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of <h1>Court Invalidates Show Cause Notices & Orders, Refunds Penalties</h1> <h3>First Global Stockbroking P Ltd. Shankar Sharma, Devina Mehra, Auduth Timblo of Goa Indian Inhabitant, Anju Timblo, Sociedade De Fomento Industrial Pvt. Ltd., Fomento Resorts and Hotels Ltd., Raman Maroo, C/o SET India Private Limited, Michael Grindon, SET India Private Limited, (Formerly known as “SET India Limited) Versus R.M. Ramchandani Adjudicating Officer, Adjudicating Authority for Directorate of Enforcement, Mumbai A.K. Bal Special Director, FEMA, Enforcement, Enforcement Directorate, Union of India, John Deere Pension Trust,</h3> First Global Stockbroking P Ltd. Shankar Sharma, Devina Mehra, Auduth Timblo of Goa Indian Inhabitant, Anju Timblo, Sociedade De Fomento Industrial Pvt. ... Issues Involved:1. Whether Mr. A.K. Bal (Respondent No.2) was specially empowered under Section 50 of FERA to be the Adjudicating OfficerRs.2. If no, whether the order passed by Mr. A. K. Bal (Respondent No.2) or his successor Mr. R. M. Ramchandani (Respondent No.1), was a valid orderRs.3. What orderRs. What reliefRs.Detailed Analysis:Issue 1: Empowerment of Mr. A.K. Bal Under Section 50 of FERAThe petitioners argued that the show cause notices were issued by Mr. A.K. Bal, who was not legally empowered under Section 50 of FERA to act as an Adjudicating Officer. FERA was repealed on 31st May 2000, and FEMA came into force on 1st June 2000. Section 49(3) of FEMA provides a two-year sunset period within which an Adjudicating Officer could take notice of any contravention under FERA. Mr. A.K. Bal was appointed as Special Director in the Enforcement Directorate under FEMA on 10th July 2001, more than a year after FERA was repealed. The Notification dated 10th July 2001 did not appoint him as an Adjudicating Officer under FERA. An order dated 20th November 2002 attempted to retrospectively empower Mr. A.K. Bal to adjudicate cases under FERA, but the court found this invalid as it did not meet the requirement of being 'specially empowered' under Section 50 of FERA.Issue 2: Validity of Orders Passed by Mr. A.K. Bal or His SuccessorSince Mr. A.K. Bal was not validly appointed as an Adjudicating Officer under Section 50 of FERA, any orders or show cause notices issued by him or his successor were deemed invalid. The court emphasized that the officer must be specifically empowered to adjudicate under FERA, and a retrospective empowerment was not permissible. The court also noted that the effect of the repeal of FERA was to obliterate the statute completely, except for actions commenced, prosecuted, and concluded while it was in force.Issue 3: Order and ReliefThe court quashed all the show cause notices and the orders passed by the respondents. The court held that the notices and orders were issued without jurisdiction as Mr. A.K. Bal was not validly empowered under FERA. The court ordered that any penalties or amounts deposited by the petitioners pursuant to the show cause notices or impugned orders be refunded with interest within eight weeks.Conclusion:The court allowed the petitions, quashing the show cause notices and the orders passed by the respondents. The court found that Mr. A.K. Bal was not validly empowered under Section 50 of FERA to act as an Adjudicating Officer, rendering the notices and subsequent orders invalid. The court ordered the refund of any penalties or amounts deposited by the petitioners.
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