Mohammad 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 Under Section 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.
3. 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 5.10.200Q 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.
4. 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.
5. 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 and Ors. v. T. Srinivas : (2004)IIILLJ769SC , Capt. M. Paul Anthony v. Bharat Gold Mines Ltd. and Anr. : (1999)ILLJ1094SC and Tata Oil Mills Co. Ltd. v. The Workmen : (1964)IILLJ113SC .
6. 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 tinder 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 tinder 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. ShriS.S. Hora, learned Counsel for the petitioner argued that this court can take judicial noticeof 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. and Anr. v. P.K. Prathapan and Ors. : (2005)1SCC212 and argued on the authority of the said case that requirement of the FERA in any case, when FEMA replaced it, would stand diluted.
7. 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 hot 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. Thbse judgments cannot be applied to the proceedings under the FERA. Even otherwise, the Hon'ble Supreme Court in State of Rajasthan v. B.K. Meena and Ors. : (1997)ILLJ746SC 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 and Ors. v. Directorate of Enforcement and Ors. : 2006(197)ELT18(SC) 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.
8. I have given my thoughtful consideration to the arguments advanced by learned Counsel for the parties and perused the material on record.
9. 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. v. Kushal Bhan : (1960)ILLJ520SC 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 v. Bharat Coking Coal Limited : (1988)IILLJ470SC . But then, their lordships of the Supreme Court later succinctly clarified the law in State of Rajasthan v. B.K. Meena and Ors. : (1997)ILLJ746SC 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.
10. Those judgments, in spite of the fact that they also pertain to departmental enquiries in the administrative sphere of the Government, cannot be applied to an adjudicatory proceedings relating to a violation of a fiscal law vis-a-vis the criminal liability for an economic offence. Hon'ble Supreme Court in Shambhu Dayal Agarwala v. State of West Bengal and Anr. : [1990]2SCR987 had the occasion to consider a' matter relating to confiscation of certain essential commodities seized under Section 3 of the Essential Commodities Act 1955. The Collector released the goods under Section 6E of the Act which order upon being challenged by the State Government was reversed by the High Court. When the judgment of the High Court was challenged before the Hon'ble Supreme Court, their lordships considering the scope of the confiscation proceedings vis-a-vis the criminal trial, observed that 'confiscation of the essential commodity, etc., is not in lieu of punishment but can be in addition to the penal consequences.' It was held that 'any person who contravenes any order made Under Section 3 becomes liable to penal action under Section 7 and the property in respect of which the order has been contravened becomes liable to forfeiture.'
11. Coming now to the argument of double jeopardy, such argument was also raised before the Hon'ble Supreme Court in Collector of Customs & Central Excise, Bhubneshwar, District Puri v. Paradip Port Trust and Anr. : 1990CriLJ2673 . Their Lordships in para 10 of the judgment repelled the argument holding thus:
From the foregoing provisions, we find that for the same transaction, act or occurrence in an appropriate case, there may be prosecution and punishment under Chapter XVI and confiscation of goods and conveyances and also imposition of penalty not exceeding one thousand rupees for contravention of any of the provisions of the Act or abetment of any such contravention and for failure to comply with any provisions of the Act with which it was one's duty to comply where no express penalty is elsewhere provided for such contravention or failure. It may also be possible that an act or event which entails punishment under Chapter XVI and at the same time constitutes a contravention of of abetment of contravention of any of the provisions of the Act or failure to perform any duty prescribed under the Act or amounts to non-compliance with any of the provisions of the Act, there will be possibility of prosecution and punishment under Chapter XVI of the Act and any other provision of law and at the same time confiscation and penalty under Chapter XIV of the Act.
12. Section 50 of the FERA provides that if any person contravenes any of the provisions of the said Act other than Section 13, Section 18(1)(a) and Section 19(1)(a) or of any rule, direction or order made therein, he shall be liable to such penalty not exceeding five times the amount or value involved in any such contravention or five thousand rupees, whichever is more. Section 51 of the FERA further provides that for the purpose of adjudging under Section 50 whether any person has committed a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder, the adjudicating officer shall hold an inquiry in the prescribed manner after giving that person a reasonable opportunity for making a representation in the matter and if, on such inquiry, he is satisfied that the person has committed the contravention, he may impose such penalty as he thinks fit in accordance with the provisions of that section. It should therefore be clear that the adjudication proceedings are not in substitution of the criminal prosecution but they are in addition to such criminal prosecution.
13. All said and done, the core issue which the petitioner has raised in the present case has been set at rest conclusively by Hon'ble Supreme Court in Standard Chartered Bank, supra, although it was a case where the argument raised was that the adjudication must precede the prosecution but nonetheless the ratio of the judgment applies to the present case on all its four corners. Their Lordships of the Supreme Court on consideration of the provisions of the FERA, in para 22 of the judgment had following observations to make:
The Act was enacted, as indicated by its preamble, for the conservation of foreign exchange resources of the country and the proper utilisation thereof in the economic development of the country. When interpreting such a law, in the absence of any provision in that regard in the Act itself, we see no reason to restrict the scope of any of the provisions of the Act, especially in the context of the presence of the 'without prejudice' clause in Section 56 of the Act dealing with offences and prosecutions. We find substance in the contention of the learned Additional Solicitor General that the Act subserves a twin purpose. One, to ensure that no economic loss is caused by the alleged contravention by the imposition of an appropriate penalty after an adjudication under Section 51 of the Act and two, to ensure that the tendency to violate is curbed by imposing an appropriate punishment after a due prosecution in terms of Section 56 of the Act. The contention that as a matter of construction -since the provisions could not be attacked as violative of rights under Part III of the Constitution- we should interpret the provisions of the Act and hold that an adjudication has to precede a prosecution cannot be accepted as we see nothing in the provisions of the Act justifying such a construction. On the scheme of the Act, the two proceedings are seen to be independent and the launching of the one or the other or both is seen to be controlled by the respective provisions themselves. Xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx xx
14. Reliance on Dale & Carrington Invt. (P) Ltd., supra, placed by learned Counsel for the petitioner for the argument that this court should take note of the change in the position of law is wholly misconceived. That was a case where sanction of the Reserve Bank of India as per Section.29 of FERA was not obtained for issuance/allotment of additional share capital by the Managing Director in his own favour. The permission was obtained ex post facto. It was held that statutes does not provide for any time limit for obtaining the permission and while so holding their Lordships also additionally observed that subsequent developmentthat FERA now stands repelled having been replaced by FEMA which does not contain any such requirement of obtaining permission. This judgment does not in any manner help the petitioner.
15. Adverting now to the argument advanced by the learned Counsel for the petitioner that the competent authority had no jurisdiction to issue the impugned notice under the provisions of FERA, in view of what has been provided for in Section 8 of FEMA. This argument proceeds on the ignorance of the provisions relating to repeal and saving in Section 49 of the FEMA. No doubt, Sub-section (3) of Section 49 provides that notwithstanding anything contained in any other law for the time being in force, no court shall take cognizance of an offence under the repealed Act and no adjudicating officer shall take notice of any contravention under Section 51 of the repealed Act after the expiry of a period of two years from the date of the commencement of this Act. But it should be noted that even though the FEMA was enacted in the year 1999 but in view of provisions contained in its Section 1(4) it came into force on 1.6.2000 when the Central Government by notification in the Official Gazette notified it. Notice in the present case was issued to the petitioner within two years from 1.6.2000. Moreover Sub-section (5) of Section 49 of the FEMA, even otherwise, saved anything doe or taken including any rule, notification, inspection, order or notice etc. The adjudicatory proceedings initiated under the FERA would be saved particularly when an express intention for saving all those proceedings is available in aforesaid Section 49. According to Section 49(3) of the FEMA therefore such proceedings would be valid notice of which has been taken by the adjudicatory officer within two years from the date of commencement of the FERA. Argument advanced by the learned Counsel to the effect that the proceedings under Sections 50/51 of the FERA would be barred by virtue of Section 49(3) of the FEMA is therefore wholly misconceived and is therefore rejected.
16. In view of what has been discussed above the writ petition is dismissed with no order as to costs.