UNION OF INDIA Vs. CITI BANK, N.A.

JUDGEMENT

(1.) Since the facts and the question of law that arises for consideration in all the appeals are similar, all these appeals are being heard and disposed of by the present Judgment.

(2.) In Civil Appeal No. 9337 of 2010, the respondent-­ Bank was granted license to act as an authorized dealer under the provisions of sub-­Sec. (4) and (5) of Sec. 6 of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as "the FERA"). The respondent-­Bank had accepted cash in foreign currency, equivalent to Rs.23,17,630.00­ during the period from October 1992 to January 1993 to the credit of NRE (NonResident External) Account of Umakant Bhardwaj, a NonResident Indian (NRI). For the said transaction, a show-­cause notice came to be issued on 25/2/2002 by the appellants, alleging therein that the respondent-­Bank had contravened the provisions of Ss. 8(1), 64(2), 64(4), 64(5) and 73(3) of the FERA. The said show-­cause notice was replied by the respondent-­Bank on 30/10/2002. It was the contention of the respondent-­Bank that the restriction to the effect that only an NRI Account Holder shall deposit foreign currency in his NRE account was added only with effect from 31/7/1995 vide a Circular issued by the Reserve Bank of India ("RBI" for short) of the same date. It was therefore submitted that the said Circular dtd. 31/7/1995 could not be given effect retrospectively.

(3.) However, vide notice dtd. 5/1/2005, the Adjudicating Officer held that the adjudication proceedings should be held against the respondent-­Bank and fixed the matter for further proceeding on 25/1/2005. Being aggrieved by the decision of the Adjudicating Officer to proceed further, the respondent-­Bank filed a petition being Writ Petition (Civil) No.1211 of 2005 before the High Court of Delhi. The learned Single Judge of the High Court, vide order dtd. 23/3/2007, directed the Advocate for the respondent therein (appellant herein), i.e., the Enforcement Directorate to take specific instructions as to whether prior to 31/7/1995, foreign currency deposits could be made by individuals other than the NRI Account Holder in the NRE accounts of such NRIs. On 19/4/2007, the Advocate for the appellants herein (respondents in the High Court) stated, on instructions, that prior to 31/7/1995, foreign currency deposits could be made by individuals other than the NRI Account Holders in the NRE accounts of such NRIs. As such, the learned Single Judge of the High Court, vide order dtd. 19/4/2007, set aside the show cause notice as well as the proceedings pursuant thereto. The same was sought to be reviewed by way of Review Application No. 213 of 2007 before the High Court of Delhi. However, the learned Single Judge of the High Court dismissed the said Review Application vide judgment dtd. 16/1/2009.