Legal principle

Where the adjudicating authority possesses subject-matter jurisdiction and power under Section 13 of the FT(DR) Act, 1992, an order at most amounting to an 'erroneous exercise of jurisdiction' cannot be assailed by writ; the aggrieved party must first exhaust the statutory appeal under Section 15(1)(b), the writ remedy being confined to orders passed wholly without jurisdiction.

Court decision

The Court held that the impugned order was not passed wholly without jurisdiction: it was made in exercise of powers under Section 13 of the FT(DR) Act, and the notification dated 13.06.2013 authorised the Deputy Director General of Foreign Trade to exercise Section 13 (read with Section 11) powers up to Rs. 10 crore, while the SEIS scrips were worth only about Rs. 2.37 crore. The petition was disposed of, with the petitioner relegated to the Appellate Authority under Section 15(1)(b); the appeal was to be presented within 15 days (not to be dismissed as time-barred), decided within three months, with liberty to seek interim relief and all rights and contentions left open. The result favoured the Union of India.

Facts

Reckitt Benckiser India Pvt. Ltd. was issued SEIS duty credit scrips (worth Rs. 2,37,39,352) on 20.06.2022 under the Foreign Trade Policy 2015-2020 for 'Research and Development services' rendered to its affiliate entities for FY 2019-2020. The DGFT authorities issued two show cause notices (30.10.2023 under Sections 9 and 11(3) read with Sections 13 and 17, and 21.06.2024 under Section 11(5) of the FT(DR) Act, 1992) alleging the scrips were obtained through misinformation, misrepresentation and that the claim was not tenable under the 'Research and Development' category. By order dated 27.08.2024, respondent no. 3 (Deputy Director of Foreign Trade) cancelled the scrips and imposed a penalty of Rs. 10,00,000 for obtaining the scrip by misdeclaration, and by communication dated 12.09.2024 the petitioner was placed on the 'Denied Entity List'. The petitioner moved the Delhi High Court under Article 226 seeking to quash both actions.

Key provisions

• Section 13, The Foreign Trade (Development and Regulation) Act, 1992 — Adjudicating Authority.
• Section 9, The Foreign Trade (Development and Regulation) Act, 1992 — Issue, suspension and cancellation of licence.
• Section 11(3), The Foreign Trade (Development and Regulation) Act, 1992 — Contravention of provisions of this Act, rules, orders and foreign trade policy.
• Section 17, The Foreign Trade (Development and Regulation) Act, 1992 — Powers of Adjudicating and other Authorities.