1. A very short point is involved in this petition. It would appear that on 2nd August, 1966, the firm known as Eastern Machinery and Trading Co. of which firm the petitioner is today the sole proprietor was issued a show cause notice in respect of alleged violation of Foreign Exchange Regulation Act, 1973. It is the agreed position that in respect of the said show cause notice, cause was shown by the firm by its reply dated 9th August, 1966.
2. The show cause notice has been issued by the Director of Enforcement from its Head Quarters at New Delhi. According to the petitioner, the Director of Enforcement, New Delhi, called the firm and its representatives for a hearing in connection with the show cause notice. According to the petitioner, the hearing was attended by the petitioner's representative including the petitioner's partner and one of India's senior and leading counsel. According to the petitioner, the hearing lasted for over one day.
3. It would appear that thereafter, no formal order was passed. On 4th January, 1977, the Enforcement Office woke up and notice was given to the petitioner that adjudication proceedings were fixed in respect of the show cause notice of 1966 at 2.30 p.m. on 11th January, 1977. To this fresh notice for holding adjudication proceedings, the petitioner sent his reply on 6th January, 1977 setting out, in addition to facts in the earlier notice - the very pertinent fact that the Enforcement Directorate had earlier given certain directions to the Reserve Bank of India at Bombay, which were lifted after the earlier personal hearing given by the Director at New Delhi.
4. A very curious letter of 7th January, 1977 was thereafter addressed by the Addl. Director to the petitioner. By the said letter, the petitioner was required to send a copy of the adjudication order to the said Addl. Director to substantiate that the case in question had been finalised by the department.
5. It is clear from this letter that the letter of the petitioner dated 6th January, 1977, has not been properly understood by the Addl. Director. It is not the petitioner's case that an adjudication order was formally passed and handed over to the petitioner. The petitioner cannot be aware whether any order was formally signed by the person who heard the adjudication proceedings. All that the petitioner could say was that a hearing had taken place but that he had not received the formal order. It is for the department to keep records of its adjudication proceedings. No explanation is forthcoming from the department as to why adjudication proceedings were not held for 11 years since that is the department's case.
6. It is true that no period of limitation has been prescribed for such adjudication. It follows also that the adjudication proceedings cannot be held twice over. The petitioner has averred that the adjudication proceedings took place at New Delhi and that is the position, which it would be reasonable to accept because of long lapse of time. The petitioner has also pointed out that certain directions were given to the Reserve Bank of India for lifting the earlier ban. It was open to the department to enquire from the Reserve Bank of India which also is a government concern as to what were the directions given to it earlier and subsequently for lifting the ban.
7. There is also one more aspect of the matter. In the reply, the firm has pointed out that almost all the relevant records have been destroyed and the persons who was in charge is no longer in their employment. In my view, even without considering the case that adjudication proceedings had in fact been held, I am of the opinion that this is otherwise also a stale matter which cannot be allowed to be reopened, since to allow it to be reopened, would cause serious detriment and prejudice to the petitioner. The fact that the petitioner is not able to produce the formal order is immaterial; that there were earlier adjudication proceedings may be reasonably borne out by the fact that the department did nothing for 11 years. The department has failed to clarify the position as regards the directions given to the Reserve Bank of India and an adverse inference is required to be drawn from such failure even otherwise in respect of such stale matter. In my opinion, the department is not entitled to take up old matters is this manner. If the department's contentions as to limitation were to be accepted, it would mean that the department can commence adjudication proceedings 10 years, 15 years or 20 years after the original show cause notice which cannot be permitted. The position might have been different if there had been any default on the part of the petitioner or any act of omission or commission on his part which had resulted in this long period of delay. Then in such case, the petitioner could not be permitted to take advantage of his own wrong. This is not the department's case in the present matter.
8. In the result, the rule is made absolute in terms of prayers (a) and (b). The respondents to pay the costs of the petition to the petitioner on the usual scale.