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FEMA - Case Laws
Showing 1 to 7 of 7 Records
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2017 (8) TMI 1723
Violation of Section 50 of the Foreign Exchange Regulation Act - Condition of pre-deposit of 10% of the penalty amount imposed for hearing of the appeal - HELD THAT:- We are not opining finally on the merit of the controversy as the issue is pending before the Tribunal. There is prima facie, merit in the case set up by the petitioner. There is a certificate produced from the Chartered Accountants of the writ petition certifying that the petitioner had never been the director of the company, namely, M/s Sachdeva & Sons Industries (P) Limited.
Petitioner was a director in M/s Sachdeva & Sons Rice Mills Limited, a separate legal entity, which was a partner in firm M/s Sachdeva & Sons Industries. On dissolution of M/s Sachdeva & Sons Industries, partnership firm on 5.5.1997, M/s Sachdeva & Sons Industries (P) Limited, came into existence, which took over the business of M/s Sachdeva & Sons Industries, but the petitioner was not inducted as director in the newly incorporated company. There is nothing on record to suggest otherwise. Once, prima facie, on the basis of material produced on record before this Court, it is found that the petitioner was not the director in the company, namely, M/s Sachdeva & Sons Industries (P) Limited, directing her to deposit part of penalty as precondition for hearing of her appeal on merits will certainly cause undue hardship to her. Hence, in our view, the condition of pre-deposit of 10% of the penalty amount imposed on her for hearing of the appeal filed by her and pending before the Tribunal deserves to be set aside.
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2017 (8) TMI 1307
Detention orders - Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (“COFEPOSA Act”) against the husband of the petitioner - Held that:- No ground to interfere with the impugned order oh HC [2017 (7) TMI 73 - DELHI HIGH COURT]. SLP dismised.
HC has held that as discussed the role and position of the detenue in the smuggling ring. The detenue was not a mere carrier and was in-charge of the Delhi operations of the racket as the kingpin Sh.Narendra Kumar Jain was based in Guwahati. It is clear that the activities of the detenue were of a serious nature and perpetrated with a great deal of expertise and coordination. The activities were of a massive scale and had been continuing for about two years. Resort to the law of preventive detention was justified.
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2017 (8) TMI 1016
Provision of Section 78 of the Foreign Exchange Regulation Act, 1973 and Section 44 of the Act applicability - Held that:- The petitioner who had come to India from foreign country, wanted that their NRI Account/FCNR Account may be continued in the same status. It was a kind of privilege claimed. Such status could be accorded only within the permissible parameters and in accordance with law by the Reserve Bank of India. It is difficult to conceive that the petitioners' claim to maintain status of FCNR Account could be asserted as enforceable right. It was only a kind of benefit offered to such class of persons. The petitioners cannot enjoy such benefit when they did not comply with the conditions.
For all the aforesaid reasons and grounds, the petition is bereft of merits. No relief is liable to be granted to the petitioner. Therefore, the petition is dismissed with cost of ₹ 20,000/- which shall be deposited by the petitioner with Gujarat High Court Legal Aid Committee on or before 31st August, 2017 and the receipt shall be produced with the Registry. Rule stands discharged.
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2017 (8) TMI 756
Forfeiting the properties as order passed under section 7 of the SAFEMA, 1976 - purview of the term “associate” / "relative" - connection with alleged illegal activities of the detenu - Held that:- The only activities that have been stated in this regard are that the appellant assisted AP-1 to assume the name of Sanjay Srinath Rana and to obtain documents like Ration Card and Passport in the assumed name and that the detenu resided in the residence of the appellant through November, 2004 to April, 2005. We are of the view that the said activities by themselves would not bring the appellant within the purview of the term “associate” on the basis that she was managing the affairs of or keeping the accounts of AP-1 The explanation of the appellant in this regard is that certain documents had been given by her to AP-1/detenu to help her in obtaining the passport for her blind son Nishant Rana, which was misused by him to obtain a passport for himself in an assumed name using the same set of documents.
There is also no evidence whatsoever that may indicate that the appellant was involved in the alleged illegal activities of the detenu/AP-1 in any manner whatsoever. The period of stay of the detenu at the appellant”s premises is also from November, 2004 to April, 2005 whereas the alleged illegal activity of AP-1 was of a later period viz. October, 2005. It is also observed that the impugned order is totally silent as to under which clause of the definition of associate, the appellants case is covered. We therefore find that the finding of the lower authority that the appellant would be covered within the term “associate” as defined in the Act is unsustainable.
We find that the appellant cannot be considered as the wife of the detenu/AP-1 and hence not covered under the term “relative” as defined in the Act. She is also not covered within the definition of the term “associate” of detenu/AP-1 as defined under the Act. Consequently, she does not qualify as a person covered by the provisions of SAFEMA and accordingly the provisions of SAFEMA are not applicable to her. In conclusion, we find that the impugned order is unsustainable in law.
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2017 (8) TMI 671
Illegally acquired property within the meaning of Section 3(1)(c) of SAFEMA - whether tenancy of a property, ownership of which is acquired by a person to whom the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) applies, will be treated as “illegally acquired property” within the meaning of Section 3(1)(c) of SAFEMA and can be subjected to forfeiture under the provisions thereof? - Held that:- In the present case, it is undisputed that only adjudication which has taken place by the competent authority is that the property was owned by the person to whom the Act applied i.e. against whom the order of detention had been confirmed. The rights of the appellants, who claim to be bona fide tenants even prior to purchase of the property by the person to whom the Act applied, have not been adjudicated upon on the assumption that their rights will stand automatically terminated. In view of above, we are of the view that rights of a bona fide tenant will not stand automatically terminated by forfeiture of property and vesting thereof in the Central Government. Such forfeiture will extinguish the rights of the person to whom the Act applies in the present case Krishna Budha Gawde, who was the owner of the property in question or his relative or associate having nexus with him in relation to the said property. However, we do not express any opinion whether the appellants are the bona fide tenants and had no nexus with the acquisition of the property by the person to whom the Act applied as claimed by them. This question needs to be determined independently by the competent authority as defined in Section 3(b) of the Act.
Accordingly, we allow this appeal, set aside the order of the High Court and remit the matter to the competent authority for passing an appropriate order in accordance with law. The parties are directed to appear before the competent authority for further proceedings on 9th October, 2017.
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2017 (8) TMI 574
Disobedience to respond to the summons issued under Section 40(3) FERA - offence under Section 56 of FERA, 1973 - Held that:- This point has come up for consideration before this Court in Enforcement Director and Anr. v. M.Samba Siva Rao and Ors. (2000 (5) TMI 586 - SUPREME COURT OF INDIA). Due to the divergence of opinion of the High Courts of Kerala, Madras on one hand and High Court of Andhra Pradesh on the other, a three Judge Bench of this Court considered the matter and held as clauses (i) and (ii) of Section 56(1) are material for deciding the quantum of punishment and further, there is no reason why the expression “in any other case” in Section 56(1)(ii) should be given any restrictive meaning to the effect that it must be in relation to the money value involved, as has been done by the Kerala High Court. The summons issued under Section 40, if not obeyed, must be held to be a contravention of the provisions of the Act and at any rate, a contravention of a direction issued under the Act, and therefore, such contravention would squarely come within the ambit of Section 56 of the Act.
The question of service under Section 40(3) of FERA, 1973 not being effected on the Respondent is irrelevant at this point of time as he was represented by an Advocate before the Trial Court. It appears that the Respondent is not interested in these proceedings. In any event, the judgment of the High Court cannot be sustained as it is contrary to the law laid down by this Court in Enforcement Director and Anr. v. M. Samba Siva Rao and Ors. (supra).
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2017 (8) TMI 423
Alternative remedy of appeal - Guilty for contravention of the provisions of Section 3(c) of the Foreign Exchange Management Act, 1999 - Held that:- When the statutory alternative remedy of appeal is available, the High Court should not entertain an application under Article 226 of the Constitution of India. When a right or liability is created by the statute, the High Court must insist that before availing remedy under Article 226 of the Constitution of India, a person must exhaust the remedies available under the relevant statute. However, the same is subject to certain exceptions which do not attract the present case and do not call for interference to the facts of the instant case.
Writ petition is disposed of directing petitioner Nos.2 to 4, who are the legal representatives of deceased petitioner No.1, to file an appeal before the Special Director (Appeals) under Section 17 of FEMA and if such an appeal is filed within a period of forty five (45) days from today, the appellate Forum shall consider the question of limitation having regard to the provision of Section 14 of the Limitation Act, 1963 and also having regard to the fact that petitioner Nos.2 to 4 were bona fidely pursuing their case under Article 226 of the Constitution of India before this Court. Along with the appeal, petitioner Nos.2 to 4 shall also make an application seeking interim order which shall also be dealt with. If an application seeking interim order is filed along with the appeal, the authority shall dispose of the same within a period of six (6) to eight (8) weeks from the date of filing of the said application in accordance with law.
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