LexKANWAR NATWAR SINGH versus DIRECTORATE OF ENFORCEMENT & ANR
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[2010] 13 (ADDL.) S.C.R. 99 KANWAR NATWAR SINGH v. DIRECTORATE OF ENFORCEMENT & ANR (Civil Appeal No. 8601 of 2010) OCTOBER 5, 2010 [B. SUDERSHAN REDDY! AND SURINDER SINGH NIJJAR, JJ.] A B Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 - r.4(1) - Show cause C notice by adjudicating authority - For initiating proceedings under Foreign Exchange Management Act - Noticee demanding all the documents in the possession of adjudicating authority - Only the relevant documents furnished and not all - Entitlement of the noticee to demand D all the documents - Held: The provisions of Foreign Exchange Management Act, the Rules or even the principles of natural justice do not require supply of documents upon which no reliance has been placed by the authority to set the law into motion - The concept of fairness may require the E adjudicating authority to furnish copies of only those documents upon which reliance has been placed to issue show cause notice - No court can compel the authority to deviate from the procedure laid down in a statute - On facts, demand of the noticee for supply of all the documents is based on vague, indefinite and irrelevant grounds - Foreign Exchange Management Act, 1999 - s. 16 - Principles of natural justice and concept of fairness - Doctrine of duty of adequate disclosure. F Foreign Exchange Management Act, 1999: Proceedings under the Act - Nature of - Held: The proceedings before the adjudicating authority shall be 99 G H 100 SUPREME COURT REPORTS [2010) 13 (ADDL.) S.C.R A deemed to be judicial proceedings within the meaning of s. 193 and 228 /PC - Penal code, 1860 - ss. 193 and 228. Powers of Adjudicating Authority under the Act - Held: While holding inquiry into allegations of contravention, every 8 adjudicating authority shall have powers of civil court for the purpose of ss. 345 and 346 Cr.P.C. - Code of Criminal Procedure, 1973 - ss.345 and 346. Principles of Natural Justice - Applicability of - Discussed - Principles of natural justice do not supplant the C law of the land, but supplement it. Precedent - Observations in Judicial pronouncement - Precedent value of - Held: Observations not to be read as Euclid's theorems nor as provisions of the statute, but to be 0 read in the context it is made - A line or a word in a judgment not to be read in isolation or as if interpreting statutory provisions - Constitution of India, 1950 - Arlicle 141. Practice and Procedure - Practice in Supreme Courl of including list of judicial authorities in compilation, without the E leave of the Court - Held: Not approved. The question for consideration in the instant appeal was whether a noticee, served with show cause notice ulr. 4(1) of the Foreign Exchange Management F (Adjudication Proceedings and Appeal) Rules, 2000, is entitled to demand to furnish all the documents in possession of the Adjudicating Authority including those documents on which no reliance has been placed for issuing the show cause notice. G H Dismissing the appeals, the Court HELD: 1.1 A reading of the relevant provisions of the Foreign Exchange Management Act, 1999 and Foreign Exchange Management (Adjudication Proceedings and KANWAR NATWAR SINGH v. DIRECTORATE OF 101 ENFORCEMENT Appeal) Rules, 2000 makes it abundantly clear that the A manner, method and procedure of adjudication are completely structured by the statute and the Rules. The Authority is bound to follow the prescribed procedure under the statute and the Rules and is not free and entitled to devise its own procedure for making inquiry B while adjudicating u/s.13 of the Act since it is under legislative mandate to undertake adjudication and hold inquiry in the prescribed manner after giving the person alleged to have committed contravention against whom a complaint has been made, a reasonable opportunity:of C being heard for the purpose of imposing any penalty.. The discretion of the Authority is so well structured by the statute and the Rules. [Para 17) [119-B-C] 1.2 The Rules do not provide and empower the Adjudicating Authority to straightaway make any inquiry D into allegations of contravention against any person against whom a complaint has been received by it. It is clear from Rule 4 that show cause notice to be so issued is not for the purposes of making any adjudication into alleged contravention but only for the purpose of E deciding whether
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