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The judgment was delivered by a Bench of Justices Jasti Chelameswar and Adarsh Kumar Goel. Senior Advocate Fali Nariman appeared for Mallya while Senior Advocate K Radhakrishnan appeared for the respondent Enforcement Directorate (ED).
The case dates back to 1995 when Mallya’s UB group had entered into a contract with London based Benetton Formula Limited to promote the brand Kingfisher abroad in 1995. It was alleged that Mallya had paid $200,000 to Benetton to display the Kingfisher logo in a Formula 1 racing event without RBI permission thus violating Sections 47(1) & (2), 9(1)(c) and 8(1) of the Act.
The ED had summoned Mallya for questioning but he failed to appear more than once. Hence, a complaint under Section 56 of the Act was filed before the Additional Chief Metropolitan Magistrate, New Delhi. The trial court after considering the material on record summoned Mallya and framed charge against him under Section 56 of the Act. Mallya had then moved the Delhi High Court for quashing the proceedings, but it was dismissed, whereupon he moved the Supreme Court in appeal.
Nariman, appearing for Mallya, had submitted that that the default by Mallya was not deliberate, intentional or wilful which may be punishable under Section 56 of the Act. However, the Court relied on a letter sent by Mallya seeking a date which is mutually convenient for personal appearance and interrogation. The letter reads as follows:
“As you will appreciate, I am the Chairman of several public Companies both in India as well as in the USA and, therefore, my schedule is finalized several months in advance. During the fiscal year end period, the problem only gets compounded. I would, therefore, request you to excuse me from the personal appearance on November 26, 1999 as I will be out of India. I am willing to fix a mutually convenient date to appear before you.”
The court observed that,
“From the tenor of the letter, it appears that it was not a case of mere seeking accommodation by the appellant but requiring date to be fixed by his convenience. Such stand by a person facing allegation of serious nature could hardly be appreciated. Obviously, the enormous money power makes him believe that the State should adjust its affairs to suit his commercial convenience.”
The Court, therefore, held that,
“…the appeal is required to be dismissed for more than one reason. The fact that the adjudicating officer chose to drop the proceedings against the appellant herein does not absolve the appellant of the criminal liability incurred by him by virtue of the operation of Section 40 read with Section 56 of the Act. The offence under Section 56 read with Section 40 of the Act is an independent offence. If the factual allegations contained in the charge are to be proved eventually at the trial of the criminal case, the appellant is still liable for the punishment…”
The Court then came down upon Mallya for his approach towards law enforcement agencies calling it “sheer abuse of the process of law”.
“We are also of the opinion that the entire approach adopted by the appellant is a sheer abuse of the process of law. Any other view of the matter would only go to once again establishing the notorious truth stated by Anatole France that – “the law in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets and to steal bread”.
It, therefore, dismissed the appeal with costs of 10 lakhs to be paid to the Supreme Court Legal Service Authority.
Read the full judgment below.
Image taken from here.