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FEMA - Case Laws
Showing 21 to 40 of 854 Records
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2023 (7) TMI 1126
Validity of proceedings under FERA, 1973 post introduction of FEMA, 1999 - contention of the appellants that the department had invoked the provisions of the repealed Act of 1973 subsequent to the Act of 1999 coming into force requires consideration - appellants contented that since the department did not act in terms of Section 49 of the Act of 1999 in invoking the provisions of FERA within the time period prescribed, therefore, the act of the department is invalid - HELD THAT:- Sub Section (3) of Section 49 of the Act of 1999 casts an embargo upon a Court from taking cognizance of an offence under the Act of 1973 and on the Adjudicating Officer from taking notice of any contravention under Section 51 of the Act of 1973, after the expiry of a period 2 years from the date of commencement of the Act of 1999.
The Act of 1973 has contemplated civil liability for contravention with the power to adjudicate on the same being vested with the Adjudicating Officer under Section 51. Section 56 of the Act of 1973 has provided that, without prejudice to any award of penalty by the Adjudicating Officer, if a person contravenes any of the provisions of the Act of 1973, other than Section 13, 18 (1) (a), 18 A, 19 (1) (a), 44 (2), 57 and 58 or any rule, direction or order made thereunder, such person upon conviction by a Court, be punishable with the quantum of punishment as has been prescribed.
The Act of 1973 has therefore contemplated both civil and criminal liability for contraventions of the provisions of the Act of 1973 to be scenario specific. Some contraventions are purely civil in nature while others entail both civil and criminal liability. Therefore, the Act of 1973 does not contemplate that in respect of a particular case, there must be simultaneous taking of notice of contravention by an Adjudicating Officer and cognizance of the same by the Court. The functions of the two Adjudicating authorities have been prescribed to be disjoint. In such circumstances, it would be appropriate to construe the word ‘and’ used in Section 49 (3) of the Act of 1999 as ‘or’. Any other construction would militate against the scheme of the Act of 1973 and would do violence thereto.
Appellants in the first appeal had sold foreign currency on sponsoring of fictitious firms who in turn sponsored fake names between the period April 1, 2000 and May 6, 2000. The records produced in court have established that, Manas Kumar Moitra and Mrs Rooma Maitra had formed some fictitious firms/companies who gave certain names or sponsored persons for purchase of foreign currency projecting their impending foreign business tour but all such persons were not traceable. These persons had been sponsored repeatedly within a short period of time.
Similar is the case in the next two appeals where Manas Kumar Maitra along with 4 others had been involved in creating fake firms/companies for sponsoring persons for alleged business travel within a short period of time.
In both the set of cases, both at the level of the Adjudicating Officer as also at the level of the Appellant Authority, there is a concurrent finding that, the appellants had acted without due care and in violation of the guidelines of the Reserve Bank of India in selling foreign currency to those persons. It has been concurrently held that, the appellants had failed to discharge their duty of reasonable care in selling foreign currencies to those persons involved when such currencies were sought for within such a short period of time with same dates of travel.
In all the three appeals, there have been on current finding on facts. The adjudicating officer in all the proceedings had found violations of the guidelines of the Reserve Bank of India by the appellants, in their dealings with the sale of foreign currency to the delinquents. The findings returned by the adjudicating officer and by the appellate authority on such factual aspects have not been established to be perverse in these appeals.
Thus the appeals FEA 5 of 2008, FEA 22 of 2009, FEA 23 of 2009 being without any merit are dismissed without any order as to cost.
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2023 (7) TMI 1125
Offence under FERA - sum received by petitioner from person outside India and the Petitioner was to make payment to various persons in India on behalf of the person outside India - contravention of the provisions of Section 9(1)(b) and 9(1)(d) of the FERA - HELD THAT:- As after being unsuccessful in the first round, the E.D. had issued a second Show Cause Notice. The E.D. department had not recorded statement of any person who according to them had received any benefit from the said amount - There was no evidence to prove the petitioner guilty as regards proposed distribution.
Petitioner had officially received these amounts and had shown the same in the Income tax returns. In fact, in the Order of the CIT (Appeals), it has been quoted that the assigning officer in his remand report dated 17th June, 2004 had admitted that seized cash seems to be cash on hand on the firm.
There is nothing on record to prove that the Petitioner had committed an offence under Section 9 (1) (d) of the FERA Act. No case is made out for holding the Petitioner guilty for violation of Section 9(1)(d) r/w Section 64(2) of the Customs Act. The seized documents do not corroborate the fact of receipt and distribution of said amount by the Petitioner.
This is a clear case where the Petitioner appears to have been deprived of his amount of Rs. 1,48,000/- without authority of law on a totally untenable basis. The Petitioner could have utilized the said amount, the value of which at the relevant time was substantial. Considered from all angles, the Respondents could not have retained the said amount depriving the Petitioner from his legitimate entitlement. We would, hence be justified in allowing interest to the Petitioner in allowing this Writ Petition.
An amount of Rs. 1,48,000/- shall be refunded by the respondent to the petitioner within a period of four weeks from today with simple interest at the rate of 6% per annum from 12 May 1988.
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2023 (7) TMI 829
Acquittal of the charge u/s 56 of FERA - trial Court held that there was no other evidence against the respondent except his statements [Ex.CW2/A and Ex.CW2/B] and no material was available on record to connect the appellant with the commission of the alleged crime and the prosecution had miserably failed to prove the case against him - HELD THAT:- As prosecution could not place on record any orders/notice asking the respondent to appear and make the statements. This fact alone proves that the statements made by the respondent were not voluntarily. Apart from that, the learned trial Court has correctly recorded that there is no evidence against the respondent/accused except his own statements Ex.CW2/A and Ex.CW2/B.
Even the prosecution could not lead any evidence to connect the respondent with the alleged chits Ex.C2 to Ex.C14 and the findings recorded by the learned trial Court are liable to be upheld. Apart from that, even the complaint was premature as the same was launched on the strength of the orders Ex.CW2/C and the appeal preferred by the respondent against the said order was stated to be pending before the Appellate Tribunal. Thus, it is apparent that the very basis i.e the order Ex.CW2/C had not even attained finality and the complaint was preferred in a tearing hurry without any valid explanation.
Thus instant appeal is wholly misconceived, bereft of merits and without any substance; thus, it must fail. No case for interference has been made out.
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2023 (7) TMI 636
Maintainability of appeal against an order passed by the Appellate Tribunal for Foreign Exchange - Period of limitation - Appellate Tribunal dismissing the appeal on the ground of provisions of Section 52 of the Foreign Exchange Management Act, 1999 - HELD THAT:- Non-entertainment of the appeal by the Appellate Tribunal on the ground of Section 52(2) of the Act of 1973 was erroneous in view of the ratio laid down in Thirumalai Chemicals Ltd. [2011 (4) TMI 489 - SUPREME COURT]
However, we find from the materials produced on record that, the appellant was served with the order-in-original dated January 21, 2000 by registered post which was dispatched on March 13, 2000. The appellant is unable to show any reasonable cause as to why, the appellant did not file the appeal within the time prescribed under the Act of 1973. No explanation is put forward under the Act of 1999 for condonation of delay in preferring the appeal.
We find no merit in the present appeal.
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2023 (6) TMI 1058
Contravention of Section 8(1) and 9(1)(a) of FERA by the Company - petitioner and other individuals working for the Company were made vicariously liable for the alleged contravention by the Company by virtue of Section 68 of the Act - HELD THAT:- As in view of order of the Special Director, ED, the court quashed the proceedings in respect of the company alone, (the sole petitioner before it).
As considering the status of the present case, which has been dropped by the complainant in respect of all the accused persons, the proceedings in Case pending before the Learned Metropolitan Magistrate, 11th Court, Calcutta under Sections 56 and 68 of the Foreign Exchange Regulation Act, 1973 is liable to be also quashed in respect of all the petitioners therein including the petitioner in this revision.
Revisional application is allowed.
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2023 (6) TMI 546
Non-realization export proceedings of goods - convertible foreign exchange - Reasonable steps u/s 18(3) of FERA - Suit for recovery of the balance of the price of the goods sold and delivered in respect of an export in any court in India - All Reasonable steps to receive or recover the payment for the goods as envisaged u/s 18(3) of the Act of 1973 - whether, filing of the suit by the appellants before the Hon’ble High Court at Calcutta and obtaining a decree thereon for realisation of the balance of the price of goods sold and delivered to the importer would constitute “reasonable steps to receive or recover the payment for the goods” ?
HELD THAT:- In the facts of the present case, the exporter company exported goods of the invoice value of US$ 8,37,200 and received payment of a portion thereof leaving a sum of US$ 6,37,200 outstanding. The exports took place in 1996. Suit was filed for recovery and a decree with regard thereto was obtained. The decree could not be executed in India due to lack of assets of the importer in India. The appellants claimed that, execution of the decree in the foreign country where the importer was situated was not cost effective and feasible. In the facts of the present case, the explanation offered by the appellants with regard to inability to execute the decree obtained is plausible.
The appellants adequately explained the steps taken by them to receive or recover the payment of the goods exported. The steps taken by the appellants in filing a suit and obtaining a decree thereon within the extended period is a reasonable step taken to receive and recover the payment of the goods exported within the meaning of Section 18(3) of the Act of 1973. Such facts rebut the statutory presumptions of Section 18(3) of the Act of 1973.
The impugned show cause notice, the adjudication order passed thereon and the impugned order of the appellate authority are set aside.
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2023 (6) TMI 250
Constitutional validity of Section 37A of FEMA Act - order of the Competent Authority affirming seizure by the Authorised Officer - Seeking consequential prayers of quashment of seizure order u/s 37A(1) and confirmation order of such seizure under Section 37A(3) of the Act - reason for seizure was on the ground that the respondent/Directorate of Enforcement found during the course of investigation that no agreement or legal basis was available for remitting the money by the petitioner. Royalty was not a part of the product cost. No work order or purchase order was placed. No intellectual property rights were received. Based upon the impugned seizure, seizure order was passed on 29th April 2022 invoking Section 37A(1) of the Act.
Whether the writ petition would be maintainable on the prayer that is sought i.e., to hold Section 37A of the Act to be unconstitutional on the ground that it is manifestly arbitrary and violative of Article 14 of the Constitution of India? - HELD THAT:- Article 19 would not be available to any person, who is not a citizen of this country. Same goes with the Division Bench judgment of Allahabad High Court where at para-14 it is clearly held that Article 19(1)(d) and (e) are unavailable to foreigners because these rights are conferred only on the citizens. Rights under Article 19 are withheld expressly to foreigners. The Division Bench also holds that it is of the opinion that foreigners enjoy some fundamental rights of this country but the same are confined to Article 21 of the Constitution of India which deals with life and liberty and does not include the rights guaranteed under Article 19 of the Constitution. The question therein was right to free trade under Article 19(1)(g) and, therefore, held that it was available only to Indian citizens and not to foreigners.
On a coalesce of the judgments rendered by the Apex Court and that of different constitutional Courts what would unmistakably emerge is that Articles 14 and 21 of the Constitution of India, the nation’s Grundnorm would be available to every person and they are not restricted to the citizens of the country only. However, Articles 15, 16 and 19 are restricted only to citizens of this country.
The challenge in the case at hand is on the ground that the provision is unreasonable or manifestly arbitrary, both of which would come within the ambit of Article 14 of the Constitution of India and the petition challenging the constitutional validity on the ground that it is manifestly arbitrary and violative of Article 14 or unreasonable, again being violative of Article 14, are all maintainable contentions before the constitutional Courts of the country as they are ‘person centric’ and not ‘citizen centric’. Therefore the first issue that has arisen for consideration qua maintainability is answered in favour of the petitioner holding the petition to be maintainable qua the challenge.
Whether Section 37A of the Act gives uncanalised and unguided power on it suffering from absence of safeguards ? - On a coalesce of the judgments relied on by the petitioner and others that are quoted hereinabove, as also the reasons rendered by this Court, what would unmistakably emerge is that Section 37A of the Act does not suffer from any manifest arbitrariness for this Court to strike it down on any of the grounds urged by the petitioner. The purpose behind the amendment is already quoted, and checks and balances available, under Section 37A are also quoted and analysed. Therefore, the second point that arose for consideration is answered against the petitioner.
Whether the order passed by the authorized officer suffers from non-application of mind? - The only reason that is projected by the petitioners to knock at the doors of this Court despite the remedy of filing an appeal before the Appellate Tribunal being appealable under subsection (5) of Section 37A of the Act is that the order of the Competent Authority affirming seizure by the Authorised Officer does not bear application of mind. It is trite law that application of mind is discernible from any order, if the order contains reasons for passing one, it would have been an altogether different circumstance if there were no reasons recorded in writing by the Competent Authority for this Court to hold that the order suffered from non-application of mind. The order is neither cryptic nor perfunctory. It is in great detail. It runs into more than 250 pages.
It is not the number of pages that matters, but the content in those pages which clearly indicate application of mind. We decline to accept the submission that the order suffers from non-application of mind on perusal of the entire content in the order. Every submission of the petitioner is noted, considered threadbare and answered by the Competent Authority.
The Competent Authority has not left any wood on the tree. Therefore, the order does not suffer from nonapplication of mind, as is sought to be projected and contended by the petitioner. Therefore, the only circumstance which the petitioner projects apart from challenging the constitutional validity for entertainment of the subject writ petition tumbles down, as the order of the Competent Authority does bear the stamp of application of mind through the order. Therefore, it is for the petitioner to avail of the remedy of filing an appeal before the Appellate Tribunal.
SUMMARY:
(i) The challenge to the constitutional validity of Section 37A of the Act by the petitioner is held to be maintainable and entertainable, on the fulcrum of the allegation that it is violative of Article 14 of the Constitution of India, as Article 14 is person centric, whereas fundamental rights under Articles 15, 16, 19 and 25 are citizen centric. Wherefore, a non-citizen can challenge certain laws of the nation on the ground that it is violative of Article 14 of the Constitution of India and the challenge would be restrictable only to the tenets of Article 14 of the Constitution of India.
(ii) The challenge to the constitutional validity of Section 37A of the Act is rejected, as Section 37A does not suffer from any manifest arbitrariness on any ground whatsoever.
(iii) The petitioner is at liberty to avail of the statutory remedy of filing an appeal before the Tribunal under sub-section (5) of Section 37A of the FEMA.
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2023 (6) TMI 249
Offence under FEMA - Investigation initiated under FEMA Act initiated - maintainability of the present writ petitions - complainant and Adjudicating Authority being officers of the same rank - As alleged that the Petitioners received foreign direct investment from three foreign companies and one Non-Resident Indian as consideration for issuance of shares in exchange for such investment in M/s Teleonto Tecnologies Pvt. Ltd. - HELD THAT:- Supreme Court has time and again reiterated that a writ petition is not maintainable when an efficacious alternative remedy is available. It is only in certain limited circumstances that a writ petition can be entertained, despite there being an alternative remedy.
Petitioners have raised only two issues which need consideration by this Court to decide the maintainability of the writ petition. It was contended that the impugned order is violative of principles of natural justice as the same authority which filed the complaint also passed the impugned order. Therefore, the principle of no one can be a judge in his own case is violated.
Whether the impugned order was passed in violation of principles of natural justice on account of the complainant and Adjudicating Authority being officers of the same rank/designation? - The maxim ‘nemo judex in causa sua’ states that a person who has interest either personal or pecuniary in an outcome of a particular lis, he/she shall not act as an adjudicator in the said lis. In other words, a person authorized to decide a dispute between the parties shall refuse decide such dispute, if he/she is connected to any of the party to such dispute either professionally, personally or monetarily. The connection should give rise to strong probable apprehension of bias in favour of one party.
Whether the maxim ‘nemo judex in causa sua’ is violated in the present case merely because the complainant and the Adjudicating Authority happen to be the same ranked officials/authority? - Merely because an officer is also the complainant, he/she will not be barred from performing other duties as prescribed under a statute. Bias cannot be presumed and a party alleging or attributing bias shall establish reasonable grounds for apprehension for such bias.
In the present case, merely because the complaint was lodged by an officer of the rank of Deputy Director of Enforcement and subsequently the impugned order was also passed by the same rank officer, bias cannot be presumed in the absence of any material attributing such bias to the officer.
As stated above, though of the same rank, both the officers i.e., one who filed the complaint and one who passed the impugned order were different. Therefore, the maxim ‘nemo judex in causa sua’ does not apply in cases where the designation/rank of the authority is the same but members heading them are different. Therefore, Issue No.1 is decided by holding that the impugned order was not passed in violation of principles of natural justice.
Whether the Deputy Director of Enforcement had jurisdiction to pass the impugned order in light of the contention that the case before the Adjudicating Authority involved an amount more than Rs. 10,00,00,000/-? - A case involving an amount between Rs. 10,00,00,000/- and Rs. 25,00,00,000/- can only be decided by an Additional Director of Enforcement. Further, cases involving an amount between Rs. 2,00,00,000/- and Rs. 5,00,00,000/- have to be decided by the Deputy Director of Enforcement.
Petitioner’s reliance of the alleged value of shares worth Rs. 8,46,90,000/- to calculate the monetary limit cannot be accepted for the simple reason that the said transfer was done in lieu of a loan arrangement worth Rs. 2,70,00,000/- The alleged amount violative of the pricing guidelines is Rs. 2,70,00,000/-
Therefore, the amount involved in the case is the sum of Rs. 1,32,38,364/, Rs. 85,45,184/- and Rs. 2,70,00,000/- which comes down to Rs. 4,87,83,548/-. Therefore, Issue No.2 is decided by holding that the Deputy Director of Enforcement was competent to pass the impugned order as the amount involved in the case was Rs. 4,87,83,548/-.
Maintainability of appeal - This Court holds that the present writ petitions are not maintainable as the impugned order dated 05.09.2022 was passed in compliance with the principles of natural justice and within the jurisdiction prescribed under the Act, 1999.
Petitioners have raised other contentions regarding forged and fabricated documents, the issue of delay in filing the complaint and the issue of quantum of penalty. This Court being bound by the decision in M/S COMMERCIAL STEEL LIMITED [2021 (9) TMI 480 - SUPREME COURT] holds that the said issues cannot be decided by this Court in view of an efficacious alternative remedy available under Section 17(2) of the Act, 1999.
Present writ petitions are liable to be dismissed and are accordingly dismissed. Liberty is granted to the Petitioners in both the writ petitions to raise all their grounds in appeal under Section 17(2) of the Act, 1999, if any preferred.
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2023 (5) TMI 610
FCRA registration - Delay of opening of an “FCRA bank account” with the State Bank of India - Petitioner faced difficulties in uploading the FCRA annual return under Form FC-4 under Rule 17 of the Foreign Contribution (Regulation) Rules, 2011 for F.Y 2019-2020, due to the fact that the bank account details were being sought as of 31st March, 2020 - HELD THAT:- Admittedly, in the present case, the FCRA account in the SBI was opened by the Petitioner only on 4th October, 2021, which was much beyond the deadline fixed initially i.e. 31st March 2021, and even after the expiry of the extended period till 30th June 2021 vide notification dated 18th May 2021.
Petitioner has now opened the said FCRA bank account in SBI Sansad Marg Branch, Parliament Street-New Delhi, and has deposited the penalty and also uploaded the annual return for the F.Y 2019-2020, the relief sought for in this petition has become infructuous.
Moreover, none of the cases which have been decided by this Court including WNS Cares Foundation v. Union of India [2023 (1) TMI 944 - DELHI HIGH COURT] and Shree Swaminaryan Mandir v. Union of India [2023 (4) TMI 974 - DELHI HIGH COURT] would be applicable in the facts of the present case.
In the facts of the present case, there was a delay in the opening of the said FCRA bank account and the delay has not been convincingly explained by the Petitioner. Further, the penalty amount has been deposited with Respondent No. 1-MHA, therefore the prayer for refund is not tenable and is accordingly rejected. FCRA FC-4 annual return for the F.Y 2019-2020 which has been uploaded, shall be taken as valid without any payment of further penalties by the Petitioner.
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2023 (4) TMI 1136
Maintainability of WP against Violation of the Foreign Exchange Management Act, 1999 - proceedings initiated u/s 6(3) of the Act, 1999 - The provision has been omitted - saving clause - Scope of alternative remedy - Petitioners challenge the impugned order, inter alia, on the ground that they were charged under Section 6(3)(b) of the Act, 1999 which was subsequently omitted from the Act, 1999, w.e.f. 15.10.2019 - whether present writ petition is not maintainable as the Petitioners have an efficacious and alternative remedy under Section 19 of the Act, 1999? - HELD THAT:- Section 6 of the Act, 1897 is applicable to omission of a provision by the legislature. Section 6 of the Act, 1897 saves all the pending proceedings under a provision that was subsequently omitted. Now coming to the facts of the case, it is not in dispute that the proceedings for violations of Section 6(3)(b) of the Act, 1999 were initiated in the year 2017. When the proceedings were initiated against the Petitioners, Section 6(3) of the Act, 1999 was still in force. Therefore, by virtue of Section 6 of the Act, 1897 the proceedings against the Petitioners are saved and cannot be disturbed merely because Section 6(3) of the Act, 1999 was subsequently omitted.
According to this Court, Respondent No. 1 was well within his jurisdiction to pass the impugned order dated 04.01.2023. As the Petitioner, has an effective alternative remedy in the form of an appeal under Section 19 of the Act, 1999, this Court, in light of the decision in Assistant Commissioner of State Tax (supra) holds that the present writ petition is not maintainable. Therefore, the present writ petition is liable to be dismissed.
Writ petition is dismissed. However, the Petitioners are at liberty to raise all the contentions before the Appellate Tribunal.
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2023 (4) TMI 974
Foreign Contribution Regulation - Non-filing of the returns - annual returns for the years 2019-2020 were to be uploaded in Form FC-4 for which SBI account as of 31st March, 2020 was needed, the details of the SBI bank account could not be given - Petitioner seeking directions to the Respondent – Ministry of Home Affairs, Union of India to allow the Petitioners to fill and upload Form FC-4 on the Respondent’s portal in order to enable them to file the annual returns for the financial year 2019-2020 - whether the SBI bank account could have been sought for as of 31st March 2020, when the amendment itself came into effect later i.e., in September 2020? - HELD THAT:- In view of the reasoning given in the said order in WNS Cares Foundation [2023 (1) TMI 944 - DELHI HIGH COURT] as held receipt of foreign contribution “as on 31st March of the year ending” has to be provided and the bank account has to be in the SBI, Sansad Marg branch. Since the Petitioner No.1 opened its account in August, 2021 and in any case, as on 31st March, 2020, the Foreign Contribution Regulation (Amendment) Act, 2020, had not come into effect, there appears to be some justification in the Petitioners’ case.Petitioner No.1 having opened its FCRA account in August, 2021 is, accordingly, permitted to fill up the said details of its FCRA account in serial no.7 of the Form FC – 4 and submit the same.
In this case the Petitioners also having already opened their bank accounts with SBI Sansad Marg Branch, the Petitioners are permitted to upload their annual returns for the year 2019-2020 by specifying the SBI account number of the account which was subsequently opened by them.
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2023 (4) TMI 875
Offence u/s 57 of the FERA - Non Complaint filed in compliance of the provisions of section 61 (2)(ii) of the FERA - HELD THAT:- As in this case where an offence under Section 57 of the Foreign Exchange Regulation Act, 1973 has been alleged against the accused person, the law provides that either the Enforcement Director or an officer authorised in writing on behalf of the Director or the Central Government or an authorised officer of Reserve Bank, shall be eligible to institute a complaint. The Magistrate has also emphasized that the appellant would not have the locus standi to initiate prosecution in absence of any authorization, without however considering or taking judicial note of his evidence and Exhibit-A (i.e., authorization certificate dated (22.12.2005).
The Magistrate could not ignore the ocular and documentary evidence before it, more so, when all these were uncontroverted. By virtue of holding officer at the particular period of time and having been authorized vide ‘Exhibit-A’ there was no impediment for the appellant to institute prosecution, which the Magistrate has not considered and such non-application of mind has rendered his findings not tenable in the eyes of law.
The Magistrate was duty bound to take note of the same, more particularly, in terms of Section 57(7) of the Evidence Act. It was a mandate of law. The notification dated 24th September, 1993 read with the direct evidence of the appellant before the Trial Court would unfailingly point out to the fact of the appellant to be competent officer under law, to institute prosecution on behalf of the Enforcement Directorate. By not considering all these factual and legal aspects, the Trial Court has committed gross error. The impugned judgment suffers from non-application of mind and illegality.
Thus unable to place occurrence with the finding of the Court in the impugned judgment that provisions of Section 61 (2) (ii) of the Foreign Exchange Regulation Act, 1973 has not been complied with by the complainant in order to institute a case punishable under Section 57, as it is in this particular proceeding. In my considered opinion, the impugned judgment of the Trial Court suffers for non-application of mind and wrong appreciation of the fact situation as well as the settled provisions of law. Accordingly, the same would not be maintainable and liable to be set aside, being not inconfirmity with the laws. The impugned judgment is set aside - Appeal allowed.
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2023 (4) TMI 830
FEMA (Foreign Exchange Management Act, 1999) case pending since 2020-21 pursuant to the blocking of the petitioner's two bank - Seeking Defreezing of accounts blocked by the bank since the year 2020 - HELD THAT:- We find that the petitioner has filed the present writ petition seeking, in effect, the same relief that was sought in the previous writ petition but, it is clothed in representations which is a masquerade. A second writ petition for the same cause of action is anyway not maintainable. No liberty was granted to the petitioner to file a fresh petition. In the present petition we also find that relevant facts have been concealed by the petitioner inasmuch as the learned counsel for the petitioner has not been able to point out any details of proceedings and the stage at which they are pending before the authorities concerned.
For the reasons aforesaid and given the observations in the previous judgment dated 04.05.2021 passed by this Court [2021 (5) TMI 1061 - ALLAHABAD HIGH COURT] this writ petition is dismissed with cost of Rs. 25,000/- which shall be payable by the petitioner within one month.
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2023 (4) TMI 718
Adjudication proceedings as contemplated u/s 13(1) of the FEMA - whether the supply of documents relied upon by an Adjudicating Authority in framing an opinion to proceed against the notice is a mandatory requirement? - whether a person has contravened any provision of FEMA, the Adjudicating Authority has to adjudge the matter? - HELD THAT:- It is clear that for the purpose of adjudication under Section 13 of FEMA, the Adjudicating Authority has to hold an enquiry after giving the person alleged to have committed contravention under Section 13 a reasonable opportunity of being heard. The Adjudicating Authority has to hold an enquiry upon a complaint in writing made by any the authorized officer and the person, against whom allegations of contravention are made, has a right to appear in person or to have legal assistance before the Adjudicating Authority. As per the said provision, the powers of civil court have been vested to an Adjudicating Authority.
The record, which contains these documents, goes on to confirm this fact. Therefore, even the respondents are not in possession of legible copies of the aforesaid documents, as such, there was no occasion or possibility for the respondents to provide legible copies of these documents to the petitioners when they were not themselves in possession of the legible record. Though the respondents were obliged to provide legible copies of the documents relied upon by them but when they themselves were not in possession of the legible copies of the documents mentioned above, it was impossible for them to provide the same to the petitioners. The rules of natural justice do not operate in vacuum. Therefore, when the respondents themselves incapable of furnishing legible copies of certain documents, it cannot be stated that by non-furnishing of these documents to the petitioners, the principles of natural stand violated.
A perusal of the reply to the show cause notice filed by the petitioners clearly indicates that they have effectively replied each and every allegation made in the show cause notice and they have also responded to the allegations relating to confessional statements of petitioners No.1 and 2 and their statements recorded before the Chief Judicial Magistrate, Srinagar, which are stated to be not legible. Therefore, no prejudice has been caused to the petitioners by non-supply of legible copies of these two documents which, in any case, are not available with the respondents themselves.
In the present case, if the respondents are insisted upon to provide legible copies of those documents which are not even in their possession, it will amount to stretching the principles of natural justice too far, particularly at a stage when only the adjudication proceedings have been initiated and the parties are yet to produce their respective evidences/material before the Adjudicating Authority, whereafter the matter is required to be considered finally by the said Authority.
We do not find that non-furnishing of legible copies of the documents by the respondents to the petitioner has infringed the principles of fairness. Thus, the impugned communication issued by the Adjudicating Authority does not call for any interference from this Court.
For what has been discussed hereinbefore, the petition is dismissed.
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2023 (3) TMI 1332
Search operation under Section 37 of FEMA - writ petitioner mainly contended that, no incriminating materials were seized while conducting the raid in the premises of the petitioner - More than 5 years lapsed, still the respondents have not initiated any action under the FEMA 1999 - HELD THAT:- The original files relating to the initiation of proceedings are placed before this Court. Regarding the delay on the part of the respondents, the learned Additional Solicitor General of India drew the attention of this Court with reference to the letter sent by the learned counsel for the petitioner, who in turn by letter dated 04.12.2017 has stated that they have approached the High Court of Madras by filing a writ petition and therefore no further action to be continued pursuant to the search conducted. Petitioner issued a letter through his counsel not to conduct further enquiry or investigation and on the other hand before this Court the petitioner has stated that the respondents, even after lapse of 5 years, have not initiated any action. Such a dual stand taken is impermissible and therefore the writ petition is to be rejected.
The mandatory condition contemplated under the Act regarding “reason to believe”, the file indicates certain intelligence informations about various investments which has been partly narrated in the counter filed by the respondents. Since the writ petition has been filed at the preliminary stage, certain informations and materials referred in the original files in the interest of petitioner need not be recorded in the order passed in the present writ petition. The counter reveals that there may be more such instances which is to be unearthed and the intelligence informations provided are also to be enquired into further for the purpose of initiation of further action.
Investigations are to be conducted and an opportunity was provided to the writ petitioner to produce all those documents with reference to the informations or otherwise. The petitioner instead of furnishing documents and statements have chosen to file the present writ petition. The original files reveals that the authorities have formed an opinion that there is a reason to believe, which is the condition stipulated in the Act and on satisfaction, they conducted a search and thereafter issued summons to the petitioner to respond and submit his explanations and documents.
This being the factum established, this Court is of the considered opinion that the search and seizure conducted cannot be held as illegal or ultravires to the provisions of FEMA, 1999 and Income Tax Act and CPC. The petitioner is bound to respond and defend the facts in the manner known to law. There is a prima facie case established with reference to certain transactions and investments in foreign countries and certain details are also available in the file which require a detailed investigation and necessarily the petitioner has to cooperate for further investigation and establish his case with documents and evidences.
Accordingly, the petitioner has failed to establish any ground for interference and consequently, the writ petition stands dismissed.
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2023 (3) TMI 1074
Forfeiture of illegally acquired properties of smugglers and foreign exchange manipulators - order passed by the competent authority under Section 7 read with 19(1) of the Smugglers and Foreign Exchange Manipulators(Forfeiture of Property) Act - partners of the first appellant, namely, N.A. Yusuf, was ordered to be detained by Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974(hereinafter being referred to as “COFEPOSA”) - HELD THAT:- From the evidence which came on record, it could be gathered that out of the investment made by the partners(Appellant nos. 2 to 5) to the tune of Rs.10.20 lakhs, N.A. Yusuf contributed Rs.5 lakhs and Appellant no.2(P.M. Saheeda) and her children have contributed to the tune of Rs.5.2 lakhs each but neither N.A. Yusuf has justified any source from where his capital contribution was made nor the explanation was tendered by Appellant nos. 2 to 5 regarding their source of income and it was disbelieved at all stages and a finding was returned that major part of the investment has been treated as income from undisclosed sources. That apart, no evidence was placed by Appellant no. 2(P.M. Saheeda) on record to justify that the land in question was purchased from the resources available at her command in the year 1969, through the sale deed dated 16th April, 1969. In the given circumstances, the appellants are not entitled to seek protection of Section 9 of the Act 1976.
That apart, as regards the submissions made by the counsel for the appellants to impose fine in lieu of forfeiture, as contemplated under Section 9 of the Act 1976, after noticing the argument advanced by the appellants before the High Court, a categorical finding has been recorded as to why the appellants are not entitled to seek protection of Section 9 of the Act 1976, as held that major investment remain unexplained and also disbelieved the version of the 2nd petitioner on the ground that the proof of gift from her marriage has not been produced. Thus, according to the Competent Authority as well as the Appellate Tribunal, even if the value of the land is taken only at Rs.33,000/, the total value of the land and building will work out at Rs.25,20,000/and as such, it was of the view that major part of the investment remained unexplained.
No error being committed in the finding returned by the High Court which may call for our interference.
Even before this Court, there is no material that has been placed by Appellant no.2 (P.M. Saheeda) in rebuttal which may even prima facie justify the sources of fund available at her command for acquisition of the land in question to the tune of Rs.33,000/in the year 1969. In the absence of proper explanation as to the source of acquisition and as majority of investment remains unexplained, the authority disbelieved the version of Appellant no. 2(P.M. Saheeda) as no proof was placed on record of gifts from her marriage.
Even the accounts were not maintained in respect of the cost of construction of the building, in absence whereof, the authority has not committed any manifest error in forfeiting the property in exercise of power under Section 7 of Act 1976. Appeal is without substance and accordingly dismissed
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2023 (3) TMI 705
Foreign Direct Investment Policy - permit foreign investment by a foreign airline - Public Interest Litigation (PIL) challenging the decision passed by the Ministry of Finance, Department of Economic Affairs, Government of India approving M/s Air Asia Investment Ltd. (a Malaysian Company) to incorporate a new Joint Venture Company with foreign equity of 49% amounting to USD 15 Million and the balance 51% equity share was to be held in the ratio of 30% by M/s Tata Sons Ltd. and 21% by M/s Telestra Trade Pvt. Ltd. - HELD THAT:- It is stated that the name of Air Asia (India) Pvt. Ltd. was changed to AIX Connect Pvt. Ltd. It is also stated that on 12.08.2020, Talace Pvt. Ltd. was incorporated as 100% wholly owned subsidiary of Tata Sons Pvt. Ltd. which holds 100% shares of Air India Ltd.
Material on record further discloses that vide an Order dated 11.07.2019, the Central Bureau of Investigation (CBI) was impleaded as Respondent No.6 in the writ petition and the CBI was directed to file the Status Report in a sealed cover. Similarly, this Court vide Order dated 23.01.2020, permitted the Petitioner to implead Enforcement Directorate (ED), Ministry of Finance as Respondent No.8 and the ED was also directed to file the Status Report in a sealed cover. Status Reports in sealed covers have been filed before this Court and this Court has perused the Status Reports.
In view of the fact that there is no foreign investment as of today, the prayers made in the writ petition have become purely academic. The Petitioner, who appears in person, has stated that he is no longer interested in pursuing the writ petition. In view of the statement made by the Petitioner appearing in person, the writ petition stands disposed of.
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2023 (3) TMI 335
Penalty u/s FERA Act - Demand fastened upon the petitioner in terms of Sections 70(1)(i) & 70(1)(ii) of the Foreign Exchange and Regulation Act, 1973 - HELD THAT:- A compilation has been filed by R1 & R2 containing four documents. That apart, the complaint copy itself refers to order of adjudication having been passed, though perhaps not served. Thereafter, an opportunity notice has been issued which has been duly served upon the petitioner.
The diary of proceedings before the Criminal Court have also been produced to show that the petitioner has been present from 10.06.2008 onwards, on various dates till 29.01.2018. In the meantime, steps were initiated by the respondent for splitting of the complaint qua the company and the Directors. As a result was continued in the name of the company and one Director and as against the petitioner and another Director.
Thus, through all this, the petitioner has certainly been aware of the factum of order having been passed and this is the question that this Court has to contend with, as to whether such prolonged inaction on the part of the petitioner to even seek a copy of the order and then initiate appropriate steps, may be condoned.
The response, in my considered view, must be in the negative, for the reason that there is no justification whatsoever, let alone justifiable explanation, that has been set out to consider condonation of such intervening inaction. In fact, and as been noted in the preceding paragraphs, the case of the petitioner has bordered on stating that he was not even aware of the order which position is clearly contrary to the facts.
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2023 (3) TMI 334
Violation of the provisions of the Foreign Exchange Management Act - lookout circular against the petitioner - petitioner vehemently contend that the petitioner is not an accused in any crime under the IPC or under any other law - HELD THAT:- A lookout circular cannot be issued against any subject in thin air. There has to be reason for issuance of such lookout circular. The categories on which the lookout circulars can be issued are borne out from several official memoranda issued by Union of India from time to time and right to travel can be curtailed only in terms of those ingredients found in the official memoranda. The case at hand does not have a single ingredient as found in those official memoranda for issuance of a lookout circular. The petitioner is not an accused in any case under any penal law. Therefore, the very act of issuance of lookout circular against the petitioner runs counter to law or counter to the guidelines issued by the Union of India from time to time.
The Apex Court holds that right to travel abroad is an important basic human right of great significance. Referring to the judgment of the Apex Court in the case of MRS.MANEKA GANDHI V. UNION OF INDIA [1978 (1) TMI 161 - SUPREME COURT] the Apex Court holds that refusal of such freedom to go abroad would contravene that genuine human right. Therefore the said right cannot be curtailed except in accordance with law.
Communication between the 1st and 2nd respondents, the petitioner cannot be prevented or detained for the purpose of questioning or even questioned at any airport or anywhere else on the pretext of exchange of information between the respondents, the Originating Agency and the Bureau of Immigration. Originating Agency and the Bureau of Immigration shall update on their database with regard to non-questioning of the petitioner, as is observed in the course of the order in compliance of the order.
The writ petition is disposed of with the above observations reserving liberty in the petitioner to knock at the doors of this Court in the event of any violation of this order. The writ petition is disposed of with the above observations reserving liberty in the petitioner to knock at the doors of this Court in the event of any violation of this order.
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2023 (2) TMI 1137
FCRA registration - mandation of the opening of an “FCRA bank account” with the State Bank of India - HELD THAT:- The present case would be covered by the order dated 16th January, 2023 passed by this Court in WNS Cares Foundation & Anr., v. Union of India [2023 (1) TMI 944 - DELHI HIGH COURT]
Respondent shall examine the said order and revert with the instructions, inasmuch as on 31st March, 2020, the SBI account, Sansad Marg, New Delhi could not have been opened due to the fact that the amendment in the Act came only in September, 2020.
Delay by the Petitioner in opening the bank account in SBI, Sansad Marg, New Delhi between July and October, 2020 is concerned, the penalty would be payable by the Petitioner.
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