TMI Blog2020 (8) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... rim directions as stated in the order are reiterated. Pass the following directions:- The respondent shall permit the petitioner to transmit the sum of 54.99 million USD forthwith before 31.07.2020 as has been prayed for. This permission is however subject to the following: (i) The petitioner shall furnish an undertaking from the Board of Directors that if for some reason this court passes a direction to the petitioner to deposit the said remitted amount amounting to 55 million USD, the petitioner shall forthwith deposit the same in court. (ii)The petitioner shall give an undertaking that it has unencumbered assets worth 60 million USD or above and that the petitioner shall not sell, alienate or transfer or encumber these assets without prior permission of this Court. - W.P.(C) 3601/2020 - - - Dated:- 24-7-2020 - HON'BLE MR. JUSTICE JAYANT NATH Petitioner Through: Mr. Parag P. Tripathi, Sr. Adv. and Mr. Gopal Jain, Sr. Adv. with Mr. Saket Sikri, Mr. Vijay Aggarwal, Mr. Mahesh Agarwal, Mr. Naman Joshi, Mr. Manish Kharbanda, Ms. Priya Singh, Mr. Shailesh Pandey, Mr. Deepanshu Choithani, Mr. Gurpreet Parwanda, Mr. Mudit Jain, Mr. Tarun Singla and Ms. Meera Men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders by restructuring agreement dated 07.02.2018. Under the said agreement a sum of USD 153 million was to be paid on or before 31.03.2020. Accordingly, the petitioner made an application on 03.09.2019 to respondent through its authorized agent for remittance of USD 300 million to JSPML to fulfil its debt obligations. However, the application of the petitioner was rejected by the respondent by e-mail dated 30.12.2019 on the ground that reservations expressed by the Enforcement Directorate . 4. As there was delay on the part of the respondent, the remittance payable on 31.03.2020 was re-negotiated with the lenders, the said amount payable was renegotiated and an agreement was signed on 29.05.2020. It is pleaded that a sum of ₹ 75 million US dollars has to be remitted by 24.06.2020 and another 15 million dollars has to be remitted by 30.06.2020. 5. I have heard learned counsel for the parties. Learned senior counsel for the petitioner has strongly urged that the entire transaction, namely, the loans of 279.5 million dollars and the corporate guarantee of USD 865 million have been given by the petitioner after taking due permission from RBI. It is also urged that sinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or equivalent rupee investments in case of Nepal and Bhutan (b) capitalisation of export proceeds and other dues and entitlements as mentioned in Regulation 11; (c) fifty per cent of the value of guarantees issued by the Indian party to or on behalf of the joint venture company or wholly owned subsidiary. (d) investment in agricultural operations through overseas offices or directly (e) External Commercial Borrowing in conformity with other parameters of the ECB guidelines. Notwithstanding anything contained in these Regulations investment in Pakistan shall not be permitted. (ii) The direct investment is made in an overseas JV or WOS engaged in a bonafide business activity. (iii) The Indian Party is not on the Reserve Bank s Exporters caution list /list of defaulters to the banking system circulated by the Reserve Bank or under investigation by any investigation /enforcement agency or regulatory body. (iv) The Indian party has submitted up to date returns in form APR in respect of all its overseas investments; .. Similarly, Regulation 9 reads as follows: 9. Approval of the Reserve Bank in certain cases (1) An Indian Party, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansmit the sum of 75 million USD forthwith, the respondent will also permit the petitioner to transmit another sum of 15 million USD by 30.06.2020 as has been prayed for. This permission is however subject to the following: (i) The petitioner shall furnish an undertaking from the Board of Directors that if for some reason this court passes a direction to the petitioner to deposit the said remitted amount amounting to 90 million USD, the petitioner shall forthwith deposit the same in court. (ii) The petitioner shall give an undertaking that it has unencumbered assets worth 100 million USD or above and that the petitioner shall not sell, alienate or transfer or encumber these assets till the next date of hearing. 14. Issue notice. Learned counsel for the respondent/RBI Mr. Atul Sharma accepts notice. Counter affidavit be filed within three weeks, as sought for. Rejoinder, thereto, if any, be filed within one week. 15. List on 20.07.2020. 3. Learned counsel for the petitioner has reiterated the submissions which were made when order dated 19.06.2020 was passed. It is pleaded that factually the present application raises the same issues and contentions that wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e investment and disinvestment in its WOS JSPML. Investigation against the Petitioner regarding unrealized export proceeds. Investigation in this case was initiated on the basis of communication received from SIT which in turn was received from RBI. Unrealised export proceeds for an amount of ₹ 751,48,99,454/- of the Petitioner for period prior to March 2014 and March 2014 to March 2015 were reported in the said communication. In this regard clarification was sought from the concerned AD Bank, which has reported Nil pendency regarding aforesaid amount. However, one transaction of USD 9.03 Million of the Petitioner with M/s Ircon International Ltd, Bangladesh is still under investigation for suspected contraventions of FEMA. Enquiry under the provisions of FEMA in respect of purchase and sale of 4 vessels registered in the names of their subsidiaries in Marshall Island during the year 2012 to 2017. For the aforesaid procurement of vessels deal, these entities have entered into various Joint Ventures by acquiring/transferring shares from time to time during the period. The details of these entities associated in the process amongst others include JSPML. Investiga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestigation/enquiries under FEMA and under PMLA that the objection has been withheld. 6. I may look at the relevant Regulations issued by RBI by Notification No. FEMA 120/RB-2004 dated 17.07.2004 which has been reproduced above in the order dated 19.06.2020. It is clear from a reading of Clause 6 [explanation] (iii) that an Indian party under investigation by an investigating agency/enforcement agency or Regulatory Body, cannot make direct investment in joint venture or wholly owned subsidiary outside India. Clause 9 of the Regulation stipulates that where an Indian party does not satisfy the eligibility norms under Regulation 6 they may apply to RBI for approval. It would follow that where investigations are going on against the party as stated the party has to for the purpose of making direct investment in a joint venture or a wholly owned subsidiary approach RBI for permission. 7. In this context now reference may be had to the impugned order issued by respondent/RBI declining permission to the petitioner on 30.12.2019 which reads as follows:- IP, Jindal Steel and Power Ltd-WOS, Jindal Steel and Power (Mauritius) Ltd. (UIN: NDWAZ20070442): Request for undertaking outw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o clarity on record as to what has transpired after the last permission was granted on 10.12.2018 for the respondent to take a stand to deny the permission other than communications received from Enforcement Directorate on 14.08.2019 and 03.12.2019. I may have a look at these communications. A perusal of the communicated dated 14.08.2019 shows that it is a mere request for certain information/document. Reference may also be had to the communication dated 3.12.2019. Relevant portion of which reads as follows:- 2. In this regard, I have been directed to inform you that the Directorate is conducting investigations against M/s Jindal Steel Power Ltd (India) under Foreign Exchange Management Act, 1999 (FEMA) in 04 cases. Further, the Directorate is also conducting investigations under Prevention of Money Laundering Act, 2002 (PMLA)in 03 cases against M/s Jindal Steel Power Ltd (India) and its related entities/persons. 3. Brief details of pending FEMA and PMLA cases are enclosed as Annexure-'A' and Annexure-'B' respectively. 4. In view of the above, at this stage this Directorate has objections to the subject proposal of M/s Jindal Steel Power Ltd (In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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