JP Morgan India Pvt ltd Vs Special Director, Director of Enforcement & Ors
Date-25th May 2021
Forum- Delhi High Court
Sub-Whether an order passed directing adjudication without giving detailed reasons is a valid order and amounts to violation of Principles of natural justice.

The matter related to an inquiry which was initiated by the Enforcement Directorate in pursuance of Directions of the Apex court in the case of Amrapali Group where the apex courts noted involvement of JP Morgan along with Auditors of Amrapali. The Appellant herein contended that proceeding in the matter in terms of sub-rule (3) of Rule 4 of Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 could not be held without communicating the detailed reasons of enquiry with proper application of mind. However, the Delhi High Court dismissed JP Morgan’s writ by following the decision of the Apex Court in the case of Maharashtra State Board of Secondary and Higher Secondary Education v. K.S. Gandhi & Ors., (1991) 2 SCC 716, where the Supreme Court, observed that “the applicability of the principles of natural justice is not a rule of thumb or a strait-jacket formula as an abstract proposition of law. It depends on the facts of the case, nature of the inquiry and the effect of the order/decision on the rights of the person and attendant circumstances. The court though noted that the reasons were not recorded but also observed that in the case of Hanuman Prasad & Ors. v. Union of India & Anr., (1996) 10 SCC 742, the Supreme Court held that even though the order may not contain the reasons, the record may indicate the same. 

This judgement will be helpful in dealing with those cases where the reasons have not been recorded properly.

Ramesh Patodia
06-06-2021