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2016 (4) TMI 615 - HC - FEMAIssue of grant or revocation of grant of licence - Held that:- The licence to import was vitally connected with the shareholding of Kamal Kr. Datta and the percentage shareholding of his brother Sajal Datta. If the number of shares issued to Kamal increased on the basis of importation of those items, the percentage shareholding of Sajal was likely to fall. Therefore, both the company and its principal shareholders Kamal and Sajal had an interest in the grant of the licence or revocation of it, by the Reserve Bank of India. As far as the decision Life Insurance Corporation of India v. Escorts Ltd. [1985 (12) TMI 289 - SUPREME COURT OF INDIA ] and others is concerned, none doubts the authority of the Reserve Bank of India to grant the licence. But it should be remembered that the Reserve Bank of India, like other creatures of the Constitution and the Statutes is amenable to a writ of mandamus commanding it to do its duty. In the two previous writ applications orders were passed by this court directing the Reserve Bank of India to consider the issue of grant or revocation of grant of licence upon hearing Kamal and Sajal. Therefore, both the brothers had the right to approach the court complaining of failure on the part of the Reserve Bank of India to discharge this duty, by refusing to pass an order or by passing a wrong order. Applicability of res judicata - Held that:- The shares had been allotted to Kamal subject to the outcome of the writ. No, doubt, the Hon’ble Judge had expressed his utter disgust at Kamal in preferring the writ applications to nullify the allotment of shares in favour of Kamal but nowhere it confirmed the said allotments. It certainly held oppression of Kamal by Sajal and set aside the order of this High Court in the Company Law Board appeal dated 31st March, 2005 and also all resolutions of the board from 19th April, 1995 onwards. It reversed the decision of the Board of Directors alloting additional shares of ₹ 40 lakhs and so on. But not even for a moment did the court even make any comment with regard to the 30,55,329 equity shares issued to Kamal provisionally pending the writ. The passing observation of the Court is not even obiter dicta. Therefore, the point of res judicata raised by Mr. Kapur also fails Neither adjudication of penalty nor criminal prosecution can be undertaken as the period of two years from the date of commencement of the 1999 Act has long elapsed. Either a civil proceeding for penalty had to be started by issuance of a show cause notice or cognizance of the offence should have been taken by a criminal court within two years of commencement of the Act, 1999, under Section 49 of FEMA, 1999. Since it came into effect on 1st June, 2000 any action should have been taken by 31st May, 2002. The preservation of old rights and liabilities under the FERA, 1973 was restricted for this period and to this extent only. At this point of time, even if it is assumed that the importation was wrongful, no action can be taken, by operation of law. If a new statute after repeal of an Act does not contemplate any action in relation a past illegal act under the repealed statute, then the new statute has the effect of legitimising that illegality. Lastly, the importation was made more than 20 years ago. These capital goods have spent their life. Their value, now after depreciation is nil. At the time of their importation their declared value was ₹ 3,05,53,290/-. Against this value, shares were allotted to Kamal. Even if Sajal now succeeds, the equipments, cannot be returned to Kamal. The monetary value has to be refunded with interest from the other assets of the Company. That is plainly not permissible or feasible. W.P. fails
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