1 WPJ-2007.09 IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE  CRIMINAL WRIT PETITION NO.2007 OF 2009 1. Adesh Gupta, Aged 52 years, Occupation: Service, residing at 701, Tagore Avenue, Tagore Road, Santacruz (W), Mumbai-400 054. 2. Madhavan Menon, Aged 53 years, Occupation: Service, residing at 702, Supreme Pearl, 17th Road, Khar, Mumbai-400 052. .... Petitioners - Versus - 1. State of Maharashtra 2. M.S. Bhardwaj, Enforcement Officer, Enforcement Directorate, Janmabhoomi Chambers, 1st Floor, Walchand Hirachand Marg, Mumbai-1. .... Respondents S/Shri Abad Ponda with Onkar Savarkar and Shaun Fanthome i/b M/s. Mulla & Mulla & CB&C for the Petitioners. Shri Y.M. Nakhawa, Addl. Public Prosecutor, for the State. S/Shri S.K. Shinde with A.S. Gadkari for Respondent No.2. 2 WPJ-2007.09 CORAM: R.C. CHAVAN, J. DATED: JANUARY 27, 2011 ORAL JUDGMENT: Heard. Rule. The learned APP for the State and the learned counsel for respondent No.2 waive service of rule. By consent, rule is made returnable forthwith and taken up for final hearing. 2. This petition has been filed for quashing the order dated 29-5-2002 passed on the proceedings in Criminal Case No.1349/S/02, pending in the Court of the Chief Metropolitan Magistrate, Mumbai for the offences punishable under Section 6(4) and (5) r/w Section 7(4) r/w Sections 7(2)(v) and 73(3) r/w Section 56(1) of Foreign Exchange and Regulation Act, 1973 (for short, FERA ) r/w Section 49(3) and (4) of Foreign Exchange Management Act, 1999 (for short, FEMA ), under Section 8(1) r/w Section 64(2) r/w Section 56(1) of FERA r/w Section 49(3) and (4) of FEMA directing issuance of process and summons to have been served upon the present petitioners somewhere in April, 2009, leading to the filing of the present 3 WPJ-2007.09 petition. 3. After the order directing issuance of process was passed by the learned Magistrate on 29-5-2002, the adjudication proceedings before the adjudicating authority came to an end by the order dated 24-8-2005, whereby the charges against the petitioners Adesh Gupta and Madhavan Menon were dropped by the adjudicating authority. The authority had specifically observed that the petitioners were not aware of the fact that the employees were fraudulently issuing foreign exchange. Therefore, according to the petitioners, since the adjudication has itself ended in favour of the petitioners, there is no question of prosecution continuing against them. 4. I have heard the learned counsel for the petitioners as well as the learned counsel for respondent No.2-Enforcement Officer. The learned counsel for the petitioners placed reliance on the judgment of this Court in Hemendra M. Kothari v. W.S. Waigankar & Anr., reported in 2007 ALL MR (Cri) 3216, wherein similar facts were involved except that in that case the accused had moved an application for recalling of process which the learned 4 WPJ-2007.09 Magistrate had rejected and the revision preferred by the accused also came to be dismissed by the Court of Sessions. The learned counsel for respondent No.2 submits that the proper course open to the petitioners in this case was to move the learned Magistrate under Section 245 of the Criminal Procedure Code for discharge and the petitioners could not have approached this Court directly. 5. Ordinarily a litigant must approach the lowest Court competent to redress the grievances and need not and should not rush directly to a higher forum. However, since the matter is covered by a judgment of this Court and since this petition was entertained on 5-8-2009 and ad-interim relief was granted and continued from time to time, no useful purpose will be served by remitting the parties back to the trial Court for deciding the issue on which this Court has already spent time. Therefore, this petition has been heard finally. 6. While deciding Hemendra M. Kothari s case (supra), this Court has referred to the observations of the Hon ble Supreme Court, in para 22 of Standard Chartered Bank v. Directorate of Enforcement and others, reported 5 WPJ-2007.09 in AIR 2006, S.C. 1301 and held in paras 18 and 21 as under: 18. Taking into consideration all these authorities with utmost respect, it must be said that the observation made in Standard Chartered Bank do not reverse observation and law laid down in K.C. Builders. Unless the K.C. Builders is reconsidered and a contrary view is taken by the Supreme Court, it will continue be binding authority. 21. It may be noted that in the present case the applicant was exonerated by the Dy. Director of Enforcement, who was Adjudicating Authority, in the adjudication proceedings. Admittedly that order was not challenged in appeal by the respondent and thus that order has become final. I have already noted the facts and findings of the Adjudicating Authority in detail. The Adjudicating Authority had clearly come to the conclusion that there was no material to hold the present applicant guilty for contravention of the provisions of FERA and he was 6 WPJ-2007.09 completely exonerated. When in the departmental proceedings before the Adjudicating Authority, the department could not establish the charges, it is difficult to imagine how the department could prove the same charges before the criminal Court when the standard of proof may be much higher and stringent than the standard of proof required in departmental proceedings. 7. It is not shown that this judgment has been set aside or the view taken therein has been altered. The learned counsel for the petitioners submitted that while deciding Hemendra M. Kothari s case, this Court had not considered the observations made by Supreme Court in the earlier part of para 22 of the judgment in Standard Chartered Bank s case (supra), which were to the following effect: There is nothing in the Act to indicate that a finding in an adjudication, is binding on the Court in a prosecution under Section 56 of the Act. There is no indication that the prosecution depends upon the result of the adjudication. 7 WPJ-2007.09 8. Even so since this Court had already taken the view that once adjudication comes to an end in favour of the accused, there would be no warrant for the prosecution to continue against him, and since the Supreme Court had expressed only that the view taken in K.C. Builders v. The Assistant Commissioner of Income Tax, reported in 2004 (2) SCC, 731 would require reconsideration, till the Supreme Court reconsiders the judgment in K.C. Builders case and takes a different view, it would have to be held if a party is exonerated in an adjudication, the prosecution for the same delinquency cannot be continued against such person. As rightly pointed out by the learned counsel for the petitioners, the standard of proof may be much higher and stringent, that is proof beyond reasonable doubt in a criminal trial against the adjudication where preponderance of probabilities, would settle the issue. Therefore, after an adjudication a party is exonerated, there would be absolutely no reason to continue the prosecution against him. What has been observed by the adjudicating authority in this case is that the petitioners were not aware of the fact that the employees were 8 WPJ-2007.09 fraudulently issuing foreign exchange. In view of this, it is difficult to imagine as to how the petitioners could be attributed to requisite mens rea for the acts which are allegedly committed by the employees. 9. In view of this the petition is allowed. The process issued against the petitioners by the learned Chief Metropolitan Magistrate by the order dated 29-5-2002 is quashed and set aside. (R.C. CHAVAN, J.)