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FEMA - Case Laws
Showing 501 to 520 of 1378 Records
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2013 (10) TMI 904
Jurisdiction of special judge - Transfer of case from the Magistrate to the Special Judge - Held that:- it is apparent from a reading of Section 56 of the FERA as also Section 61 of the FERA that exclusive jurisdiction has not been conferred on the Magistrate to try cases relating to a violation of the provisions of the FERA. Absent jurisdictional exclusivity, the principle of law laid down in Antulay is not applicable and the Special Judge could have been conferred jurisdiction to try the case against the petitioners - The right of appeal available to the petitioners in the present case is not taken away by transferring the case from the Magistrate to the Special Judge. The petitioners continue to have the right to appeal, but it is only the forum that has changed. They can now prefer an appeal from the order of the Special Judge to the High Court. Therefore, it is not as if the petitioners are denuded of any right to agitate their cause in a superior forum by the transfer of the case to the Special Judge - Therefore, it cannot be seriously urged that the petitioners were prejudiced by a change of the appellate forum.
High Court could have exercised its judicial power of transfer under Section 407 of the Code (if called upon to do so) and it could also have exercised its administrative power of transfer under Article 227 of the Constitution, which it did, as is evident from the letter dated 6th May 2002 issued by the Registrar General of the High Court of Jharkhand to the Secretary to the Government, Law (Judl.) Department, Government of Jharkhand. The fact that for an administrative exigency, the High Court decided to exercise its plenary administrative power does not per se lead to the conclusion that the transfer of the case from the Magistrate to the Special Judge was unlawful. The legality of the action cannot be called in question in this case since no prejudice has been caused to the petitioners by such a transfer - Decided against appellant.
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2013 (10) TMI 363
Prohibition on export and import of foreign currency - Confiscation of foreign currency - Foreign brought to India without declaration - First adjudication authority ordered complete confiscation - Tribunal ordered release of confiscation stating no confiscation necessary at the time of leaving India and that the currency in possession of the first respondent was also within the limit permitted by Reserve Bank of India - Held that:- the first respondent, as a matter of right, is not entitled to import or export in the manner as he wishes without complying with the provisions of the Regulations.
Whether foreign currency is goods for the purpose of confiscation - Held that:- Reading of the definition of "goods" as stated in Section 2(22) along with the definition of "currency" stated in Section 2(h) of FEMA, make it clear that export of currency contrary to prohibition imposed under any other law is liable for confiscation. Therefore, the contention of the learned counsel for the first respondent that there is no power to confiscate the currency under Section 113(d) of the Customs Act, is liable to be rejected.
The order of the Tribunal holding that there is no provision to declare the foreign currency in hand, cannot be sustainable. The currency possessed by the first respondent, was contrary to the Regulation, particularly Regulation No.5 which clearly states that as per Regulation, no person shall, without the general or special permission of the Reserve Bank, export or send out of India or bring into India, any foreign currency. The goods attempted to be exported being foreign exchange, as defined under the FEMA. - Decided in favour of Revenue.
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2013 (9) TMI 1282
Issues involved: Suspension of registration of a society under the Foreign Contribution (Regulation) Act, 2010 u/s 13, legality of suspension order, necessity of recording reasons for suspension.
Summary:
The High Court of Delhi considered a case where a society registered under the Societies Registration Act, 1860 had its registration suspended by the Central Government u/s 13 of the Foreign Contribution (Regulation) Act, 2010. The suspension order directed that the society could only utilize funds with prior permission. The society challenged this order, denying allegations of transferring funds to non-FCRA registered NGOs.
The Court analyzed Sections 13 and 14 of the FCRA, which outline the process of suspension and cancellation of registration. It noted that the Central Government can suspend registration for up to 180 days if it deems necessary in the public interest, after conducting an appropriate inquiry and providing a hearing to the organization. However, in this case, the suspension was deemed improper as no prior notice or inquiry was conducted before the suspension order was issued.
Furthermore, the Court emphasized the importance of recording reasons for suspension as a mandatory requirement u/s 13(1) of the Act. It clarified that while the decision to suspend is discretionary, the reasons for suspension must be clearly stated in the order itself. Failure to provide reasons hinders the organization's ability to challenge the suspension effectively.
Consequently, the Court set aside the suspension order dated 30.04.2013, highlighting the lack of proper procedure and reasoning. It allowed the respondent to take fresh action in accordance with the law but directed the immediate release of the petitioner's account.
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2013 (9) TMI 920
Refund of seized amount - Investigation procedure - Held that:- Though the money was seized on 09/05/2011 at about 11 O'clock in the night, till date the investigation is not completed. If the respondent authorities are of the opinion provisions of FEMA Act are violated by the appellant, investigation must be completed within a reasonable time. It is more than one year since the investigation is pending. In that view of the matter, though we are not agreeing with the relief sought by the appellant - there has to be time frame for completion of the investigation by the respondent authorities that is Directorate of Enforcement - Appeal is disposed of directing respondents 1 and 2 to complete the investigation as expeditiously as possible not later than four months from the date of receipt of a copy of this judgment. - Decided partly against petitioner.
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2013 (9) TMI 834
Bar in conveyance - Whether there can be a bar in conveying the property over which persons of 'Indian Origin' having rights and interests, in favour of an 'Indian Citizen' - Held that:- petitioner has not actually approached the second respondent and that there was no instance of refusing registration, as alleged by the petitioner. However, in view of the law declared, as above, this Court does not require any second thought to reiterate the same and to hold that the petitioner is entitled to have the reliefs sought for - In the said circumstance, there will be a direction to the second respondent to effect conveyance, as and when the relevant deed is produced, so as to have the desired relief, provided the document is otherwise in order and subject to satisfaction of the requirements under the Registration Act/Rules and satisfies the fees payable in this regard. So as to establish the identity of the petitioner, the petitioner shall produce the required materials, such as Passport or such other legally acceptable documents - Decided in favour of appellant.
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2013 (9) TMI 708
Abetment of Contravention of Section 8(3) and 8(4) of FERA - Whether the appellants were liable for abetment of the contravention of Section 8(3) and Section 8(4) of FERA by virtue of having opened a Letter of Credit as a status holder in terms of the provisions of the Export Import Policy and the Handbook of Procedure, in force at the relevant time – Held that:- Birla Corporation Ltd. vs. Collector of Central Excise [2005 (7) TMI 104 - SUPREME COURT OF INDIA] - if no appeal was filed against an earlier order or the earlier appeal involving the identical issue was not pressed by the revenue, the revenue was not entitled to press the other appeals involving the same question - if the department accepted a principle laid down in an earlier case, it should not be permitted to take a contrary stand in a subsequent case - It was further pointed out that the classification of goods adopted in earlier decision must not be slightly disregarded in the subsequent decisions.
Both the notices issued under FERA / FEMA, charged the appellants with similar allegation to the effect that Foreign Exchange was acquired for bringing into India the goods of - (i) specific value; and (ii) specific description, but what was brought into India were goods of different value and different quality and hence there was mis-utilisation of foreign exchange and consequent breach of Sections 8(3) and 8(4) of FERA - when the authorities under FERA while issuing notice solely relied upon the investigation carried out by the customs authorities then in such circumstances the authorities under FERA should not have taken a stand contrary to what was taken by the customs - The rational of this Rule was the need for consistency, certainty and predictability in the administration of justice.
The manner in which the customs authorities were expected to follow the decision of the licensing authorities in the matter of issuance of license, the custom authority's decision in the matter of classification and valuation are also final vis-a-vis FERA authorities, more particularly, when the custom authorities were the statutory authorities empowered to decide the issue of classification and valuation of goods at the time of import as well as export.
Validity of Saving Provisions of Section 49(3) of FEMA - When proceedings commenced prior to 31.05.2002 under erstwhile Section 51 of the FERA were sought to be saved under Section 49(3) of the FEMA – Held that:- Following Star India Pvt. Ltd. v. Union of India [2010 (12) TMI 657 - BOMBAY HIGH COURT ] - The adjudicating officer, on taking notice of the alleged contraventions of FERA, had signed the show cause notice on 31st May 2002. Since the adjudicating officer had taken note of the alleged offence on 31st May 2002, which was within the period of two years from the commencement of FEMA as contemplated under Section 49, Clause (3) of the FEMA, the adjudicating officer had the jurisdiction to adjudicate the notice dated 31st May 2002 - The fact that the said notice was served upon the appellant on 4th June 2002 would not invalidate the proceedings initiated by show cause notice dated 31st May 2002, because for the purpose of Section 49, Clause (3) of FEMA, what was relevant is taking notice and not issuance or service of notice.
Principles of Natural Justice – Held that:- On the material on record there had been no such breach - In the show-cause notice issued on August 21, 1961, all the material on which the Customs Authorities have relied was set out and it was then for the appellant to give a suitable explanation - The complaint of the appellant now was that all the persons from whom enquiries were alleged to have been made by the authorities should have been produced to enable it to cross-examine them - the principles of natural justice do not require that in matters like this the persons who have given information should be examined in the presence of the appellant or should be allowed to be cross-examined by them on the statements made before the Customs Authorities.
Opportunity to Cross Examination – Held that:- The refusal on the part of the adjudicating authority to permit the appellants to cross-examine the experts, who had given their opinions as regards classification and valuation of the goods, has really vitiated the entire proceedings - The appellants were absolutely justified to request the adjudicating authority to permit them to cross-examine those experts on the line as to on what basis they had reached to such a conclusion, which was contrary to the other set of opinion.
When there was an apparent conflict between the two sets of opinion the appellants were justified in making a request to cross-examine those officers, who had expressed the opinion quite contrary to the one on which the custom authorities had relied upon - We fail to understand what prejudice could have been caused to the department if at all such permission would have been granted - On the other hand, the prejudice seems to have been caused to the appellants as they were not in a position to convince the adjudicating authority and the Appellate Tribunal why the adverse opinion which was in conflict with the first two opinions should have been ignored in absence of opportunity to cross-examine the person who gave such a opinion in writing - It was also not the case of the department that such request was made only with a view to protract the proceedings.
Validity of Order - The order impugned travels much beyond the scope of the show cause notice and his clients had no opportunity to explain many relevant aspects which the Tribunal had taken into consideration - it is settled law that a party to whom a show cause notice of this kind was issued must be made aware of the allegations against it - As observed by the Supreme Court in Kaur Singh v. Collector of Central Excise, New Delhi [1996 (11) TMI 84 - SUPREME COURT OF INDIA ] - this was a requirement of natural justice - Unless the party concerned was put to such notice, he had no opportunity to meet the case against him - Which ground was alleged against the party must be made known to him, and there was no scope for assuming that the ground was implicit in the issuance of show cause notice.
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2013 (8) TMI 584
Entitlement for Cross Examination – In the complaint that had been filed, the statements of three witnesses had been extensively relied upon - the application was filed by the appellants for seeking permission to cross-examine - it was stated that there was a need to cross-examine the witnesses to controvert their statements and to establish their (appellants) innocence as the charges had been denied by the said appellant – Held that:- The present appeal should be allowed to the extent that the appellants should be entitled to cross-examine the three witnesses whose statements had been relied upon by the respondent in the complaint – The respondent had failed to place on record any fact to show that prejudice would be caused to it if the appellant was permitted to cross-examine the witness - The learned counsel could not specify any prejudice – following Ayaaubkhan Noorkhan Pathan vs. State of Maharashtra [2013 (8) TMI 563 - SUPREME COURT] - the appellant intended to cross -examine the said person to controvert the veracity of the complaint regarding contraventions of various provisions of FEMA and it was further stated that the statements made by the said complainant in the complaint were inherently false.
Cross-examination of witnesses had been held to be an integral part and parcel of the principles of natural justice - Refusal to grant permission to cross-examine witnesses would normally be an exception - The legal position that would follow is that normally if the credibility of a person who has testified or given some information is in doubt or if the version or the statement of the person who has testified is in dispute normally right to cross-examination would be inevitable - If some real prejudice was caused to the complainant, the right to cross-examine witnesses may be denied - it was not possible to lay down any rigid rules as to when in compliance of principles of natural justice opportunity to cross-examine should be given - In the application of the concept of fair play there had to be flexibility.
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2013 (8) TMI 511
Status of the Petitioner - Whether the petitioner, who returned to India after six (6) years from Saudi Arabia, ought to have been granted the same facilities qua his bank accounts maintained with State bank of India (SBI), which are available to a Non-Resident Indian (NRI) - Held that:- Under Regulation A.15 the NRE account of the petitioner had to be re-designated as 'Resident Account' - accounts of NRIs should be redesignated as resident accounts immediately upon the return of the account holder to India if authorized dealer is satisfied that he has returned to India for taking up employment or carrying on a business or vocation for for any other purpose with the intention of residing in India – Where account holder is only on a short visit to India, the account may continue to be treated as Non-resident (External) account even during his stay in this country – The petitioner quite clearly indicated that, since he had returned to India, his status be changed to that of a "Resident".
In order to ascertain intention, what is required to be seen is the conduct of the person and the surrounding circumstances - it cannot be said that the respondents had not, correctly, concluded that the petitioner intended to stay in India for an uncertain period and thus, consequently, fell within the rigour of Section 2(p)(ii)(c) of FERA - Regulation A.15 of the Foreign Exchange Manual would be applicable to the petitioner.
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2013 (8) TMI 435
Violation of FEMA - Imposition of Penalty - Definition of Person u/s 2(u) - penalty was imposed on the President of the Board of Control for Cricket in India for the violation of the Act – Held that:- The material on record was sufficient to take the view that the petitioner himself was not in charge of and responsible for opening and operating the bank accounts involving receipts and remittances of foreign exchange to parties outside India, it would be necessary for the adjudicating authority to form an opinion whether the petitioner could at all be considered as covered by the substantive part of Section 42(1) of the Act and further, even if the answer was in the affirmative, whether the petitioner should be called upon to prove that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention - The definition of person U/s 2(u) of the Act was an inclusive one and, therefore, BCCI as well as Governing Council for IPL were persons within the definition of Section 2(u) of the Act.
It was the case of the petitioner, which was not contradicted by any person whose statement was recorded at the investigation and in fact it was corroborated by the material which was part of the complaint, that the petitioner had stated in so many words at the BCCI meeting that the permission of the Reserve Bank of India would have to be obtained for opening a foreign exchange bank account - In fact, the resolutions passed at various meetings of BCCI clearly indicate that all operational matters were to be dealt with by the Chairman of the Governing Council for IPL and officers engaged by the said Council and by the Secretary and Treasurer of BCCI.
Adjudicating Authority after issuing show cause notice and receiving objections to the notice from the noticee, was required to apply his mind to the objections by recording his reasons for forming an opinion on the file – the recording of reasons was not an appealable order but it would give the noticee a chance during adjudication proceedings to meet the reasons which led the Adjudicating Authority to form an opinion that he must proceed further with the inquiry against notice - This would only result in fair procedure which would be in consonance not only with Rule 4 of the Adjudication Rules but with principles of natural justice.
There was nothing on record to indicate that the adjudicating authority had considered the aforesaid aspects before forming the opinion to proceed further with the inquiry under subrule (4) of Rule 4 of the Adjudication Rules.
Matter remanded back with direction - Special Director, Directorate of Enforcement first to form his opinion, after recording reasons, whether to proceed against the petitioner with regard to the impugned 11 show cause notices, in light of the observations made in this judgment. If the opinion so formed is adverse to the petitioner, such opinion along with the reasons so recorded shall be furnished so as to reach the petitioner at least 15 days prior to the date of personal hearing. This would meet the requirements of Rule 4(3) of the Adjudication Rules.
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2013 (8) TMI 400
Officer u/s 25 of Evidence Act - Customs Officer was under the Act of 1962 not a police officer within the meaning of Section 25 of the Evidence Act and the statements made before him by a person who was arrested or against whom an inquiry was made were not covered by Section 25 of the Indian Evidence Act - Badku Joti Savant case[1966 (3) TMI 17 - SUPREME COURT OF INDIA]
Right to Cross examination – Whether the petitioner was denied the right to Cross examination – Held that:- statement of the co-accused was recorded u/s 40 of FERA by an officer of the department in the pre-charge evidence, the statement of co-accused was exhibited by Assistant Director of Enforcement - the complainant had not recorded the statement – Phool Kumar v. Delhi Administration [1975 (3) TMI 129 - SUPREME COURT] - any objection as to the mode of proof of a document had to be taken at the earliest opportunity i.e. when the document was exhibited in the presence of the Petitioner - no objection was taken at that stage, the Petitioner cannot take such an objection now - Further Section 80 of the Evidence Act raises a presumption as to the documents produced as record of evidence.
Framing of Charges - Offence u/s 8(1) of FERA - Whether there was any other evidence on record against the Petitioner or in the absence of any other evidence on record whether charge can be framed merely on the statement of the co-accused - statement of the co-accused being admissible in evidence and duly exhibited – Held that:- There was a recovery of foreign currency from the co-accused - the statement of the co-accused and the other documents seized show that the co-accused was acting on the behest of the Petitioner - At this stage, the Court will not dissect the evidence against each accused and come to the conclusion that the only evidence against the Petitioner was the statement of the co-accused and that being not substantive evidence, no charge can be framed against him.
Relevant fact U/s 10 of Evidence Act - In a case a conspiracy if there was reasonable ground to believe that two or more persons have conspired together to commit an offence then by virtue of Section 10 of the Evidence Act, anything said, done or written by one of such persons in reference to their common intention, was a relevant fact as against each of the persons believed to be so conspiring, as well for the purpose of proving the existence of the conspiracy, as for the purpose of showing that any such person was a party to it - At this stage, it had only to be seen whether a prima facie case exists against the Petitioner - prima facie a strong suspicion arises that the Petitioner along with the co-accused committed the offence as alleged - Whether the said evidence is sufficient for sustaining a conviction would be seen after the witnesses are examined and the entire evidence is adduced – there was no infirmity in the order – Decided against petitioner.
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2013 (8) TMI 359
Detention of property u/s 3(1) - Husband of the present petitioner was ordered to be detained by u/s 3(1) of the COFEPOSA following seizure of foreign currency – Department issued Notice u/s 6(1) of the SAFEMA to show cause why the property belonged should not be forfeited and to show the source of income, earnings and assets, out of which or by means of which, the property was acquired – Held that:- The Tribunal had considered all the submissions made by the them and after examining the reasons assigned by the Authority and documentary evidence produced by the petitioner - the Tribunal thought it fit not to interfere with the order passed by the Authority - the reasons for issuance of notice were attached with the Notice - the Authority had not committed any breach of provisions of SAFEMA while issuing the notice.
The persons engaged in smuggling and foreign exchange manipulations do not keep regular and proper accounts with respect to such activity or its income or of the assets acquired therefrom - The violation of foreign exchange laws and laws relating to export and import necessarily involves violation of tax laws - the idea of defining the word “relative” in detail was to reach his properties in whosoever’s name they were kept or by whosever they were held - It had been further held that the idea was to forfeit the illegally acquired properties of the convict/detenue irrespective of the fact that such properties were held by or kept in the name of or screened in the name of any relative or associate as defined in the said Explanations of Section2 of the Act -
The Authority had rightly appreciated the provisions of the SAFEMA and the definition of `relative’ and, therefore, had rightly held that they had miserably failed in proving that the property in dispute was purchased by legal means - The burden to prove the same lies upon the person affected to prove that the property which was under the process of forfeiture was purchased by legal means either by himself or his relatives - Attorney General of India, etc. etc vs. Amratlal Prajivandas and Ors. [1994 (5) TMI 235 - SUPREME COURT] – Decided against Petitioner.
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2013 (7) TMI 887
Whether the appellants can be said to have not used the foreign exchange for the purpose for which it was given to them though they admittedly paid it to the aforesaid Switzerland company and therefore not liable for any penalty - Held that:- it is sub-section (3) of Section 8 which mandates that when a person other than an authorized dealer or a money changer acquires foreign exchange for any particular purpose, then he has to use it only for that purpose and if he fails to use it, he has to inform the authorities concerned. Then sub-section (4) further clarifies what is meant by “not using a foreign exchange” when it is obtained by a person for importing goods and it says that even if he fails to import the goods, he will be held to have violated sub-section (3). The burden is imposed upon him to explain to prove the contrary and what is the significance of the expression “to prove the contrary” will be dealt with a little later.
The appellants should have entered into contract with the Switzerland company after making every arrangement with the concerned bank and making it doubly sure that they get the loan and when the bank fails, they cannot be expected to be heard to say that the bank was at fault and plead for exoneration. The learned counsel for the appellants did not cite any authority to show that mens rea is necessary to apply sub-sections (3) and (4) of Section 8 read with Section 50 of the Act and the appellants cannot be proceeded against in a situation like this. - impugned order of the appellate tribunal cannot, in principle, be disturbed though as will be presently seen there is, in my opinion, ground to reduce the penalty.
Section 50 says that it cannot exceed five times the foreign exchange involved. It is now well settled that Section 50 provides an outer limit for the penalty prescribed which is not mandatory. Even the Deputy Director and the appellate tribunal did not impose the maximum penalty. In other words, it follows that the authorities under the Act and this court have also the power to impose a lesser penalty. - Decided partly in favour of assessee.
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2013 (7) TMI 505
FDI - foreign investment for Service Sector - Nature and business of the company - whether the company was a trading company and also whether it was primarily engaged in export for availing of the automatic route - Held that:- If a new trading company indulging in export primarily also will have to make an application to the RBI for automatic approval for foreign investment upto 51% foreign equity and the thrust would be on export activities. - Registration of the company as an exporter / importer with the Ministry of Commerce and registration of an export house is also a pre-requisite - according to the Notification then in existence and the Press Note upto 31.12.1991 the companies engaged primarily in trading activities whether new or existing will have to fulfill certain conditions by applying to the RBI for permission for foreign investment up to 51% - No permission was obtained by the respondent company from the RBI for 51% foreign equity induction, for trading, by way of export. RBI, on the other hand, granted general permission only for dealing with the activities mentioned in NIC Code 893 and not for any trading activities leading to import or export.
Lifting of Corporate Veil - Held that:- in a given situation the authorities functioning under FERA find that there are attempts to over-reach the provision of Section 29(1)(a), the authority can always lift the veil and examine whether the parties have entered into any fraudulent, sham, circuitous or a devise so as to overcome statutory provisions like Section 29(1)(a). It is trite law that any approval/permission obtained by non- disclosure of all necessary information or making a false representation tantamount to approval/permission obtained by practicing fraud and hence a nullity.
Whether the company violated the provisions of Section 19(1)(a) and (d) and Section 29(1)(b) r.w Sections 9(1)(e), 49 and 68(1) and (2) of FERA leading to penal consequences – Held that:- The company violated the provisions and thus would be liable for the consequences – premises of the company ordered to be seized – amounts present in various bank accounts confiscated – personal penalties were also imposed.
Permission and Registration with RBI - Held that:- The company stated in the application as "Business Management Consultancy for Trading, Marketing and Selling of Goods and Services". Even there also, there is no indication whatsoever that the company was set up for trading, but only indicated "consultancy for trading". Further Para IX (iii) called for the description of the products for export trading wherein the company has stated as "not applicable". Resultantly, it is clear that the purpose for which the company had sought for foreign collaboration was not for trading in gold coins either for export or domestic purpose, but for the activities mentioned in the NIC Code 893. - The High Court, in our view, has committed an error in holding that no questions of law arose for its consideration under Section 54 of FERA and has completely misread and misinterpreted the Industrial Policy, Press Notes and Section 19(1)(a) and (b), Section 29(1)(a) and (b) etc. - Decided against the company.
Whether the above Bank has contravened Section 6(5) of FERA and misused the permission granted to it by RBI for importing gold coins - The Bank, it is seen, had imported the gold on its own behalf and sold the same to the company and if the Bank was acting as an agent of the company, it would not have sold the gold to the company, but would have charged the commission for acting as an agent. No materials have been placed before us to show that the Bank was acting as an agent of the company. On facts, the Tribunal as well as the High Court took the view that the Bank had not misused the permission granted by the RBI for importing gold coins. We do not find any reason to interfere with those finding of facts. - Decided in favor of Bank.
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2013 (6) TMI 935
Issues Involved:
1. Jurisdiction and maintainability of Section 34 Petition in India.
2. Proper law governing the arbitration agreement and the contract.
3. Applicability of Part I of the Arbitration Act.
4. Conflict of laws and the governing law.
5. Enforceability and challenge to foreign awards in India.
6. Delay in filing the petition and condonation of delay.
Detailed Analysis:
1. Jurisdiction and Maintainability of Section 34 Petition in India:
The primary issue was whether the Section 34 Petition to set aside the arbitral awards is maintainable in India. The judgment emphasized that the awards in question, being foreign awards, were challenged under Section 34 of the Arbitration Act. The court considered the precedents set by the Supreme Court in Bhatia International and Venture Global, which held that Part I of the Arbitration Act applies to international commercial arbitrations unless expressly excluded by the parties. The court concluded that the petition is maintainable in India, as there was no specific exclusion of Part I, and the subject matter and cause of action were closely connected to India.
2. Proper Law Governing the Arbitration Agreement and the Contract:
The court analyzed the proper law governing the arbitration agreement and the contract. It noted that the agreement specified Singapore law as the governing law, but the procedural law was determined by the seat of arbitration, which was London. The court highlighted that the proper law of the arbitration agreement governs the validity and scope of the arbitration, while the curial law governs the procedure. Despite the choice of Singapore law, the court held that Indian law should prevail for determining the validity and enforceability of the contract and the arbitration agreement due to the significant connection with India.
3. Applicability of Part I of the Arbitration Act:
The court addressed the applicability of Part I of the Arbitration Act, stating that the exclusion of Part I must be explicit. In this case, the court found no such exclusion, and thus, Part I applied. The court reiterated that Part I applies to all arbitrations, including international ones, unless expressly excluded. The judgment emphasized that the venue of arbitration does not automatically exclude the applicability of Part I.
4. Conflict of Laws and the Governing Law:
The judgment delved into the conflict of laws, considering the multiple legal systems involved-Singapore, English, and Indian laws. The court noted the inconsistency in the agreed clauses and emphasized the need to consider the surrounding circumstances and the close nexus with Indian laws. It concluded that the Indian laws should govern the contract's interpretation and enforcement, given the significant connection to India and the absence of a clear exclusion of Indian law.
5. Enforceability and Challenge to Foreign Awards in India:
The court examined the enforceability of foreign awards in India and the right to challenge them under Section 34. It held that the awards could be challenged in India, as the subject matter and cause of action were situated in India. The court emphasized that the finality of an award is subject to the competent court's confirmation and that the procedural law of the seat of arbitration does not override the substantive law governing the contract.
6. Delay in Filing the Petition and Condonation of Delay:
The court addressed the issue of delay in filing the petition, noting that the final award was received on 1 April 2008, and the petition was filed on 21 July 2008, resulting in a 20-day delay beyond the prescribed period. The court found that the delay was within the permissible outer limit and condoned it, allowing the Notice of Motion for condonation of delay. The court recognized that the partial awards were interlinked with the final award, justifying the challenge to all awards together.
Conclusion:
The court concluded that the Section 34 Petition is maintainable in India, condoned the delay in filing, and directed the matter to be placed for admission, emphasizing the applicability of Indian laws and the significant connection to India in the arbitration proceedings.
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2013 (5) TMI 1071
Issues:
1. Challenge of penalty imposed under Section 17(4) of FEMA, 1999.
2. Delay in filing the appeal.
3. Application for dispensation of the demand.
4. Consideration of substantial justice over technical considerations.
Detailed Analysis:
1. The appellant challenged a penalty of Rs. 2,00,000 imposed under Section 17(4) of FEMA, 1999 by the Special Director (Appeals), Enforcement Directorate. The appeal was filed along with an application for dispensation of the demand in question.
2. The appellant, Shri Girish Ratilal Shah, passed away during the pendency of the case, and his legal heir, Smt. Usha Ben Girish Shah, was impleaded. The appellant's representative contended a minor delay in filing the appeal, attributing it to reasons beyond their control, such as the inability to get documentation in time and the demise of the appellant. The delay was condoned by the tribunal.
3. The appellant's counsel argued for dispensation of the demand, stating that the appellant's widow was not financially capable of meeting the demand. The delay in filing the appeal was explained by the change in the appellant's office address due to selling the office building to pay off liabilities. The tribunal acknowledged the financial hardship faced by the widow and waived the pre-deposit, admitting the appeal for hearing.
4. The tribunal considered the merits of the appeal and highlighted that the first appeal was dismissed on the technical point of limitation. Citing the principle of substantial justice prevailing over technical considerations, the tribunal remanded the appeal back to the Special Director (Appeals) for a decision on merits after setting aside the impugned order.
In conclusion, the tribunal condoned the delay in filing the appeal, waived the pre-deposit, and directed the Special Director (Appeals) to reconsider the first appeal on its merits, emphasizing the importance of substantial justice in the adjudication process.
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2013 (5) TMI 604
Untrue declaration - Petitioners had failed to repatriate export proceeds to the extent of Rs.24.18 Crores from overseas buyers within the stipulated period of one year - Power to compound contravention - Held that:- As Petitioners states that they have no objection to pursuing the compounding applications in the manner as indicated by the communications of the Reserve Bank. The letters issued by the Reserve Bank on 28 March 2013 intimate to the Petitioners that they would in the first instance have to apply through the Panaji Regional Office of the bank to the Foreign Exchange Department of the Bank upon which, a decision would be taken. The learned Senior Counsel appearing on behalf of the Reserve Bank states that in the event that the Petitioners submit a complete set of documents within a period of one week from today to the Panaji Regional Office, a decision thereon shall be taken by the Foreign Exchange Department within a period of four weeks thereafter and that the application for compounding shall thereupon be processed and decided in accordance with law within a period of three months.
Insofar as the adjudication proceedings are concerned, since the Petitioners are pursuing an application for compounding the contravention before the Reserve Bank, the Director and the Special Director of the Directorate of Enforcement informs the Court that without prejudice to the rights and contentions of the Department in the notice to show cause, the adjudication proceedings shall not be pursued for a period of four months from today in order to enable the Reserve Bank of India to take a final decision on the application submitted by the Petitioners. The Petitioners shall in the meantime file a reply to the notices to show cause within a period of four weeks from today & the adjudication proceedings shall not be pursued for a period of four months in order to enable the Reserve Bank to take a decision in accordance with law on the application for compounding.
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2013 (5) TMI 352
Writ petition against the reviewed policy of FDI in Single-Brand Product Retail Trading, Multi-Brand Retail Trading, Air Transport Services, Broadcasting Carriage Services and Power Exchanges. As per petitioner that the impugned FDI Policy is not founded on any material obtained from the government agency and no extensive consultation was made before formulation of the impugned Policy.
Held that:- DIPP is empowered to make policy pronouncements on FDI. There is no merit in the submission of the petitioner that Central Government has no authority or competence to formulate FDI Policy. The competence of the Central Government to formulate a policy relating to investment by a non-resident entity/person resident outside India, in the capital of an Indian company is beyond doubt. The Reserve Bank of India (RBI) is empowered to prohibit, restrict or regulate various types of foreign exchange transactions, including FDI, in India by means of necessary regulations. RBI Regulates foreign investment in India in accordance with Government of India's policy. Writ Petition is dismissed
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2013 (3) TMI 507
Section 8(1) of the Foreign Exchange Regulation Act, 1973 (FERA) - The petitioner and one Seethalakshmi Nagaraj were examined under Section 40 FERA and it was their common stand that the money seized belonged to Seethalakshmi Nagaraj and with the permission of the mother of the petitioner, the same had been left with his wife for safekeeping. Despite an opportunity notice, the petitioner had not been able to show that he had obtained any permission from the Reserve Bank of India - Charge of commission of offence u/s 8(1) punishable under Section 56(1)(i) of FERA - Held that:- To meet the charge of having acquired foreign exchange, it must be shown that the petitioner was the owner thereof, whereas the finding of the Division Bench is that there was nothing to show that the same belonged to the petitioner. We may inform that the Court below indeed is wrong in observing that no petition for discharge would like after the recording of the preliminary prosecution evidence under Section 244 Cr.P.C.
This Revision shall stand allowed. The petitioner shall stand discharged of the charge against him in C.C. No. 252 of 1997 before the Court.
Consequently, connected miscellaneous petition is closed.
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2013 (3) TMI 483
Section 8(1) of the Foreign Exchange Regulation Act,1973 (FERA) - Section 56(1)(i) - During search foreign currencies were seized - Petitioner in his statement U/s 40 of the Foreign Exchange Regulation Action 1973 (FERA) had admitted that he visited Seethalakshmi Nagaraj and requested for foreign exchange as he wanted to deposit the same into the NRE account of his brother in law as such person was in need of the same. Held that:- Without going into the merits, even if it be accepted that the foreign exchange did belong to Seethalakshmi Nagaraj, the prosecution would still have a case of borrowing prohibited under section 8(1) FERA1973, if it establishes its contention in this regard. It would be for the petitioner to establish in the course of trial that he had received the foreign exchange from Seethalakshmi Nagaraj at her instance.
This is more so because section 71 FERA 1973 places the burden of proving lawful possession of foreign exchange in excess of value of upon him. The revision shall stand dismissed.
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2013 (3) TMI 93
Violation of sections 3(a), 3(d) & 4 of FEMA - assessee contested against on no proper opportunity given, thus violation of principles of natural justice - Held that:- As clear from para 15 of the impugned order that notice was served vide letter dated 4.4.2008, under mahazar dated 3.4.2008 in terms of Rule 9(c) of FEMA (Adjudication Proceedings and Appeal) Rules 2009. But none appeared on the date of hearing. However, by letter dated 7.4.2008 the petitioner herein filed a reply memorandum dated 11.7.2007 giving the details of the stand taken in opposition to the adjudication.
Thereafter also several opportunities were given to which the petitioner as well as his counsel did not respond and participate in the proceedings. Therefore, the authority had no other option except to pass final order. Hence, the plea of no opportunity given and there is a violation of principles of natural justice has to be rejected and is accordingly rejected.
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