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TMI Blog2024 (8) TMI 1341X X X X Extracts X X X X X X X X Extracts X X X X ..... al Company - Systemically Important Non-Deposit taking company with the Reserve Bank of India (in short, 'RBI'). The appellant is engaged in the business of providing unsecured short-term loans to its customers/borrowers in India via its Digital Application based platform called the 'CashBean'. The appellant had 58 employees on the payroll and around 427 employees working on a third-party payroll basis. The CashBean application of the appellant had 60.3 million users, and 39.2 million registered customers, out of which only 3.75 million unique customers were selected after an assessment of creditworthiness for the loan. It is contended that it is because of the success of the CashBean application that the appellant has a high recovery rate of the loans disbursed and profitable operations. b. It is stated that the appellant had engaged a Hong Kong based Company, namely Hong Kong Fintango Limited for procurement of an IP licence and had entered into a Software Licence Agreement dated 1st October, 2019, with it for providing IP and Digital Lending Software Licence, that is, the CashBean App to the appellant for the Indian digital micro-lending market. c. The appellant further stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panies of the appellant. It is alleged that the appellant has, therefore, contravened Section 4 of the Foreign Exchange Management Act, 1999, (hereinafter referred to as "the FEMA") and an equivalent value of the property was liable to be seized from the appellant in India. The above seizure orders have been confirmed by the respondent no. 2 vide the Order dated 4th February, 2022. h. The appellant had challenged the order dated 4th February 2022 of the Competent Authority by way of the underlying writ petition. The said writ petition was dismissed by the impugned judgement dated 13th December, 2023. Hence the present appeal. 3. Ms. Vanita Bhargava, learned counsel for the appellant, pointed at the outset that despite the order dated 04th May, 2023 passed by the Supreme Court directing the learned Single Judge to hear the matter on merits, according to her, learned Single Judge had disposed of the said writ petition on the ground that the disputed questions of facts as arising in the petition could not be considered by a writ Court under Article 226 of the Constitution of India. 4. She submits that the Supreme Court had, in the order dated 04th May, 2023, taken note of the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to support her contentions, she has taken this Court through the order dated 04th May, 2023 of the Supreme Court as also various paragraphs of the impugned judgment. 7. She submits that grave prejudice has been caused to the appellant by virtue of the impugned judgment of the learned Single Judge inasmuch as, on the one hand, the appellant has withdrawn its statutory appeal challenging the seizure orders as also the order dated 04th February, 2022 passed by the Competent Authority filed before the Appellate Tribunal on the ground that the underlying writ petition was pending before the learned Single Judge of this Court, and on the other hand, the learned Single Judge has, without appreciating the tangible material placed alongwith the underlying writ petition, literally relegated the appellant to take its remedies before the Adjudicating Authority. On this basis, she submits that the petitioner has not only been deprived of a proper hearing on merits but also lost out an opportunity of a statutory appeal. 8. She submits that learned Single Judge in para 42 of the impugned order has observed that since substantial hearings have already taken place before the Adjudicating Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He vehemently opposes the submissions made by the appellant in respect of withdrawal of the appeal allegedly predicated on the statement of learned ASG. as noted in the order dated 24th August, 2022 in LPA No.487/2022. He submits that it was the counsel for the appellant himself who had chosen to withdraw the statutory appeal and made the relevant submissions in the underlying writ petition pending before the learned Single Judge. In order to support the said submissions, he invited the attention of this Court to the order dated 13th September, 2022. He states that it was categorically noted in the said order that the learned Senior Counsel appearing for the appellant/petitioner chose not to pursue their appeal pending before the Tribunal subject to the rights being reserved to agitate all questions in the pending writ petition. On this basis, he states that the learned Single Judge had considered all the arguments of the parties and passed the impugned judgment. He states that the scope of proceedings under Article 226 of the Constitution of India are restrictive and cannot be akin to an appellate proceeding. He prays that the present appeal be dismissed. 13. We have heard the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the backdrop, as Mr. Ganesh would contend, of the fact that pleadings have been duly exchanged on the instant writ petition and the Division Bench in the LPA No. 487/2022 has framed directions for the disposal of the writ petition itself. In view of the aforesaid, let the petitioner, if so chosen and advised, withdraw the appeal which is pending before the Appellate Tribunal subject to rights being reserved to pursue and agitate all questions in the instant writ petition. List again on 18.10.2022 in the category of "End of Board"." 16. It is also clear from the record that the appellant had filed an application before the Appellate Tribunal seeking withdrawal of the appeal on the ground that the underlying writ petition is pending adjudication. It is observed from the order dated 12th October, 2022 passed by the Appellate Tribunal that the appeal was permitted to be withdrawn with a Caveat that the same is to the risk of the appellant. It is also clear from the said order that the Tribunal was clear in its opinion that the jurisdiction to adjudicate upon such dispute was squarely with the Tribunal. Yet, on the insistence of the appellant, the appeal before the Tribunal was pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter is concerned, we find that the contention is contrary to the observations made by the learned Single Judge in the impugned judgment. A perusal of the impugned judgment clearly indicates that the learned Single Judge had meticulously examined the facts, considered the submissions of the parties and applied its mind to the facts and rendered his findings thereon. We also find that the learned Single Judge has considered various provisions of the Act and after having examined the facts as submitted and the law as laid down by the Supreme Court in Radha Krishan Industries vs. State of Himachal Pradesh and Ors., 2021 6 SCC 771, concluded that there was enough tangible material before the Seizing Officer as also the Competent Authority to confirm such seizure. Learned Single Judge also took into account that the respondents are basing their allegations on the ground that the huge amounts of foreign currency have been clandestinely transferred by the appellant, in the garb of licence fees and other charges, to the foreign entities which, in fact, were being held by the appellant itself in the bank accounts of such foreign companies and are related to the Opera Group. It is furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here* is a bona fide reason to doubt the burden lies on the respondent to prove that it is true transaction value in the course of international trade. There is no cogent evidence to show or demonstrate indeed the respondent participated in the transaction and the price is the sole consideration. For instance, the respondent has imported and utilized cash bean app free of cost on trial basis from 1st January 2019 to 1st October 2019 supplied by the group companies. The respondent during the period disbursed the loan amount Rs. 1470.63 crores. The Hongkong Fintango company was established on 04.09.2019 and the app had been developed much before its birth. The respondent company failed to show or place on record any evidence when, at what point of time Hongkong Fintango acquired the licence of the app proof of its purchase, what price and proof of its payment. It is shown that the respondent company purchased the app on 01.10.2019 from Hongkong Fintango. It is unbelievable that such a costly app was provided free of cost for nearly 9 months usage and itself shows that app value is overinvoiced. The above facts clinchingly proves that the cashbean app is already in possession of benef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4th February, 2022 of the Competent Authority under the FEMA and find that the same is based on tangible material which was analysed and consequently the seizure orders were confirmed. At that stage a Constitutional Court is not to interdict the investigations or probe the evidentiary value of such material gathered. It is trite that Courts exercising powers of judicial review would consider as to whether there was objective and tangible material available with the authorities before any action of effecting seizure was contemplated. A Court exercising writ jurisdiction is not sitting as an appellate court or authority. Thus, we are satisfied that the learned single Judge has exercised the jurisdiction vested, correctly. 22. We have also perused the grounds raised by the appellant in the present appeal and find that the appellant has urged many facts which cannot be evaluated or considered by a writ Court since the same would require evidence and the evaluation thereof. Moreover, the issue as to what constitutes "capital account transaction" and "current account transaction" and as to how the appellant has transacted its business and by what mode etc. and whether the appellant is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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