Pre-amendment NRE deposit rules did not clearly require personal tender by the account holder; later change was prospective.

For deposits into NRE accounts made before 31-7-1995, the pre-amendment exchange-control materials did not clearly require the foreign currency proceeds to be tendered in person by the NRI account holder, so deposits through a power of attorney holder were not shown to be prohibited. The later circular and amended paragraph introduced an express in-person requirement and were treated as a substantive change operating prospectively, not as a mere clarification. The availability of an alternative appellate remedy did not bar writ relief on the facts, given the long pendency and existing interim orders. The writ petitions were allowed and the notices and consequential adjudication orders were set aside.

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Issues: (i) whether, for the period prior to 31-7-1995, foreign currency deposits in NRE accounts could be made through a power of attorney holder or were required to be tendered in person by the NRI account holder; (ii) whether the availability of an appellate remedy under the foreign exchange law warranted refusal of writ relief.

Issue (i): whether, for the period prior to 31-7-1995, foreign currency deposits in NRE accounts could be made through a power of attorney holder or were required to be tendered in person by the NRI account holder.

Analysis: The governing materials considered were paragraph 13B.22 of the Exchange Control Manual, 1993, the amendment introduced later, and the circular dated 31-7-1995. The unamended paragraph did not clearly state that deposits or credits in the NRE account could be made only by the account holder in person. The subsequent circular and amended paragraph expressly introduced the requirement that the proceeds of foreign currency notes and travellers cheques be tendered to the authorised dealer in person by the account holder himself. The Court treated the later circular and amendment as making a substantive change, and not as a mere clarification of an existing prohibition.

Conclusion: Prior to 31-7-1995, there was no clear legal requirement that such deposits could not be made by persons other than the NRI account holder. The issue was decided in favour of the petitioners.

Issue (ii): whether the availability of an appellate remedy under the foreign exchange law warranted refusal of writ relief.

Analysis: The petitions had remained pending for a long period, and interim orders had permitted the proceedings to continue while restraining implementation of the adjudication orders. In that setting, and because the core controversy was already covered by the earlier Division Bench ruling, relegating the petitioners to appeal was not considered an equally efficacious course. The existence of an appellate remedy did not preclude writ relief in the facts of the case.

Conclusion: The availability of an alternative remedy did not bar the writ petitions. This issue was decided in favour of the petitioners.

Final Conclusion: The writ petitions were allowed and the show-cause notices as well as the consequential adjudication orders were set aside.

Ratio Decidendi: Where the relevant pre-amendment exchange-control materials do not clearly prohibit deposits in an NRE account by a person other than the account holder, a later circular and amendment introducing an in-person requirement operate prospectively and cannot be treated as mere clarification.

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