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HIGH COURT OF DELHI
Date of Decision: 03.12.2020
NATWEST MARKETS PLC FORMERLY THE ROYAL BANK OF SCOTLAND NV ..... Petitioner
Through: Mr.Suhail Dutt, Sr. Adv. with Mr.Nishant Varun & Mr.Pawan
Sharma, Advs.
ADJUDICATING AUTHORITY DIRECTORATE OF ENFORCEMENT & ANR. ..... Respondents
Through: Mr.Chetan Sharma, ASG & Mr.Anil Soni, CGSC with
Mr.Devesh Dubey, Adv. for UOI.
Mr.Ravi Prakash, CGSC with Mr.Farman Ali, Mr.Mohammad
Shahan Ulla & Mr.Kaushal Kait, Advs.
This petition has been heard through video conferencing.
Allowed, subject to all just exceptions.
JUDGMENT
1. This petition has been filed by the petitioner challenging the Show Cause Notice dated 24.08.2020 issued by the respondent no. 1 2020:DHC:3458 W.P.(C) 9743/2020 Page 2 calling upon the petitioner to show cause as to why an inquiry be not held against the petitioner in the manner provided in Rule 4 of the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 (hereinafter referred to as the ‘Rules’).
2. The learned senior counsel for the petitioner submits that the Show Cause Notice relates to proceedings of the year 2010 and therefore, is highly belated. He submits that this itself is a ground for setting aside the Show Cause Notice. In support of his submission, he places reliance on the judgment of this Court in Standard Chartered Bank vs. Directorate of Enforcement, MANU/DE/3676/2010.
3. He further submits that even on the face of the Show Cause Notice, no violation of Clause 2.[2] of the Circular dated 17.05.2005 is made out against the petitioner. He submits that the petitioner is in full compliance with the provisions of Clause 2.[2] of the Circular dated 17.05.2005, violation of which has been alleged against the petitioner. Placing reliance on the judgment of this Court in General Electric Company and Ors. Vs. Deputy Director of Income Tax and Ors. MANU/DE/3364/2011 and of the Supreme Court in The Deputy Commissioner, Central Excise & Anr. vs. Sushil & Company & Anr. MANU/SC/0547/2016, the learned senior counsel for the petitioner submits that where no case is made out on the facts alleged in the Show Cause Notice itself, this Court would be within its jurisdiction to entertain the Writ petition and quash such Show Cause Notice.
4. I have considered the submissions made by the learned senior counsel for the petitioner. W.P.(C) 9743/2020 Page 3
5. The Impugned Show Cause Notice has been issued to the petitioner in terms of Rule 4 of the Rules and reads as under:-
6. Rule 4 of the Rules requires a two-stage scrutiny of the complaint by the Adjudicating Authority. Sub-rule 1 to sub-rule 5 of Rule 4 of the Rules are quoted hereinunder:-
7. A reading of the above Rules would clearly show that the Impugned Show Cause Notice is at the first stage wherein the Adjudicating Authority on receiving a reply to the Impugned Show Cause Notice is to form an opinion whether an inquiry at all should be held against the petitioner.
8. In view of the above, at this stage I do not deem it appropriate to entertain this present petition. The petitioner shall be at liberty to raise all its contentions before the Adjudicating Authority. Needless to say, if the petitioner is aggrieved of the decision taken by the Adjudicating Authority, it shall always be open to the petitioner to challenge the same in accordance with law.
9. The petition is accordingly dismissed with no order as to costs.
NAVIN CHAWLA, J DECEMBER 3, 2020