M/S Gunasheela And Associates vs The Assistant Director Of Enforcement on 14 June, 2019

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Karnataka High Court

M/S Gunasheela And Associates vs The Assistant Director Of Enforcement on 14 June, 2019

Bench: B. Veerappa

                           1




     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

         DATED THIS THE 14TH DAY OF JUNE, 2019

                        BEFORE

          THE HON'BLE MR. JUSTICE B. VEERAPPA

       WRIT PETITION Nos.45727-45728/2017(GM-FE)

BETWEEN:

1.     M/S GUNASHEELA & ASSOCIATES,
       #140B, 3RD FLOOR, 9TH CROSS,
       MARGOSA ROAD, MALLESWARAM,
       BANGALORE-560065.
       REP. BY ITS PARTNER,
       SHRI M. N. GUNASHEELA,
       AGED ABOUT 52 YEARS,

2.     SHRI M. N. GUNASHEELA,
       PARTNER(FORMERLY PROPRIETOR)
       M/S GUNASHEELA & ASSOCIATES
       #140B, 3RD FLOOR, 9TH CROSS,
       MARGOSA ROAD,
       MALLESWARAM,
       BANGALORE-560065.
                                       ... PETITIONERS

(BY SRI CHIDANANDA URS B. G., ADVOCATE)

AND:

1.     THE ASSISTANT DIRECTOR OF ENFORCEMENT
       OFFICE OF THE JOINT DIRECTOR
                          2



     DIRECTORATE OF ENFORCEMENT
     BENGALURU ZONAL OFFICE
     3RD FLOOR, B BLOCK
     BMTC SHANTINAGAR
     TTMC-KH ROAD, SHANTHINAGAR
     BANGALORE-560027.

2.   THE JOINT DIRECTOR GENERAL
     OF FOREIGN TRADE,
     6TH FLOOR, C & E WING
     KENDRIYA SADAN
     KORAMANGALA
     BANGALORE-560034

3.   THE RESERVE BANK OF INDIA
     FOREIGN EXCHANGE DEPARTMENT
     10/3/8 NRUPATHUNGA ROAD,
     BENGALURU-560001.
     (REPRESENTED BY ITS SECRETARY)
                                      ... RESPONDENTS

(BY SRI S. RAJASHEKAR, CGC FOR R1 & R2;
R3 IS SERVED, BUT UNREPRESENTED)

                      ****
    THESE WRIT PETITIONS ARE FILED UNDER ARTICLES
226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING
TO QUASH THE ORDER DATED 31.8.2017 PASSED BY
RESPONDENT-1 AS PER ANNEXURE-C.

     THESE  WRIT   PETITIONS  COMING  ON   FOR
PRELIMINARY HEARING IN 'B' GROUP THIS DAY, THE
COURT MADE THE FOLLOWING:-
                              3




                        ORDER

The petitioners have filed the present writ petitions to quash the order dated 31.8.2017 passed by the 1st respondent - Adjudicating Authority as per Annexure-C.

2. Sri S. Rajashekar, learned CGC for Respondent Nos.1 and 2 raised preliminary objection with regard to maintainability of the writ petitions and contended that the proceedings are initiated under Section 7(3) of the Foreign Exchange Management Act, 1999 ('FEMA' for short) and the impugned order passed by the Adjudicating Authority under Section 13(1) of the FEMA and therefore the petitioners have got an alternative and efficacious remedy of appeal before the Appellate Authority under Section 17 of the FEMA.

3. Sri B.G. Chidananda Urs, learned counsel for the petitioners contended that certain adverse remarks are made against the petitioners in the impugned order by the Adjudicating Authority and the Appellate Authority cannot expunge the adverse remarks passed by the Adjudicating Authority. Therefore he seeks for entertaining the present writ petitions and to expunge the adverse remarks made against the petitioners.

4. Having heard the learned counsel for the parties, it is not in dispute that the proceedings are initiated by the Adjudicating Authority under Section 7(3) of the FEMA and the impugned order passed by the Adjudicating Authority on 31.8.2017 exercising the powers under Section 13(1) of the FEMA. Therefore, the petitioners have got an alternative and efficacious remedy of appeal before the Appellate Authority under Section 17 of the FEMA. Section 17(4) clearly depicts that on receipt of an appeal under 5 sub-section (1), the Special Director (Appeals) may after giving the parties to the appeal an opportunity of being heard, pass such order thereon as he thinks fit, confirming, modifying or setting aside the order appealed against. Therefore the contention of the learned counsel for the petitioners that the Appellate Authority cannot expunge the adverse remarks passed by the Adjudicating Authority, cannot be accepted. The Appellate Authority has got every right to confirm, modify or set aside the order appealed against. Hence the Appellate Authority can also expunge the adverse remarks, if any. Therefore the petitioner has to avail the alternative remedy of appeal.

5. In view of the above, the writ petitions are disposed of as not maintainable with liberty to the petitioners to avail the alternative remedy of appeal under the provisions of Section 17 of the FEMA within a period of three weeks from the date of receipt of copy of the order. 6 The petitioners are also permitted to file an application before the Appellate Authority for exclusion of the time spent before this Court. If such an application is filed, the Appellate Authority shall consider the same and proceed with the appeal and pass orders in accordance with law.

Ordered accordingly.

Sd/-

JUDGE Gss/-

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