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2019 (4) TMI 1355 - SC - FEMAOffence under FEMA - writ petition in the High Court against the Union of India and sought therein a writ of mandamus claiming refund of the pre-deposit amount - High Court allowed the appeals, set aside the order of the Tribunal and restored the order of the Adjudicating Authority - Whether the High Court was justified in allowing the appeals filed by the Union of India. HELD THAT - High Court did not examine the case of the parties in the context of material placed by the appellants, though the Tribunal in Para 29 of its order has considered the said material. High Court should have taken into consideration the said material with a view to decide as to whether it was relevant or/and sufficient, and whether it could justify the appellants case as contemplated under Section 8 of FEMA. High Court seemed to have proceeded on wrong assumption that since the appellants did not file any material, a case was made out against them. This observation of the High Court, in our view, was contrary to the record of the case and hence, interference in the impugned order is called for. The proper course in such a case would be to remand the case to the High Court and request the High Court to decide the appeal afresh on merits in accordance with law. Appeals succeed and are accordingly allowed. The impugned order is set aside. The case is remanded to the High Court for deciding the appeals afresh on merits in accordance with law keeping in view the observations made above.
Issues:
1. Violation of FEMA provisions by the appellant-Company. 2. Adjudication by the Special Director and subsequent appeals. 3. Tribunal's order and refund directive. 4. Appeals in the High Court by Union of India and the appellants. 5. Impugned order of the High Court and subsequent appeals to the Supreme Court. 6. Consideration of material evidence and remand decision by the Supreme Court. Issue 1: Violation of FEMA provisions by the appellant-Company The Enforcement Directorate filed a complaint against the appellant-Company under FEMA, alleging violations related to foreign exchange dealings. The investigation focused on the company's business operations, international dealings, share transactions, and loans. The complaint stated contravention of FEMA provisions and prayed for appropriate action against the company. Issue 2: Adjudication by the Special Director and subsequent appeals The Special Director found the appellant-Company guilty of FEMA violations and imposed penalties. The appellants appealed to the Tribunal, which overturned the Special Director's decision, directing a refund of the deposited amount. Union of India appealed to the High Court under FEMA Section 35, while the appellants filed a writ petition seeking a refund. Issue 3: Tribunal's order and refund directive The Tribunal's order was challenged in the High Court, which set aside the Tribunal's decision, restored the Adjudicating Authority's order, and dismissed the writ petition. This led to the filing of appeals in the Supreme Court by the appellant-Company and its Managing Director. Issue 4: Appeals in the High Court by Union of India and the appellants The High Court allowed the Union of India's appeals, prompting the appellants to challenge this decision in the Supreme Court. The central question was whether the High Court's decision to allow the Union of India's appeals was justified. Issue 5: Impugned order of the High Court and subsequent appeals to the Supreme Court The High Court's decision to allow the Union of India's appeals and dismiss the writ petition was contested in the Supreme Court. After hearing arguments from both sides, the Supreme Court decided to remand the case back to the High Court for a fresh decision based on the material evidence presented. Issue 6: Consideration of material evidence and remand decision by the Supreme Court The Supreme Court noted that the High Court did not adequately consider the material evidence provided by the appellants, leading to an erroneous assumption of guilt. The Supreme Court directed the High Court to reevaluate the case based on the material evidence and make a decision in accordance with the law, emphasizing the importance of a fair and thorough examination of the evidence presented.
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