appear. The petitioners contended that the delay of 27 years was inordinate, that they had no records of the show cause notices or the alleged actions, and that no evidence was available after such a long time. They argued that the revival of proceedings was arbitrary and violated Article 14. The court, after considering the submissions, held that the unexplained delay of 27 years in pursuing the show cause notices was arbitrary and an abuse of process. The court quashed the impugned letters and prohibited the respondents from proceeding with the adjudication. The judgment was delivered by a Division Bench of the Bombay High Court on 18th January 2010.
Headnote
A) Constitutional Law - Article 14 - Inordinate Delay - Revival of proceedings after 27 years held arbitrary and violative of right to equality - The court held that the unexplained delay of 27 years in pursuing show cause notices issued in 1973-74 for alleged violations in 1958, 1966, and 1970 was arbitrary and an abuse of process, depriving the petitioners of their right to a fair hearing and violating Article 14 (Paras 1-10).
Issue of Consideration
Whether the revival of adjudication proceedings under the Foreign Exchange Regulation Act after a delay of 27 years from the issuance of show cause notices is arbitrary and violative of Article 14 of the Constitution of India.
Final Decision
The court allowed the writ petition, quashed the impugned letters dated 3rd July 2001 and 29th August 2001, and prohibited the respondents from proceeding with the adjudication.
Law Points
- Inordinate delay
- abuse of process
- Article 14
- natural justice
- Foreign Exchange Regulation Act
- 1947
- 1973
- Foreign Exchange Management Act
- 1999
Case Details
2010 LawText (BOM) (01) 443
Writ Petition No.2558 of 2003
Mr. Z.B. Kandin instructed by Amarchand & Mangaldas & S.A. Shroff & Co. for petitioners; Mr. A.S. Rao with Rui Rodrigues for respondents
Cambata Industries Pvt. Ltd., Rustom S. Cambata, Shiavax S. Cambata, Kershi S. Cambata
The Additional Director of Enforcement, Enforcement Directorate; The Union of India
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Nature of Litigation
Writ petition under Article 226 seeking prohibition against adjudication proceedings under FERA.
Remedy Sought
Writ of prohibition to restrain respondents from proceeding with adjudication pursuant to letters dated 3rd July 2001 and 29th August 2001.
Filing Reason
Revival of show cause notices after 27 years of inaction, alleged violations from 1958, 1966, 1970.
Previous Decisions
Show cause notices issued in 1973-74; no action taken until 2001.
Issues
Whether the revival of adjudication proceedings after 27 years is arbitrary and violative of Article 14.
Submissions/Arguments
Petitioners argued that the delay of 27 years was inordinate, they had no records, and no evidence was available, making the revival arbitrary and violative of Article 14.
Respondents argued that the proceedings were pending and could be revived.
Ratio Decidendi
An unexplained delay of 27 years in pursuing show cause notices is arbitrary and an abuse of process, violating the right to equality under Article 14 of the Constitution.
Judgment Excerpts
Petitioners are seeking a Writ of Prohibition or a Writ in the nature of Prohibition and/or direction under Article 226 of the Constitution of India prohibiting the respondents from proceeding with the adjudication pursuant to their letters dated 3rd July, 2001 and 29th August, 2001 annexed to the petition.
The petitioners herein are facing adjudication proceedings under the provisions of Foreign Exchange Regulation Act,1947, Foreign Exchange Regulation Act,1973 and Foreign Exchange Management Act,1999 for the alleged acts and omissions alleged to have been committed in the year 1958, 1966 and 1970.
For the first time, after 27 years, the petitioners were again called upon to appear for personal hearing before respondent No.1 i.e. on 17th July, 2001.
Procedural History
Show cause notices issued in September 1973 and June 1974; no action for 27 years; letters dated 3rd July 2001 and 29th August 2001 revived proceedings; writ petition filed in 2003; judgment on 18th January 2010.
Acts & Sections
- Foreign Exchange Regulation Act, 1947:
- Foreign Exchange Regulation Act, 1973:
- Foreign Exchange Management Act, 1999:
- Constitution of India: Article 14, Article 226
