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TMI Blog2019 (5) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... s with the respondent as a penalty amount and the said amount has already been deposited by the appellants. The impugned order is passed contrary to the provision of section 13(1) of the Act and thus it is modified. The penalty already deposited under the said provision be appropriated by the respondent (as counsel for the appellant is agreeable for the same). The Revision Petition filed by the respondent is become infractuous. - FPA-FE-25/CHD/2016, FPA-FE-26/CHD/2016, RA-FE-31/CHD/2016 - - - Dated:- 24-4-2019 - Justice Manmohan Singh Chairman For the Appellant : Mr. Prashant Pandey And Mrs. Aagam Kaur, Legal Consultants For the Respondent : Mr. T.K. Gadoo, Advocate, Mr. Ravi Mehrotra, Advocate CORAM JUSTICE MANMOHAN SINGH : CHAIRMAN FPA-FE-25, 26 31/CHD/2016 1. The appellant has filed two appeals against the adjudication order No. SDE(NR)/01/CHD/2016 dated 30.09.2016 passed by the Special Director of the Enforcement Directorate (NR), Chandigarh in the matter of Memorandum of Show Cause No. T-4/06/CHD/2014/SDE dated 22.10.2014 in Complaint T- 3/3/CHD/208 dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Custodian ICICI Bank. Accordingly, MLL handed over the Equity Share Certificate No. 9891 containing 50 million equity shares with distinctive nos. 90500001 to 140500000 dated 30.03.2003 to its Custodian ICICI Bank at ICICI Towers, NBCC Place, Bhishma Pitamah Marg, Pragati Vihar, New Delhi 110 003. c) MLL confirmed to the depository the Bank of New York about the handing over of the said share certificate to its custodian ICICI Bank and informed vide its letter dated 31.03.2003 that 50,000,000 equity shares of rupees 2 per share which was credited to the account with ICICI Bank for the benefit of the Bank of New York, are fully paid, registered in the books of MLL in the name of the Depository and are held by the depository not for the MLL but for holders of GDRs pursuant to the terms and conditions of the GDRs. d) The issue of Global Depository Receipts was fully in accordance with laid down rules, regulations and procedures and there had been no allegation or charge that MLL had not complied with the provisions of the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993 and guidelines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .07.2009 and 14.10.2010; that among others, he stated that RBI was duly informed in the prescribed format about the GDR issue. During investigation as stated in para 6.14 of the impugned Order, he stated that Shri Anil Khandelwal, then Vice President (Finance) was dealing with the matter and he had not dealt with the matter, therefore, statements of Shri Ajay Sharma are inadmissible in evidence and cannot be relied upon in support of the charge. It is submitted that despite the Investigating Officers having been informed of the person knowing all the aspects of the issue of GDRs. It was stated that neither any summons was issued to Shri Anil Khandelwal to appear before the officers to help in the investigation nor any attempt was made to examine him under oath as was required under section 37 of FEMA, 1999 and thereby, to find out the factual particulars in respect of the statutory compliance involved under para 4 of Schedule 1 of Regulation 5(1) of FEM (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000. However, the Adjudicating officer took a contrary view of the matter stating under para 6.15 the reasons as to why statements of Shri Ajay Sharma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi (Delhi Administration) reported at (1988) 3 SCC 609 that the compliance of the section is mandatory and imperative and non-compliance of it renders the confession inadmissible in evidence. However, the Adjudicating authority rejected the submissions as if section 164 had nothing to do with violations of FEMA regulations as FEMA, 1999 is a special statute clearly prescribing the powers to investigate under section 37 of FEMA, 1999. 13. It is submitted that the Adjudicating authority erred in not correctly understanding the submissions as made in paragraphs 20 -22 of the Reply to the SCN. The Adjudicating authority under paras 6.7 6.9 assumed the submissions of the appellant as admission and acknowledgement of RBI s letter that noticees did not file report in Form FC-GPR in respect of issue of GDRs. 14. It is submitted on behalf of appellant that assuming for the sake of argument, without admitting, that MLL has contravened the provisions of para 4 (and not Regulation 4) to Schedule 1 of Regulation 5(1), the SCN had to spell out as to which provisions of the sub-paras of para 4 to Schedule 1 of Regulation 5(1) had not been complied with by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of submission of the return in form FC GPR and, whether it had been filed or not. 18. The charge framed against the appellants in the SCN T- 4/6/CHD/2014/SDE dated 22.10.2014 is that the appellants have contravened the provisions of para 4 of the Schedule 1 to Regulation 5(1) of FEMA Notification No. 20/2000-RB dated 03.05.2000 read with Section 42 of FEMA, 1999. 19. It is evident from SCN and complaint that though the SVN alleges contravention of the provisions of para 4, the charge against the appellants in the complaint is in respect of sub-para (2) of para 4 of Schedule 1 to Regulation 5(1) of FEMA 20/2000-RB which reads as under:- (2) The Indian company issuing shares under sub-paragraph shall furnish to the Reserve Bank, full details of such issue in the form specified in Annexure C within 30 days from the date of closing of the issue. 20. Despite the aforesaid, the Adjudicating Authority has held the appellant guilty of sub-section (2) (3) of para 4 of Schedule 5(1) of FEMA 20/2000-RB by adding contravention of sub-para (3) also while on adjudicating. Sub-para (3) is reproduced below for easy refere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13(1) If any person contravenes any provision of this Act, or contravenes any rule, regulation, notification, direction or order issued in exercise of the powers under this Act, or contravenes any condition subject to which an authorization is issued by the Reserve Bank, he shall, upon adjudication, be liable to a penalty up to thrice the sum involved in such contravention where such amount is quantifiable, or up to two lakh rupees where the amount is not quantifiable . 27. While deciding the stay application, the appellants were directed to deposit ₹ 4 lakhs with the respondent as a penalty amount and the said amount has already been deposited by the appellants. 28. In the light of above, the impugned order is passed contrary to the provision of section 13(1) of the Act and thus it is modified. The penalty already deposited under the said provision be appropriated by the respondent (as counsel for the appellant is agreeable for the same). The Revision Petition filed by the respondent is become infractuous. 29. All the three petitions are disposed in these directions. 30. No costs. - - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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