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FEMA - Case Laws
Showing 301 to 320 of 1378 Records
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2018 (4) TMI 1342
Seizure of bank account due of the suspicion that foreign exchange was suspected to be held outside India in contravention of Section 4 of the FEMA, 1999 - Liberalise Remittance Scheme (LRS Scheme) - Exercise of powers conferred upon him in terms of the provisions of Section 37A(1) of FEMA, 1999 - Held that:- The main error in the impugned order is that RBI scheme has not been discussed at all. The impugned order is totally silent about the scheme. The relevant circulars of RBI 2004 to 2007 have not been considered. When, it was pointed to Mr. Rana, he says that these are not applicable. The said arguments of Mr. Rana is without any force as the circulars speak for themselves and those are applicable.
It is also a matter of surprise that the hearing were conducted by the Ld. Competent Authority in disjoint manner, separately for appellant and separately for complainant. The said practice is not a healthy practice in our system. It is apparent that the Competent Authority did not want to hear the matter in the presence of both parties.
The Competent Authority has violated the principles of natural justice by not affording cross-examination of respondent authority while passing the order by which the Appellant would have been able to establish the fallacy of allegations and also the fallacy of patent illegality of the order apart from exhibiting that there was no material nor the reason to believe as envisaged under Section 37-A(1) of FEMA, 99.
In the nature of the seriousness of present case, the right to cross- examination would have been given in view of gravity of the matter. Had the said right been granted, there might have been different result. Rather in the present case, the adjudicating authority has issued the notice after the expiry of five months knowingly well that the proceedings were to be completed within the period of 180 days. Even no time left for the purpose of cross-examination of relevant witnesses.
In the interest of justice equity and fairplay we allow the respondent to again verify the position as to whether the appellants have brought the entire amount of remittance within four weeks, from the date of the order after verification the amounts seized be released in the accounts of Appellants with YES Bank, Chhattarpur Branch, New Delhi within one week thereafter. The liberty is also granted to the respondent to move application for clarification if any pertaining to deposit of amount in question.
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2018 (4) TMI 1110
Violation of the declared FDI Policy - Held that:- Enforcement Directorate has taken action against the violators. The Enforcement Directorate has also filed a counter affidavit pointing out that it is inquiring into e-commerce entities which are guided by self gain or motive other than in public interest and that the Bangalore Zonal office of the answering respondent had initiated enquiries against ten (10) e-commerce entities and in 5 out of these 10 of those enquiries, investigations are reported to be underway. Charge-sheets have been prepared in 4 out of 5 cases in which investigation has been completed and the same are pending consideration. Besides that, enquiries were also initiated against Firstcry.com and Infibeam.com by the Mumbai and Ahmedabad offices respective of the answering respondent and the same are under progress.
Therefore the respondents are conscious of their responsibilities and are taking action for violation of the applicable FDI Policy. The required action upon completion of the investigation would have to abide by the procedure prescribed by law.
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2018 (4) TMI 681
Violation of FERA - lending against the deposit without taking any primary security - Held that:- Bank had lent money against the security of deposits in the NRNR accounts. There was no bar in such type of lending as is apparent from the RBI’s Notification. The bank was required to comply with the condition attached to such lending as prescribed by the RBI under the FERA/FEMA. One such condition was that the bank could grant loan facilities to resident individuals, firms, companies in India against the collateral of such fixed deposits.
In spite of the aforesaid conditions of granting loans against collateral security of such deposits the bank continued to grant loans to the resident individual (third parties) treating them as primary security. Understood that the assets created out of the proceeds of the loan could only be the primary security and not the deposits in the present case. Thus, the action of the bank in lending against the deposit without taking any primary security was not in consonance with the provisions of the Act. Details as enumerated at para 5 supra, proves the violation of FERA. RBI’s suspension of the said account also point towards the wrong doing.
Banks are expected to act as trustees of public money rather than misusing the powers granted by the regulators thereby facilitating abuse of the Act by unscrupulous persons. The appellant bank therefore cannot be absolved of the charges against it.
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2018 (4) TMI 421
Violation of Section 9(1)(e) of Foreign Exchange Regulations Act, 1973 - failure to comply with the mandatory requirement of Section 61(2) of FERA - Held that:- The subject complaint was filed on 29.05.2002. Since petitioners were never granted an opportunity, as mandated by Section 61(2) of FERA, there is clearly a breach of the mandate of law. Since the requirements of Section 61(2) of FERA have not been complied with, reliance placed by the respondent on the statement recorded at the time when proceedings under Section 40 of FERA were being undertaken and reliance on the same in the impugned order as sufficient compliance of Section 61(2) of FERA, is clearly misplaced.
Since respondents have failed to comply with the mandatory requirement of Section 61(2) of FERA, the Trial Court clearly erred in taking cognizance.
The impugned order on charge dated 11.07.2017 cannot be sustained and is liable to be set aside. The impugned order dated 11.07.2017 is, accordingly, quashed. The present petition is allowed.
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2018 (4) TMI 232
Stay petition - Held that:- This is is an arguable case on merits and hence cannot also be stated to be prima facie in their favour. They are accordingly required to pre-deposit the penalty of ₹ 10 lakhs within a period of four weeks from today failing which the appeal shall be disposed off as per the provisions of FEMA.
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2018 (4) TMI 162
Order passed by an officer coram non judice - gross violation of the principles of natural justice. These orders have been passed without complying with the statutory requirements - Held that:- Though a writ of certiorari can be issued by this court despite the presence of alternate and equally efficacious remedy, that is not a prohibition or rule, but a matter of prudence, still, whether to issue such a writ or not depends upon the facts and circumstances of each case. No general rule can be laid down. Eventually, this court's jurisdiction under Article 226 of the Constitution of India is extraordinary, discretionary and equitable. One who invokes this jurisdiction must approach this court with clean hands. Once we have noted that the petitioner never disputed the power of the authority to issue the show cause notice, the competence to adjudicate it and pass a final order thereon and that the notice refers to both enactments, namely, FERA and FEMA, all the more we are not inclined to grant any relief in writ jurisdiction.
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2018 (3) TMI 1291
Appeal for non-compliance of pre-deposit of penalty - Held that:- All the information provided proves that the conduct of the appellant/his counsel has not been very honest and they have tried to misguide the tribunal. That they have failed to file a review petition within a reasonable time is apparent from above, and are now coming up with some ground or the other. The judgements relied upon by the learned counsel of the appellant during hearing as ground do not help them as none of the Judgements deals with condonation of delay when the conduct of the appellant in making the said application is in doubt.
The Miscellaneous Application for condonation of delay in filing the Review Petition is therefore, dismissed.
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2018 (3) TMI 1251
Public authority excluded from the purview of Right to Information Act - Held that:- Section 24(1) of the Act expressly excludes intelligence and security organizations specified in the Second Schedule of the Act from the purview of the Act. Admittedly, the Directorate of Enforcement is included in the Second Schedule to the Act and, thus, cannot be called upon to disclose information under the provisions of the Act. The only exception carved out from the exclusionary clause of Section 24(1) of the Act relates to information pertaining to allegations of corruption and human rights violation. Undisputedly, the information sought for by the petitioner cannot be categorized as such information.
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2018 (3) TMI 1250
Maintainability of Appeal under Section 19 of FEMA Act - Held that:- Provisos to Section 19(1) of the Act, an appeal can be maintained/heard only when the issue of pre-deposit of penalty has been examined/addressed.
In the instant case, the conditions for filing Appeal has not been satisfied as no “penalty” has been imposed in the absence of “an order”. As the provisions laid down in Section 19(1) of the Act have not been fulfilled, the appeal filed by the appellant is pre-mature and hence non- maintainable.
As stated earlier, the instant appeal has been filed by the appellant against “record of personal hearing” held on 15.11.2017 in the office of the Special Director of Enforcement, Mumbai.
As would be observed from the above, appeals have been filed at various stages during the course of Adjudication proceedings praying this Tribunal to pass certain directions to the Adjudicating Authority. Even the instant appeal has not been filed against an “order” of the Adjudicating Authority. The provisions of Section 19 of FEMA entitles the appellant to prefer an appeal only once the “order” is passed and not against hearings conducted by Adjudicating Authority in adjudication proceedings.
The contention of the appellant that Section 19(6) empowers the Tribunal to suo moto examine the “legality, propriety or correctness of any order” made by the Adjudicating Authority is not restricted and limited to the final order and that the words “any order” in Section 19(6) and “an order in Section 19(1) has to be given the same meaning is misconceived and misleading. This could not have been the intent of the legislature as every notice issued by Adjudicating Authority or hearing/enquiry conducted by Adjudicating Authority in the process of adjudication so as to enable him to pass an “order” could become a subject matter of appeal.
In the instant case, the conditions for filing Appeal has not been satisfied as no “penalty” has been imposed in the absence of “an order”. As the provisions laid down in Section 19(1) of the Act have not been fulfilled, the appeal filed by the appellant is pre-mature and hence non- maintainable.
It would not be prudent for this Tribunal to entertain the appeal against the “record of personal hearing” in the office of Adjudicating Authority during the course of Adjudication proceedings. Needles to reiterate, it would also not be prudent for this Tribunal to advice/direct/instruct the Adjudicating Authority to follow a specific or particular course of action in adjudication proceedings as the same would amount to interference in the functioning of the Adjudicating Authority.
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2018 (3) TMI 1136
Calling of witness Mr. Chokshi whose cross examination was already conducted on 20/09/2017 was rejected - Held that:- It is the interest of justice, equity and fairplay, let Mt. Chokshi be further cross-examined on this aspect. The argument of the respondent has no forced that the appellant has covered entire case on 20.09.2017 if when the question of 41-45 were put to Mr. Chokshi.
Thus, the findings given in the impugned orders are contrary to facts and law and are not sustainable. The prayer for recall of witness ought to have been allowed in view of peculiar facts of the matter. The appeal is liable to be allowed. The impugned order is set-aside.
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2018 (3) TMI 1067
Working of Special Investigation Team (‘SIT’) questioned - As submitted SIT especially the Directorate of Enforcement (‘ED’) is acting in contravention and beyond the orders of this Court which was supposed to investigate the dispute of M/s International Customer Related Management Services Pvt. Ltd. (for short, ‘ICRMS’) and rather it has plunged into third party disputes - Held that:- In the light of unison shown by the learned counsel representing various parties that the officer from CBI would be heading the SIT to look into the investigations, facilitate collecting of evidence, recording of the statements and similar functions to enable the SIT to collect and compile the evidence.
Thus, the very purpose of passing orders (Annexure P1) by this Court by virtue of which different constituents formed part of the SIT for a specialized investigation into every angle of running of the affairs of ICRMS. During the course of hearing, Mr. Roopesh Kumar, Assistant Director from the Directorate of Enforcement has made statement undertaking that their agency would not order attachment of the bank accounts of ICRMS, affairs of which are under investigation by the SIT.
As during the course of proceedings that the various constituents of the SIT, somehow or the other, are not working in unison and in tandem with each other and are trying to carry on individually which is quite contrary to and in violation of the directions of this Court contained in order (Annexure P1) dated 16.09.2015 thus, necessitates issuance of directions to the constituents of the SIT to follow investigations and carry on the same strictly in accordance with all the orders of this Court enumerated above and to ensure that all these agencies so formed part of the SIT, act cohesively in unison towards attaining the purpose and goal of the orders of this Court, else there is every likelihood if these agencies are allowed to carry on individually would certainly defeat the very intent and purpose for which the SIT has been constituted. These constituents are directed not to go beyond the directions of this Court issued from time to time .
Thus, it necessitates and flows from it that the SIT and its constituents in the light of orders (Annexure P1) shall ensure by all means that their investigations do not go haywire and rather than following and pursuing the policy of pick-and-choose, the goals for which it has been constituted are achieved by all means and shall not in any manner plunge into third party dispute of the petitioner with others and further that the SIT shall not use any coercive means against the petitioner, his family members or relatives regarding their own personal businesses/avocations and would strictly adhere to their assignment and task.
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2018 (3) TMI 1066
Application of FEMA for a contravention in the FERA issue - Held that:- The present appeal instead of being preferred before the Special Director (Appeals) under Section 17 of FEMA has being filed this Tribunal for Foreign Exchange under section 19 FEMA is not maintainable and thus the same is liable to be dismissed.
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2018 (3) TMI 119
Violation of provisions of FEMA - cross-examination of the witnesses other than the IO - Held that:- The application made to the Special Director in the course of proceedings in this case (dated 21.12.2017), is part of the record. No doubt, the appellant sought the Investigating Officer’s cross-examination inasmuch as, according to him, examination as to the conclusion in his report was necessary.
The appellant, at the same time requested for cross-examination of the other witnesses, whose statements were on record by the Directorate of Enforcement. So far as statements of these witnesses or individuals are concerned, the order of the Special Director is absolutely silent. In this given situation, the Single Judge’s conclusion that cross-examination cannot be sought as a matter of right in respect of witnesses is correct. At the same time, what appears to have been overlooked in the impugned order is that, apart from the Investing Officer, other witnesses’ examination too, was sought. The Special Director did not deal with that aspect in any manner. In the circumstances, the appellant shall approach the Special Director within three weeks spelling out the reasons why the cross-examination of the witnesses other than the IO is needed.
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2018 (2) TMI 1682
Order of seizure in terms of provisions of Section 37A(1) of FEMA - foreign exchange worth USD 352258.25 suspected to be held outside India in contravention of Section 4 of FEMA - Held that:- The petitioner filed an additional affidavit dated 08.01.2018 placing certain factual details regarding the amount, which was lying in the foreign Bank account in 2002. Along with the additional affidavit, the petitioner has enclosed copy of the letters of HSBC dated 07.03.2016, 25.11.2014, enclosing the information regarding transfer of the petitioner s banking operation etc. In the light of the material, which has been placed before this Court, it would be necessary for the competent authority to consider the same as it may impact the proceedings by going to the root of the matter. However, I do not wish to express anything on the merits of the matter except to state that the petitioner should be afforded one more opportunity and place their objections to the confirmation of the order of seizure before the competent authority.
So far as the order of seizure is concerned, the petitioner cannot be stated to be aggrieved by such an order of seizure, as no amount has been withdrawn from the petitioner s Bank account. Since the order of seizure has already been confirmed by the order passed by the first respondent, the question of interfering with the same at this juncture does not arise.
Writ Petition is allowed and the impugned order passed by the competent authority is set aside and the matter is remanded to the competent authority for fresh consideration
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2018 (2) TMI 762
Right to cross-examine - Cross examine the witnesses whose statements were recorded under Section 37 of FEMA and whose statements have been relied upon in the complaint - complaint alleges that the provisions of section 3(b) of the FEMA have been contravened by the petitioner by making a payment to Cricket South Africa (CSA) a person residing outside India, without permission of the Reserve Bank of India (RBI) and that is inter alia apparent from an agreement dated 30th March, 2009 executed between the BCCI and Cricket South Africa - Held that:- (i) The impugned order dated 10th July, 2015 and the contents of the communication are quashed and set aside.
(ii) We direct respondent no. 1 to issue summons to the persons whose statements have been recorded and permit the advocates for the petitioner to cross-examine them. However, we are of the firm view that neither the petitioner nor the respondents can delay the proceedings any further.
(iii) We are indeed surprised that the show cause notice issued way back on 25th November, 2011 remains unadjudicated till date. We do not see how even the respondents agreed to the postponement of the proceedings before this court and in a petition filed on 21st August, 2015. Since this petition was pending for more than two years, the adjudication has been delayed further. Hence, to ensure that the adjudication proceedings come to an end expeditiously, we direct that the petitioner will appear before the adjudicating authority on 14th February, 2018 at 10.30 a.m. and the adjudicating authority shall issue summonses in the requisite forms to the persons whose statements have been recorded and are being relied upon to appear before it for cross-examination and such cross examination shall be held on or before 2nd March, 2018.
(iv) The cross-examination shall be conducted and concluded in two or three sittings and positively by 13th March, 2018.
(v) After the cross-examination is conducted and further opportunities, as envisaged by the rules, are provided, we direct that the adjudication proceedings shall be concluded as expeditiously as possible and in any event by 31st May, 2018. No extension shall be granted in any circumstances.
(vi) We clarify that we have not expressed any opinion on the rival contentions as far as the merits of the allegations in the show cause notices. We also clarify that each of them are kept open for being raised at an appropriate stage before appropriate forum.
We must indicate that it is because of the acts and deeds of the BCCI in relation to a tournament styled as IPL that all these proceedings had to be initiated and now conducted in accordance with the FEMA. If IPL has led to serious breaches and violations of the FEMA, then, it is high time the organisers realise that after 10 years of holding such tournaments what we have achieved can be termed as a gain or advantage or benefit for they are outweighed completely by the resultant illegalities and breaches of law, which are projected in several courts consuming a lot of precious judicial time. If the IPL has resulted in all of us being acquainted and familiar with phrases such as "Betting", "fixing of matches", then, the RBI and the Central Government should at least now consider whether holding such tournaments serves the interest of a budding cricketer, the sport, the game itself. There is a auction and buying and selling of young cricket players by business houses and chubs. Apart from huge money involved, the tournament has brought with it crimes and casualties in the form of ban on clubs and players allegedly involved in wrong doing and breaching of rules and regulations
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2018 (2) TMI 579
Abetting one Sh. P.G. Rawal in transferring foreign exchange in contravention of Section 8(3) read with 8(4) and Section 48 read with Section 64(2) - Held that:- While the order in original has passed a very detailed order, however the adjudicating authority has not given any evidence or facts to state as to how the appellant has abetted with Sh. P.G. Rawal, in the said contravention. It appears that he has based his judgment on an inference from the conduct of the appellant since in spite of ample opportunities given to him, the appellant has failed to file a reply or appear for the personal hearing.
With regard to the contention that the appellant was the proprietor of two firms, i.e. M/s Vikram Sales Corporation and M/s Valifan Sales Agency, the adjudicating authority mentions at para 25 (vii) that the appellant in his statement, stated that both these firms belonged to Sh. Nitin Shah but the latter "appointed" him as the proprietor of the above two firms. It is not clear as to how a proprietor can be appointed. This fact has not been gone into by the original authority at all and no investigation has been conducted to establish the link between the appellant and the firms. Most importantly , no basis has been given by the adjudicating authority as to how he was involved in the entire case of fraudulently transfer of foreign exchange. This is a case where remittances were sent abroad by way of bogus imports. In order to penalize someone for contravention of various provisions of law, clear cut evidences have to be there with regard to his/their involvement. The adjudicating authority has made no efforts to provide the same. Instead, he has gone ahead and levied penalty of ₹ 7,50,000/- on the basis of mere inferences as recorded by him.
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2018 (2) TMI 333
Offence under FEMA - reject the petitioner's application for cross-examination - Held that:- A plain reading of the application filed by the petitioner seeking cross-examination of certain individuals named above also indicates that the petitioner had reiterated its contention that the material or evidence on record does not substantiate the allegation made against him. At the outset, the petitioner had denied all the allegations made against him in the complaint filed against him. The only reason provided by the petitioner for seeking cross-examination of Mr. Manoj Garg, Investigation Officer and the complainant is that they can be confronted with the documents in question.
According to the petitioner, the documents do not implicate or establish any offence on the part of the petitioner. The documents referred to by the petitioner are not documents that have been created or initiated by the investigating officer or the complainant; the documents have been found during the search and seizure operations conducted by the concerned officers. In the circumstances, this Court is not persuaded to accept that there is any ground to permit cross-examination as sought for by the petitioner. Similarly, there is also no ground to permit cross-examination of signatories to the Panchnama and the Panch witnesses either.
In the facts of the present case, it is apparent that the case set up against the petitioner is not based on any testimony of the investigating officer but on documents. In the aforesaid circumstances, this Court finds no infirmity with the decision to reject the petitioner's application for cross-examination.
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2018 (1) TMI 1222
Contravention of section 3 FEMA - statement made under oath reliance - Held that:- In harwala transactions, the main aspect is secrecy and stealth. Most of the facts relating to such transactions remain in the knowledge of the persons involved in such transactions. It is difficult for Authorities to unravel every link of such transitions. The burden is on the person to explain; otherwise adverse inference can be drawn based on surrounding facts and circumstances. The appellant is engaged in the money exchange business, real estate brokering and pre-owned car sales. In the case of the appellant, there is a presumption that he has indulged in two transactions and also he was in touch with a person in Dubai as per his own statement though retracted later on. A statement made under oath has to be taken as true, unless there is contra evidence to dispel that presumption. Mere retraction of a statement made under oath cannot help the appellant to get relief from the consequences of violations of an act.
Thus the elements of contravention of section 3 FEMA have been established in the present case. As considering the financial condition of the appellant, the penalty amount is reduced to ₹ 2 lac as agreed by the appellant to deposit within eight weeks from today. Let the appeal be dispose of on these terms by modifying the impugned order by reducing the penalty 50% of the penalty imposed only to this extent.
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2018 (1) TMI 568
Brother of the present respondent was detained under the provisions COFEPOSA Act - Held that:- No substance in any such ground for the simple reason that the law is well settled as interpreted and decided by the Honourable Supreme Court. The petitioner has also tried to compare several other judgments and Special Act like TADA and NDPS Act to plead and to induce by this Court to believe that it would be difficult to get direct evidence to control grave offence and, therefore, burden of proof rests upon respondents to prove that what is pleaded by the authority is not correct rather than to ask the authority to prove that what is pleaded by them is correct fact. It is difficult to believe such submission.
Petitioner has gone to the extent of challenging the impugned order by describing it as a non speaking order when it is pleaded that the Appellate Tribunal has neither considered the issue raised by the petitioner nor discussed the fact of the case. As already recorded herein above and perusal of impugned judgment, makes it very much clear that the factual details are well discussed in such judgment and all issues are properly dealt with and answered by the Appellate Tribunal with reasonings and citations of relevant cases. Therefore, there is no substance in the petition when it is trying to misguide the judicial proceedings.
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2018 (1) TMI 221
Application for dispensation and directing appellant to deposit 10% of the penalty amount and to furnish a credible security for the balance 50% - Held that:- On the one hand the appellant contends its financial credibility and on the other hand undue economic hardship. The Tribunal has waived off substantial pre-deposit and has directed only 10% of the penalty amount to be deposited with a surety for the balance 50% which cannot be said to be undue hardship on the appellant. Considering its own claim of financial stability, on the facts of the case this Court finds no error in the impugned order.
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