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2009 (8) TMI 1202 - DELHI HIGH COURT

2009 (8) TMI 1202 - DELHI HIGH COURT - TMI - Crl. App.No. 806/2007 - Dated:- 4-8-2009 - MOOL CHAND GARG, J Present:- Mr. Tarun Gulati, Mr. Neil Hildreth, Mr. Kunal Kishore, Advocates for the appellants Mr. Vineet Malhotra, Mr. Sanjay Kr., Mr.K. Singhal, Advocates for respondent. Mr. R.V. Rawal, Asstt. Director of E.D., Mr. Dinesh, Mr. J.P. Kuzur, A.E.O. of E.D. 1. This order shall dispose of an appeal filed by the appellants under Section 35 of the Foreign Exchange Management Act, 1999 (hereinaf .....

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e and thereby violated the provisions of Section 8(1) r/w Section 52 of the Foreign Exchange Regulation Act (hereinafter referred to as the FERA ). 2. It is the case of the appellants that the order passed by the Tribunal was bad in law and is liable to be set aside on three counts; i.e. (i) The Show Cause Notice issued to the appellant by the Enforcement Directorate was without any cause of action and without application of mind, which fact stands admitted by the Directorate in the order dated .....

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ration and was not a company which needed prior permission of RBI for investing in the shares of a NRI company as an exception to the general rule regarding investment of money through the Directorate. 3. Respondents have not filed any counter to the petition despite opportunities granted. However, the counsel appearing for the respondents has refuted all the points raised by the appellants. 4. I have given my thoughtful consideration to the rival submissions. At the outset, I may take note of t .....

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d of oil exploration. The basis for such an assumption arises out of the main objects of the company as envisaged in the Memorandum of Association of the company, as well as their application in the Ministry for approval of FIPB to transfer of 10,000/- shares of ₹ 10 each held by the notice company s initial subscribers, to M/s. M.I. Holdings (BVI), a company incorporated in British Virgin Islands which had subscribed to 5,32,705 equity shares in the Indian company. The original applicatio .....

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of FDI through automatic route and observed that the main objects of the company contained activities requiring prior Govt. approval, in compliance of the provisions of Regulation 9 of Schedule I to FEMA 20/RB dated 03.05.2000. The notices have been, from the very beginning of the investigations, pleading that they are not in the business of oil exploration and their business is limited to the manufacturing of separators, which are used in the Oil industry, Food products and pharmaceuticals. Th .....

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A to Regulation 2 of Schedule I of FEMA 20/2002 RB dated 03.05.2000 reads - 4. Petroleum including exploration/ refinery/ marketing. It does not prohibit non-residents from investing in a company engaged in manufacturing, trading, etc. of equipments used in oil exploration or providing services and consultancy in the field of oil exploration. To sum up, the charge against the notices that they did not take prior permission of the Govt. with respect to the FDI in the equity shares of the Noticee .....

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the provisions of FERA and not under FEMA beyond the limitation prescribed for filing of an appeal and that too through a Deputy Legal Advisor who is not an authorized person. In this regard it is pointed out that the Tribunal itself in a number of orders has been reiterating this position. One such order has been brought to my notice delivered in the case of Director, Enforcement Directorate Vs. Starlite Lighting Ltd. Revision petition No. 298/2003 dated 12.11.2008. In this order in a similar .....

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tion. Further, this defect has not been removed nor any efforts are made to remove this defect. Therefore, we agree with the argument on behalf of the respondents that this revision petition is not maintainable and is required to be dismissed. In the same breath, we can also say that invoking suo motto powers of revision is totally separate jurisdiction which cannot be mixed up when revisional powers are invoked by any revisionist. In the present facts situation the revisional powers are invoked .....

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against the Deputy Legal Advisors/ Assistant Legal Advisors and it is only on 23.02.2009 they have got an order issued through an Under Secretary to the Govt. of India regarding authorization in favour of the Deputy Legal Advisor of the Directorate of Enforcement which order reads as under: Government of India Ministry of Finance Department of Revenue ORDER 23rd February, 2009 Subject: Authorization in favour of the Deputy Legal advisers of the Directorate of Enforcement for filing the Revision .....

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for filing the Revision Petitions/ Review Applications etc. on behalf of the Directorate of Enforcement before the erstwhile Foreign Exchange Regulation Appellate Board (FERA Board) now the Appellate Tribunal for Foreign Exchange in cases arising from the Foreign Exchange Regulation Act, 1973 (46 of 1973) and the Foreign Exchange Management Act, 1999 (42 of 1999). (S.G.P. Verghese) Under Secretary to the Govt. of India 8. It is apparent that this order has been passed after 4 years of the filin .....

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ereunder: (A) The MAIN OBJECTS TO BE PURSUED BY THE COMPANY ON ITS INCORPORATION ARE: i. To carry on the business of manufacturing, trading, import and export of different chemicals. ii. To carry on the business of manufacturing, trading, import and export of all types of equipments used in the business of oil exploration. iii. To carry on the business of providing services and consultancy in relation to the exploration and drilling of mineral oils in India and abroad. 10. From a reading of the .....

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either illegal or contrary to the FEMA and that is why the Enforcement Directorate found that the appellant had not committed any offence and exonerated them from the show cause notice. 11. On the point of limitation the appellants have also relied upon the judgment of the Hon ble Supreme Court delivered in the case of State of Punjab and Ors. Vs. Bhatinda District Cooperative Milk Producers Union Ltd. 2007 11 SCC 363 wherein it has been held: In Section 21 of the Act although no period of limit .....

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er 45 days the revision if at all was to be filed should have been filed within the same period of filing the revision after 1 and a half year could not be justified. 13. Respondents have relied on another judgment to rebut the contentions made by the appellants on the point of limitation delivered by this Court in the case of Union of India Vs. Prem Khanna 125 (2005) DLT 249 wherein it has been held: 8. So far as the submission of the respondent that the proceedings before the Appellate Tribuna .....

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ent of Supreme Court (supra) this judgment is of no consequence. 15. On the point of authorization also the appellants have relied upon a judgment delivered by the Hon ble Supreme Court in the case of Mohtesham Mohd. Ismail Vs. Special Director, Enforcement Directorate 2007 8 SCC 254 where it has been held: 13. An adjudicating authority exercises a quasi-judicial power and discharges judicial functions. When its order had been set aside by the Board, ordinarily in absence of any power to prefer .....

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