TaxTMI 
TaxTMI 
2019 (8) TMI 213
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....at it is the case of the Respondent that Sh. Sanjeev Gupta, a resident of USA maintained an NRE Account bearing No. 320169535 with the Connaught Place Branch of American Express Bank, wherein foreign remittances equivalent to approx. Rs. 2.05 Crores remitted by persons other than the Account Holder and that American Express bank as Banker accepted and allowed the credits, without adhering to the guidelines laid down by Reserve Bank of India. 4. The Show Cause Notice was in terms of Section 49(3) & (4) read with Appeal Rules, 1974, to inter-alia the Appellant, alleging violation of various provisions of FERA and directed them to show cause as to in writing within 30 days as to why adjudication proceedings as contemplated under Section 51 FERA, 1973 should not be initiated against them for the alleged violations. 5. The Appellant sent an interim reply to the Show Cause Notice and requested for the documents being relied upon by the Respondent in support of their allegations. The Appellant admittedly denied all allegations leveled against him who reiterated his stand of his confessional statement having been given under coercion and undue influence. Despite the request of the Ap....
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....igh Court of Delhi allowed the Writ Petition and quashed the Show Cause Notice dated 04.04.2001, whilst holding as follows: - "15. .....In view of the fact that we consider that the issue raised in these writ petitions stands covered by the decision of the Division Bench in Union of India & Others v. Citi Bank, N.A. (supra), we feel that no useful purpose would be served by relegating the petitioners to seek their alternative remedy of appeal under Section 90 of the FEMA, particularly, because, according to us, that would not, now, be an equally efficacious remedy. In view of the foregoing discussion, these writ petitions are allowed. The show cause notices and the consequent adjudication orders are set aside. There shall be no order as to costs." 10. On 15.03.2010, the Respondent filed a Special Leave to Petition, being S.L.P. (C) No. 013877/2011 titled as "Directorate of Enforcement V/s Standard Chartered Bank" (hereinafter referred to as the "SLP"), before the Hon‟ble Supreme Court of India, challenging the Judgment dated 18.12.2009 passed by the Hon‟ble High Court of Delhi. By Order dated 09.05.2011, leave to Appeal was granted by the Hon‟ble Supre....
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....April, 2007, and Review Petition was dismissed on 16th January, 2009. Against the order of Single Bench of this Court dated 19th April, 2009, an LPA was preferred, being L.P.A No. 117 of 2009, Union of India v. Citi Bank, N.A, before the Division Bench. The Division Bench considered the show cause notice and the circular/instructions issued by the Union of India in 1995 in respect of deposits of Foreign Exchange in NRIs accounts and also considered the provisions of Exchange Control Manual and came to conclusion that the circular dated 31st July, 2005 advised foreign exchange dealers to strictly follow instructions given therein and made it clear that prior to the circular there was no requirement clearly pointing out that deposits in NRI accounts could not be made by a person other than the NRI account holder themselves, vide a judgment dated 18th December, 2009 in civil writ petitions preferred by Standard Chartered Bank and Bank of America N.A, in respect of similar show cause notices, a Division Bench of this Court made following observations: 13. Mr. Chandhiok also submitted that the circular dated 31.7.1995 was only a clarificatory circular and it only clarified some....
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....everal show cause notices served by the Department upon the different banks. In another show cause notice of similar nature, the Adjudicating Authority passed an order that bank was not liable for penalty and penalty was imposed only on NRI while in the present case penalty was imposed on NRI as well as bank." 13. By Judgment dated 15.12.2010, passed in "Standard Chartered Bank V/s Directorate of Enforcement & Ors", the Hon‟ble High Court of Delhi reaffirmed the view as mentioned above, whilst holding as follows: - "9. In the above-noted facts, it is clear that the show cause notices had been issued to the appellant and its predecessor in interest in the month of March/April, 2002 for the irregularities allegedly committed in the year 1993 i.e after about nine years. What can be deduced from the facts narrated hereinabove is that appellant has been found to have contravened various provisions of FERA and the rules and regulations framed thereunder, since it had accepted the deposits in the NRE account from the person other than the account holder. Thus, the question that needs attention of this Court is whether deposits in foreign currency made by the mandatee or ....
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....arious persons outside India other than the A/c Holder Sh. Subhash Sethi himself and the said inward remittances have been credited into the said NRE A/c time to time in the year 1993; that Sh. S.K. Mittal in association with the said Sh. Umesh Mendiratta made disbursements to various persons through Cheques/DDs/Pos by debit to the said NRE A/c from American Express Bank, New Delhi against premium @ 10% over & above the value of the said instruments from the recipients of such instruments in the garb of gifts that they used to issue gift deeds to such beneficiaries which got pre- signed by the said NRE A/c holder Sh. Subhash Sethi.... ... 11.In the first place, it is not clear why, after recording the statements under Section 40 FERA of the Appellant and Mr. Mendiratta in May 1995, the ED waited till the last date of the sunset period, i.e., 30th May 2002 for issuing the Memorandum. The second feature is that the only relied upon documents in the Memorandum are the statements made by the Appellant and Mr. Mendiratta, the letter dated 7th August 1995 of Mr. Sethi and the statement of account provided b ythe AMEX Bank. In other words, the ED does not appear to have ....