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2013 (8) TMI 511 - HC - FEMAStatus of the Petitioner - Whether the petitioner, who returned to India after six (6) years from Saudi Arabia, ought to have been granted the same facilities qua his bank accounts maintained with State bank of India (SBI), which are available to a Non-Resident Indian (NRI) - Held that - Under Regulation A.15 the NRE account of the petitioner had to be re-designated as Resident Account - accounts of NRIs should be redesignated as resident accounts immediately upon the return of the account holder to India if authorized dealer is satisfied that he has returned to India for taking up employment or carrying on a business or vocation for for any other purpose with the intention of residing in India Where account holder is only on a short visit to India, the account may continue to be treated as Non-resident (External) account even during his stay in this country The petitioner quite clearly indicated that, since he had returned to India, his status be changed to that of a Resident . In order to ascertain intention, what is required to be seen is the conduct of the person and the surrounding circumstances - it cannot be said that the respondents had not, correctly, concluded that the petitioner intended to stay in India for an uncertain period and thus, consequently, fell within the rigour of Section 2(p)(ii)(c) of FERA - Regulation A.15 of the Foreign Exchange Manual would be applicable to the petitioner.
Issues Involved:
1. Restoration of the writ petition. 2. Condonation of delay in filing the rejoinder. 3. Determination of the petitioner's residential status and its implications on his bank accounts. Detailed Analysis: 1. Restoration of the Writ Petition: The writ petition was initially admitted on 05.12.1995 but was dismissed due to the petitioner's non-appearance on 12.10.2006. It was restored on 28.05.2007 upon the petitioner's application. The petition was again dismissed in default on 23.04.2009 due to the petitioner's absence. An application for restoration was dismissed on 17.08.2009, but this order was set aside by the Division Bench, directing the writ petition to be heard on merits. The matter was dismissed again on 12.07.2012 due to non-representation by the petitioner. Finally, the counsels for the respondents gave their no objection to the writ petition being restored, leading to its restoration and setting down for hearing. 2. Condonation of Delay in Filing the Rejoinder: The petitioner filed CM No. 1437/2013 for condonation of a 76-day delay in filing the rejoinder. The application was allowed, and the rejoinder was taken on record. 3. Determination of the Petitioner's Residential Status: The core issue was whether the petitioner, who returned to India from Saudi Arabia on 26.01.1988, should be granted the same facilities for his bank accounts as a Non-Resident Indian (NRI). The petitioner argued that his return to India was exploratory and temporary, intending to explore job opportunities and possibly return overseas within 12 months. He claimed that wrongful conversion of his NRE account to a resident account resulted in loss of career opportunities and investments. Respondents' Arguments: - SBI contended that the petitioner had two accounts (NRE and NRO) and had authorized SBI to invest in shares and debentures under the Non-Resident Portfolio Investment Scheme. Upon learning of the petitioner's return to India, SBI advised re-designation of his NRE account to NRO account. - SBI argued that the petitioner availed benefits under the Transfer of Residence Scheme, indicating his intention to stay in India for an uncertain period. - The petitioner's letter to BASF (India) on 20.07.1988, requesting to change his status to "resident" and correspond directly with him, further indicated his intention to stay in India. Legal Provisions and Analysis: - Section 2(p)(ii)(c) of the Foreign Exchange Regulation Act (FERA) defines a "person resident in India" as someone who returns to India with an intention to stay for an uncertain period. - Regulation A.15 of the Exchange Control Manual mandates that NRE accounts be re-designated as resident accounts upon the account holder's return to India with the intention of residing. Court's Conclusion: The court concluded that the petitioner's own communications and conduct indicated his intention to stay in India for an uncertain period. Therefore, under Section 2(p)(ii)(c) of FERA and Regulation A.15 of the Exchange Control Manual, the petitioner's NRE account was rightly re-designated as a resident account. The judgment of the Supreme Court in K. Ramullan v. Commissioner of Income Tax was distinguished based on the facts of the present case. Final Judgment: The writ petition was dismissed, with no orders as to costs.
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