FEMA - Cross examination of witnesses cannot be denied, if Adjudicating authority has expressly relied on their statements while issuing SCN: HC
BY TIOL News Service
MUMBAI, FEB 12, 2018: THE ISSUE BEFORE THE DIVISION BENCH IS - Whether cross examination of witnesses can be denied where their statements are exclusively relied upon by the Adjudicating Authority when issuing a Show Cause Notice to the person against whom such evidence is sought to be used. NO is the verdict.
Interestingly, the Court also expressed its dismay over the violations of law committed by the organizers of the Indian Premier League (IPL) tournaments. It observed that apart from huge money involved, the tournament also brought with it crimes and casualties in the form of ban on clubs and players allegedly involved in wrong doing and breaching of rules and regulations. It also observed that such events were being organised even by those in-charge of other sports. Thus, the Court left it to the Central Government and the administrators to take a call on this issue.
Facts of the case:
The petitioner herein claimed to be a Vice President of the Board of Control of Cricket in India (BCCI) & also claimed to be the Chairperson of a council governing a cricket tournament called the Indian Premier League (IPL). The petitioner was one of several parties who were served several SCNs by the Enforcement Directorate (ED), based on a complaint that the petitioner made payment of an amount in USD to an entity located outside India. Such amount was equivalent to approx. Rs 243 crores. The ED also claimed that such payment was made without permission from the RBI, thus contravening Section 3(b) of the FEMA. Proceedings were issued against the petitioner and imposition of penalty was proposed. The petitioner alleged that he was denied copies of reply to the SCN filed by the other co-noticees, including the BCCI. The petitioner also claimed that other documents were provided belatedly after several requests. The petitioner also alleged that he was denied copies of statements given by officials of the BCCI. Subsequently, the petitioner's request to cross examine the persons whose statements were recorded. Hence the present writ.
High Court held that,
++ the word "evidence" is of great significance. It means that material which has withstand cross-examination by the person against whom it is sought to be used. In the case of M/s. Barelilly Electricity Supply Co. Ltd. vs. The Workmen and Others AIR 1972 SC 330, the Supreme Court has laid down the principle. In the present facts and circumstances, it is found from a perusal of the show cause notices and the complaint, based on which they have been issued, that the adjudicating authority expressly relies upon these statements, which have been referred to in Annexure II and given by the persons whose names have been enlisted in the show cause notices. It is undisputed that these statements have been recorded by the authority so empowered under the FEMA. These statements have been recorded in connection with the violations and breaches of the FEMA and its rules. They have been recorded in connection with and have direct nexus to the IPL, which was conducted in South Africa. The persons connected with the affairs of the BCCI and others, who have given these statements, are referred to with names in the annexure. This is not a merely referred material. These statements are proposed to be expressly relied upon. If they are relied upon, then, it is incumbent upon the first respondent to allow the petitioner to cross-examine these persons during the course of the adjudication.
++ it also needs to be indicated that it is because of the acts and deeds of the BCCI in relation to a tournament styled as IPL that all these proceedings had to be initiated and now conducted in accordance with the FEMA. If IPL has led to serious breaches and violations of the FEMA, then, it is high time the organisers realise that after 10 years of holding such tournaments what we have achieved can be termed as a gain or advantage or benefit for they are outweighed completely by the resultant illegalities and breaches of law, which are projected in several courts consuming a lot of precious judicial time. If the IPL has resulted in all of us being acquainted and familiar with phrases such as "Betting", "fixing of matches", then, the RBI and the Central Government should at least now consider whether holding such tournaments serves the interest of a budding cricketer, the sport, the game itself. There is a auction and buying and selling of young cricket players by business houses and chubs. Apart from huge money involved, the tournament has brought with it crimes and casualties in the form of ban on clubs and players allegedly involved in wrong doing and breaching of rules and regulations. Now the worrying trend is that such events are being organised even by those in-charge of other sports/games such as Football, Hockey and Badminton. Therefore, it is for the Central Government and the administrators to take a call on all this.
(See 2018-TIOL-254-HC-MUM-FEMA)
