HC dismisses frivolous writ plea filed by directors against the issue of SCN for unauthorized dealing in forex

  • Blog|News|FEMA & Banking|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 15 December, 2021

Foreign Exchange Management Act 1999 - Dealing in foreign exchange

Case Details: Nataraj Dakshinamurthy v. Special Director, Directorate of Enforcement, Chennai - [2021] 133 taxmann.com 68 (Karnataka)

Judiciary and Counsel Details

    • Krishna S. Dixit, J.
    • Raghavan, Sr. Counsel and Raghuram Cadambi, Adv. for the Petitioner. 
    • M.B. Naragunda, ASG and Unnikrishnan M., CGSC for the Respondent.

Facts of the Case

In the instant case, a show-cause notice alleging violation of sections 3(b), 5, 6(2)(a), and 10(6) of the Foreign Exchange Management Act, 1999 was served on company ‘D’ and its directors including the petitioner. The Petitioners filed an instant writ alleging that impugned notice lacked in minimum material facts and thus, petitioners were put in a disadvantageous position of not being able to reply to same.

High Court Held

The High Court found that impugned notice gave sufficient particulars making out a specific case which petitioners were asked to meet. It was further noted that the impugned notice mentioned about petitioners being persons in-charge of and responsible for the conduct of the business of notice company during the relevant period; it mentioned their consent, connivance, and neglect; it specified a sum of Rs. 180 lakhs as being equivalent of foreign exchange that was tainted because of the alleged violation. The High Court held that instant writ petition being devoid of merit and was liable to be dismissed and petitioners were to be granted a period of four weeks for submitting their reply to the subject notice.

List of Cases Referred to

    • Walter Annamunthodo v. Oil Fields Workers Trade Union 1961 AC 945 (PC) (para 5)
    • K.K. Ahuja v. V.K. Vora [2009] 94 SCL 140 (SC) (para 5)
    • Shylendra Swarup v. Dy. Director Enforcement Directorate 2020 SCC Online SC 600 (para 5)
    • S.N. Sinha v. State of Karnataka ILR 2012 Kar. 448 (para 5)
    • S.N. Bangur v. Klen & Marshalls Mfrs. & Exports (P.) Ltd. [2002] 3 CTC 342 (Mad.) (para 5).

 

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied