TaxTMI 
TaxTMI 
2010 (12) TMI 1050
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....d. ('AEBL'). In the said NRE account, certain deposits were made between 22-2-1993 and 11-10-1993. Deposits in the said account were made by Umesh Mandiratta and Narender Kumar, mandatees of the account holder Anand Prakash Tripathi. It may be noted here that AEBL has since been amalgamated with the appellant bank, pursuant to the order dated 4-3-2008 passed by the Reserve Bank of India under section 44(A) of Banking Regulation Act. 4. Since the deposits were made by the persons other than the account holder, a show-cause notice dated 18-3-2002 was issued by the Directorate of Enforcement to the appellant. It was alleged in the notice as under :- "And Whereas it appears that American Express Bank, New Delhi, have accepted the above mentioned cash deposited to the credit of NRE a/c of Sh. Anand Prakash Tripathi, maintained with them without conforming to the guidelines laid down by the Reserve Bank of India. And Whereas it appears that American Express Bank, New Delhi by their failure to conform to guidelines laid down by RBI by accepting the cash foreign currency deposit as stated in para 3 have contravened the provisions of section (1) read with section 64(2) and also rea....
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.... deposits and not enquiring the source of the foreign currencies. A mandate holder, to my mind, does not enjoy such a privilege." [Emphasis supplied] Crl. Appeal No. 338/2009 6. Facts involved in this appeal are that one Deepak Bahiri was maintaining two NRE accounts. One NRE A/c No. 320169951 was maintained with the AEBL, Connaught Place Branch and other A/c No. 015-03-41935 with the appellant's Sansad Marg Branch. In both these accounts certain deposits were made between 3-3-1993 and 11-10-1993 by Shekhar Goel, who was the mandatee of the said NRE accounts holder. Certain other persons had also made deposits in the said accounts during that period. Since the deposits were made by a person other than the account holder, a show-cause notice dated 20-4-2002 was issued to the appellant along with other noticees for accepting foreign exchange deposits through a person other than the account holder. It was alleged in the notice as under :- "And whereas by accepting in cash foreign exchange equivalent to Rs. 66,98,318.90 and Rs. 17,22,336.20 tendered by persons other than the account holder for depositing in two NRE accounts of the said Shri Deepak Bahiri of Spain, in the afore....
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....f Rs. 5,00,000 (Rupees Five Lakhs only) on American Express Bank, noticee No. 4 under section 50 of the FERA, 1973 for contravention of provisions of section 9(1)(e) of FERA, 1973 respectively. (ix)I impose personal penalty of Rs. 2,00,000 (Rupees Two Lakhs only) on the Manager-in-Charge of Standard Chartered Bank noticee No. 5 under section 50 of the FERA, 1973 for contravention of provisions of section 6(4) & 6(5) read with sections 73(3) and 49 of FERA, 1973 and para 29B.8(c) of ECM, 1987 respectively in terms of section 68 of the FERA, 1973. (x )I impose personal penalty of Rs. 2,00,000 (Rupees Two Lakhs only) on the Manager-in-Charge of Standard Chartered Bank noticee No. 5 under section 50 of the FERA, 1973 for contravention of provisions of section 9(1)(e) of the FERA, 1973 in terms of section 68 of the FERA, 1973. (xi)I impose penalty of Rs. 2,00,000 (Rupees Two Lakhs only) on Standard Chartered Bank, noticee No. 6 under section 50 of the FERA, 1973 for contravention of provisions of section 6(4) & 6(5) read with sections 73(3) and 49 of FERA, 1973 and para 29B.8(c) of ECM, 1987 respectively. (xii)I impose penalty of Rs. 2,00,000 (Rupees Two Lakhs only) on Stand....
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....t clearly pointing out that deposits in NRI accounts could not be made by a person other than the NRI account holder themselves. 11. Similar issue was posed for answer in Standard Chartered Bank v. Directorate of Enforcement [2010] 100 SCL 501 (Delhi). The question canvassed in the said case was whether prior to 31-7-1995, deposits in foreign currency needed to be made, necessarily, by the Non-Resident Indian account holder in person? By following the earlier judgment in Citi Bank [LPA No. 117 (Delhi) of 2009], Division Bench of this Court held that prior to 31-7-1995, there was no requirement that deposits in NRE accounts could not be made by a person other than the NRE account holders themselves. In the said case, an argument was advanced by the Department that unamended provision itself required that the foreign currency was to be tendered by the account holder. Secondly, it was also a condition that such tender must be made during the temporary visit in India of the account holder. This argument was advanced by placing reliance on unamended paragraph 13B.22(c) of the Exchange Control Manual, 1993 which was in pari materia to paragraph 29B.8(c) of the Exchange Control Manual,....