2024 (9) TMI 122 - SCH - FEMA

Powers of investigation in relation to the contraventions of the FEMA - Power to compound contravention - Power of Reserve Bank to compound contravention - as decided by HC 2018 (6) TMI 1492 - BOMBAY HIGH COURT while upholding the constitutional validity and legality of the proviso, particularly by reading it in the manner noted above, we are in agreement that in the facts of this case, the RBI was not bound to put an end to the compounding proceedings. We are of the opinion that the compounding proceedings initiated vide the compounding applications of the petitioner and pending before the RBI should proceed, but strictly in accordance with law. Thus, the above discussion concludes this judgment. Rule is made absolute by quashing and setting aside the communication dated 1st December, 2017 and further directing the RBI to consider the compounding applications in accordance with law uninfluenced by the communication of the Enforcement Directorate dated 1st December, 2017 or any prior letters/communications, which are quashed and set aside by this judgment - We also proceed to direct the RBI to render the necessary guidance to the petitioner in the matter of compounding of the contraventions under the FEMA. HELD THAT - After having heard learned counsel appearing for the parties, we find no error with the effective order passed by the High Court which is in paragraph 109 of the impugned judgment. Paragraph 109 itself records that the applications for compounding shall be decided in accordance with law. Hence, no case for interference under Article 136 of the Constitution of India is made out. The Special Leave Petition is accordingly, dismissed.

Summary

The Supreme Court upheld the High Court's order regarding compounding applications, finding no error. The Special Leave Petition was dismissed under Article 136 of the Constitution of India.