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FEMA - Case Laws
Showing 621 to 640 of 1378 Records
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2010 (10) TMI 459
Confiscation of the foreign currency - Legal import - Jatin Jhaveri has produced before the Commissioner copies of the two currency declaration forms one dated 25-6-1994 for US $ 2,54,000/- and other dated 28-6-93 for US $ 35,250/ - The Commissioner in his order does not deny that these two forms had been issued. On the contrary, he refers to these documents produced before him at the hearing and mentions what seems to be changes in the dated from 26-6-93 to 25-6-93 and some discrepancy in the passport number - He emphasizes the suspicions behaviour of Jatin Jhaveri and his flight from the investigation, his disowning the currency in his statement of 12-10-1993 and the fact that the currency in any case is liable to confiscation for being attempted to be exported in contravention of the provisions of the Foreign Exchange Regulation Act -Held that:the submission of the learned Counsel for the Respondents that in the light of the two authorities under the Customs Act and Income Tax Act, having found the amount of 2,89,250 US $ to be legally brought into India and in the instant proceedings also the Tribunal having concurred with the view of the CEGAT, this Court should not interfere in the above Appeals - Decided in favour of assessee. Appeals - The objection of the Respondents to the maintainability of the Appeals would have to be sustained on the application of Mohte Sham’s Case and resultantly, the Appeals would have to be dismissed on the ground that the Director of Enforcement who was the adjudicating authority had no authority to file the Appeals - The Appeals, therefore, to stand dismissed on the said ground also. Relief - Interest - The principal relief sought is that of the release of the currency amount of US $ 2,89,250 along with interest thereon @ 18% from date of seizure until release thereof to the Petitioner - However, the Petitioner would have to deal with the said amount in terms of the order of the CEGAT as also the Order impugned in the above Appeals i.e. re-export the said amount with the permission of the RBI - Since, the Respondents have retained the amount on account of the pending proceedings, we are of the view that the Petitioner i.e. Jatin Jhaveri in Appeal No. 64 of 2006 would not be entitled to any interest - Thus , the Petitioner would not be entitled to interest on the said amount of 2,89,250 US $.
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2010 (10) TMI 226
Appeal to High Court – Territorial jurisdiction - directors had entered into an agreement for sale of their share holdings in their individual capacity and since the directors reside in Mumbai, Court have jurisdiction notwithstanding the fact that the company had its registered office in Bangalore - agreement was in respect of the sale of the shares of the company which as indicated above can be said to ordinarily carry out its business in Bangalore at the relevant time - whole intrinsic cause of action can also be said to have arisen in Bangalore and therefore the Company’s appeal would lie before the High Court of Karnataka - Since the Company’s appeal would lie before the High Court of Karnataka, the Appeal Nos. 72/09 and 73/09 filed by the appellants, who were the directors of the said company, cannot be segregated on the ground that the directors reside in Mumbai and, therefore, the said appeals would also lie before the High Court of Karnataka
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2010 (10) TMI 156
Foreign exchange – Adjudication – acquisition of foreign exchange without RBI permission - spending of foreign exchange without RBI permission - Notice to show cause - Held that: The appellants insisted for supply of all documents in the possession of the authority and such demand is based on vague, indefinite and irrelevant grounds. The appellants are not sure as to whether they are asking for the copies of the documents in possession of the adjudicating authority or in possession of the authorized officer who lodged the complaint. The only object in making such demand is obviously to obstruct the proceedings and the appellants, to some extent, have been able to achieve their object as is evident from the fact that the inquiry initiated as early as in the year 2006 still did not even commence. Adjudicating authority to deal with the complaint as expeditiously as possible and every endeavour shall be made to dispose of the complaint finally at the earliest. No unreasonable request for adjournment shall be entertained by the adjudicating authority.
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2010 (10) TMI 84
Whether once an Authorised Dealer duly complies with the instructions laid down in the Memorandum of instructions to Full Fledge Money Changer (FFMC), issued by Reserve Bank of India (RBI) under section 73(3) of FERA, while undertaking money changing transactions with another Authorised Dealer, can such Authorised Dealer then be held liable for violation of provisions of section 6(4) and (5) of FERA?
Held that:- The submission of the learned counsel for the Appellants based on para 9 of the FLM, in our view, is misconceived, though para 9 permits free transaction between two money-changers, the said transaction cannot be carried out in violation of the provisions of FERA but has to keep within the parameters of FERA. Relying upon para 9 of the FLM, a money changer cannot absolve himself or itself of the obligation cast by section 6(4) and 6(5) of FERA. In fact para 9 of the FLM is circumscribed by the provisions of the Act namely section 6(4) and 6(5) as also para 3 of the FLM. The submission of the learned counsel for the Appellants that there was no obligation on the Appellants to check the credentials of the representative of the Hotel Zam Zam in terms of section 6(5) in view of para 9 of the FLM does not commend to us and has to be rejected.
Thus we do not find any infirmity or illegality in the order passed by the ATFFE confirming the Order in Original. Resultantly, the question of law would have to be answered in favour of the revenue and against the appellants.
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2010 (9) TMI 1283
Issues involved: Appeal against order imposing penalty and confiscating foreign currency u/s 63 of FERA Act for alleged contravention.
The judgment pertains to an appeal against an order confirming the penalty and confiscation of foreign currency imposed on the appellant u/s 63 of the FERA Act. The appellant's appeal was based on the argument that there was no variance between the statements made by him during the search and preparation of Panchanama. The appellant consistently maintained that the seized US $1,300 belonged to his mother, who had kept it in his bedroom cupboard during her visit to India. The appellant's defense highlighted that possession does not necessarily imply acquisition, especially when there is no evidence indicating how the foreign exchange was acquired. Citing a judgment of the Apex Court, it was argued that mere possession without positive material on acquisition cannot lead to culpability. The High Court agreed with the appellant's contentions, finding that the impugned orders suffered from a perverse appreciation of evidence and were unsustainable. Consequently, the orders were quashed, the appeal was allowed, and the confiscated amount was to be returned to the appellant within eight weeks, with provisions for interest if delayed.
In conclusion, the High Court allowed the appeal, directing the Revenue to return the confiscated foreign currency to the appellant within eight weeks, failing which interest at the rate of 10% per annum would be applicable. The appellant was granted the right to deal with the foreign exchange in accordance with the law upon its return. No costs were awarded in this matter.
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2010 (9) TMI 1212
The Delhi High Court dismissed the writ petition challenging a detention order at the pre-execution stage, allowing the petitioner to approach the court later if needed. The judges were Justice Badar Durrez Ahmed and Justice V.K. Jain.
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2010 (9) TMI 1089
Issues Involved:
1. Legality of issuance and dispatch of the notice dated 31.05.2002.
2. Compliance with service requirements under Rule 10 of the Adjudication Proceedings and Appeals Rules, 1974.
3. Validity of the proceedings held on 13.01.2004.
4. Existence and implications of a draft order found on the record.
5. Maintainability of the petition challenging the legality of a show cause notice.
Issue-wise Detailed Analysis:
1. Legality of Issuance and Dispatch of Notice Dated 31.05.2002:
The petitioner challenged the notice dated 31.05.2002 issued by Mr. K.R. Bhargava, questioning whether it was issued in his capacity as an Adjudicating Officer under Section 51 of the FERA and Rule 3 of the Adjudication Proceedings and Appeals Rules, 1974, or merely as an officer of the Enforcement Directorate. The court noted that the respondent clarified this aspect through an additional affidavit, confirming that Mr. K.R. Bhargava acted as an Adjudicating Officer, supported by a notification dated 16.04.1999. This settled the controversy in favor of the respondent.
2. Compliance with Service Requirements Under Rule 10:
The petitioner argued that the notice was not served in accordance with Rule 10 of the Adjudication Proceedings and Appeals Rules, 1974, which mandates service by registered post or personal delivery. The notice was dispatched by courier, which the petitioner claimed was not a recognized mode of service. The court found that the notice was indeed dispatched by courier on 31.05.2002 and received by the petitioner on 03.06.2002. However, the court did not explicitly rule on whether this mode of service complied with Rule 10.
3. Validity of Proceedings Held on 13.01.2004:
The petitioner contended that the proceedings on 13.01.2004 were invalid as the matter had been adjourned sine die on 23.12.2003 due to non-inspection of original documents. The court agreed, noting that the notice dated 31.12.2003 for a personal hearing was premature and vitiated, as the petitioner had not been given an opportunity to inspect the documents. Consequently, the court quashed both the notice to show cause dated 31.05.2002 and the proceedings held on 13.01.2004.
4. Existence and Implications of a Draft Order:
The petitioner discovered a draft order on the record during file inspection on 06.01.2004, raising concerns about the fairness of the proceedings. The court found the existence of the draft order suspicious and indicative of a pre-determined outcome, undermining the petitioner's opportunity for an unbiased hearing. This further justified quashing the proceedings.
5. Maintainability of the Petition:
The respondent argued against the maintainability of the petition, asserting that it challenged the legality of a show cause notice. The court noted that the petitioner had cooperated with the proceedings and that the delay was attributable to the respondent's inaction despite court orders. Given the six-year duration and the change of the Adjudicating Officer, the court decided to dispose of the petition with specific directions for fresh consideration of the reply to the notice to show cause.
Conclusion:
The court directed the new Adjudicating Officer to reconsider the reply filed by the petitioner to the notice to show cause, issue a fresh notice if necessary, and ensure a fair hearing. The petitioner was allowed to raise all legal pleas in the fresh proceedings. The court emphasized that the petitioner could seek further legal remedies if aggrieved by future orders. No costs were awarded.
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2010 (9) TMI 470
Penalty - foreign currency seized – foreign currency found in possession of Respondent while checked about the rates of foreign exchange with the said shop-keeper where search operation was in progress – Held that: - preparation or intention to commit an offence cannot be equated with the commission of the offence itself - Appellant had made inquiries about the price of foreign currency but not progressed further as he had been accosted by the officers of the Directorate - no merit in the Appeal - accordingly dismissed
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2010 (9) TMI 463
Foreign Exchange violations – Non receipt of consideration - Initiation of proceedings - initiation of proceedings under the FERA in terms of Section 49(3) FEMA read with the Rules - Held that: in the instant case, been able to show that the Petitioner No. 1 took all reasonable steps to receive back the goods that had been despatched for export. The Petitioner No. 1 wrote to TCIL asking it to re-book the consignment for the delivery back atNew Delhi. TCIL, for reasons best known to it, was unable to do so. It first stated that all the six consignments were in its custody. Later it contradicted this by stating that four of the consignments had been delivered to the consignee. There is already a finding rendered by the NCDRC on this aspect. - The Petitioners have been able to show that the essential ingredient of Section 18(2) read with Section 18(3) FERA has not been satisfied in the present case. It will not be in the interests of justice after nearly eight years, to require the Petitioners to face the entire proceedings before the Adjudicating Authority to demonstrate that the notice issued to them on28th February 2002was without jurisdiction. The facts necessary to even prima facie draw the inference of violation of Section 18(2) FERA by the Petitioners do not exist in the present case. - SCN issued by DoE set aside.
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2010 (9) TMI 33
Personal liability of Managing Director - contravention of provisions - Held that: - t is necessary to specifically aver in a complaint under Section 141 that at the time the offence was committed the person accused was in charge of and responsible for the conduct of business of the company. - Merely, being a director of a company is not sufficient to make the person liable under Section 141 of the Act. A director in a company cannot be deemed to be in charge of and responsible to the company for conduct of its business. - The question notes that the Managing Director or Joint Managing Director would be admittedly in charge of the company and responsible to the company for conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the Act. By virtue of the office they hold as Managing Director or Joint Managing Director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under Section 141. So far as signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under subsection (2) of Section 141
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2010 (8) TMI 720
Pre-deposit – undue hardship - non realization of export consideration - reasonable steps - contravention of the provisions of FEMA - Mere financial difficulties cannot be said to be “undue hardship”. when the Appellate Tribunal has judicially exercised its discretion, High Court/Appellate Court will not interfere with the exercise of discretion, which has been judicially exercised. The views expressed by us in this order shall not be construed as expression of opinion on the merits of the matter, Civil Miscellaneous Appeals are dismissed, there is no order as to costs, consequently, the connected miscellaneous petitions are closed
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2010 (8) TMI 462
Release of seized material - principle the respondents have agreed to return the articles/documents - But respondents still not received approval from the Headquarters Office - petitioner cannot be made to wait endlessly for return of the said documents/articles - respondents are directed to return the documents/articles as and when necessary – Held that: - respondents have some reservations regarding returning the same at this stage, considering the period of time that has elapsed since the date of seizure of the documents, the respondents cannot be permitted to retain the same for a much longer period – petitioner not be permitted to raise any grievance on future if not turns up to collect document
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2010 (7) TMI 1000
Issues involved:
The issues involved in the judgment include the challenge to a show cause notice issued under Section 6 of the Foreign Exchange Management Act (FEMA) and the alleged contravention of provisions related to guarantee by a resident in India to a non-resident.
Details of the Judgment:
Challenge to Show Cause Notice:
The petitioners, the Managing Director and former Chairman of a Public Limited Company, challenged a show cause notice issued by the adjudicating authority under FEMA. The notice pertained to a contravention alleged in furnishing a bank guarantee to a non-resident, based on the applicability of Section 6 (3) (1) (J) of FEMA. The petitioners argued that issuing a guarantee to a non-resident was permissible under Section 6 (2) of the Act. The dispute arose from a share purchase agreement involving the purchase of vMoksha entities, where the petitioners fulfilled their obligations, but a breach occurred leading to arbitration proceedings.
Violation of Natural Justice:
The petitioners contended that the respondents violated principles of natural justice by not responding to requests for the return of seized documents and proceeding with the enquiry without considering representations. The respondents issued a show cause notice and refused to provide requested documents, leading the petitioners to offer explanations based on limited records. The petitioners argued that this violated their rights and interfered with the enquiry process.
Maintainability of Writ Petitions:
The respondents raised the issue of the maintainability of the writ petitions, stating that the petitioners had already offered detailed explanations and therefore could not challenge the show cause notice under Article 226 of the Constitution of India. The Additional Solicitor General argued that the petitioners had already responded to the notice and were called for a personal hearing, indicating compliance with natural justice principles.
Decision of the Court:
After hearing arguments from both sides, the Court referenced a Supreme Court decision emphasizing that writ petitions challenging show cause notices should not be entertained unless there is a clear lack of jurisdiction or legal basis. The Court declined to interfere with the show cause notice but directed the respondents to consider the petitioners' objection regarding the applicability of Section 6 (3) (j) of FEMA and to pass appropriate orders within four weeks. The writ petitions were disposed of accordingly, with no costs awarded.
This summary provides a detailed overview of the issues involved in the judgment, including the challenge to the show cause notice, violation of natural justice, and the decision of the Court regarding the maintainability of the writ petitions.
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2010 (7) TMI 997
The High Court dismissed a writ petition against an order of the Appellate Tribunal for Foreign Exchange regarding waiver of penalty pre-deposit, citing that only an appeal under Section 35 of the Foreign Exchange Management Act, 1999 is maintainable as per a Supreme Court judgment. The petitioner can raise all points in the appeal as per the Supreme Court's clarification.
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2010 (6) TMI 878
Issues Involved:
1. Legality of the show cause notice issued u/s 8(1) of the FERA Act.
2. Validity of penalty imposition based on allegations not mentioned in the show cause notice.
3. Applicability of section 6(4) versus sections 8(1) and 8(2) of the FERA Act for non-issuance of encashment certificates.
Summary:
1. Legality of the show cause notice issued u/s 8(1) of the FERA Act:
The appellant, an Assistant Manager at the State Bank of India (SBI) Extension Counter at Anna International Airport, was charged under sections 8(1) and 8(2) of the Foreign Exchange Regulation Act (FERA) for possessing foreign currencies without proper accounting. The appellant argued that as an employee of an authorized dealer (SBI), he was empowered to deal in foreign exchange, making the show cause notice under sections 8(1) and 8(2) inapplicable. However, the court found that the appellant's actions were independent and not connected with the authorized dealer's activities, thus validating the notice under sections 8(1) and 8(2).
2. Validity of penalty imposition based on allegations not mentioned in the show cause notice:
The appellant contended that the penalty was imposed based on the non-procurement of encashment certificates, which was not mentioned in the show cause notice. The court noted that the respondent's reference to the absence of encashment certificates was to discredit the appellant's explanation for tallying accounts, not the basis for the penalty. The penalty was imposed for contravening sections 8(1) and 8(2), and the court found no merit in the appellant's argument that the penalty was based on a different reasoning.
3. Applicability of section 6(4) versus sections 8(1) and 8(2) of the FERA Act for non-issuance of encashment certificates:
The appellant argued that any violation related to non-issuance of encashment certificates should fall under section 6(4) of the FERA Act, not sections 8(1) and 8(2). The court held that the respondent's reference to the non-issuance of encashment certificates was to disbelieve the appellant's explanation for the possession of foreign and Indian currencies. The penalty was not imposed for failing to issue encashment certificates but for unauthorized dealing in foreign exchange, thus sections 8(1) and 8(2) were applicable.
Conclusion:
The court dismissed the appeal, upholding the penalties imposed by the respondent for violations of sections 8(1) and 8(2) of the FERA Act. The appellant's arguments regarding the legality of the show cause notice and the basis for the penalty were rejected.
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2010 (6) TMI 823
Issues involved:
The issues involved in the judgment are the acquisition and transfer of immovable property in India by individuals of Indian origin who are not Indian citizens, as well as the interpretation of relevant regulations governing such transactions.
Acquisition of Property:
The first petitioner, a Malaysian citizen, acquired property in India through a sale deed executed by her Indian citizen husband. The petitioners are in possession and enjoyment of the property, paying taxes accordingly. The petitioners seek relief against the third respondent's refusal to register a sale deed for the property.
Regulations Interpretation:
The petitioners rely on Regulation 2(c) of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000, asserting their entitlement to acquire and dispose of property in India. The amended definition of 'a person of Indian origin' includes individuals with Indian lineage, such as the first petitioner and her children.
Legal Analysis:
The judgment examines Regulation 4 of the aforementioned regulations, which permits persons of Indian origin residing outside India to transfer immovable property in India to Indian residents. Late Thekkepeediyakkal Moideen Haji, an Indian citizen, acquired the property in question, making the petitioners, his legal heirs, eligible to inherit and transfer the property.
Decision and Direction:
The court concludes that the petitioners, being individuals of Indian origin, are entitled to transfer the property to an Indian citizen residing in India. The respondents' objection to the sale deed registration is deemed unsustainable. However, the registering authority may require proof of the petitioners' identity as citizens of their respective countries. The writ petition is disposed of with a direction for the third respondent to allow the execution and registration of the sale deed upon proof of identity and payment of stamp duty.
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2010 (4) TMI 1121
Issues Involved:
1. Validity of proceedings initiated under FERA post the sunset period defined by FEMA.
2. Financial hardship and the requirement to furnish a bank guarantee as a pre-condition for the appeal.
Detailed Analysis:
Issue 1: Validity of Proceedings Initiated Under FERA Post-Sunset Period Defined by FEMA
The primary challenge in this petition is to the order dated 22nd August 2002, passed by the Special Director, Enforcement Directorate (ED), which fixed a personal hearing for the petitioner on 12th September 2002. The petitioner also challenges the subsequent adjudication order dated 17th February 2005, which found the petitioner guilty and levied a penalty of Rs. 10 lakhs for contravention of Section 18(2) and 18(3) of the Foreign Exchange Regulation Act, 1973 (FERA). Additionally, the petitioner disputes the orders dated 7th February 2006 and 19th January 2007, passed by the Appellate Tribunal of Foreign Exchange.
The petitioner contends that the proceedings under FERA were initiated only on 22nd August 2002, after the expiry of the "sunset" period on 31st May 2002 as per Section 49(3) of FEMA. Therefore, the proceedings were without the authority of law. The petitioner argues that the issuance of a show cause notice under Section 51 FERA is merely an initiation and not the commencement of adjudication proceedings. The petitioner's counsel refers to Rule 3 of the Adjudication Proceedings and Appeal Rules (APAR), 1974, and argues that the show cause notice dated 28th February 2000 did not signify the commencement of proceedings under FERA. Instead, it was the communication dated 22nd August 2002 that signified the commencement of proceedings.
The court considered the arguments and referred to the Supreme Court judgment in S.K. Sinha v. Videocon International Ltd. (2008) 2 SCC 492, which explained that "commencement" connotes "take notice of judicially." The court also referred to the decision of the Single Judge of the Madras High Court in Deputy Director, Enforcement Directorate, Madras v. Naina Maricair AIR 1990 Madras 22, which held that adjudication proceedings under Section 51 of FERA commenced when a show cause notice is issued under Rule 3(1) of APAR.
The court concluded that the Adjudicating Officer took notice of the contravention when he issued the notices on 28th February 2000 and 27th March 2001 to the petitioner. This was within the sunset period, and therefore, the proceedings were not bad in law. Consequently, there was no error committed by the Adjudicating Officer in communicating on 22nd August 2002 that the proceedings would continue under FERA, 1973. The contention of the petitioner on this aspect was rejected.
Issue 2: Financial Hardship and Requirement to Furnish Bank Guarantee
The petitioner also challenged the validity of the orders dated 7th February 2006 and 19th January 2007, passed by the Appellate Tribunal, which required the petitioner to furnish an unconditional bank guarantee of Rs. 25 lakhs as a condition for the appeal being taken up for hearing. The petitioner argued that he demonstrated his lack of financial capacity to comply with the order.
The court noted that the adjudication order levied a total penalty of Rs. 50 lakhs on the petitioner for various contraventions under FERA. The petitioner was directed by the Appellate Tribunal to furnish a bank guarantee to the extent of 50% of the penalty amount, i.e., Rs. 25 lakhs. The petitioner pointed out that M/s Sita Electronics Pvt. Ltd., of which he was Chairman, suffered huge losses and was in liquidation. He also stated that he had resigned as Managing Director of Suri Computers Pvt. Limited on 29th October 1989.
The court found that the observations of the Appellate Tribunal, which stated that the petitioner had not shown any bona fide efforts in complying with the order for furnishing the bank guarantee, were not justified. The court held that the Appellate Tribunal erred in approaching the matter casually without adverting to the specific pleadings. The petitioner was able to demonstrate a lack of financial capacity to furnish a bank guarantee of Rs. 25 lakhs.
Considering the facts and circumstances, the court set aside both the orders dated 7th February 2006 and 19th January 2007, passed by the Appellate Tribunal. The court directed that subject to the petitioner depositing a sum of Rs. 1 lakh within four weeks, the petitioner's appeal would be heard by the Appellate Tribunal. The appeal would be placed for hearing before the Appellate Tribunal on 1st June 2010 or any day thereafter. If the petitioner failed to produce proof of having deposited the sum within the specified period, his appeal would automatically stand dismissed.
The writ petition was disposed of with no orders as to costs, and a copy of the order was directed to be sent to the Appellate Tribunal for Foreign Exchange.
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2010 (4) TMI 1054
Issues involved: Challenge against communication by Director General of Foreign Trade denying transitional arrangements under para 1.6 of the FTP for import of marble slabs due to absence of LCs.
Factual Background: Petitioner engaged in import of marble slabs, entered into a contract for import with a Chinese supplier. Customs accepted the contract, and partial imports were made. Subsequently, an amendment restricted import of certain goods. Petitioners applied for permission to import remaining quantity under the contract, but DGFT refused.
Submissions: Petitioner's counsel argued that the contract was genuine, already executed partially, and payments made through banking channels. Emphasized the importance of irrevocable LC for sanctity of the contract. DGFT's refusal was challenged for lack of reasons and non-application of mind.
Counter-arguments: Respondent's counsel contended that fiscal policies are in public interest, and interference by courts should be limited unless fraud or lack of bonafides is proven. Cited judgments supporting this stance.
Consideration: Court noted the purpose of requiring irrevocable LC before imposition of restrictions was to prevent manipulation. Found no evidence of petitioner attempting to take advantage or bypass the modified policy. DGFT's refusal lacked reasoning and did not consider the genuine nature of the contract.
Judgment: The court quashed the communication denying permission, remitted the matter back to DGFT for reconsideration, and directed a time frame for contract completion if permission granted. Petition allowed with no costs.
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2010 (4) TMI 432
Writ Jurisdiction- Interlocutory order- The appellant, along with another person, were issued a notice under Section 3(c) of the Foreign Exchange Management Act, 1999 (FEMA) for receiving unauthorized payments worth ₹ 5 crores under instructions from persons living outside India in connection with his illegal cricket betting operation. He was also asked to explain why the amount of ₹ 1 lac, confiscated during search from his residence, should not be credited to the account of the Central Government under Section 13(2) of FEMA, 1999. Held that- If the appellant in this case is allowed to file a writ petition despite the existence of an efficacious remedy by way of appeal under Section 35 of FEMA this will enable him to defeat the provisions of the Statute which may provide for certain conditions for filing the appeal, like limitation, payment of court fees or deposit of some amount of penalty or fulfillment of some other conditions for entertaining the appeal - It is obvious that a writ court should not encourage the aforesaid trend of by-passing a statutory provision. - liability of the appellant is not created under any common law principle but, it is clearly a statutory liability and for which the statutory remedy is an appeal under Section 35 of FEMA, subject to the limitations contained therein. A writ petition in the facts of this case is therefore clearly not -maintainable.
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2010 (3) TMI 904
Issues Involved:
1. Violation of Fundamental Rights under Article 14, 19, and 21 of the Constitution.
2. Lack of basis for inferring any act of omission or commission by the detenu.
3. Inordinate delay in issuance of the detention order.
4. Non-placement of vital and material documents before the Detaining Authority.
5. Detention order passed on irrelevant, extraneous, vague, and non-existent grounds.
Detailed Analysis:
1. Violation of Fundamental Rights under Article 14, 19, and 21:
The petitioner argued that exercising the powers under Section 3(1) of COFEPOSA violates the fundamental rights of the detenu, as FEMA makes it a civil compoundable offense. The court, however, referred to the Supreme Court's decision in Union of India Vs. Venkateshan (2002) 5 SCC 285, which clarified that the enactment of FEMA does not prevent the authorities from passing a detention order under COFEPOSA.
2. Lack of Basis for Inferring Any Act of Omission or Commission:
The petitioner contended that the Detaining Authority failed to recognize that there was no basis for inferring any act of omission or commission by the detenu. The court emphasized the principles laid down in Alka Subhash Gadia, which permit interference at the pre-execution stage only in exceptional cases. The court also clarified that the detenu does not have the right to the order of detention or the grounds thereof before the order is executed.
3. Inordinate Delay in Issuance of the Detention Order:
The petitioner argued that there was an abnormal delay in passing the detention order, which vitiates the order. The court examined the timeline and found that the delay was justified and explained. The court noted that the authorities did not want to pass the order in haste and needed sufficient material to support the detention. The court concluded that the time taken was due to due diligence and thorough examination of the case.
4. Non-placement of Vital and Material Documents:
The petitioner claimed that vital documents, including letters of retraction and representations, were not placed before the Detaining Authority. The court found that the letters of retraction were considered by the Detaining Authority. Regarding the representation dated 25.06.2009, the court noted that it was addressed to the Member (Customs) and was not received by the Sponsoring Authority or the Detaining Authority. The court held that the representation did not raise new issues that were not already considered.
5. Detention Order Passed on Irrelevant, Extraneous, Vague, and Non-existent Grounds:
The petitioner argued that the detention order was based on irrelevant and non-existent grounds. The court emphasized that the grounds of detention and the material relied upon are not served upon the detenu at the pre-execution stage, and thus, the detenu cannot challenge the order on merits at this stage. The court reiterated that such a challenge is permissible only after the order is executed.
Conclusion:
The court dismissed the writ petition, finding no merit in the contentions raised by the petitioner. The court clarified that any observations made in the judgment would not prejudice the petitioner when challenging the detention order appropriately after its execution. The court emphasized the limited jurisdiction at the pre-execution stage and refrained from deeper scrutiny into the merits of the grounds of detention.
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