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FEMA - Case Laws
Showing 341 to 360 of 1378 Records
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2017 (7) TMI 1455
Prosecution under FERA - Acquirng foreign exchange without previous general or special permission from RBI from persons not being authorised dealers in foreign exchange and deposited the amounts in a bank account outside India - As decided by HC [ 2017 (2) TMI 518 - MADRAS HIGH COURT]contention of the respondent that he is not the citizen of India and he will not come under the purview of FERA is not at all acceptable - Also there are so many incriminating materials available to presume that the respondent would have committed the offences and he is liable to be charged under Sections 8(1) and 9(1)(a) of FERA, 1973
HELD THAT:- No ground to interfere with the impugned order. The special leave petitions are, accordingly, dismissed.
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2017 (7) TMI 1017
Contravention of certain provisions of Foreign Exchange Regulation Act, 1973 - Held that:- It is of conscious of the fact that by this order, the petitioner should not take advantage and protract the proceedings. Likewise by rejecting this petition, I am of the considered view that it would amount to denial of a reasonable opportunity of argument since framing of charges is an important event in the trial of warrant cases. In order to strike the balance between the prosecution's objections and the petitioner's request, it would be appropriate to direct the Court below to grant one day time for the petitioner to put forth his arguments with regard to framing of charges.
In the result, the charges framed on the file of the learned Additional Chief Metropolitan Magistrate (E.O.II), Egmore, Chennai is set aside. The petitioner is permitted to put forth his arguments on the charges framed in the said case. Such an exercise shall be completed within one working day and such date shall be fixed by the learned Additional Chief Metropolitan Magistrate (E.O.II), Egmore, Chennai on or before 31.07.2017. It is made clear that I have not expressed any of my views with regard to the merits of the petitioner's case and it is open to the learned Additional Chief Metropolitan Magistrate (E.O.II), Egmore, Chennai to frame charges against the petitioner, if such arguments are not advanced on the stipulated date.
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2017 (7) TMI 312
Penalties on account of violation of Sections 9(1)(b) and (d), Section 68(1), Section 64(2) and 63 of FERA - Whether the show cause notice is void being received by appellant after the sun set period? - Whether the statements given under section 108 of the Customs Act can be used as evidence against the accused?
Held that:- The new law (FEMA) continues to govern action vis-à-vis all offences under the repealed law (FERA) in accordance with the provisions of the latter, the only restriction being that notice of contravention under Section 51 of FERA had to be taken by the adjudicating officer before the expiry of two years from the date of commencement of FEMA – that is to say, by 31.05.2002. Since the show cause notice in the present case was issued by the adjudicating authority on 31.05.2002 which would be within the sunset clause under FEMA, its validity cannot be questioned, the fact that such show cause notice was served only in 2003 being inconsequential. Since the action was initiated within the period provided in law, delay (if any) in relation to the directions in the order of CEGAT would not render it bad.
In the present case, noticeably, the statements under Section 108 of the Customs Act have been taken note of by the authorities below for recording re-assurance on the ground the same corroborated the main incriminating circumstances, the same being seizure of unaccounted money and incriminating documents showing the infringing activity.
The submissions that the order of the Customs authorities has been set aside by CEGAT takes the appellants nowhere. The said order only brought to an end the proceedings taken out under the Customs Act. The said result can have no effect on proceedings taken out under FERA, its provisions being distinct from those of the Customs Act.
The questions of law raised in this appeal, thus, are answered against the appellants.
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2017 (7) TMI 73
Detention orders - Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (in short “COFEPOSA Act”) against the husband of the petitioner - Held that:- We have discussed the role and position of the detenue in the smuggling ring. The detenue was not a mere carrier and was in-charge of the Delhi operations of the racket as the kingpin Sh.Narendra Kumar Jain was based in Guwahati. It is clear that the activities of the detenue were of a serious nature and perpetrated with a great deal of expertise and coordination. The activities were of a massive scale and had been continuing for about two years. This had led to the detaining authority satisfying itself about the propensity and potentiality of the detenue to further indulge in such activities. Hence, it is clear that the ordinary law of the land was insufficient to curtail the activities of the detenue and the resort to the law of preventive detention was justified.
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2017 (6) TMI 983
Condonation of delay - period of limitation - submission of the respondents that FEMA is a special statute and, therefore, the provisions of Section 5 of the Limitation Act, 1963, would have no application - Held that:- Having regard to the provisions of the Statute, we are of the view that, given the language of the proviso to Section 35 of FEMA, this Court does not have a power to condone the delay beyond the time prescribed therein. The language used in the proviso appended to Section 35 of the FEMA by necessary implication excludes applicability of Section 5 of the Limitation Act to FEMA, being a Special law, which operates in a field, inter alia, connected with economic offences. Speed coupled with certainty are the bedrock of the statute. Clearly, even according the Revenue, the accompanying appeal has been filed beyond the prescribed time frame.
We are unable to condone the delay. The application will have to be dismissed.
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2017 (6) TMI 957
Non release and repatriate to India any foreign exchange which is due or accrued - Whether the company had failed to take all reasonable steps within the prescribed period, to release and repatriate to India, any foreign exchange which is due or accrued to it and in failure to do so, the department shall proceed, as per Section 8 of the Act, read with Regulation 3 of the Foreign Exchange Management (Realization, Repatriation and Surrender of Foreign Exchange) Regulations 2000 ?
Held that:- The company should take all reasonable steps to release and repatriate to India, the entire amount due in US dollars within such period and in such manner as stated by the Reserve Bank of India. In the case on hand, the department states that the company had obtained no permission from the Reserve Bank of India, under Section 42 of FEMA. Therefore, any violation to section 42 of the Act, the provisions of FEMA would attract against the company. No material has been produced before this Court as to what steps have been taken to realise the amount, within the stipulated period. The company was not able to place any material to show the reason for the failure to realise the said amount within the stipulated period, or any permission for extension of period has been obtained from the Reserve Bank of India, as contemplated under Section 42 of the FEMA. In the absence of any such orders from the Reserve Bank of India, the contention of the company cannot be accepted. Therefore, as the company has not complied with the provisions of FEMA, the action initiated by the department, for violation of FEMA is in consonance with the provisions of law. In view of the above, the Tribunal has lost its sign to consider the above said provisions of law, in allowing the appeals. Therefore, we have no hesitation to interfere with the orders passed by the Tribunal and hence the same is liable to be set aside.
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2017 (5) TMI 852
Violation of Section 3 of FEMA, 1999 - Held that:- In the present case, the remitter and investor are different and are not in accordance with the Regulations made by the Reserve Bank of India under the Act. The remittance 1 and remittance 2 were made by the person other than the investor and are in direct contravention of Regulation 5 of FEMA (Permissible Capital Account Transactions) Regulations, 2000.
From the perusal of record, it is clear that in the instant matters, there is contravention of the provisions of Section 3 (b) .Section 6(2), 6(3)b & Section 42 (1) of FEMA, 1999 read with Regulation 5 (1) of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India), Regulations, 2000, Paragraph 8 of schedule 1 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, Regulation 5 of the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000, and Para 9 (1) (A) of schedule to the Foreign Exchange Management (Transfer one! Issue of Security by a Person Resident outside India) Regulations, 2000. We agree with the observations of the Adjudicating Authority expressed in para nos. 73 to m of the Adjudication Order. SCNs 1 to 4 were rightly issued.
The penalty amount, if any deposited by the appellants as pre-deposit will be adjusted and the balance amount will be paid by them individually within a period of sixty days from the date of communication of the order, failing which the Enforcement Directorate may recover in accordance with law. With these directions, the instant appeals are disposed of with some modification in the amounts of penalties imposed against all the appellants taking into consideration all the facts and circumstances of the case.
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2017 (5) TMI 492
Enforcement of the Award - recognition and enforcement of Award made in favour of Docomo - Held that:- As regards the refusal of permission by RBI for the second time, after the Award, the seeking of such permission by Tata was based on its earlier opposition to the Award which was similar to the one raised now by RBI. With Tata having accepted the Award as such, it has withdrawn its objections thereto and consequently its stand in the application made to RBI on 1st July 2013 seeking permission. As long as the Award stands, there is no need for any special permission of RBI for remission by Tata of the amount awarded thereunder to Docomo as damages. The refusal by RBI of such permission which is not required in the first place, or the fact that such refusal has not been challenged, would therefore not affect the enforceability of the Award.
There is no provision in law which permits RBI to intervene in a petition seeking enforcement of an arbitral Award to which RBI is not a party. Its prayer for permission to intervene is rejected.
Validity of the SHA and the Award - Clause 5.7.2 of the SHA was a contractual promise by Tata to find a buyer for Docomo's shares which could always have been performed using general permissions of RBI under FEMA 20. It was held that the promise was valid and enforceable because sub-regulation 9(2)(i) of FEMA 20 permitted a transfer of shares from one non-resident to another non- resident at any price. The AT held that Tata could have lawfully performed its obligation to find a buyer at any price, including at a price above the shares' market value, through finding a non-resident buyer. Its failure to do so was, according to the AT, a breach entitling Docomo to damages.
The SHA, therefore, could not be said to be void or opposed to any Indian law including the FEMA, much less the ICA. FEMA contains no absolute prohibition on contractual obligations. It envisages grant of special permission by RBI. As rightly held by the AT, Clause 5.7.2 of the SHA always was legally capable of performance without the special permission of RBI, using the general permission under sub-regulation 9(2) of FEMA 20.
As far as the Award itself is concerned, the interpretation placed by the AT on the clauses of the SHA was consistent with the intention of the contracting parties and not opposed to any provision of Indian law. There is nothing in the SHA as interpreted by the Award that renders it void or voidable under the ICA or opposed to either the public policy of India or the fundamental policy of Indian law. The AT's interpretation of the various provisions of the FEMA and the regulations thereunder have also not been shown to be improbable or perverse. What was invested by Docomo was US $ 2.5 billion and what it will receive in terms of the Award is only 50% of that amount. The Court finds that no ground under Section 48 of the Act is attracted to deny the enforcement of the Award.
Is the compromise valid? - Held that:- The Court is unable to find anything in the Consent Terms which can be said to be contrary to any provision of Indian law much less opposed to public policy or void or voidable under the ICA. The issue of an Indian entity honouring its commitment under a contract with a foreign entity which was not entered into under any duress or coercion will have a bearing on its goodwill and reputation in the international arena. It will indubitably have an impact on the foreign direct investment inflows and the strategic relationship between the countries where the parties to a contract are located. These too are factors that have to be kept in view when examining whether the enforcement of the Award would be consistent with the public policy of India.
It appears to be a well settled legal position that parties to a suit, or as in this case, an Award, may enter into a settlement even at the stage of execution of the decree or Award.
The Award dated 22nd June 2016 passed by the AT in London in LCIA Case No. 152896 under the LCIA Rules is declared as enforceable in India and shall operate as a deemed decree of this Court.The parties are bound by the Consent Terms and will proceed to take steps in terms thereof.
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2017 (4) TMI 930
Proceedings under Section 13 of the Foreign Exchange Management Act, 1999 read with Rule 9 of the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 - Held that:- Reasons have been clearly disclosed by the second respondent in the communications dated 04.11.2016 by specifically indicating that the case requires an indepth examination, meaning thereby, the objections raised by the petitioners as against the allegations levelled against them are required to be considered further and for such consideration, the petitioner must appear in person to putforth their case. Therefore, the reliance placed by the learned Senior counsel for the petitioners on the Division Bench decision of the Bombay High Court will not lend support to his case.
For all the above reasons, hold that the communications dated 04.11.2016, which are impugned in these writ petitions, are intended for carrying out an indepth examination by the second respondent as against the allegations raised against the petitioners. Such communications, in my considered opinion, are also in compliance of the principles of natural justice. By the communications dated 04.11.2016, the second respondent has not determined the case against the petitioners or passed an order adverse to their interest. Therefore, the writ petitions are only liable to be dismissed and the petitioners are not entitled for any relief in these writ petitions.
The second respondent is hereby directed to issue a fresh notice to the petitioners indicating the date, time and venue for the personal hearing to be given to the petitioners and if any such notice is received, the petitioners are at liberty to appear before the second respondent either in person or through an authorised representative to putforth their defence.
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2017 (4) TMI 729
Enforcement of a foreign award - express representations were made that the transactions were in compliance with the applicable laws, it is now contended that the SHA was only a device to circumvent the provisions of FEMA - Held that:- The conduct and the stand of Unitech can most charitably be described as plainly dishonest. This court is of the view that permitting Unitech to prevail on such contentions to resist the enforcement of Award would plainly amount to rewarding dishonesty and would be manifestly unjust.
Curiously, no such contentions were advanced by Unitech before the Arbitral Tribunal. Further, Unitech has also failed to indicate any credible explanation for not urging the same before the Arbitral Tribunal. Thus, Unitech cannot be permitted to raise such contentions at this stage. It is also necessary to bear in mind that the present proceedings are for enforcement of inter se rights between Cruz City and Unitech and Cruz City cannot be precluded from enforcing its rights which fall within the ambit of private international law.
The contentions advanced by Unitech are plainly an afterthought as no such contentions were advanced before the Arbitral Tribunal. Indisputably, the Arbitral Tribunal was the forum of choice and had jurisdiction to decide all disputes between the parties. The Keepwell Agreement was subject to Indian laws and Unitech had full opportunity to challenge the validity of the Keepwell Agreement before the Arbitral Tribunal. However, Unitech having failed to do so, this court finds no reason to entertain such contentions to resist enforcement of the Award. There is also much merit in Mr Mukopadhaya’s contention that Unitech had deliberately refrained from taking any such plea before the Arbitral Tribunal as that may have entitled Cruz City to claim further damages. It is apparent that Unitech has also not provided any reason why such defences were not raised before the Arbitral Tribunal. In the circumstances, this court has little hesitation in finding that the contentions now raised are an abuse of the process of this court and, therefore, must be rejected. This is a fit case where principles of issue estoppel ought to be applied notwithstanding the grounds available under Section 48(1) of the Act.
Even if it is accepted that Burley's business was not bonafide, Unitech would be liable to suffer the consequences that would follow under FEMA, but Unitech cannot escape its liability to Cruz City. Insofar as the public policy of India is concerned, the same can be adequately addressed while considering the question of regulatory compliances at the time of remitting the funds recovered from Unitech. When considered in the context of public policy, it would be more pernicious and destructive of the rule of law to permit Unitech to escape its obligations and avoid the Award in comparison to enforcing it.
Unitech’s contention that structure contemplated under the Keepwell Agreement read with the SHA provided an assured return at a predetermined rate to Cruz City and this was a flagrant violation of FEMA and Regulations made thereunder, is also bereft of merit. The Put Option provided to Cruz City under the Keepwell Agreement could be exercised only within a specified time and was contingent on the Santacruz project not being commenced within the prescribed period. This was not an open ended assured exit option as is sought to be contended by Unitech. Cruz City had made its investment on a representation that the construction of the Santacruz Project would commence within a specified period. Plainly, if the construction of the Santacruz project had commenced within the specified period - that is, by 17.07.2010 - Cruz City would not be entitled to exercise the Put Option for exiting the investment. Further, the Put Option could only be exercised within a fixed time period of 180 days and the said option would be lost thereafter.
The reliance placed by Unitech on the RBI circulars dated 09.01.2014 and 14.07.2014 is also misplaced. In terms of RBI’s circular dated 09.01.2014 optionality clauses granting assured returns on FDI are proscribed. However, it is doubtful whether the said circular would be applicable to cases where a foreign investor founds its claim in breach of contract. Plainly, if an investment is made on representations which are breached, the investor would be entitled to its remedies including in damages. The aforesaid circulars proscribe assured return instruments brought in India under the guise of equity. However, in the present case, Cruz City is only seeking to enforce its obligations against Burley, an overseas entity.
Even if it is accepted that the Keepwell Agreement was designed to induce Cruz City to make investments by offering assured returns, Unitech cannot escape its liability to Cruz City. Cruz City had invested in Kerrush on the assurances held out by Unitech and notwithstanding that Unitech may be liable to be proceeded against for violation of provisions of FEMA, the enforcement of the Award cannot be declined.
As argued the Keepwell Agreement and the SHA were only a device to overcome the provisions of FEMA is not entitled to raise this plea for the reasons as stated hereinbefore. No such plea was raised before the Arbitral Tribunal. It is plainly an afterthought and an abuse of the process of this court. Secondly, the contention is premised on an erroneous assumption that the Keepwell Agreement provides for an assured return in violation of FEMA. As stated above, the Put Option was relevant only if the construction of the Santacruz Project was not commenced within the specified period of two years. Cruz City had no assurance of exit at a pre-determined return under the Keepwell Agreement in the event the execution of the project was commenced on schedule. And thirdly, if Cruz City has been induced to make an investment on a false assurance of the Keepwell Agreement being legal and valid, Unitech must bear the consequences of violating the provisions of Law, but cannot be permitted to escape their liability under the Award.
In view of the above, the objections raised by Unitech under Section 48 of the Act against enforcement of the Award are rejected.
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2017 (4) TMI 4
Rejecting the petition of the petitioner for releasing the foreign currency notes recovered from the vehicle of the petitioner - Held that:- From plain reading of Section 451 of Cr P C, it appears that the Court should pass order with regard to the custody or release of the seized articles. Admittedly, the petitioner was having licence to deal in foreign currency and his licence was valid up till 31.08.2016. He applied for renewal of his licence on 04.01.2016, one month before the date of expiry of that licence. From the perusal of Annexure 2 it appears that the Reserve Bank of India renewed the licence of the petitioner to deal in foreign currency on 04th January, 2016. The petitioner again applied for renewal of licence and in this interregnum period, it shall be deemed that the licence of the petitioner is valid unless there is express order by the authority concerned to reject the application of the petitioner granting his licence. It also transpires that the petitioner, who is dealing in foreign currency and the aforesaid foreign currency worth ₹ 39,12,102.30 P was seized and is kept in the District Treasury. Apparently, no useful purpose would be served in keeping the currency in the District Treasury. Therefore, that currency should be released in favour of the petitioner on providing proper security. It is also a fact that foreign currency is not a material evidence.
Therefore, find that the rejection of the petition of the petitioner by the Court of learned Chief Judicial Magistrate as well as the learned Additional Sessions Judge X, East Champaran at Motihari holding that the petitioner has got no licence is illegal and it cannot be allowed to sustain.
Considering the facts aforesaid, the quashing petition is allowed. Direction to the Court below to release the foreign currency in favour of the petitioner on providing security of the same amount with one surety.
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2017 (3) TMI 1059
Penalty imposed under FEMA for contravention of the provisions of Section 9(1)(b) and Section 72(i)(c) of Foreign Exchange Regulation Act, 1973 - Single Judge declined to entertain the writ petition on the ground that an alternative efficacious remedy of appeal is available against the impugned order - Held that:- Having regard to the specific case of the writ petitioner/appellant herein that the impugned order was in violation of the principles of natural justice, in our considered view dismissal of the writ petition at the threshold solely on the ground of availability of alternative remedy is not warranted.
Accordingly, the order under appeal is set aside and the writ petition is restored to file for consideration afresh in the light of the observations made above.
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2017 (2) TMI 656
Complainant preferred a complaint under Sections 8(1), 9(1)(c) and 9(1)(a) of the Foreign Exchange Regulation Act, 1973, punishable under Section 56(1)(i) of Foreign Exchange Regulation Act, 1973 - Held that:- On perusal of the entire materials available on record, it is clearly revealed that so many incriminating materials available against the petitioner/A3. It is also revealed that the petitioner/A3 was informed by A2 about the business transaction of the A1 Company then and there.
Further, the petitioner/A3 has acted as Chairperson for the Board of Directors of the Company meeting and passed resolution in the Board Meeting and A1 Company entered into contract with some other companies and the subsequent transactions were also informed by A2 to the petitioner/A3. Hence, it is very reasonable to presume that the petitioner/A3 was knowing about the in-charge and responsibility for the conduct of the business. Hence, the argument of the learned Senior counsel appearing for the petitioner/A3 that the petitioner is not in-charge of the company and she does not know about the contravention took place in the day today administration of the company is not acceptable, at the present stage, since so many materials were produced on the side of the Enforcement authorities.
Further, the learned Senior counsel appearing for the petitioner has submitted that at the time of interrogation by the respondent authorities, the petitioner has denied all the questions and she has specifically stated that she had no knowledge about the business transactions of the company and the day today affairs of the Company. In this regard, this court is of the considered view that the petitioner/A3 denied all the questions raised by the enforcement officials and replied that she did not know about the company day today affairs and hence, this court has to look into the materials and evidences produced on the side of the Enforcement authorities.
On verification of the materials available on record, it is presumed that the petitioner/A3 is responsible and liable for the contraventions done by the A1 Company and there are sufficient records and evidences produced on the side of the enforcement authority. Hence, this court is of the considered view that there are prima facie materials available to frame charges against the petitioner/A3 under Sections 8(1), 9(1)(a) and 9(1)(c) of the Foreign Exchange Regulation Act, 1973 and the trial Judge has rightly come to the conclusion that prima facie materials are available against the petitioner and dismissed the discharge petition filed by the petitioner/A3. In view of the above circumstances, this court finds no infirmity or illegality in the order of the trial court, which do not call for any interference by this court.
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2017 (2) TMI 518
Prosecution under FERA - Acquirng foreign exchange without previous general or special permission from RBI from persons not being authorised dealers in foreign exchange and deposited the amounts in a bank account outside India - Complaint under Sections 8(1), 9(1)(a) and 14 of the Foreign Exchange Regulation Act, 1973 - HELD THAT:- On perusal of the letter written by the respondent, the contention of the respondent that he is not the citizen of India and he will not come under the purview of FERA is not at all acceptable.
In view of the above circumstances, this court is of the considered view that there are so many incriminating materials available to presume that the respondent would have committed the offences and he is liable to be charged under Sections 8(1) and 9(1)(a) of FERA, 1973. The trial court, in the considered view of this court, without considering the materials available on record, has come to the conclusion that there is no incriminating materials available in this case in prima facie for framing charges under Section 8(1) of FERA & 9(1)(a) of FERA. Hence, the impugned order passed by the trial court is liable to set aside and accordingly, the same is set aside.
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2017 (1) TMI 1342
Purchase of agricultural lands in India in violation of Foreign Exchange Management Act (FEMA) - Detention of passport - Look Out Circular issued - Whether the passport of the petitioner can be impounded and the impugned notices issued by the respondents are sustainable? - Held that:- As per the instructions issued by the respondents/ department, look out circular can be issued against (i) persons with terrorist or militant links (ii) beligerent foreigners (iii) foreigners previously noticed for violations of visa conditions (iv) persons required by court in criminal/civil cases who are absconding and (v) absconding offenders wanted by Police/CBI/Customs/Central Excise/Directorate of Revenue Intelligence and other competent investigation agencies. In the present cdase, no where it was mentioned in the impugned circular that the petitioner comes under any of the categories mentioned in the instructions given by the respondents themselves.
In so far as impounding of passport is concerned, the Honourable Supreme Court in the case of Suresh Nanda vs. CBI mentioned [2008 (1) TMI 876 - SUPREME COURT], has held that the police may not have power under Section 102 (1) of Code of Civil Procedure to seize a passport or to impound the same. It was further held that impounding of a passport can only be done by the Passport Authority under Section 10 (3) of the Passports Act, 1967.as per Section 104 of Cr.P.C., a 'document' does not include a passport. In the present case, it is not the case of the respondents that they have taken necessary steps under Section 10 of the Passports Act to impound the passport Act and therefore, the mere detention of the passport of the petitioner at the airpott without following the provisions contained under Section 10 of the Passport Act and issuing the look out circular without issuing prior notice are not legally sustainable.
It is brought to the notice of this Court that after dismissal of writ petitions filed by petitioner before the Kerala High Court, the respondents themselves wanted the petitioner to appear for inquiry only at Delhi on the ground that cumulatively, investigation can be done in Delhi. At any rate, it is contended that the petitioner is cooperating with the enquiry.
It is to be noted that the petitioner's passport, which has been impugned by the second respondent, is in the custody of the authorities concerned for the past 30 days. In the meantime, the petitioner has appeared before the authorities for inquiry on 15.01.2017 and 23.01.2017 and extended his cooperation for conducting the enquiry. Therefore, impounding of the petitioner's passport is not warranted. In this case, in the impugned notices, there is no reason has been mentioned for calling the petitioner an absconder. It is also to be noted that the impugned look out circular has been issued without any prior notice to the petitioner and without giving him a reasonable opportunity. It is also not the case of the respondents that they have taken necessary action as contemplated under Section 10 of the Passport Act, without doing so, the impugned orders are legally not sustainable.
This Court direct the respondents to return the passport to the petitioner forthwith after cancelling the Look Out Circular with stringent conditions:
[i] the petitioner will appear before the authority concerned for the enquiry as and when he has been summoned when a notice is given to a reasonable time for his appearance;
[ii] the petitioner will undertake before this Court that he will specifically cooperate with the inquiry and will not abscond from the proceedings;
[iii] he will abide any other reasonable conditions which may be imposed by the authority concerned; and
[iv] he may be entitled for the assistance of a lawyer but the lawyer will be only present in the office of the respondent at the time of enquiry.
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2017 (1) TMI 1166
Penalty for contraventions of the provisions of Sections 8(1), 9(1)(a) and 14 of FERA - legal status of the appellant independently - Held that:- As seen from the records that the appellant claimed not a citizen before the Division Bench of this Court in the Habeas Corpus Petition. In the election petition filed by him, he claimed as an Indian citizen. But before the Foreign Exchange Regulation authorities, he claimed as if he is a non-resident Indian. Thus, the appellant has taken different stands, which are not permissible under law. In such view of the matter, this Court deems it fit only to hold that the order passed by the appellate authority that the appellant was a resident within India in this respect does not require any interference. Accordingly the first question of law is answered against the appellant.
Whether the appellate authority, having found that on evidence, the charges held to be not proved, can exercise the suo motu powers under Section 52 and re-frame the charges sitting in appeal and whether new evidence can be accepted by the appellate authority? - Held that:- In the present case, the appellate authority has rightly considered only the evidence that was considered by the adjudicating authority and no new material was placed or considered. It is also not the case of the appellant that the appellate authority has based its findings on some evidence, alien to the adjudication proceedings, without granting any opportunity. In the case on hand, the appellate authority had to proceed with the examination of the evidence in accordance with Section 52, as the findings and conclusions arrived at by the adjudicating authority did not logically follow. The appellate authority has also held that the primary burden of the findings rendered by the adjudicating authority would appear to be to deal with the points taken in defence and not to examine the evidence so as to find out as to how the charges can be substantiated on that evidence, and that the adjudicating officer assumed the allegations in the show-cause notice as self-evident of the charges. Hence, on that score, it became necessitated for the appellate authority to deal with the evidence for corroborating the same with the points taken in defence. It is also evident from Page-96 of the order of the appellate authority that the learned counsel for the appellant also rightly admitted that the Board has the authority to consider the matter afresh based on the evidence already collected. Therefore, the appellant cannot now question the authority, which even otherwise, is well protected under Section 52(3) and (4).
Whether the order of the adjudicating authority is vitiated on account of bias, violations of principles of natural justice and fair play as he was a part of the investigating team and a witness in the criminal case initiated by the Department? - Held that:- There is nothing on record to show that the adjudicating officer was prejudiced on the subject matter, which reflected in the adjudication process or in the decision. Upon perusal of the records, we find that the appellant was given a fair opportunity. As found by the appellate authority, the guilt of the appellant was culled out only from the documentary evidence, and the entire statements of the other witnesses were discarded. Thus the plea of bias put forth by the learned senior counsel appearing for the appellant, will not hold any water. Though the principles enunciated in the other judgments relied on by the learned senior counsel for the appellant, in respect of bias, are not in dispute, the same will not apply to the case on hand. Further, the plea of bias looses its significance in the present case, since the appellate authority had independently examined the issues based on evidence on record, afresh. Thus, the third question of law is answered against the appellant.
Whether Section 3(1) of the Companies Act, which confers a separate legal entity to the company, absolutely dissolves the liability of the Director of a company under every circumstances? - Held that:- The protection given to a company is not an absolute bar to proceed against the directors and it is to be decided on the facts of the each case put to test. In this regard, the appellate authority, after analysing the matter in detail, and also considering the evidence placed on record, came to the conclusion that the name of the company Dipper Investments Limited was used for obtaining the bank drafts, opening an account in Barclays Bank, and for crediting the amount of drafts in that account and transferring the funds so credited to the accounts of Meer Care & Desai, Westback Ltd., and Bank of Ireland. There is also a clear finding that none of these acts could be attributed to the company and that there is no evidence that these were done in the course of company's business.Even though the show-cause notice does not spell out as to how the charges can be made out on the basis of the evidence as narrated, that has been done in the inquiry during the adjudication proceedings. In view of the clear finding given by the appellate authority that the various acts done in the name of the company could not be attributed to the company and that there is no evidence that these were done in the course of company's business, it is clear that the appellant is legally liable for those acts. Accordingly, the fourth and final question of law is answered against the appellant.
Appeal decided in favour of revenue
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2017 (1) TMI 1114
Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 - forfeiture order - detention of the original petitioners - Held that:- In the present case, the original petitioner is not a person of no means. Her father owned properties and wrote a will. Later, it was cancelled and the family members had a registered deed of partition among themselves. Further, her father was a gold and silver merchant and has declared jewellery under the Gold Control Act to the Superintendent of Central Excise. All these documents have been accepted by the authorities but only doubts have been thrown without any legal basis. The original petitioner had submitted proper records to shift the burden of proof on the department. The mere fact that the Act does not require the competent authority to record a finding that the forfeited property was purchased by monies received from smuggling activities does not end the matter. The burden no doubt is on the person who is in possession of the property to explain their sources. But, once an explanation is forthcoming, then, naturally it is for the competent authority to prove the contrary.
This Court is not satisfied with the order of the Appellate Authority. As can be seen from Section 15, the Appellate Authority has ample power to call for any records from anyone and if they were not satisfied with the receipts produced by the petitioner, they could have summoned such of those documents from necessary quarters or examined witnesses in that behalf. This is especially when a property of a person is sought to be confiscated. This Court is satisfied that the original petitioner had discharged her obligation of proving her source of wealth in purchasing the property and in these two decades of litigation, she had also passed away. This is not a matter where a further remand is necessary. Further, the very same properties were under orders of forfeiture in connection with the detention of the original petitioners another son and that was released by the very same Tribunal. Again, the Tribunal, instead of relying upon the full order of that Tribunal chose to rely upon a portion of the order without any reason. The Tribunal also did not keep in mind the order of this Court made earlier remanding the matter.
This Court has no hesitation to set aside the order of the 2nd Respondent Tribunal made confirming the forfeiture order of the 1st Respondent.
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2017 (1) TMI 826
Violation of Section 8 (3) and Section 8 (4) of the Foreign Exchange Regulation Act, 1973 read with Chapter 7A.20 (i) of the Exchange Control Manual, 1995 - Held that:- Courts have repeatedly held that in quasi criminal proceedings the penalty should not be imposed merely because it is lawful to impose the penalty. Whether penalty should be imposed or not is a matter of discretion to be exercised judicially and on consideration of all the relevant circumstances. Further simplicitor from the non-compliance of placing on record no inference can be drawn that the foreign remittance was not used for the purpose of import. It is trite law that to impose a penal liability compliance should be sought within a reasonable time and a person cannot be penalised for not retaining the documents for a period of 13 years. During the course of the present appeal, exchange copy of Bill of Entry qua transaction at Sr. No. 2 has already been placed however, despite best efforts the appellant could not locate the exchange copies of Bills of Entry qua other two transactions.
In view of the belated show cause notice being served on the appellant, the defence of the appellant that it was not in possession of the copies of Bill of Entry for the two transactions is plausible. It cannot be held that the respondent has proved its allegation beyond reasonable doubt and the copies of the Bills of Lading probablise that the remittances were utilized for import.
Consequently, the impugned orders passed by the Appellate Tribunal and the Adjudicating Authority are set aside.
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2017 (1) TMI 461
Maintainability of the writ petitions before this Court - whether issue involved in these writ petitions relate to 2G Spectrum Case and therefore, this Court has no jurisdiction to entertain these writ petitions? - Held that:- Since the investigation carried on by the respondents is being monitored by the Honourable Supreme Court, it is too early for this Court to take up these writ petitions for adjudication on merits. Consequently, the preliminary objection raised on behalf of the respondents is sustained. The writ petitions are dismissed as they are not maintainable before this Court.
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2017 (1) TMI 398
Principle of segregation - Detention order - Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 - High Court has come to the conclusion that there were various grounds which formed the basis of the detention order and even if the documents pertaining to one particular ground were not furnished, that ground could be ignored applying the principle of segregation and on remaining grounds the detention order was still sustainable - whether the principle of severability of grounds, which is enshrined in Section 5A of the Act, is not applicable to the case at hand as the detention order was passed on one ground only? - Held that:- Each 'basic fact' would constitute a ground and particulars in support thereof or the details would be subsidiary facts or further particulars of the said basic facts which will be integral part of the 'grounds'. Section 3 of the Act does not use the term 'grounds'. No other provision in the Act defines 'grounds'. Different instances would be treated as different 'grounds' as they constitute basic facts making them essentially factual constituents of the 'grounds' and the further particulars which are given in respect of those instances are the subsidiary details.
When we apply the aforesaid test to the facts of this case, we are inclined to agree with the conclusion of the High Court that the order of detention is based on multiple grounds inasmuch as various different acts, which form separate grounds, are mentioned on the basis of which the detaining authority formed the opinion that it was desirable to put the appellant under detention. We, thus, reject the contention of the appellant that, in the instant case, the detention order is based only on one ground. Once it is found that the detention order contains many grounds, even if one of them is to be rejected, principle of segregation contained in Section 5A gets attracted.
In the instant case, the documents containing the statement of Pooran Chand Sharma were not given and for this very reason, the High Court rightly held that such a ground cannot be relied upon by the respondents in support of the order. However, that would not mean that if there are other grounds on which the detention order can be sustained, principle of severability would become inapplicable. If this is accepted, it would mean that provisions of Section 5A of the Act cannot be applied at all. While rejecting such a contention, it would be sufficient to point out that constitutional validity of Section 5A of the Act was challenged in this Court and repelled in the case of Attorney General for India & Ors. v. Amratlal Prajivandas & Ors. (1994 (5) TMI 235 - SUPREME COURT ) after discussing the provisions of Section 5A in the light of Article 22(5) of the Constitution. Therefore, this contention is not available to the appellant.
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