Foreign investment approval route cannot import automatic-route disqualifications; pending inquiries alone do not justify refusal.

Regulation 9 of the foreign investment framework allows an Indian party that does not satisfy the automatic-route eligibility conditions to seek Reserve Bank approval, and the authority cannot read into that approval route a disqualifying condition confined to Regulation 6 unless the text expressly says so. Pending enforcement inquiries, by themselves, were not treated as a valid basis to refuse remittance approval where the applicant showed prior permissions and a prima facie need to avoid default and credit damage. The remittance was directed to be approved subject to undertakings securing the amount and preserving sufficient unencumbered assets.

---

---

Issues: Whether the petitioner was entitled to permission for remittance to its overseas wholly owned subsidiary under the approval route despite pending enforcement inquiries, and whether the Reserve Bank could refuse permission on the ground of those inquiries.

Analysis: Regulation 6 of the foreign investment framework permits direct investment subject to specified eligibility conditions, including the condition relating to pending investigation by law enforcement agencies. Regulation 9 separately enables an Indian party that does not satisfy the eligibility norms under Regulations 6, 7 or 8 to seek Reserve Bank approval. The refusal in the present case rested on the Enforcement Directorate's reservation, but the Court noted that the text of Regulation 9 does not incorporate the same disabling stipulation found in Regulation 6. The petitioner had also shown prior permissions granted by the Reserve Bank and made out a prima facie case that the remittance was necessary to avoid default and damage to credit standing.

Conclusion: The petitioner was entitled to seek and receive approval under Regulation 9, and the Reserve Bank could not decline permission merely because investigations were pending.

Final Conclusion: Permission for the remittance was directed to be granted, subject to undertakings securing the remitted amount and preserving sufficient unencumbered assets.

Ratio Decidendi: Where a regulatory scheme separately provides an approval mechanism for cases not satisfying automatic-route eligibility, the authority cannot import into that approval mechanism a disqualifying condition expressly confined to the automatic-route provision unless the regulation itself so provides.

---