TMI Blog2010 (12) TMI 1050X X X X Extracts X X X X X X X X Extracts X X X X ..... CRL. APPEAL NOS. 337 AND 338 OF 2009 - - - Dated:- 15-12-2010 - A. K. PATHAK, J. Sumit Bansal, Ajay Monga and Ateev Mathur for the Appellant. K. Singhal and Siddharth Mittal for the Respondent. JUDGMENT 1. Both the above noted appeals are disposed of together being in similar facts, inasmuch as, the law point involved therein is also same. 2. These appeals are directed against the order passed by the Appellate Tribunal for Foreign Exchange ( the Tribunal ) whereby orders passed by the Adjudicating Authority imposing penalties on the appellant for contravention of provisions of sections 6(4), 6(5), 73(3), 49 and 9(1)( e ) of Foreign Exchange Regulations Act, 1973 ( FERA ) read with section 29B.8( c ) of Exchange Control Manual, 1987 has been upheld. Crl. Appeal No. 337/2009 3. Brief facts involved in this appeal are that one Mr. Anand Prakash Tripathi had been maintaining a NRE account No. 320169601 with the American Express Bank Ltd. ( AEBL ). In the said NRE account, certain deposits were made between 22-2-1993 and 11-10-1993. Deposits in the said account were made by Umesh Mandiratta and Narender Kumar, mandatees of the account holder Anand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly carry out such transactions of deposit of foreign exchange. Any rational person would have doubted or became suspicious when foreign exchange in hard currency form were deposited in the account that also frequently. It would have been a case in favour of the noticee bank had they enquired with the persons including the mandate holders so as to the source of such foreign exchange deposited by them. It is not correct that just on the strength of a mandate, any person can deposit foreign currency procured from any source and deposit in the bank account of another person in absentia to circumvent the foreign exchange laws and the noticee bank without raising an eyebrow go on accepting the foreign exchange. The argument of the bank would have some merits in such a situation where the account holder himself came and deposited the foreign currency. In such case, the noticee bank would have been justified in not insisting on currency declaration form at the time of accepting the deposits and not enquiring the source of the foreign currencies. A mandate holder, to my mind, does not enjoy such a privilege." [Emphasis supplied] Crl. Appeal No. 338/2009 6. Facts involved in this appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof are given as under:- "( v )I impose personal penalty of Rs. 5,00,000 (Rupees Five Lakhs only) on the Manager-in-Charge of American Express Bank, noticee No. 3 under section 50 of the FERA, 1973 for contravention of provisions of section 6(4) and 6(5) read with sections 73(3) and 49 of FERA, 1973 and para 29 B.8( c ) of ECM, 1987 respectively in terms of section 68 of the FERA, 1973. ( vi )I impose personal penalty of Rs. 5,00,000 (Rupees Five Lakhs only) on the Manager-in-Charge of American Express Bank, noticee No. 3 under section 50 of the FERA, 1973 for contravention of provisions of section 9(1) of FERA, 1973 and in terms of section 68 of the FERA, 1973. ( vii )I impose personal penalty of Rs. 5,00,000 (Rupees Five Lakhs only) on American Express Bank, noticee No. 4 under section 50 of the FERA, 1973 for contravention of provisions of section 6(4) and 6(5) read with sections 73(3) and 49 of FERA, 1973 and para 29B.8(C) of ECM, 1987. ( viii )I impose personal penalty of Rs. 5,00,000 (Rupees Five Lakhs only) on American Express Bank, noticee No. 4 under section 50 of the FERA, 1973 for contravention of provisions of section 9(1)( e ) of FERA, 1973 respectively. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... number of writ petitions in this Court, thereby challenging the validity and legality of such show-cause notices. In Citi Bank v. Union of India [W.P.(C) No. 1211 (Delhi) of 2005, dated 19-4-2007] held that prior to 31-7-1995, there was no clear-cut stipulation that deposits/credits could not be made in the NRE accounts of NRI account holders in the absence of the account holders themselves. Review petition filed by the Union of India in the aforesaid matter was also dismissed on 16-1-2009. Union of India then preferred an Union of India v. Citi Bank [LPA No. 117 (Delhi) of 2009], before the Division Bench of this Court, there by, challenging the order passed by the Single Judge. This LPA was, however, dismissed on 26-3-2009. Division Bench considered the show-cause notice and circular/instructions issued by the Union of India on 31-7-1995 in respect of deposits of foreign exchange in NRE accounts, as also the provisions of Exchange Control Manual and held that prior to 31-7-1995, there had been no requirement clearly pointing out that deposits in NRI accounts could not be made by a person other than the NRI account holder themselves. 11. Similar issue was posed for an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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