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FEMA - Supreme Court - Case Laws
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2011 (2) TMI 154
Foreign exchange - Search and seizure - Prosecution and penalty - appellant submits that the standard of proof required to bring home the charge in a criminal case is much higher than in the adjudication proceedings and once the appellant has been exonerated in the adjudication proceedings, his prosecution is an abuse of the process of court. - Held that: - in a statute relating to economic offences, there is no reason to restrict the scope of any provisions of the Act. These provisions ensure that no economic loss is caused by the alleged contravention by the imposition of an appropriate penalty after adjudication under section 51 of the Act and to ensure that the tendency to violate is guarded by imposing appropriate punishment after due transaction in terms of section 56 of the Act. The scheme of the Act makes it clear that the adjudication by the concerned authorities and the prosecution are distinct and separate. No doubt, the conclusion of the adjudication, in the case on hand, the decision of the Special Director dated November 18, 1996, may be a point for the appellant and it is for him to put forth the same before the Magistrate. Inasmuch as the FERA contains certain provisions and features which cannot be equated with the provisions of the Income-tax Act or the Customs Act and in the light of the mandate of section 56 of the FERA, it is the duty of the criminal court to discharge its functions vested with it and give effect to the legislative intention, particularly, in the context of the scope and object of the FERA which was enacted for the economic development of the country and augmentation of revenue. Though the Act has since been repealed and is not available at present, those provisions cannot be lightly interpreted taking note of the object of the Act. - appeal dismissed.
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2011 (2) TMI 127
Waiver of pre-deposit - quantum of pre-deposit - The appellant failed to discharge its export obligation under the licences - The Adjudicating Authority imposing a penalty - The appellant failed to make the pre-deposit of Rs. 5,00,000/- and consequently the appeals were dismissed - The Division Bench of the High Court passed the impugned order allowing the appellant to deposit a sum of Rs. 20,00,000/for each of the appeals - The Division Bench of the High Court should not have passed the impugned order for deposit of Rs. 20,00,000/- for each of the appeals when the Appellate Authority had directed the appellant to make pre-deposit for Rs. 5,00,000/- for both the appeals - Discretion is vested in the Appellate Authority to dispense with a pre-deposit of penalty either unconditionally or subject to such condition as the Appellate Authority may impose - If in exercise of such discretion, the Appellate Authority in the present case dispensed with the pre-deposit penalty of Rs. 1,30,00,000/- in each of the two appeals subject to the appellant depositing a sum of Rs. 5,00,000/- the Division Bench of the Delhi High Court ought not to have enhanced the amount of pre-deposit to Rs. 20,00,000/- for each of the two appeals - Set aside the impugned order of the Division Bench of the High Court of Delhi - Direct that in case the appellant deposits the sum of Rs. 5,00,000/- and the appeal will be heard on merits afresh by the Appellate Authority.
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2011 (1) TMI 1269
Whether the representations filed on behalf of the detenus were not disposed of in accordance with the mandate of Article 22(5) of the Constitution?
Whether the manner of consideration and rejection of representation by the Central Government is in accord with the principles laid down by this Court on this aspect in several cases?
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2010 (10) TMI 156
Foreign exchange – Adjudication – acquisition of foreign exchange without RBI permission - spending of foreign exchange without RBI permission - Notice to show cause - Held that: The appellants insisted for supply of all documents in the possession of the authority and such demand is based on vague, indefinite and irrelevant grounds. The appellants are not sure as to whether they are asking for the copies of the documents in possession of the adjudicating authority or in possession of the authorized officer who lodged the complaint. The only object in making such demand is obviously to obstruct the proceedings and the appellants, to some extent, have been able to achieve their object as is evident from the fact that the inquiry initiated as early as in the year 2006 still did not even commence. Adjudicating authority to deal with the complaint as expeditiously as possible and every endeavour shall be made to dispose of the complaint finally at the earliest. No unreasonable request for adjournment shall be entertained by the adjudicating authority.
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2010 (4) TMI 432
Writ Jurisdiction- Interlocutory order- The appellant, along with another person, were issued a notice under Section 3(c) of the Foreign Exchange Management Act, 1999 (FEMA) for receiving unauthorized payments worth ₹ 5 crores under instructions from persons living outside India in connection with his illegal cricket betting operation. He was also asked to explain why the amount of ₹ 1 lac, confiscated during search from his residence, should not be credited to the account of the Central Government under Section 13(2) of FEMA, 1999. Held that- If the appellant in this case is allowed to file a writ petition despite the existence of an efficacious remedy by way of appeal under Section 35 of FEMA this will enable him to defeat the provisions of the Statute which may provide for certain conditions for filing the appeal, like limitation, payment of court fees or deposit of some amount of penalty or fulfillment of some other conditions for entertaining the appeal - It is obvious that a writ court should not encourage the aforesaid trend of by-passing a statutory provision. - liability of the appellant is not created under any common law principle but, it is clearly a statutory liability and for which the statutory remedy is an appeal under Section 35 of FEMA, subject to the limitations contained therein. A writ petition in the facts of this case is therefore clearly not -maintainable.
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2009 (7) TMI 1193
Whether the High Court/Supreme Court has the power to transfer a suit from a Civil Court to the DRT?
Whether Article 142 is applicable to direct a transfer from a Civil Court to DRT, especially when the DRT Act does not bar the jurisdiction of the Civil Court to entertain a suit against a bank and therefore powers under Article 142 ought not to be exercised to have such an effect or Article 142 is not applicable where a statute occupies the field or Power under Article 142 should be exercised only to prevent injustice and do complete justice between the parties?
Held that:- Having regard to our finding that even Section 24 of the Code of Civil Procedure cannot be taken recourse to, there cannot be any doubt whatsoever that the Punjab and Haryana High Court could not have transferred the suit from the civil court Ludhiana to DRT. Appeal allowed.
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2008 (12) TMI 31
What would be the effect of a retracted confession for the purpose of levy of penalty under FERA, 1973 - violation of Section 8(3) and 9(1)(a) - remittance of the foreign exchange worth US Dollars - no reliance should be placed on the retracted confessional statement unless the same was corroborated by some independent evidence - order of the Tribunal and HC cannot be sustained – assessee’s appeal is allowed - amount which is with the Department shall be refunded to the appellant
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2008 (11) TMI 655
Whether the detention order dated 22.05.2008 passed against the petitioner, Deepak Gopaldas Bajaj, resident of Mumbai under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 is correct?
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2008 (5) TMI 10
FEMA - Constitutional validity of Section 18(2) and (18(3) of the FERA - Held that A legal provision does not become unconstitutional only because it provides for a reverse burden. - Commercial expediency or auditing of books of accounts cannot be a ground for questioning the constitutional validity of an Act. If the Parliamentary Act is valid and constitutional, the same cannot be declared ultra vires only because the appellant faces some difficulty in writing off the bad debts.
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2006 (11) TMI 642
Whether order of detention dated 21-7-2005 passed against the detenu under S.3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 ("the COFEPOSA Act")cannot be sustained?
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2006 (8) TMI 605
Whether order of detention passed under Section 3(1) of Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 on January 27, 2006 valid?
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2006 (8) TMI 521
Detention order passed on 12.2.1997 under Section 3(1) of Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 challenged - Held that:- Appeal dismissed. Where a person himself evades service of detention order, it is not open to him to contend that in view of the long period which has elapsed between the offending activities and the actual arrest and detention, the vital link had snapped and there was no ground for actually detaining him. An otherwise valid detention order cannot be rendered invalid on account of the own act of the detenu of evading arrest and making himself scarce. The contention thus raised has absolutely no merit and has to be rejected.
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2006 (7) TMI 594
Dismissal of habeas corpus petition filed by one Rizwana Ziyath seeking release of her husband, the present appellant Ibrahim Nazeer ('detenu') who was detained and kept in custody in the Central Prison of Chennai under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974
Held that:- Whether prayer for bail would be accepted depends on circumstances of each case and no hard and fast rule can be applied. The only requirement is that the detaining authority should be aware that the detenu is already in custody and is likely to be released on bail. The conclusion that the detenu may be released on bail cannot be ipsi-dixit of the detaining authority. On the basis of materials before him, the detaining authority came to the conclusion that there is likelihood of detenu being released on bail. That is his subjective satisfaction based on materials. Normally, such satisfaction is not to be interfered with. On the facts of the case, the detaining authority has indicated as to why he was of the opinion that there is likelihood of detenu being released on bail. It has been clearly stated that in similar cases orders granting bail are passed by various courts. Appellant has not disputed correctness of this statement. In fact, five bail applications filed had been already rejected. In that background this Court observed that it was not "normal" case. The High Court was justified in rejecting the stand of the appellant. Appeal dismissed.
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2006 (2) TMI 272
Whether in a case where an offence was punishable with a mandatory sentence of imprisonment, a company incorporated under the Companies Act, can be prosecuted, as the sentence of imprisonment cannot be imposed on the company?
Held that:- Merely because the expression ‘punished’ is used, it does not mean that it is confined to a prosecution under Section 56 of the Act, since the element that attracts the imposition of penalty and the prosecution is the same, namely, the contravention of any of the provisions of the Act. Moreover, there is nothing in the Act which, confines the expression ‘punished’ only to a punishment for a criminal prosecution. An imposition of a penalty can also be a punishment. The second part of the reasoning appears to be self-contradictory. If a person includes a company, there is no reason to confine Section 68 to a prosecution only, because the company as a person is liable to be proceeded against under Section 50 and Section 56 of the Act, though in a criminal prosecution the punishment by way of imprisonment can be imposed only on the officer or officers of the company referred to in Section 68 of the Act. Section 68 only indicates the manner in which a contravention by a company can be dealt with and it does not show that it is confined in its operation only to prosecutions against a company. It is a general provision relating to a contravening company, which is to be proceeded against whether it be under Section 50 or under Section 56 of the Act. The fact that a fine alone can be imposed on a company in a prosecution under Section 56 of the Act, cannot enable us to confine the operation of Section 68 to criminal prosecutions alone under the Act. We see no reason to whittle down the scope of Section 68 of the Act.
It is true that the entire penalty that may be imposed on adjudication, is capable of being recovered from the company itself. But that does not mean that it cannot be recovered from the officer incharge of the company or those who connived at or were instrumental in the contravention of the provisions of the Act by the company. Once the ingredient of the offence is contravention of the provisions of the Act and the consequences flowing from the contravention is to make that person including a company liable for penalty as well as for prosecution, there does not appear to be any justification in confining the scope of the Section 68 only to prosecutions under Section 56 of the Act. We have earlier indicated that use of the expression ‘offence’ in the marginal heading of Section 68 is not indicative of the expression ‘being confined to a criminal offence alone’ because an offence in the context of the Act is really a contravention of any of the provisions of the Act referred to in Section 50 and in Section 56 of the Act.
Hence, the decision of the High Court calls for modification as regards the scope and applicability of Section 68 of the Act. The appeals filed by the Union of India are liable to be allowed to that extent.
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2004 (2) TMI 653
Whether order dated 31.8.1995 passed by the Competent Authority under Section 7 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (in short ’the SAFEMA’) against respondent nos. 1 and 2 was not sustainable in law?
Whether the order of detention could be challenged subsequent to the disposal of the earlier writ petition on the ground that it had become unfructuous?
Held that:- SAFEMA applies when the revocation is based on the report of the Advisory Board. As the factual position noted above goes to show, the revocation was only in terms of Section 11(1)(b) of COFEPOSA. Such revocation when is done by the Central Government as in this case is really unrelated to a report of the Advisory Board. On the factual position, none of the three situations indicated in the first sub-clause of the said proviso are applicable. The inevitable position is, therefore, crystal clear that the proviso to clause (b) of sub-section (2) of Section 2 SAFEMA had no application to the facts of the case as held by the High Court. To that extent the judgment of the High Court is indefensible and is set aside.
According to learned counsel for appellants position has been settled beyond doubt that it is impermissible in view of what has been stated in Attorney General’s case [1994 (5) TMI 235 - SUPREME COURT] . This submission deserves no serious consideration, being one made in disregard of the view taken already by this Court. We find that the effect of said decision was considered in the two decisions relied upon by learned counsel for respondent nos. 1 and 2. The view taken in Amritlal Chandmal Jain’s case (1998 (4) TMI 530 - SUPREME COURT) and Karimaben K. Bagad’s case (1998 (7) TMI 680 - SUPREME COURT OF INDIA) does not call for any further or fresh look or consideration – the same being not only just and reasonable but quite in conformity with the basic tenets of Rule of Law but commends for our respectful acceptance, as well - Appeal allowed - remit the matter back to the High Court for fresh adjudication on merits as to the legality and validity of the orders of detention, for the purpose of applying the provisions of SAFEMA against the respondents or the properties concerned.
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2003 (7) TMI 650
Whether the notice issued by the competent authority satisfies the requirement of Section 6?
Held that:- Kesar Devi has never been assessed to tax nor has she ever filed her return of income. Kesar Devi is the holder of house property D-48, Bapu Nagar, Jaipur. Kesar Devi, in her statement on 22.7.1976 before Sh. S.P. Gupta, Inspector, Jaipur has stated that she purchased the plot of land D-48, Bapu Nagar, about 13 years back and immediately thereafter constructed a house on this plot.When specifically questioned about evidence in respect of the assertions made by her regarding the source of investment in the plot or the construction of the house, she in no unequivocal terms, admitted that she had no evidence. Kesar Devi is reported to have had no known sources of income. The source of investment in the house, therefore, remains unproved. The house property thus constitutes property which has, wholly or partly, come out of or by means of any income, earnings or assets, the source of which cannot be proved and which cannot be shown to be attributable to any act or thing done in respect of any matter in relation to which Parliament has no power to make laws and accordingly is a property within the meaning of Sec. 3(1)(c)(iii) of the SAFEMA.
The notice clearly records the reasons for belief and, therefore, it fully complies with the requirement of law and there is no infirmity in the same.
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2003 (1) TMI 657
Why forfeiture of one-tenth property of the appellant shall not be effected?
Held that:- As going through the reasons recorded by the Competent Authority alongwith the show cause notice no averments found to the effect that the property acquired by the appellant is a benami property of her son or the same was illegally acquired from her son.
The contents of the said notices, even if taken at their face value do not disclose any reason warranting action against the appellant. No allegation whatsoever has been made to this effect that there exists any link or nexus between the property sought to be forfeited and the illegally acquired money of the detenu(s). As the condition precedent for initiation of the proceeding under SAFEMA did not exist, the impugned orders of forfeiture cannot be sustained. In that view of the matter, the appeals deserves to be allowed.
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2001 (3) TMI 1085
... ... ... ... ..... nal proceedings on a finding that it does not tantamount to violation of any provisions of the Act. Needless to mention that if associations and political parties would be allowed to receive foreign contribution and would deposit the same in any bank they like notwithstanding their declaration with the Central Government at the time of registration, then the very purpose of conferring power on the Central Government to regulate, would be frustrated and all other provisions for inspections and auditing conferring power on the Central Government would be futile. In the aforesaid premises, we have no hesitation to come to the conclusion that the High Court committed serious error by quashing the criminal proceedings in the impugned judgment on an erroneous interpretation of the provisions of the Act and the Rules made thereunder, as stated above and we, accordingly set aside the same. These appeals are allowed. The Magistrate is directed to proceed with the matter expeditiously.
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2001 (1) TMI 903
Detention order - Held that:- Appeal allowed. The order of detention having been made as early as on 9-6-1998 and the same not having been effected till today, it is certainly necessary for the authorities concerned in the Government to apply mind as to whether detention of the respondent is still necessary or not and take appropriate steps either in giving effect to the order of detention or to revoke the same. In addition, we may also notice that the order made by us will not prejudice the interest of the respondent that in the event the said order of detention is given effect to, it is open to the respondent to raise all grounds as are permissible in law notwithstanding what we may have observed in the course of this order.
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2000 (9) TMI 1040
... ... ... ... ..... cement of the retraction made by Sowkath All would not have affected the conclusion as petitioner's confession stood unsullied, cannot be accepted by us. The detaining authority had relied on different materials and it was a cumulative effect from those materials which led him to his subjective satisfaction. What is enumerated in Section 5A of the COFEPOSA Act cannot, therefore, be applied on the fact situation in this case. 10. In this context it is to be mentioned that the detention order passed against Sowkath Ali was quashed by this Court when he challenged that detention order under Article 32 of the Constitution vide A. Sowkath Ali v. Union of India . 11. We are therefore unable to sustain the detention order passed against this petitioner and accordingly we quash the same. We order petitioner to be set at liberty if his further detention is attributable only to the detention order challenged in the writ petition. 12. Accordingly, this writ petition is disposed of.
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