AI Drafter 
TaxTMI 
TaxTMI 
2022 (12) TMI 977
X X X X Extracts X X X X
X X X X Extracts X X X X
....IR/ CEZO- II/ 26/2022, on the ground that the respondent is acting beyond the jurisdiction conferred by the provisions of Prevention of Money Laundering Act, 2002 (hereinafter referred to as 'the PML Act'). 2. The brief facts of the case is that a case under the Foreign Exchange Management Act [in short "FEMA"] was registered against the petitioner company on the allegation that they had sent foreign exchange abroad in violation of FEMA Rules and investigation was taken up by the Enforcement Directorate. The Enforcement Directorate passed provisional orders of seizure of certain movable and immovable properties of the petitioner company, which were not confirmed by the Competent Authority acting u/s.37-A of FEMA, by orders dated 13.04.20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....spondent is indirectly conducting the investigation by taking advantage of the FIR registered in Crime No.161 of 2022, based on the complaint given by AXIS bank and a reading of the entire complaint will show that what has been alleged against the petitioner was only contravention of the provisions of FEMA and there is no IPC offence involved in this case. It was further contended that the FIR in Crime No.161 of 2022 has already been put to challenge in Crl.O.P.No.21536 of 2022 and the same has been entertained and an interim order has been passed on 07.09.2022, to the effect that no final report should be filed till the disposal of the Criminal Original Petition. The learned Senior Counsel further contended that the grievance of the AXIS b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f FEMA has already been put to challenge by filing a Writ Petition and the said order has been stayed pending disposal of the Writ Petition. It was further submitted that as per the RBI regulations, the ODI forms up to the year 2016, mandated the disclosure of any investigation pending against Promoters/Directors and right from the year 2012 onwards, the petitioner Company was misleading the authorised dealer, as if, there was no enquiry or investigation and whereas the Promoter of the petitioner Company was facing investigation conducted by the Directorate of Enforcement from the year 2012 onwards. If the petitioner Company had stated the true facts, the authorised dealer would have done the due diligence before sending the valuable foreig....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g as the authorised dealer and was handling the remittances of the petitioner Company towards the Overseas Direct Investments. While making these remittances, the remitter is mandated to give the complete and correct declaration to enable the bank to examine the details and decide as to whether there is a need to approach the RBI for taking necessary approvals/clarifications or whether the remittances can be carried out under the automatic route as per the Reserve Bank of India guidelines. It is alleged that the petitioner Company right from the beginning was making declaration, as if, there is no investigation pending before any enforcement agency or regulatory body. The bank, only at a later point of time, came to know that a misdeclarati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the registration of FIR under Section 417 and Section 420 of IPC. According to the AXIS bank, the petitioner Company has cheated the bank and siphoned off nearly Rs.216.40 Crores out of India and thereby, there was a wrongful gain for the petitioner Company. 11. On the basis of the above FIR, the respondent has opened an ECIR and an investigation has been initiated under the provisions of PML Act. Admittedly, the offence under Section 420 of IPC is a schedule offence. The petitioner Company by making a false declaration has induced the authorised dealer to deliver valuable foreign exchange and such remittances in the hands of the wholly owned subsidiaries of the petitioner Company, situated outside India, would constitute proceeds of cri....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to various provisions under FEMA and relevant regulations. We do not want to deal with any issue touching upon the merits of the case by taking the role of the investigation agency. We have to satisfy ourselves as to whether the respondent is acting within the four corners of PML Act and not misusing the powers of investigation. If we are convinced that the investigation taken up by the respondent is within their powers and there is no misuse of powers, we cannot act as a stumbling block in the further progress of the investigation conducted by the respondent. It is left open to the petitioner Company to submit their explanation to the respondent along with all supporting documents and we expect the respondent to proceed further with the i....