Case Note & Summary
Background: The petitioner, a former Vice President of the Board of Control for Cricket in India (BCCI) and Chairman of the Indian Premier League (IPL) Governing Council, faced adjudication proceedings under the Foreign Exchange Management Act, 1999 (FEMA). The Directorate of Enforcement issued show cause notices alleging that the petitioner and others had contravened Section 3(b) of FEMA by transferring US$ 4,98,62,799.42 to Cricket South Africa without Reserve Bank of India permission, in connection with the IPL tournament. Facts: On 16 November 2012, the Assistant Director, Enforcement Directorate, filed a complaint under Section 18(3) of FEMA before the Special Director. Subsequently, on 25 November 2011, eleven show cause notices were issued to the petitioner and seven other individuals/entities including BCCI, Shashank Manohar, N. Srinivasan, M.P. Pandove, Ratnakar Shetty, Prasanna Kannan, and Sundar Raman. The complaint and show cause notices relied on several documents, including statements of the aforementioned individuals recorded under Section 37 of FEMA, an agreement between BCCI and Cricket South Africa dated 30 March 2009, and transaction details from State Bank of Travancore. The petitioner, as noticee no.2, was alleged to have violated FEMA under Section 42(1) along with others. The petitioner requested the Special Director to permit cross-examination of the witnesses whose statements were relied upon, but this was refused by letter dated 10 July 2015. Legal Issues: The primary legal issues raised in the writ petition were: (i) Whether, in FEMA adjudication proceedings, the adjudicating authority is obliged to permit cross-examination of witnesses whose statements form the basis of the complaint and show cause notice, in order to comply with principles of natural justice? (ii) Whether a noticee is entitled to copies of replies filed by co-noticees in response to the same show cause notices? (iii) Whether all related show cause notices should be adjudicated jointly to avoid inconsistent findings and ensure fairness? Arguments: The petitioner argued that the denial of cross-examination violated his right to a fair hearing, especially since the show cause notice explicitly relied on witness statements. He further contended that non-disclosure of co-noticees' replies handicapped his defence, and that separate proceedings would prejudice him. No arguments on behalf of the respondents were recorded in the available portion of the judgment. Court's Analysis and Decision: The provided excerpt ends before the court's analysis and decision. The matter was heard on 30 January 2018, and rule was made returnable forthwith, but no final order or reasoning is contained in the text. Therefore, the court's actual findings on the issues and the ultimate relief granted cannot be determined from this incomplete judgment text.
Issue of Consideration
Whether the adjudicating authority under FEMA is required to permit cross-examination of witnesses whose statements are relied upon in the complaint and show cause notice; whether the noticee is entitled to copies of co-noticees' replies; whether all related show cause notices should be heard jointly
Case Details
2018 LawText (BOM) (01) 95
Writ Petition No. 2803 of 2015
S. C. Dharmadhikari, Smt. Bharati H. Dangre
Mr. Aspi Chinoy (Senior Advocate) with Mr. Gaurav Goyal and Ms. Naveli Reshmwalla for petitioner; Mr. Anil Singh (Additional Solicitor General) with Mr. Avinash Rana (Senior Advocate), Mr. Pradeep S. Jetly, Mr. Parag Vyas and Ms. Geetica Gandhi for respondents
1. Special Director, Directorate of Enforcement (Western Region) and 2. Assistant Director, Directorate of Enforcement (Western Region)
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Nature of Litigation
Writ petition under Article 226 of the Constitution of India challenging the decision of the Special Director, Directorate of Enforcement, in refusing the petitioner's request to cross-examine witnesses whose statements were relied upon in a complaint and show cause notice issued under the Foreign Exchange Management Act, 1999 (FEMA).
Remedy Sought
The petitioner sought a writ of certiorari to quash the decision dated 10 July 2015; a writ of mandamus to summon and permit cross-examination of named witnesses; supply of copies of replies filed by other co-noticees; and direction to hold proceedings against all noticees simultaneously.
Filing Reason
The show cause notices alleged contravention of Section 3(b) of FEMA by making unauthorized foreign exchange payments to Cricket South Africa. The petitioner contended that the adjudicating authority relied on witness statements but denied cross-examination, violating principles of natural justice.
Previous Decisions
The first respondent, Special Director, by letter dated 10 July 2015, refused the petitioner's request for cross-examination. No prior court decisions are mentioned.
Issues
Whether the adjudicating authority under FEMA is required to permit cross-examination of witnesses whose statements are relied upon in the complaint and show cause notice?
Whether the petitioner is entitled to copies of replies submitted by co-noticees in the adjudication proceedings?
Whether all related show cause notices against multiple noticees should be heard together for a fair adjudication?
Submissions/Arguments
Petitioner argued that denial of cross-examination of witnesses whose statements formed the basis of the show cause notice violated natural justice.
Petitioner claimed non-supply of co-noticees' replies prejudiced his ability to defend effectively.
Petitioner submitted that separate adjudication proceedings would lead to inconsistent findings and requested a joint hearing.
Judgment Excerpts
(a) issue a Writ of certiorari or any other appropriate writ/order or direction in the nature of certiorari quashing the decision contained in the letter dated 10 th of July 2015 to the extent the Respondent No. 1 has refused the request of the Petitioner to cross examine the witnesses whose statements were recorded under Section 37 of FEMA and whose statements have been relied upon in the complaint;
the complaint alleges that the provisions of section 3(b) of the FEMA have been contravened by the petitioner by making a payment of US$ 4,98,62,799.42 equivalent to Rs.243,45,35,781/- to Cricket South Africa (CSA) a person residing outside India, without permission of the Reserve Bank of India (RBI) and that is inter alia apparent from an agreement dated 30 th March, 2009 executed between the BCCI and Cricket South Africa.
You are therefore required to show cause in writing within 30 days of the receipt of this notice, as to why adjudication proceedings as contemplated under Section 16 of the Foreign Exchange Management Act,1999 should not beheld against yo for the aforesaid contraventions.
Procedural History
On 16 November 2012, the Assistant Director filed a complaint under Section 18(3) of FEMA. Show cause notices dated 25 November 2011 were issued to the petitioner and others alleging contravention of Section 3(b) read with Section 42(1). The petitioner requested cross-examination of witnesses, which was refused by the Special Director on 10 July 2015. The writ petition was filed in 2015. The High Court heard the matter on 30 January 2018 and made rule returnable forthwith. The remaining judgment text is not available in the provided excerpt.
Acts & Sections
- Foreign Exchange Management Act, 1999: 3(b), 4, 13(1), 16, 18(3), 42(1)
- Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000: Rule 4
- Tamil Nadu Societies Registration Act, 1978:
