FOREIGN EXCHANGE REGULATION ACT, 1973 [REPEALED]

Facts: The Enforcement Directorate has proceeded against ANZ Grindlays Bank Ltd as well as Standard Chartered Bank. At the relevant time, they were two distinct entities and were separately noticed by the Enforcement Directorate. Thereafter, Standard Chartered Bank acquired ANZ Grindlays Ltd and the two entities stood merged into one, where the ANZ Grindlays Bank Ltd. has been charged for contravention in which they were engaged in a transaction involving foreign exchange. On otherside the Standard Chartered Bank converted the non - convertible rupee funds of the Bank into convertible funds and transferred the said amount in foreign exchange and the said amount in foreign exchange to Standard Chartered Bank, London, a person resident outside India, therefore the Appellants Bank violated the provisions of the Foreign Exchange Regulations Act, 1973.

Held: The appellants being a bank it was only for RBI to impose the penalty if any thought alternative submissions are also made and entire penalty amount has been deposited by the Bank. Thus it appears that after realising lapse on their part and the said penalty amount shall not be pressed by the appellants for refund.

Facts: The Enforcement Directorate has proceeded against ANZ Grindlays Bank Ltd as well as Standard Chartered Bank. At the relevant time, they were two distinct entities and were separately noticed by the Enforcement Directorate. Thereafter, Standard Chartered Bank acquired ANZ Grindlays Ltd and the two entities stood merged into one, where the ANZ Grindlays Bank Ltd. has been charged for contravention in which they were engaged in a transaction involving foreign exchange. On otherside the Standard Chartered Bank converted the non - convertible rupee funds of the Bank into convertible funds and transferred the said amount in foreign exchange and the said amount in foreign exchange to Standard Chartered Bank, London, a person resident outside India, therefore the Appellants Bank violated the provisions of the Foreign Exchange Regulations Act, 1973.

Held: The appellants being a bank it was only for RBI to impose the penalty if any thought alternative submissions are also made and entire penalty amount has been deposited by the Bank. Thus it appears that after realising lapse on their part and the said penalty amount shall not be pressed by the appellants for refund.

Facts: The Enforcement Directorate has proceeded against ANZ Grindlays Bank Ltd as well as Standard Chartered Bank. At the relevant time, they were two distinct entities and were separately noticed by the Enforcement Directorate. Thereafter, Standard Chartered Bank acquired ANZ Grindlays Ltd and the two entities stood merged into one, where the ANZ Grindlays Bank Ltd. has been charged for contravention in which they were engaged in a transaction involving foreign exchange. On otherside the Standard Chartered Bank converted the non - convertible rupee funds of the Bank into convertible funds and transferred the said amount in foreign exchange and the said amount in foreign exchange to Standard Chartered Bank, London, a person resident outside India, therefore the Appellants Bank violated the provisions of the Foreign Exchange Regulations Act, 1973.

Held: The appellants being a bank it was only for RBI to impose the penalty if any thought alternative submissions are also made and entire penalty amount has been deposited by the Bank. Thus it appears that after realising lapse on their part and the said penalty amount shall not be pressed by the appellants for refund.

Facts: The Enforcement Directorate has proceeded against ANZ Grindlays Bank Ltd as well as Standard Chartered Bank. At the relevant time, they were two distinct entities and were separately noticed by the Enforcement Directorate. Thereafter, Standard Chartered Bank acquired ANZ Grindlays Ltd and the two entities stood merged into one, where the ANZ Grindlays Bank Ltd. has been charged for contravention in which they were engaged in a transaction involving foreign exchange. On otherside the Standard Chartered Bank converted the non - convertible rupee funds of the Bank into convertible funds and transferred the said amount in foreign exchange and the said amount in foreign exchange to Standard Chartered Bank, London, a person resident outside India, therefore the Appellants Bank violated the provisions of the Foreign Exchange Regulations Act, 1973.

Held: The appellants being a bank it was only for RBI to impose the penalty if any thought alternative submissions are also made and entire penalty amount has been deposited by the Bank. Thus it appears that after realising lapse on their part and the said penalty amount shall not be pressed by the appellants for refund.

Facts: The Commissioner of Customs passed order of confiscation of currency of diamond trader and also, imposed penalty on him. Thereafter Show Cause Notice was issued by Directorate of Enforcement for contravention under FERA Act, 1973. The Currency Declaration Forms according to the Appellate Tribunal proved that the currency was brought in by the trader and the confiscation was confirmed. Thereafter the Special Director imposed penalty on the trader and other persons as well. It was held that the currency in question was liable to confiscation under Section 63 of FERA.

Held: The amount was refunded and credited to the account of trader Jatin Jhaveri during the pendency of the proceedings and subject to his undertaking to return the same with interest, he is directed to refund the amount with interest at 10% per annum within six weeks from the date of this judgment.

Facts: The Commissioner of Customs passed order of confiscation of currency of diamond trader and also, imposed penalty on him. Thereafter Show Cause Notice was issued by Directorate of Enforcement for contravention under FERA Act, 1973. The Currency Declaration Forms according to the Appellate Tribunal proved that the currency was brought in by the trader and the confiscation was confirmed. Thereafter the Special Director imposed penalty on the trader and other persons as well. It was held that the currency in question was liable to confiscation under Section 63 of FERA.

Held: The amount was refunded and credited to the account of trader Jatin Jhaveri during the pendency of the proceedings and subject to his undertaking to return the same with interest, he is directed to refund the amount with interest at 10% per annum within six weeks from the date of this judgment.

Facts: The Commissioner of Customs passed order of confiscation of currency of diamond trader and also, imposed penalty on him. Thereafter Show Cause Notice was issued by Directorate of Enforcement for contravention under FERA Act, 1973. The Currency Declaration Forms according to the Appellate Tribunal proved that the currency was brought in by the trader and the confiscation was confirmed. Thereafter the Special Director imposed penalty on the trader and other persons as well. It was held that the currency in question was liable to confiscation under Section 63 of FERA.

Held: The amount was refunded and credited to the account of trader Jatin Jhaveri during the pendency of the proceedings and subject to his undertaking to return the same with interest, he is directed to refund the amount with interest at 10% per annum within six weeks from the date of this judgment.

Facts: The first respondent issued Show Cause Notice against ANZ Grindlays Bank, the Account Holder and three bank officials for having credited Non-convertible Rupee Funds received from Moscow, into the Non- Resident Account of Dr. P.K. Ramakrishnan in contravention under FERA, alleging that it had taken place with the consent, connivance of and attributable to the negligence on the part of the said Officials. However, by letter addressed to the appellant, the respondent ordered that charges relating to 'consent' and 'connivance' shall stand deleted from the Show Cause Notice. Meanwhile, Opportunity Notice followed by Complaint was filed Under Section 56 of FERA, 1973 against the respondent alleging contravention of Section 6 read with Section 49 of FERA having taken place with the consent, connivance of and attributable to the negligence of the Officials and the Additional Chief Metropolitan Magistrate took cognizance of the complaint for the offence Under Section 56 of FERA itself and issued summons to the accused.

Held: The contention of the Appellant that the cognizance was taken on irrelevant consideration, is to be countenanced. There was suppression and also material omission in non-mentioning of reply sent by the Appellant to the Opportunity Notice, in the complaint. Further, to substantiate the averments in the complaint, not even a single original document was enclosed. Though the allegation of negligence can be independently looked into, considering the standard of proof in criminal prosecution, the continuance of prosecution against the Appellant is not tenable in law and the proceedings are liable to be quashed.

Facts: The first respondent issued Show Cause Notice against ANZ Grindlays Bank, the Account Holder and three bank officials for having credited Non-convertible Rupee Funds received from Moscow, into the Non- Resident Account of Dr. P.K. Ramakrishnan in contravention under FERA, alleging that it had taken place with the consent, connivance of and attributable to the negligence on the part of the said Officials. However, by letter addressed to the appellant, the respondent ordered that charges relating to 'consent' and 'connivance' shall stand deleted from the Show Cause Notice. Meanwhile, Opportunity Notice followed by Complaint was filed Under Section 56 of FERA, 1973 against the respondent alleging contravention of Section 6 read with Section 49 of FERA having taken place with the consent, connivance of and attributable to the negligence of the Officials and the Additional Chief Metropolitan Magistrate took cognizance of the complaint for the offence Under Section 56 of FERA itself and issued summons to the accused.

Held: The contention of the Appellant that the cognizance was taken on irrelevant consideration, is to be countenanced. There was suppression and also material omission in non-mentioning of reply sent by the Appellant to the Opportunity Notice, in the complaint. Further, to substantiate the averments in the complaint, not even a single original document was enclosed. Though the allegation of negligence can be independently looked into, considering the standard of proof in criminal prosecution, the continuance of prosecution against the Appellant is not tenable in law and the proceedings are liable to be quashed.

Facts: The first respondent issued Show Cause Notice against ANZ Grindlays Bank, the Account Holder and three bank officials for having credited Non-convertible Rupee Funds received from Moscow, into the Non- Resident Account of Dr. P.K. Ramakrishnan in contravention under FERA, alleging that it had taken place with the consent, connivance of and attributable to the negligence on the part of the said Officials. However, by letter addressed to the appellant, the respondent ordered that charges relating to 'consent' and 'connivance' shall stand deleted from the Show Cause Notice. Meanwhile, Opportunity Notice followed by Complaint was filed Under Section 56 of FERA, 1973 against the respondent alleging contravention of Section 6 read with Section 49 of FERA having taken place with the consent, connivance of and attributable to the negligence of the Officials and the Additional Chief Metropolitan Magistrate took cognizance of the complaint for the offence Under Section 56 of FERA itself and issued summons to the accused.

Held: The contention of the Appellant that the cognizance was taken on irrelevant consideration, is to be countenanced. There was suppression and also material omission in non-mentioning of reply sent by the Appellant to the Opportunity Notice, in the complaint. Further, to substantiate the averments in the complaint, not even a single original document was enclosed. Though the allegation of negligence can be independently looked into, considering the standard of proof in criminal prosecution, the continuance of prosecution against the Appellant is not tenable in law and the proceedings are liable to be quashed.

Facts: One Lambert Kroger, Stefen Mayer and Cliff Roy, all foreign nationals, had met Anil Bhalla and expressed their desire for establishing a company for trading in Maple Leaf Gold Coins in India, which they were doing in Netherlands and Germany. Anil Bhalla was informed that necessary approvals would be obtained through M/s. Abacus Legal Group, New Delhi. Anil Bhalla and Rajesh Sethi, Chartered Accountants of that firm, became subscribers of the newly formed company. Cliff Roy, a foreign national and power of attorney holder of Piccadily informed him that from Abacus, one Vikrant Singh Jafa and Rahul Krishna would be the Directors of the company and ten shares of the company each in the name of Anil Bhalla and in the name of Rajesh Sethi were issued, which were transferred in the name of Vikram Singh Jafa and a sum was received in cash from Cliff Roy. In the above background, the company was incorporated, on the same date. Cliff Roy was appointed as the Managing Director of the company. Anil Bhalla, Rajesh Sethi, Rahul Krishnan and Jafa, then, resigned as Directors of the company. He held 49% shares of the company and a Share Transfer Agreement was entered into by him with one A.R. Khan and Lambert Kroger, the Managing Director of the company to transfer 9780 shares of the company to A.R. Khan. The Adjudicating Officer says, ultimately, the Indian company came under the control of Cliff Roy, Paul Singh Clare, Lambert Kroger, all foreign nationals.

Held: There is no error in the view taken by the Tribunal as well as the High Court that the proceedings initiated against the Bank that it had violated Sections 6(4) and (5) of FERA was illegal. We notice trading in gold is not an activity covered under Notification, perhaps for that reason, Respondent also took some steps to establish its 100% subsidiary in India and an application to that effect was filed to FIPB by the company but it was not pursued further and sought to achieve the same as if RBI had granted automatic permission which cannot be sustained lawfully.

Facts: One Lambert Kroger, Stefen Mayer and Cliff Roy, all foreign nationals, had met Anil Bhalla and expressed their desire for establishing a company for trading in Maple Leaf Gold Coins in India, which they were doing in Netherlands and Germany. Anil Bhalla was informed that necessary approvals would be obtained through M/s. Abacus Legal Group, New Delhi. Anil Bhalla and Rajesh Sethi, Chartered Accountants of that firm, became subscribers of the newly formed company. Cliff Roy, a foreign national and power of attorney holder of Piccadily informed him that from Abacus, one Vikrant Singh Jafa and Rahul Krishna would be the Directors of the company and ten shares of the company each in the name of Anil Bhalla and in the name of Rajesh Sethi were issued, which were transferred in the name of Vikram Singh Jafa and a sum was received in cash from Cliff Roy. In the above background, the company was incorporated, on the same date. Cliff Roy was appointed as the Managing Director of the company. Anil Bhalla, Rajesh Sethi, Rahul Krishnan and Jafa, then, resigned as Directors of the company. He held 49% shares of the company and a Share Transfer Agreement was entered into by him with one A.R. Khan and Lambert Kroger, the Managing Director of the company to transfer 9780 shares of the company to A.R. Khan. The Adjudicating Officer says, ultimately, the Indian company came under the control of Cliff Roy, Paul Singh Clare, Lambert Kroger, all foreign nationals.

Held: There is no error in the view taken by the Tribunal as well as the High Court that the proceedings initiated against the Bank that it had violated Sections 6(4) and (5) of FERA was illegal. We notice trading in gold is not an activity covered under Notification, perhaps for that reason, Respondent also took some steps to establish its 100% subsidiary in India and an application to that effect was filed to FIPB by the company but it was not pursued further and sought to achieve the same as if RBI had granted automatic permission which cannot be sustained lawfully.

Facts: One Lambert Kroger, Stefen Mayer and Cliff Roy, all foreign nationals, had met Anil Bhalla and expressed their desire for establishing a company for trading in Maple Leaf Gold Coins in India, which they were doing in Netherlands and Germany. Anil Bhalla was informed that necessary approvals would be obtained through M/s. Abacus Legal Group, New Delhi. Anil Bhalla and Rajesh Sethi, Chartered Accountants of that firm, became subscribers of the newly formed company. Cliff Roy, a foreign national and power of attorney holder of Piccadily informed him that from Abacus, one Vikrant Singh Jafa and Rahul Krishna would be the Directors of the company and ten shares of the company each in the name of Anil Bhalla and in the name of Rajesh Sethi were issued, which were transferred in the name of Vikram Singh Jafa and a sum was received in cash from Cliff Roy. In the above background, the company was incorporated, on the same date. Cliff Roy was appointed as the Managing Director of the company. Anil Bhalla, Rajesh Sethi, Rahul Krishnan and Jafa, then, resigned as Directors of the company. He held 49% shares of the company and a Share Transfer Agreement was entered into by him with one A.R. Khan and Lambert Kroger, the Managing Director of the company to transfer 9780 shares of the company to A.R. Khan. The Adjudicating Officer says, ultimately, the Indian company came under the control of Cliff Roy, Paul Singh Clare, Lambert Kroger, all foreign nationals.

Held: There is no error in the view taken by the Tribunal as well as the High Court that the proceedings initiated against the Bank that it had violated Sections 6(4) and (5) of FERA was illegal. We notice trading in gold is not an activity covered under Notification, perhaps for that reason, Respondent also took some steps to establish its 100% subsidiary in India and an application to that effect was filed to FIPB by the company but it was not pursued further and sought to achieve the same as if RBI had granted automatic permission which cannot be sustained lawfully.

Facts: A memorandum to show cause notice was issued by Special Director to M/s. Godrej Industries Ltd. and its two Directors for allegedly committing contravention in respect of imports and exports of certain commodities made with two foreign parties, named M/s. Fingrain, S.A. Geneva and M/s. Continental Grain Export Corporation, New York during the year 1977-78. During pendency of proceedings, FERA act was repealed, however it was replaced by Foreign Exchange Management Act, 1999, an adjudication order was passed by Deputy Director of Enforcement under FEMA read with FERA in relation to show cause notice by this order, penalty was imposed on M/s. Godrej Industries Ltd. and its two Directors for contravening the provisions of FERA.

Held: The appeal filed by respondent against the order passed by Deputy Director of Enforcement under Section 51 of FERA will lie and was, therefore, maintainable only before the Appellate Tribunal under Section 19 of FEMA and the appeals which respondent had filed before the Special Director are accordingly transferred to the concerned Appellate Tribunal constituted under Section 18 of FEMA for their disposal.

Facts: A memorandum to show cause notice was issued by Special Director to M/s. Godrej Industries Ltd. and its two Directors for allegedly committing contravention in respect of imports and exports of certain commodities made with two foreign parties, named M/s. Fingrain, S.A. Geneva and M/s. Continental Grain Export Corporation, New York during the year 1977-78. During pendency of proceedings, FERA act was repealed, however it was replaced by Foreign Exchange Management Act, 1999, an adjudication order was passed by Deputy Director of Enforcement under FEMA read with FERA in relation to show cause notice by this order, penalty was imposed on M/s. Godrej Industries Ltd. and its two Directors for contravening the provisions of FERA.

Held: The appeal filed by respondent against the order passed by Deputy Director of Enforcement under Section 51 of FERA will lie and was, therefore, maintainable only before the Appellate Tribunal under Section 19 of FEMA and the appeals which respondent had filed before the Special Director are accordingly transferred to the concerned Appellate Tribunal constituted under Section 18 of FEMA for their disposal.