9911796707
TMI Blog2013 (5) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.24.18 Crores from overseas buyers within the stipulated period of one year. A second notice to show cause was issued to the Managing Director of the Petitioner on 3 February 2012 alleging a contravention of the provisions of Section 4 of the Foreign Exchange Management Act as a result of the acquisition of an amount of Rs.24.18 Crores outside India without the permission of the Reserve Bank. A third notice to show cause was issued on 3 February 2013 to the Managing Director stating that there was a contravention of the regulations framed under the Act by the opening and operation of two bank accounts outside India in which amounts were deposited in a sum equivalent to INR 31.52 Cores. By a fourth notice to show cause also dated 3 February ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the compounding applications on the ground that an investigation is being conducted by the Directorate of Enforcement; and (iii) For a direction to the Reserve Bank to reconsider and decide the compounding application submitted on 20 February 2013; 5. The provisions in regard to compounding are governed by Section 15 of the Foreign Exchange Management Act 1999 which provides as follows : 15. Power to compound contravention.-- (1) Any contravention under section 13 may, on an application made by the person committing such contravention, be compounded within one hundred and eighty days from the date of receipt of application by the Director of Enforcement or such other officers of the Directorate of Enforcement and officers of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a sensitive nature involving broader issues of national security or money laundering or a serious infringement of the regulatory framework in which case a compounding cannot be allowed. In fact, even this is not an exhaustive list of factors since the facts of each case will have to be considered by the Competent Authority when it decides whether the application for compounding should be granted. There is a public interest element in the enactment of regulatory statutes such as the FEMA. Whether compounding of a breach would compromise the public interest involved in the enforcement of law has to be considered in the facts of each case. The circular which has been issued by the Reserve Bank makes it clear that the factors which have been se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 9. Insofar as the adjudication proceedings are concerned, since the Petitioners are pursuing an application for compounding the contravention before the Reserve Bank, learned Senior Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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