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FEMA - Case Laws
Showing 141 to 160 of 1378 Records
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2022 (8) TMI 1107
Violation of the provisions of the FERA - proceedings to be initiated within a particular period provided under the Statute - As submitted authorized dealer, before permitting the deposits of foreign currency, was required to satisfy himself that the foreign currency is deposited by the NRI Account Holder himself; that the account holder is on a temporary visit to India; and that the account holder is still normally resident abroad - whether High Court has grossly erred in holding that it was for the first time that the stipulation regarding the deposits of foreign currency by the account holder himself, was expressly provided for by Circular dated 31st July 1995 and therefore the Circular dated 31st July 1995 could not have had a retrospective operation? -
HELD THAT:- We are of the view that the show causes notices issued in the year 2002, i.e., after a period of almost one decade from the date of the alleged transactions of 1992-1993, were not tenable in law.
It is a settled proposition of law that when the proceedings are required to be initiated within a particular period provided under the Statute, the same are required to be initiated within the said period. However, where no such period has been provided in the Statute, the authorities are required to initiate the said proceeding within a reasonable period. No doubt that what would be a reasonable period would depend upon the facts and circumstances of each case.
Admittedly, in the present cases, the alleged transactions had taken place during the financial years 1992 and 1993. Show cause notices for the said transactions were issued in the year 2002 and that too just before the sunset period of FERA was to expire, i.e., on 1st June 2002. We are therefore of the considered view that show cause notices and the proceedings continued thereunder are liable to be set aside on this short ground.
As per provisions of Rules 2, 3 and 4 of the said Rules every Banking Company to preserve records stated in Rule 2 for five years and eight years for records mentioned in Rule 3 respectively. No doubt that under Rule 4 of the said Rules, the RBI, having regard to the factors specified in subsection (1) of Section 35A, by an order in writing, is empowered to direct any banking company to preserve any of the books, accounts or other documents, etc. for a period longer than the period specified under the said Rules.
Undisputedly, no such order has been placed on record which required the respondents-Banks to preserve records concerning the transactions in question for a period longer than eight years.It could thus be seen that even under the said Rules, the Banks are required to preserve the record for five years and eight years respectively. On this ground also, permitting the show cause notices and the proceedings continued thereunder of the transactions which have taken place much prior to eight years would be unfair and unreasonable.
We find no error in the impugned judgments of the learned Single Judge as well as the Division Bench of the High Court of Delhi. The Civil Appeals as also the Criminal Appeals are therefore dismissed.
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2022 (8) TMI 151
Stay of recovery - whether any hearing can take place before the Tribunal qua the subject matters to be listed before the Tribunal even if these four members are appointed in the absence of the Chairman of the Tribunal. Learned ASG seeks some time to obtain instructions? - HELD THAT:- We had earlier also posed a query to learned ASG and pose it again as to why we should not pass an order directing stay of recovery proceedings in all matters before the Tribunal as the judicial remedy is before the Tribunal and if the Tribunal is not being constituted to hear the matter, which is resulting in unnecessary expenses to the litigants to approach the High Court and burden on the High Court to deal with those matters.
List on 02.08.2022.
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2022 (8) TMI 64
Offence under FEMA - cash money which was seized from the residence the husband of the petitioner No.1 and two other petitioners, who are the daughters, belonged to the petitioners - noticees referred therein were asked to give response to the same within 30 days from the date of receipt of the said notice as to why adjudication proceedings as contemplated under Section 16 read with Section 13 of FEMA, 1999 should not be held against them - HELD THAT:- Writ Court in exercise of its Constitutional writ jurisdiction under Article 226 of the Constitution should not investigate the ownership of such disputed amount of cash money seized from the possession of one of the noticees at Kolkata in course of search and seizure in question while petitioners are claiming the same as their own money.
It is well settled principle of law that High Court in exercise of its Constitutional writ jurisdiction under Article 226 of the Constitution of India should not investigate and adjudicate the title or ownership of any disputed immovable or movable properties and declare the ownership of the same in favour of one party.
Considering the facts and circumstances of the case and the submission of the parties and in view of the fact that this Writ Petition filed by the petitioners challenging the impugned show-cause notice and prayed for quashing of the same are by none of the noticees and noticees have not challenged the same which has been issued by the Enforcement Authority at Jaipur in Rajasthan and none of the noticees have filed this Writ Petition challenging the impugned adjudication proceedings in question arising out of the impugned search and seizure proceedings out of which impugned adjudication proceedings are pending at Chandigarh and in view of the fact that the highly disputed question of ownership of the seized cash amount in question is involved which is a part of the said pending adjudication proceeding at Chandigarh which the petitioners want release by the order of this writ court, I am not inclined to entertain this writ petition.
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2022 (7) TMI 983
Offence under FEMA - Levy of penalty post compounding orders - Power to compound contravention - HELD THAT:- The compounding order is passed on 20.11.2008 and the adjudication order levying penalty is passed on 21.11.2008, i.e., one day after the passing of the compounding order. Sub-section (2) of section 15 as alluded to hereinabove clearly envisages a position that once a contravention has been compounded under sub-section (1) (which in the present case has been compounded on 20.11.2008), no proceeding or further proceeding, as the case may be, shall be initiated or continued, as the case may be, against the person committing the contravention.
We cannot hold petitioners responsible for contravention once the compounding orders have been passed. We have noted that there is a gap of “one day” between the passing of the two sets of orders, i.e., compounding orders and adjudicating order. Be that as it may, petitioners cannot be faulted and held liable for contravention once the compounding orders are passed by the Compounding Authority. That is the mandate of the statute.
As also fairly conceded that respondents though aggrieved with the five compounding orders, have not challenged the said orders. If respondents were indeed aggrieved with the compounding orders, it was open for respondents to challenge the said orders. Having not done so, respondents cannot justify passing the adjudication order once the compounding orders have been passed and complied with by petitioners. Passing of the adjudication order after the offence has been compounded, is thus contrary to the statutory provisions discussed hereinabove, is not maintainable and thus without jurisdiction.
The impugned adjudication order passed by respondent No.1 is an appealable order and petitioners should be relegated to the alternate remedy of filing the statutory appeal under section 19 of the said Act before the Appellate Tribunal. This submission deserves to be rejected at the threshold. As held by us, the impugned adjudication order has been passed without jurisdiction in view of the fact that the offence contravened by petitioners have been compounded by the statutory Compounding Authority before the passing of the impugned order. Hence, we reject this submission advanced by Mr. Patil.
Writ Petition stands allowed in terms of prayer clause “c” which reads as under:
“c) that a writ in the nature of Mandamus may be issued commanding the Respondents to act according to law and/or cancel and/or withdraw and/or rescind the impugned order dated 21st November, 2008 passed by the Respondent No.1 and the Show Cause Notice dated 11th June, 2008 issued by the Respondent No.1 and all proceedings there under and/or in pursuance thereof.”
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2022 (7) TMI 826
Offence under FEMA - Scope of alternate remedy - violation of Section 4 of FEMA - Whether the writ petition is liable to be dismissed as not maintainable on the ground of availability of alternate remedy and the writ petition is premature? - HELD THAT:- FEMA is a complete Code in itself and is an act to consolidate and maintain law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange management in India. It also states that when statute creates a special mechanism for adjudication and when statute itself provides for remedy that too in a physical statute, a writ petition should not be entertained ignoring the statutory dispensation. The above judgment in Raj Kumar Shivhare [2010 (4) TMI 432 - SUPREME COURT] was rendered on 12.04.2010 much prior to insertion of Section 37A of FEMA, but it would not make any difference. Under Section 37A of FEMA also special mechanism is provided to determine the violation of Section 4 of FEMA.
Whether the Authorised Officer had reason to believe that any foreign exchange situated outside India is suspected to have been held in contravention of Section 4 or reasons recorded by the Authorised Officer would be sufficient to initiate action under Section 37-A of FEMA, are to be considered by the Competent Authority. At this stage, examining sufficiency of reason or otherwise under Article 226 of the Constitution of India would prejudice the case of either of the parties. It is best left to the Competent Authority to examine the same when it considers the entire issue under sub-Section (3) of Section 37-A of FEMA.
Section 37A of FEMA provides mechanism to decide the contravention or otherwise of Section 4 of FEMA. The case of the petitioner is at the stage of sub-Section [1] of Section 37A of FEMA which is impugned in the present writ petition. Timeline is fixed under Section 37A of FEMA for conclusion of the proceedings initiated by the Authorized Officer. The Authorized Officer has passed seizure order which is in the nature of provisional order is to be placed before the Competent Authority within 30 days from the date of such seizure order. The impugned order is dated 29.04.2022 and the learned Additional Solicitor General Sri. M.B. Naragund has submitted that within 30 days i.e., on 27.05.2022 itself the Authorized Officer has placed the seizure order along with relevant material before the Competent Authority. Since the seizure order and relevant material is already placed before the Competent Authority, it would be appropriate for this Court to direct Competent Authority to issue notice of hearing to the petitioner, hear the petitioner as well as representatives of the Directorate of Enforcement and pass appropriate orders in accordance with law. The timeline of 180 days mentioned in sub-Section [3] of Section 37A is an outer limit. In the facts and circumstances, since the petitioner contends that seizure order has affected day-to-day business of the petitioner, it would be appropriate for this Court to direct the Competent Authority to dispose of the petition expeditiously but not later than 60 days from the date of making available copy of this order.
The Competent Authority appointed by respondent No. 1 under Sub-section [2] of Section 37A of FEMA is directed to issue notice of hearing to the petitioner, hear the parties concerned and pass appropriate order either confirming or setting aside the seizure order within a period of 60 days from the date of making available a copy of this order.
This Court, by order dated 05.05.2022 stayed the impugned order dated 29.04.2022 (Annexure-A) subject to condition that the petitioner shall operate Bank accounts which are seized under the impugned order, only for the purpose of meeting expenses for carrying out day to day activities of the Company and observed that order shall not confer any right on the petitioner to make payment in the form of royalty or in any other form to the Companies located outside India. Further, on 12.05.2022, this Court clarified that the petitioner is at liberty to take Overdraft and make payments from such Overdrafts to Foreign Entities excluding payment of royalty. Interest of justice would be met, if the above interim order is continued till orders are passed by the Competent Authority as stated above. The interim order passed by this Court on 05.05.2022 and clarified on 12.05.2022 would enure to the benefit of the petitioner, till the Competent Authority passes order under sub-Section (3) of Section 37-A of FEMA.
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2022 (7) TMI 302
Amounts released despite the stay order - on query ASG accepts this - HELD THAT:- Prima facie this is contempt of the orders of this Court. On our asking the query as to which of the Officer(s) to whom the contempt has to be issued, learned senior counsel states that the amount will be released within 3 days and that this Court may hold its order on issuance of notice of contempt. We take this stand of the learned ASG on record.
Insofar as the constitution of the Tribunal is concerned, the affidavit states that the Search-cum-Selection Committee was appointed in terms of Order dated 26.10.2001. The process thereafter is taking place.
It is pointed out to us that the Chairman demitted office on 21.9.2019 being a retired judge of the High Court and thereafter a Single Member Tribunal doing only interim proceeding work and he too demitted office sometime in March-April, 2021. Even the last Chairman was on extension.
We are of the view that the status report does not reflect a complete picture and we would like to know the details as to what steps were taken starting from at least six months prior to the Chairman demitting office on 21.9.2019 to fill up that post right upto the department order dated 26.10.2021 with supporting documents.
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2022 (7) TMI 301
Provisional attachment orders made under the provisions of FEMA - prayer for grant of interim directions was opposed by learned CGSC who contended that the Certificate of Registration (COR) of the petitioner already stands cancelled by the Reserve Bank of India (RBI) - HELD THAT:- Insofar as the question of cancellation of the COR is concerned, the Court notes that the same would have no bearing on the issues which arise in the present writ petition since that constitutes action taken by the RBI under the statutory provisions contained in the Banking Regulation Act, 1949. The said action would only impact the right of the petitioner to continue the business which was permitted.
The Court notes that insofar as the release of Rs. 15.5 crores is concerned, it was submitted by Mr. Ganesh that the aforesaid sum has not been released in fact and the petitioner has not even been able to utilise the same till date. The Court further notes the submission of Mr. Ganesh who contends that the aforesaid amount which was released was just sufficient to meet the needs of the petitioner for the period between November 2021 to January 2022. Bearing in mind the issues, which stand raised, this Court is of the opinion that in the interim certain amounts would merit being released in favour of the petitioner to enable it to meet its day to day expenses pending final disposal of the present writ petition.
Accordingly, let a sum of Rs. 25 crores be released in the interim, subject to the condition that the petitioner shall utilise the said monies only for the purposes of meeting its day to day essential expenditure as well as towards salaries of employees. The petitioner shall also place on the record of these proceedings an affidavit disclosing details of utilisation of the sum which is being released. The Court further takes on board the undertaking of the petitioner that no part of the monies which stand released in the interim and pursuant to this order shall be remitted overseas. The interim release which has been directed in terms of this order shall be in addition to the amount of Rs 15.5 crores which was released pursuant to the statement of the learned ASG as recorded before the Supreme Court.
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2022 (6) TMI 1341
Person aggrieved’ in section 17 of FEMA - deemed complainant - Whether appellant is not an aggrieved person? - writ petitioner entiltment for copy of the adjudication order as he was only an informer and he cannot be treated as complainant - Central Government Counsel [CGC] contended that the petitioner is not entitled for a copy of the adjudication order, since he is only an informer and cannot be termed as the complainant - HELD THAT:- We find substantial force in the contention urged by the learned CGC. Other than alerting the officials of the Department regarding violations of the Act, an informer has no further role as per the scheme of the Act. The complaint based on the information has to be filed by an authorised officer, upon which alone the adjudicating authority can conduct enquiry. The Rules envisage issuance of copy to the person against whom an order of adjudication is passed. The term ‘aggrieved person’ in Section 17 will take in only the person against whom the order is passed and the complainant. Being so, the informer is not entitled for a copy of adjudicating order has no legal right to challenge the order by filing an appeal under Section 17.
In the result, the writ petition is dismissed, without prejudice the petitioner’s right to pursue his application for obtaining a copy of the order under the Right to Information Act, 2005.
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2022 (6) TMI 1043
Foreign Exchange Regulatory Appellate Board confirming the order passed by the Assistant Director imposing penalty and confiscating as per section 63 of the Foreign Exchange Regulation Act, 1973 - HELD THAT:- Though the Appellant may be right in insisting on compliance of the order of this Court as it is and it is because of the pendency of the litigation that the Appellant is agreeable for receipt of the amount in Indian rupees, the Appellant cannot be penalized but must be compensated in fair manner.
Accordingly, we direct that the order passed by this Court be complied with by the Enforcement Directorate within a period of eight weeks, with a clarification that the amount of US$ 1,300 should be converted in Indian rupees as per the rate prevailing as on today i.e. 14 June 2022 and be paid to the Appellant within a period of eight weeks along with interest. We place the responsibility of compliance with this order on the Assistant Director, Enforcement Directorate, the Respondent No.2 and if the order is not complied within a period of eight weeks as above, the Court may take serious view of non-compliance.
As regards the claim of interest is concerned, it is the contention of the Enforcement Directorate that since the Department had offered to return the amount immediately in Indian rupees, interest need not be imposed. The order dated 30 September 2010 stipulates 10% interest.
Department has not followed the procedure under section 42(4) of the Act and has taken unilateral steps. The approach of the Enforcement Directorate is to keep the application pending. In the circumstances, we do not propose to deviate from the rate of interest specified in the order dated 30 September 2010.
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2022 (6) TMI 165
Offence under FERA - Non-realization of payment towards exported goods - “reasonable steps” to be taken for securing the sale proceeds of exports or not? - concerned buyer in France became bankrupt and therefore, some of the export proceeds against the said consignments could not be realized - HELD THAT:- Any person effecting an export of goods is also responsible, rather duty bound, to also effect the securing of proceeds from such export/sale. The only exception, as per the language of the provision, is permission from the RBI, which if obtained may lead to granting of the leverage of not securing the proceeds within the stipulated and prescribed period. Further, sub-section 3 makes a presumption against the person who has not been able to secure the proceeds from exports that he/she has not taken all reasonable steps so as to recover the amount to be realized from the proceeds of sale. The purpose behind these provisions becomes clearer when seen from the standpoint of the legislature and its intention and purpose of bringing into the Act into existence
It is evident from the objective, as specified in the preamble of the Act, that the need at the time of enactment of the Act was to accommodate trade deficit with the aim to also conserve foreign exchange resources in the Country. The purpose behind the Act was to ease out the foreign exchange crunch that the Country was going through. The objective, therefore, was to make such enabling provisions to facilitate due, proper and timely realization of the amount that is accrued by foreign buyer towards goods exported and to also facilitate regularized foreign exchange.
Whether the steps taken by the appellant were ‘reasonable steps’ as have been stipulated under Section 18(3) of the FERA? - There are no established principles or guidelines laid down by law to the question as to what amounts to reasonable steps under Section 18(3) of the FERA, and therefore, the same has to be established in light of the facts and circumstances of each case.
In the instant matter, the appellant upon non-realization of payment towards exported goods made attempts to communicate with the buyer in France. The following communications were made by the appellant, as have been enlisted in her reply dated 26th March, 2004, to the Show Cause Notice by the respondent no. 2/ED
As it is found that the appellant undertook the basic and primary measures of contacting and communicating with the foreign buyers and approaching the RBI after the lapse of the stipulated time period, however, these fundamental steps in themselves were not sincere, serious and sufficient attempts to effectively cause the recovery of the proceeds of sale. Another relevant factor to be considered is that the Appellate Tribunal reduced the penalty imposed upon the appellant by about 60 percent, that is from Rs. 25,00,000/- to Rs. 15,00,000/-, which in itself is a relief granted to the appellant despite having been found guilty of contravening the provisions of the FERA.
In light of the facts and circumstances, contentions raised, arguments advanced and judgments cited, it is found that there is no error in the impugned order dated 30th August, 2016 passed by the Appellate Tribunal in Appeal No. 138/2007. The Tribunal has rightly imposed the penalty upon the appellant and this Court does not find any substantial ground or cogent reason to invoke its extraordinary jurisdiction and interfere with the said order. Accordingly, the instant Criminal Appeal is dismissed.
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2022 (5) TMI 256
Offence under FEMA - prejudice on account of infraction of the procedure - main ground of challenge was that the impugned notice was issued without complying with the Rule 4(1) and Rule 4(2) of the Rules of 2000 - HELD THAT:- The adjudicating authority is required to give the notice under sub-rule (1) to the concerned person requiring him to show cause as to why inquiry should not be held against him indicating the nature of contravention alleged to have been committed by him. After considering the cause, if any shown, and on forming an opinion that an inquiry should be held, the adjudicating authority is required to issue notice under sub-rule (3) fixing the date of appearance. In the present case, undisputedly no notice in terms of sub-rule (1) and (2) of Rule 4 has been given and straight away notice under sub-rule (3) of Rule 4 has been issued which was subject matter of the challenge in the writ petition.
As decided in KANWAR NATWAR SINGH & KANWAR JAGAT SINGH VERSUS DIRECTORATE OF ENFORCEMENT [2010 (10) TMI 156 - SUPREME COURT] Notice in terms of sub-rule (1) and (2) is necessary and thereafter formation of opinion under sub-rule (3) is required before conducting inquiry in terms of other provisions of the Rule.
The Hon’ble Supreme Court in the matter of State of Uttar Pradesh vs. Singhara Singh and Others [1963 (8) TMI 43 - SUPREME COURT] has noted that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and that other methods of performance are necessarily forbidden.
Enforcement Directorate was required to form an opinion after giving notice to the petitioner before issuing the impugned show cause notice dated 06.07.2020 which he has failed to do in the present case.
Hence, we dispose of the appeal without interfering in the show cause notice dated 06.07.2020 but by directing the Special Director, Eastern Region, Enforcement Directorate to form his opinion after recording reasons in terms of sub-rule (3) of Rule 4. If the opinion so formed is adverse to the appellant, such opinion along with the reasons so recorded shall be furnished so as to reach the appellant at least 15 days prior to the date of personal hearing as the same would meet the requirement of Rule 4(3).
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2022 (5) TMI 241
Offence under FEMA - Petitioner argued that the adjudicating authority did not follow the procedure prescribed in Rule 4(1) and 4(2) of the Adjudication Rules of the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 - petitioner has been seriously prejudiced by refusal and failure to supply documents relied upon by the complainant Assistant Director - HELD THAT:- In the instant case, failure to bring back export proceeds to the extent of seven thousand crores arose out of loan transactions between the petitioner and his entities and about 23 banks.
It is now well settled that every infraction of the principles of natural justice or procedure stipulated for adjudication would not vitiate a proceeding. The petitioner has to demonstrate actual and real prejudice
The two tier procedure under Rule 4 which warrants a preliminary enquiry to form an opinion before the process of actual adjudication, may have laudable objects given the very serious civil consequences. The need of demonstration of prejudice due to infraction of such procedure would still be necessary to vitiate the proceedings, and would not otherwise be given a go-by merely because of codification of principles of natural justice into separate Rules in the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000.
Since the petitioner himself submits that the notice issued by the Adjudicating Authority was under Rule 4(3), this Court requires the adjudicating authority to submit a brief gist of its satisfaction of prima facie case against the petitioner along with copies of necessary documents within a period of 15 days from date.
Upon receipt of such gist, the petitioner shall show cause both to the notice dated 6th July 2020 as well as the gist. The procedure prescribed under Rule 4(3) would thereafter be undertaken by the adjudication authority.
The proceedings before the adjudicating authority shall be completed expeditiously and preferably within a period of two months from the date of supplying the gist as indicated hereinabove.
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2022 (4) TMI 937
Offence under FEMA - maintainability of writ petition before this Court - HELD THAT:- This Court finds that the writ petition filed at Jaipur Bench, Jaipur for challenging the order dated 26.04.2019 passed by the Additional Director, is not maintainable as no cause of action has arisen in the territory of State of Rajasthan.
The submission of the petitioner that initially a complaint was filed by the Additional Director and further direction to deposit the penalty amount in Jaipur Office, cannot be termed as a part of cause of action.
This Court finds that the complaint which was filed against the petitioner, has resulted into issuance of show cause notice to the petitioner and thereafter, adjudication has to take place and as such the petitioners cannot be allowed to state that part of cause of action, has arisen in the territory of State of Rajasthan.
This Court finds that initially the petitioner had filed writ petition against show cause notice in the Punjab and Haryana High Court at Chandigarh and after an order being passed to approach the respondents by giving a detailed and comprehensive representation, the Authorities have finally ajdudicated the issue of violation of Foreign Exchange and order dated 26.04.2019 has been passed.
The submission of learned counsel for the petitioners that the petitioners are residents of Jodhpur and further, they are having their business operations in the State of Rajasthan and as such, this Court has ample jurisdiction to entertain the writ petition, suffice it to say by this Court that the residence of the petitioners or their place of carrying business, cannot constitute as part of cause of action.
The other reason with regard to maintainability of writ petition before this Court on account of violation of principle of natural justice, suffice it to say by this Court that if the petitioner has any grievance in respect of violation of any provisions of Rules of 2000 or the Act of 1999, the Appellate Forum has been constituted by the legislature and all issues including the issue of violation of principle of natural justice or delay can all be agitated by the petitioner before the Appellate Forum.
This is beyond comprehension of this Court that when an appeal is provided, before the Appellate Authority, then litigant cannot raise the issue of violation of principle of natural justice/delay/competence of any Authority to issue the orders.
This Court finds that the alternative statutory remedy available to the litigant/petitioners is available to them and the order, which is put to challenge itself makes a reference of such a remedy/Authority for raising the grievance.
This Court, in the wake of statutory alternative remedy available to the petitioners, would not like to entertain the present petition filed under Article 226 of the Constitution of India.
Accordingly, this writ petition is dismissed on account of alternative, statutory remedy available to the petitioners as well as on the ground of lack of cause of action arisen before this Court.
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2022 (3) TMI 943
Legality and validity of the seizure orders - HELD THAT:- The facts of the case reveal that before the learned Single Judge, though a prayer for quashment of seizure orders dated 26.08.2021, 30.09.2021 and 15.12.2021 was made, an interlocutory application was preferred for release of ₹ 15,35,45,317/- and the learned Single Judge has allowed the application. The writ petition itself has been disposed of by the impugned order dated 11.02.2022.
In the considered opinion of this Court, once the seizure orders were not set aside and no statutory provision was brought to the notice of the learned Single Judge for release of such amount and the seizure orders have been affirmed by the competent authority under Section 37A(2) of the Act, no such provisional release could have been ordered by disposing of the writ petition itself.
Learned counsel for the Union of India has also brought to the notice of this Court the press release issued by the Reserve Bank of India dated 24.02.2022 and the same reflects that even the banking licence of the respondent No.1/writ petitioner has been cancelled.
However, as this Court is not dealing with the cancellation of licence, no comment has been offered in respect of such cancellation. Learned counsel for the respondent No.1/writ petitioner has stated that he does not have a copy of the aforesaid order and he is not aware of the same.
Section 37A of the Act provides for a remedy of appeal and therefore, as now an order dated 04.02.2022 is in existence, the respondent No.1/writ petitioner shall certainly be free to prefer an appeal or to avail the other remedies available under the law. Resultantly, the order passed by the learned Single Judge is set aside and the writ appeal stands allowed.
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2022 (3) TMI 917
Seizure orders - respondent No.2 has seized an amount of approximately 270 crores and has transferred a substantial portion of the said amount to its own bank account - HELD THAT:- Several circumstances are narrated with regard to the hardship which the petitioner Company would face, if an amount of ₹ 15,35,45,317/- is not ordered to be released. Under these circumstances, in order to keep the petitioner Company alive and to enable it to meet its day to day expenses like payment of salaries to its employees, payment of taxes, statutory dues and operational expenses etc., this Court, in the interest of justice, deems it appropriate to direct the respondent No.2 to release an amount of ₹ 15,35,45,317/- (Rupees fifteen crores thirty five lakhs fourty five thousand three hundred and seventeen only), which is commensurate with the amount mentioned in paragraph 9 of the affidavit filed in support of I.A. No.1 of 2022, i.e., expenditure incurred by the petitioner company for the months of November and December, 2021 and January, 2022.
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2022 (3) TMI 809
Offence under FEMA - enquiry contemplated under Section 16(3) of the Foreign Exchange Management Act, 1999 on the basis of complaint by an Authorized officer as provided for under the said sub-section - As argued show-cause notices are not in compliance with the procedure prescribed under Rule 4 of 2000 Rules - HELD THAT:- We are of the view that no indulgence is warranted in the matter of issuance of impugned show-cause notice dated 08.04.2021 and the notice for personal hearing dated 28.06.2021.
Adjudicating Authority is yet to hold an enquiry and thereafter take a decision to initiate proceedings for imposition of penalty under Section 13 of the FEMA. Thereafter, the petitioner has a remedy of filing appeals viz. (1) under Section 17 to the Special Director (Appeals) against the orders of the Adjudicating Authorities, being an Assistant Director of Enforcement or a Deputy Director of Enforcement; (2) under Section 19 to the Appellate Tribunal against the order made by an Adjudicating Authority other than those referred to in sub-section (1) & (2) of Section 17, or the Special Director (Appeals); and (3) under Section 35 to the High Court against the order of Appellate Tribunal.
Though the petitioners complain of not being able to file reply on merits against the impugned show-cause notice, nevertheless there is no reason forthcoming as to why the petitioners have not attended the office of prescribed Authority as indicated in the impugned notice for inspection of documents attached with the complaint. Be that as it may, while responding to the notice dated 28.06.2021 for personal hearing, petitioners are always free to seek the opportunity for inspection of documents and file reply. Petitioners may raise all questions on facts and in law available to them in the context of the enquiry under Rule 4 of 2000 Rules. The Adjudicating Authority shall be well advised to consider the reply during the course of proceedings.
Four weeks' time, as prayed for, is granted to inspect the documents, if so advised, and file reply. Adjudicating Authority shall complete proceedings within eight weeks thereafter keeping in mind the time bound completion of proceedings as ordered bearing in mind the provisions of sub-section 6 of Section 16 of FEMA.
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2022 (2) TMI 1465
Charge punishable u/s 56 of FERA for violation of Section 9(1)(b) and 9(1)(d) and 63 - acquittal of the accused by the Metropolitan Magistrate for violation - HELD THAT:- It is needless to say that confessional statement is not a substantive piece of evidence. It is corroborative in nature. Moreover, when a confessional statement is retracted its evidentiary value loses in view of the fact that the Court is required to weigh the probative value of two statements – one in the nature of confession and another in the nature of retraction. During trial of the case, the accused took a plea that his confessional statement was recorded by force and coercion. It is also specifically pleaded by the accused that he accumulated the seized money from his construction business. In order to prove that he is engaged in construction business, the respondent submitted series of documents during trial of the case. The Learned Trial Court accepted the defence version.
As needless to say that in the instant case two views are apparent on the face of the record. First, the allegation of accumulation of money by way of illegal foreign exchange and payment of money illegally to different persons and secondly, the accused accumulated money by way of construction business.
It is no longer res integra that when two views are possible, the view that help the accused and in favour of him shall be accepted.
For the reasons stated above, no merit in the instant appeal. Accordingly, the appeal is dismissed on contest. The judgment and order of acquittal passed by the Learned Magistrate, 11th Court at Calcutta is affirmed.
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2022 (2) TMI 794
Violation of provisions of FCRA, 2010 - Suspension of certificate - suspension u/s 13(1) of the FCRA, 2010 - HELD THAT:- This Court, in the facts of that case had set aside the suspension order on two grounds, firstly, no reasons have been spelt out in the suspension order and secondly, the respondents have neither issued Show Cause notice nor initiated an inquiry by the time the suspension order was passed.
Insofar as, stating the reasons for suspension is concerned, as concluded above, the reasons have been given in the impugned order. To that extent, the judgment has no applicability. Insofar as the conclusion of the Court by the time the suspension order was passed neither an inquiry was initiated nor any Show Cause notice was issued is concerned, it is my conclusion that the process of inquiry was started in the year 2017. So, it is not a case where neither any inquiry was initiated nor any Show Cause notice was issued. So, the judgment relied upon by Mr. Datar and Mr. Singh is clearly distinguishable.
Insofar as the reliance placed by Mr. Datar and Mr. Singh on the judgment in the case of Modern Dental College and Research Centre and Ors. [2016 (5) TMI 1366 - SUPREME COURT] the same is inapplicable to the present case, inasmuch as, the impugned order suspending the petitioner is in consonance with the object which the instant legislation/statute strives to achieve and has not gone in excess of that object, as my findings above would depict, and as such, satisfies the doctrine of proportionality.
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2022 (1) TMI 1368
FCRA registration - Delay opening of an “FCRA bank account” with the State Bank of India - petitioner could not upload the FC-4 Form on the respondent’s portal within the scheduled time period of June 30, 2021 as there was delay in opening the designated account in the main Branch of the State Bank of India, 11, Sansad Marg, New Delhi – 110001 - HELD THAT:- On a specific query to the learned counsel for the petitioner what steps, were taken by the petitioner to open the account, when the concerned amendment was notified on October 7, 2020, the learned counsel for the petitioner seeks some time to take instructions and file relevant documents along with an affidavit.
Noting the said submission, re-notify on March 11, 2022.
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2021 (12) TMI 132
Proceedings in terms of section 16(1) r/w sec. 13 of the Foreign Exchange Management Act, 1999 - contravention of the provisions of sections 3(b), 5, 6(2)(a) & 10(6) of FEMA r/w. Regulations 3 & 4(a) of the Foreign Exchange Management (Permissible Capital Account Transactions) Regulation 2000 in relation to a foreign exchange - HELD THAT:- After service of notice, the respondents having entered appearance through the Central Govt. Counsel vehemently oppose the petitions making submission in justification of the impugned notice & the complaint and in support of the reasons on which they have been constructed.
As these Writ Petitions being devoid of merits, are liable to be dismissed and accordingly, they are, all contentions having been kept open.
Petitioners are granted a period of four weeks for submitting their reply to the subject notice; discretion lies with the answering respondents to grant some more time as well if a case is made out therefore; it is also open to the petitioners to seek reasonable clarifications from the quarters concerned, if need be.
The observations herein above made being confined to disposal of these Writ Petitions, shall not shade the reply to be submitted by the petitioners and influence the formation of the opinion by the answering respondents as to enquiry-worthiness of the matter.
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