Petitioners directed to pursue alternative remedies under FEMA; Court emphasizes on adjudicatory process and appeals
In a significant ruling, the Madras High Court has dismissed a series of review applications filed by Sachin Bansal and others against the Directorate of Enforcement. The Court upheld its previous order dismissing the writ petitions, emphasizing the availability of alternative remedies under the Foreign Exchange Management Act, 1999 (FEMA).
The case revolves around alleged violations of FEMA by the petitioners, with a specific focus on investments made in India dating back to 2009. The petitioners challenged the show cause notices issued by the Directorate of Enforcement, arguing that the alleged violations occurred before the relevant Reserve Bank of India notifications came into effect.
Justice S. Sounthar, presiding over the matter, highlighted that the petitioners have an effective alternative remedy under FEMA. The Court stressed that the merits of the case, including the delay in issuing show cause notices, should be adjudicated by the designated authority under FEMA. Further appeals can be made to the Appellate Tribunal and the High Court as per Sections 13, 19, and 35 of FEMA.
The petitioners had argued that there was a significant delay in issuing the show cause notices, which they claimed violated their fundamental rights. However, the Court noted that the reasonableness of such delays should be considered by the adjudicating authority, taking into account the specific facts and circumstances of each case.
The Court also addressed arguments related to the applicability of notifications and the definition of "Group Company," stating that these are matters for the adjudicating authority to decide. The ruling emphasized that the petitioners cannot use review applications to re-argue the merits of the case.
Ultimately, the Court found no error apparent on the face of the record in its previous order and dismissed the review applications. The decision underscores the judiciary's stance on the importance of following procedural hierarchy and utilizing available legal remedies before escalating to higher courts.
Bottom line:-
Review applications dismissed on the ground that the petitioners have an effective alternative remedy under the Foreign Exchange Management Act, 1999 (FEMA). The Court refrained from adjudicating on the merits of the submission as the petitioners can raise these points before the adjudicating authority and appeal further to the Appellate Tribunal and High Court under FEMA provisions.
Statutory provision(s):
Foreign Exchange Management Act, 1999 Sections 13, 19, and 35
Sachin Bansal v. Directorate of Enforcement, (Madras) : Law Finder Doc id # 2925993
