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FEMA - Case Laws
Showing 541 to 560 of 1378 Records
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2012 (10) TMI 197
FEMA - Writ petition - provisions of the Revenue Recovery Act for recovery of the amount - search in the house of the petitioner as per the provisions of Section 37 of the Foreign Exchange Regulation Act, 1973 on 8-10-1993 - Tribunal directed the petitioner to deposit the penalty amount which is the pre-deposit - petitioner was unable to comply with the said order and ultimately, the second respondent has dismissed the appeal on 17-7-2007 - After dismissal of the appeal nearly 2˝ years, at the instance of the Department, the third respondent Tahsildar has initiated proceedings under the provisions of Revenue Recovery Act to recover the amount and that has been challenged by the petitioner on the ground that the same is opposed to the principles enunciated under the Foreign Exchange Regulation Act - Held that:- It is certainly not open to the petitioner to quash the validity of such order of the Appellate Tribunal especially when the third respondent has proceeded to recover the amount under the Revenue Recovery Act - Tribunal’s order was on 17-3-2007 and the petitioner has chosen to challenge the same only in the year 2010 without resorting to the remedy of appeal to the High Court within 60 days and therefore, this writ petition is liable to be dismissed - writ petition fails and the same is dismissed
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2012 (10) TMI 44
Interest on the seized foreign currency - applicability of Rule 8 – Held that:- Interest at the rate of 6% per annum under Rule 8 could have been awarded to the respondent on the seized Indian currency only - writ petition in the nature of enforcement of a civil liability that is claim for interest in the nature of compensation for wrongful retention of money is not maintainable. It is not as if payment of interest under Rule 8 (ii) was mandatory (as under Rule 8(i)) and which could be enforced by way of a writ petition - judgment awarding interest under Rule 8(i) qua Indian currency also can thus not be sustained
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2012 (9) TMI 388
Non realization of export proceeds - Contravention of provisions of section 18(2) of FERA - penalty imposed on the firm and on each of the partners - Held that:- The decision of the Appellate Tribunal that the firm has failed to take reasonable steps for realizing the export proceeds is a finding based on facts that the appellants continued to export despite continuous defaults made by the said party in clearing the outstanding and the importer approached R.B.I., after expiry of about five years thus cannot be faulted.
However, looking to the facts that the firm had taken some steps to realize export proceeds though may not be adequate, application for extension of time and to write off the export proceeds was pending consideration before the RBI, part payment was recovered by the firm from the importer, thus this is a fit case for accepting the alternate submission of the assessee that the penalty should be restricted to 35% of the penalty imposed and the amount already paid by the firm may be treated in full and final satisfaction of the penal liability.
Penalty on each partner - Held that:- The word “firm” or the “firm name” is merely a compendious description of all the partners collectively & as the firm acts through its partners both are to be treated as one - as the authority has already imposed separate penalty on the firm & in the absence of lapse/negligence/bonafides on the part of the partners of the firm individually, imposition of penalty on each of the partners is unjustified.
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2012 (8) TMI 253
Foreign exchange was acquired by the Company - bank-to-bank transaction under a Letter of Credit - contravention of the provisions of FERA, 1973 - Held that:- The Appellant Parag Dalmia stated that notice to the company is not notice to the Appellant especially when the company had been wound up - though the offence was allegedly committed on 28th April, 1987, Appellant Parag Dalmia was sent summons for the first time to appear on 16th July, 2001 & till that date no summons were ever issued to him. This belated issuance of summons after 14 years has caused serious prejudice to him as then nothing was available with him to show that he had no role to play in the alleged offence. He neither has the bills of entry nor the postal refer of 1987 - Since the Appellants Parag Dalmia was only an ex-employee, he had no access to the documents and thus he could not file any document in reply to the opportunity notice.
Merely because a person is a Director, he cannot be held liable and the onus is cast on the prosecution to prove that the Appellant was responsible and in-charge for the day-to-day functioning of the Company. As per Section 68(1) the initial burden is on the prosecution which is not discharged here.
That extensive efforts were made to trace out the address of the company and various letters were written to the bank, however, it may be noted that the least that was required from the Respondent was to find out from the record of the Registrar of Companies about the address of the company - As serious prejudice is caused to the Appellant after more than 14 years in leading his defence this is not a case of delay on account of the acts of the Appellants but because of a casual approach adopted by the Respondent - in favour of assessee.
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2012 (8) TMI 216
Imposition of penalty - whether the appellant had violated Section 9(1)(b) of FERA - transaction to sell the flats to the two directors were non resident Indians - Held that:- Apart from the statement of the appellant recorded to the effect that the two directors in whose name the receipt was received were persons resident outside India there is no material on record to suggest that on the date of receiving the amount, the appellant was aware of this fact and even from the statement recorded also cannot be inferred that the appellant on the date of issuing the receipts was aware of this fact.
The Appellate Tribunal has drawn adverse inference against the appellant solely on the ground that the appellant has not produced the agreement entered into by the appellant with the two directors as apart from issuing receipts, no agreement was entered into - it was adverse on the part of Tribunal to arrive at a conclusion that an agreement must have been entered into by and between the appellant and the two directors and impose penalty of Rs.34 lacs upon the appellant - the Prothonotary and Senior Master is directed to refund the amount of Rs.7.50 lacs with accrued interest to whom the assessee has deposited with the direction of Court - in favour of assessee.
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2012 (8) TMI 177
Imposing a penalty - violation of provision of Section 9(1)(f)(i) of FEMA - Held that:- As Appellate Tribunal against the three main accused held that they have not violated the provisions of and as the main accused are relieved of the charges on no satisfactory evidence have been produced to prove the alleged violations committed by them, then, the charges levelled against the appellant to the effect that he had aided and abetted the main accused in violating the provisions of law could not be said to have been proved.
As the documents relied upon by the revenue do not establish violation of the provisions of law against the main accused the same set of documents cannot be said that the person who is alleged to have aided and abetted the main accused has violated the provisions of law - penalty levy cannot be sustained - in favour of assessee.
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2012 (7) TMI 1130
Issues Involved:
1. Whether the plaintiff is a permanent resident of Singapore and if so, whether he should be non-suited u/s Foreign Exchange Regulation Act.
2. Whether the two lease deeds relied upon by the plaintiff have been acted upon and are valid.
3. Whether the plaintiff is in possession and enjoyment of the suit property as claimed.
4. Whether the suit is bad for mis-joinder of parties.
Summary:
Issue 1: Plaintiff's Residency and Foreign Exchange Regulation Act
The trial court framed the issue of whether the plaintiff, being a permanent resident of Singapore, should be non-suited u/s Foreign Exchange Regulation Act. However, this issue was not significantly addressed in the final judgment.
Issue 2: Validity and Execution of Lease Deeds
The trial court found Exs.A1 and A2 lease deeds to be true, valid, and acted upon, establishing that Thirunavukkarasu was put in possession and enjoyment of the suit property. The lower appellate court upheld this finding, confirming the validity of the lease deeds despite the defendants' challenge based on Section 36 of the Indian Trust Act and Section 23 of the Indian Contract Act. The court also held that the lease deeds did not require prior permission from the Reserve Bank of India u/s 31 of the Foreign Exchange Regulation Act, as the violation of FERA only attracts penal provisions and does not nullify the transfer.
Issue 3: Plaintiff's Possession and Enjoyment of the Suit Property
The trial court dismissed the suit, finding that the plaintiff failed to prove his possession and enjoyment of the suit property based on Ex.A3 family arrangement, which was not stamped or registered. The lower appellate court reversed this finding, relying on the judgment in O.S. No. 274 of 1995 and accepting the plaintiff's claim of possession. However, the High Court found this reliance erroneous and held that Ex.A3 could not be used to prove possession as it was inadmissible for establishing right, title, or ownership. The court concluded that the plaintiff failed to prove his possession and enjoyment of the suit property.
Issue 4: Mis-joinder of Parties
This issue was not significantly addressed in the final judgment.
Conclusion:
The High Court allowed the second appeal, setting aside the judgment and decree of the lower appellate court and restoring the judgment and decree of the trial court, thereby dismissing the plaintiff's suit for permanent injunction.
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2012 (7) TMI 909
The Calcutta High Court dismissed an application for condonation of delay exceeding 60 days, citing a previous judgment. The delay in this case was about 96 days. The appeal related to the application was also dismissed.
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2012 (7) TMI 710
Ultra vires - whether Rule 5 of the Appellate Tribunal for Foreign Exchange (Recruitment, Salary and Allowances and Other Conditions of Service of Chairperson and Members) Rules, 2000 is ultra vires the Foreign Exchange Management Act, 1999
Held that:- The High Court had quashed the appointment of part time Members and the appointment of Chairperson who was a part time Member once. As the appointment of part time Member was quashed, as a logical corollary, such a person could not be allowed to be appointed to the post of Chairperson. To elaborate; the disqualified Member cannot hold the post of a Chairperson as a stop gap arrangement. Thus, we do not find any error in that regard in the judgment passed by the High Court.
The judgments and orders passed by the Appellate Tribunal by the Chairperson or Members who were not qualified and whose appointments have been quashed shall not be treated to be null and void.
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2012 (7) TMI 641
Condoning delay, taking recourse to the power of this Court under section 52(2) proviso of the Foreign Exchange Regulation Act, 1973 (FERA) - held that:- the application under Section 5 of the Limitation Act for condonation of delay for a period exceeding sixty days, as mentioned in the proviso of Section 6 of the General Clauses Act, is not entertainable. In other words, the High Court cannot condone delay for a single day exceeding sixty days, as mentioned in the said section, simply because, the High Court is not conferred with such power. If there is no power question of granting relief does not arise. - the views taken by the earlier Division Bench is the correct position of law.
The earlier Division Bench in the case of Union of India and Anr. –vs- M/s. SMP Exports Pvt. Ltd. and Ors. and other three matters, held that Court’s power to condone delay against the judgment and order of the Appellate Tribunal is governed by the provision of section 35 read with proviso of FEMA, even if the appeal has been preferred in relation to contravention of any provision of FERA after repeal.
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2012 (7) TMI 202
Constitutional validity of Section 3(1) of Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (‘COFEPOSA’) to the extent it empowers the competent authority to make an order of detention against any person ‘with a view to preventing him from acting in any manner prejudicial to the conservation or augmentation of foreign exchange’ - petitioner contending that repeal of FERA and enactment of FEMA (FEMA did not regard its violation of criminal offence) an act where no punitive detention (arrest and prosecution) is even contemplated or provided under law, such an act cannot be made the basis for preventive detention and any law declaring it to be prejudicial to the interest of the State so as to invoke the power of preventive detention is violative of Articles 14, 19 and 21 of the Constitution.
Held that:- It is true that FEMA does not have provision for prosecution and punishment like Section 56 of FERA and its enforcement for default is through civil imprisonment. However, insofar as conservation and/or augmentation of foreign exchange is concerned, the restrictions in FEMA continue to be as rigorous as they were in FERA. Although contravention of its provisions is not regarded as a criminal offence, yet it is an illegal activity jeopardizing the very economic fabric of the country.
On the touchstone of constitutional jurisprudence, as reflected by Article 22 read with Articles 14, 19 and 21, impugned provision cannot be rendered as unconstitutional. There is no constitutional mandate that preventive detention cannot exist for an act where such act is not a criminal offence and does not provide for punishment. An act may not be declared as an offence under law but still for such an act, which is an illegal activity, the law can provide for preventive detention if such act is prejudicial to the state security. After all, the essential concept of preventive detention is not to punish a person for what he has done but to prevent him from doing an illegal activity prejudicial to the security of the State.
In complete agreement with the position stated in UOI vs. Venkateshan S.(2002 (4) TMI 789 (SC))“if the activity of any person is prejudicial to the conservation or augmentation of foreign exchange, the authority is empowered to make a detention order against such person and the Act does not contemplate that such activity should be an offence”, no merit is found in challenge to the constitutional validity of impugned part of Section 3(1) of COFEPOSA - Decided against the Petitioner.
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2012 (7) TMI 145
FERA – penalty - contravention of Section 9(1)(f)(i) of FERA 1973 - appellants had paid equivalent Indian currency through Mr. Niranjan Shah to a person outside India without any general or special exemption granted by the RBI as a consideration for acquisition of US$ 1,00,000 - Each of the appellant received US$ 25000/- in their respective saving bank account on or about 12.10.1991 as and by way of remittance - According to the appellants the said remittances were received by them in accordance with the scheme namely Remittances in Foreign (Immunities ) Scheme, 1991 – Held that:- Scheme framed under the said Act gives various immunities which are listed in Section 3 of the said Act - payments made to Shri Niranjan Shah for being remitted outside India with a view to acquire US$ 25000/- by such appellant would not be in violation of Section 9(1)(f)(i) of the FERA Act in view of the fact that the amount of US$ 25,000/- has been declared as having been received under the said Scheme - no action could have been initiated against appellants under Section 9(1)(f)(i) of the FERA Act
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2012 (6) TMI 675
Penalty for contravention of Section 9(1) (d) read with Section 68 of Foreign Exchange Regulation Act, 1973 - Condonation of 507 days delay in filing the appeal - appellants contended that delay in filing the original appeal and in re-filing has taken place on account of the delay in normal decision making process which is bound to entail certain time at different levels and since the case of the appellants – Held that:- applications have been drafted in a most casual manner and absolutely no details have been given for the reasons as to why a delay of 507 days had occurred - appeals are bereft of any material which will persuade the Court to condone the delay either originally or in re-filing – Application for COD dismissed
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2012 (6) TMI 433
Writ petition for declaring sections 5(1) and 5(4) of the Foreign Contribution (Regulation) Act, 2010 and Rules 3(i), 3(v) and 3(vi ) of the Foreign Contribution (Regulation) Rules, 2011 (for short, 'the 2011 Rules') as ultra vires the Articles 14, 19(1)(a), 19(1)( c) and 21 of the Constitution of India.
Held that:- Reading the Rule as a whole, we really fail to fathom, how it can be urged that it travels beyond the statutory provision. What is urged before us is that the right to raise the voice of the people to advance public causes is curtailed. The provision under section 5(1) carves out an exception when an organisation can be notified and thereafter barred from accepting foreign contribution section 3(1)(f), section 5(1) and Rule 3 have to be read together in harmony. The Rule effectuates the two sections and complements them. The Rule at every place refers to the political actions. Therefore, the Rule, according to us, is within the rule making power of the statutory authority. It confirms to the provisions of the statute and comes within the scope of purview of the rule making power of the authority of framing the Rule. Therefore, the Rules cannot be declared as ultra vires the Act.
It is trite law that there is a distinction between conferment of power and exercise of power. If the power by an authority is not properly exercised, the same can always be assailed in a court of law. It has nothing to do as regards the constitutional validity of a Rule or a guideline. The apprehension in the mind of the petitioner that there would be abuse of power and some organizations may be unnecessarily harassed, we are disposed to think, is not to be taken note of while dealing with the validity of a statutory provision or the Rule made thereunder. The same shall be subject to judicial scrutiny when the order is passed. Thus, the aforesaid submission, being bereft of merit, is rejected.
Ex-consequenti, the writ petition, being sans substratum, stands dismissed without any order as to costs.
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2012 (6) TMI 78
FEMA – Penalty for contravention of Sections 6(4) & 6(5) read with Section 13A-10 of Exchange Control Manual - granting of loan to the petitioner, a Non-Resident Indian (NRI) and relending of the same to the respondent No.5 M/s. Prime Petro Products Ltd. through its Chairman and Managing Director Sh. R.K. Mishra impleaded as respondent No. 6 – Held that:- Bank had at the time of granting loan to the petitioner obtained her undertaking that she was not taking the loan for further committing loan transaction and had also complied with the other instructions issued by the Reserve Bank of India in this regard. It was thus held that the Bank and its official could not be said to be privy to or in the know of the illegality committed and no case for imposition of penalty against them was made out – petitioner unable to explain as to how the petitioner is affected by the order so as to have a locus to challenge the same. petition dismissed.
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2012 (5) TMI 875
Issues Involved:
1. Legality of the appellant's insurance activities in India under the Insurance Act, 1938 and the Insurance Regulatory and Development Authority Act, 1999.
2. Applicability of Indian insurance laws to foreign insurance policies issued in India for coverage abroad.
3. Requirement of registration and licensing for the appellant under Indian insurance regulations.
4. The extra-territorial application of Indian insurance laws.
5. The impact of prohibiting the appellant's activities on Indian citizens traveling abroad.
Issue-wise Detailed Analysis:
1. Legality of the Appellant's Insurance Activities:
The primary issue was whether the appellant's activities of selling foreign insurance policies in India, for coverage in Ukraine and Belarus, constituted carrying on the business of insurance in India. The respondent IRDA had determined that the appellant was engaged in the business of insurance by collecting premiums and issuing certificates on behalf of foreign state insurance companies, thus requiring registration and licensing under Indian laws. The appellant argued that the insurance policies were only operative outside India and thus not subject to Indian insurance regulations.
2. Applicability of Indian Insurance Laws:
The court examined whether the Indian insurance laws applied to the foreign insurance policies sold by the appellant. It was noted that the Insurance Act and IRDA Act did not explicitly cover insurance policies that were only effective outside India. The court found no legislative intent to apply these laws extra-territorially, especially when the insurance coverage was for risks incurred outside India.
3. Requirement of Registration and Licensing:
The court analyzed whether the appellant needed to be registered or licensed under the Insurance Act and IRDA Act to sell foreign insurance policies in India. The IRDA had argued that any person carrying on insurance business in India required a valid license. However, the court concluded that since the insurance policies were not effective in India, the appellant's activities did not constitute carrying on insurance business in India, thus not necessitating registration or licensing.
4. Extra-territorial Application of Indian Insurance Laws:
The court considered the extra-territorial application of Indian insurance laws and referred to the Supreme Court's decision in Vodafone International Holdings B.V. v. Union of India, which stated that Indian laws are generally not intended to apply outside Indian territory unless explicitly stated. The court found no provision in the Insurance Act or IRDA Act indicating an intention to regulate insurance business conducted outside India.
5. Impact on Indian Travelers:
The court addressed the practical implications of prohibiting the appellant's activities, highlighting the inconvenience and increased costs for Indian travelers to Ukraine and Belarus who would otherwise have to purchase insurance policies at the destination at a higher price. The court deemed this an arbitrary and unreasonable restriction on travel, emphasizing that the appellant's activities provided a beneficial service to travelers.
Conclusion:
The court allowed the appeal, setting aside the orders of the learned Single Judge and the IRDA. It held that the provisions under which the IRDA acted were not applicable to the appellant's activities. The court clarified that if the government wished to regulate such activities, it should enact specific laws or regulations. The decision underscored the need for a clear legislative framework to address the unique nature of foreign insurance policies sold in India for coverage abroad. No costs were awarded.
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2012 (5) TMI 387
FEMA – allegations against the respondent are that on 30-8-1996 the appellant herein had served summons on the respondent through his counsel under section 40 of the Foreign Exchange Regulation Act, 1973 ('the 'Act') requiring him to appear - summons were served at 8.35 P.M. by the appellant on the respondent who was in Jail No. 2 through his counsel who made an endorsement on the summons that the respondent would appear on 31-8-1996 at 2.00 P.M. It is alleged that the respondent neither appeared on 30-8-1996 nor on 31-8-1996, this led to filing of a complaint under section 56 of the Act against the respondent – Held that:- before a person can be held to be guilty of disobeying the summons, the summons must be served on him and he must have wilfully disobeyed the summons with a view to hamper the investigation or not to produce the document. possibility of the respondent being in Jail is reflected by the endorsement of the counsel, who mentions Jail No. 2 on his endorsement which prima facie can be taken to show that at the relevant time the respondent was in Jail. petition is dismissed
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2012 (5) TMI 251
FEMA - complaint filed by respondent No. 2/Enforcement Directorate under section 56 of the Foreign Exchange Regulation Act, 1973 (‘the FERA’) and sub-sections (3) and (4) of section 49 of the Foreign Exchange Management Act 1999 (‘the FEMA’), a disclosure was made by the then captain of South African Cricket Team, Mr. Hansie Cronje, to the effect that the one day international cricket matches played in India during the Seasons (1996-1997) between South Africa and India were heavily influenced through illegal betting, etc – Simultaneously, adjudication proceedings before the Enforcement Directorate were initiated against the petitioner under the said Acts. In the adjudication proceedings, an order dated 11-12-2003 was passed by the Special Director, Enforcement Directorate, imposing a penalty of Rs. 2 crores on the petitioner for acquisition of foreign exchange from the persons other than the authorized dealer and for making payment to persons residing outside India, without any previous general or special permission of the Reserve Bank of India, in contravention of sections 8(1) and (9)(1)(a) of the FERA – Held that:- it would be unjust for the departmental authority to continue with the criminal complaint, when in the course of adjudication, categorical and unambiguous findings have been returned that there is no contravention of the provisions of the Act, and when the concerned person has been exonerated, no useful purpose shall be served by proceeding further with the criminal complaint in the instant case and the respondent agency cannot be permitted to prosecute the petitioner, having failed to establish the foundational facts to justify his prosecution.
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2012 (5) TMI 157
Bogus exports - Fabricated Export - export under the DEPB Scheme - Violation of the provisions of Section 3(b) and Section 3(d) of the Foreign Exchange Management Act, 1999 (“the FEMA”) - Power of the settlement commission - held that:- the immunity is only from penalty under the Customs Act and not in respect of any other Act including the FEMA. - the orders of the Settlement Commission are considered to be conclusive of the matters stated therein and cannot be challenged in any other proceeding under any other law including FEMA.
Rights of third parties - held that:- observations of the Tribunal cannot be construed as affecting the rights of any third parties who were not before the Court, since the Tribunal was and this Court is concerned only with the involvement of those who are parties to the appeal proceedings. Independently, the evidence against the Appellant is sufficient to sustain the finding of breach of Sections 3(b) and 3(d). The penalty is not disproportionate, but is commensurate with the gravity of the charge, the nature of the misconduct and the role attributed to the Appellant.
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2012 (5) TMI 69
Tribunal dismissed the stay Petition for waiver of predeposit of penalty in FEMA appeal – unauthorizedly receipt of payments amounting to Rs.5 Crores on the instructions of persons resident outside India. - Held that:- No case was made out by the Appellant for a complete waiver of the requirement of predeposit under the second proviso to sub section (1) of Section 19 - Tribunal had directed the Appellant to deposit the penalty within thirty days failing which it was stated that the Appeal would stand dismissed - the Appellant had filed writ proceedings before the Delhi High Court and in an appeal therefrom to the Supreme Court under Section 35 - an extension of time of four weeks from the date of order should be granted to the Appellant to affect deposit.
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