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Delhi High Court Acts as a Mediator Between a Business Entity and the Foreign Trade Ministry

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W.P. (C) 4652/2021 & CM APPL. 14311/2021

IN THE HIGH COURT OF DELHI AT New Delhi

Excerpt

The petitioners, in this case, had challenged an order dated 21st December 2018 and a show-cause notice dated 22nd April 2019 on the grounds of not receiving supporting documents from the respondent. The court after due consideration of all facts and arguments gave a set of instructions to both the petitioner and the respondent. 

Facts

In the present case, the petitioners have challenged the order passed by the respondent on 21st December 2018 according to which the petitioner was placed in the “Denied Entity list” which was under the provisions of the Foreign Trade (Development & Regulation) Act, 1992. The petitioner was served with the said order along with a show-cause notice on 22nd April 2019 to which the petitioner immediately approached the respondent and sought clarification and grounds for the same. 

Petitioner’s Arguments

The learned counsel for the petitioner states that the petitioner was served with the said order along with a show-cause notice on 22nd April 2019. The petitioner had then approached the Deputy Director of Directorate General of Foreign Trade and sought the supply of the documents mentioned in the show-cause notice upon which the said order was relied upon and also requested for a personal hearing on the matter. 

The learned counsel stated that after a few times of making the same request over again, an interim reply was served to the DGFT on 2nd March 2021 giving submissions and asking for the relied upon documents on behalf of the petitioner. The learned counsel argued that the petitioner was aggrieved and the material based on which the show-cause notice and the said impugned order was served had yet not been provided to the petitioner and no reply has been given by the respondent for the requests and interim reply as well. 

Respondent’s Arguments

The learned counsel for the Respondent opposed the arguments of the opposing counsel and stated that if the petitioner had any problem with the said order dated 21st December 2018 then an appeal should have been filed against that order under Section 15 of the Foreign Trade (Development & Regulation) Act, 1992. About the provision of documents requested by the petitioner and the number of requests unanswered by the respondent, the learned counsel did not remark. 

Court’s Observations

The court observed both the documents of the respondent in question which is the said order in question dated 21st December 2018 and the follow-on show-cause notice delivered to the petitioner on 22nd April 2019 show clearly that the act of putting the Petitioner in the DEL category was a temporary action and the petitioner was allowed to reply to the same stating why the petitioner should not be included in the DEL category. 

The court observed that it was a temporary move and no explicit period was mentioned for which the petitioner would be put under DEL. It was only after the petitioner replied to the said order/show-cause notice that the continuation of the petitioner’s name in the DEL be decided. 

However, the court observed that there was also no reply in any form to the repeated efforts of the petitioner to communicate and the directions should have been issued to make sure that the matter would have concluded. 

Court’s Decision

The court based its decision on the nature of the case and on the fact that the show-cause notice relied upon a set of documents. The court ruled that the said documents, which were used to support the said order dated 21st December 2018 and the show-cause notice, have to be supplied to the Petitioner within a timeframe of four weeks till 15th May 2021. 

After that, the petitioner would be allowed to reply to the same documents with an additional response within four weeks after getting the documents i.e. by 15th June 2021. 

The court concluded that after this due process is followed a personal hearing shall be called and the final order shall be passed before or on 15th August 2021. 

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