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TMI Blog2007 (8) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... ategory-1 Authorised Dealer Banks. Madam/Sir, Foreign investment in infrastructure Companies in Securities Markets - Amendment to the Foreign Direct Investment Scheme. Attention of Authorised Dealer Category - 1 (AD Category -1) banks is invited to Schedule 1 to Foreign Exchange Management (Transfer or issue of Security by a Person Resident Outside India) Regulations, 2000, notified vide FEMA Notification No. 20/2000-RB dated May 3, 2000, as amended from time to time. 2. It has been decided in consultation with Government of India to allow foreign investment in infrastructure Companies in Securities Markets, namely stock exchanges, depositories and clearing corporations, in compliance with SEBI Regulations and subject to the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorises the Reserve Bank of India to issue such circulars. On the basis of the averments made in the petition, the petitioner has also raised an issue that the Stock Exchange is not an infrastructure Company but is a regulatory body and it cannot be allowed to function for profit. The impact of the impugned circular is putting restrictions on the trade activities of the general corporate sector which does not fall within the ambit and scope of the Reserve Bank of India. The Government of India took a policy decision and vide circular dated 22 nd December, 2006, issued by Securities and Exchange Board of India, it has been decided to permit foreign investment subject to the restrictions and classifications made in that Circular. The cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. A bare reading of these provisions clearly show that the Reserve Bank of India has the power to issue directions to the authorised persons and this power is wide enough to cover any kind of directions so far it provide for the regulation of the Foreign Exchange management. We are unable to find any merit in the contention raised on behalf of the petitioner that the Reserve Bank of India has no jurisdiction to issue such circulars. Section 10 (4) of the Act clearly stipulates that an authorised person shall, as contemplated under Section 10 (1) of the Act, in all his dealings is bound by the directions, general or special, issued by the Reserve Bank of India. Similarly, Section 11 (1) of the Act provides that the Reserve Bank of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed in June, 2007, after a considerable delay and that too without rendering any plausible explanation for such inordinate delay. Obviously, the circular has been given full effect to by all concerned. The Reserve Bank of India has already issued directions in furtherance to the policy decision taken by the Central Government. The petitioner has not challenged in the present writ petition the policy decision of the Central Government but has merely questioned the incidental act i.e. the impugned circular. In any event, these are policy decisions which fall within the domain of the authorities concerned in the Central Government. The effects and repercussions of such policy decision can hardly be subject matter of judicial review. Policy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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