RESERVE BANK OF INDIA BANGALORE Vs. JACQUELINE CHANDANI

JUDGEMENT

(1.) these ten appeals arise from the common order passed by the learned single judge in five writ petitions by which the notification issued by the reserve bank of India as per annexure-h came to be quashed and the order passed by the deputy director, enforcement directorate, levying penalty of Rs. 26,5007- on the petitioner was set aside and the union of India as also the deputy director were prohibited from enforcing the provisions of sections 8(1), 14 and 19(l)(e) of the foreign exchange, Regulation Act, 1973 (for short 'the act') in so far as the petitioner is concerned. The reserve bank of India which was not a party before the learned single judge being aggrieved by that portion of the order by which its notification came to be quashed has preferred writ appeal nos. 740 to 744 of 1991 with the leave of this court. The union of India as also the deputy director, enforcement directorate, who were respondents in the writ petitions have preferred the second set of writ appeals in writ appeal nos. 809 to 813 of 1991. As All these appeals arise from the same order, they are being disposed of by this common judgment.

(2.) the case put forward by the writ petitioner is as hereunder: she is a citizen of united states of america by birth and origin holding a u.s. passport. She was married to one jagdish chandani of indian origin in 1967 when he was permanently residing in u.s.a. he shifted his residence from u.s.a. to india. After marriage, the petitioner was residing in u.s.a. with her parents who were citizens of america by birth and origin and she had already been employed. Prior to her marriage, All her savings from her earnings had been deposited from time to time in the bank account maintained with winters national bank and trust company, dayton, ohio, u.s.a. and she continued to operate the same even after her marriage. She continued to have her u.s.a. citizenship even after her marriage and she registered herself as a foreigner in this country under the foreigners act and her visa was being extended from time to time. On 10-9-1981 the assistant director, enforcement directorate, searched the residential premises of her husband at no. 385, rajmahal vilas extension, Bangalore and also the premises of M/s. System manufacturing limited, peenya industrial area, tumkur road, bangalore. At that time the petitioner was not in India and she was staying with her parents at dayton, ohio, u.s.a. certain documents including a diary of the petitioner were seized by the enforcement authorities and the diary reflected maintenance of accounts in her name and also in the name of her minor children with winters bank and trust company, u.s.a. and that petitioner was also holding twelve shares of general motors stock, u.s.a. the statement of the husband of the petitioner was recorded and he stated that his wife, the petitioner, would be in a position to explain her accounts and thereafter a directive was issued on 18-1-1982 by the assistant director to furnish All the material particulars. On receipt of the same, petitioner returned to India on 25-1-1982 and submitted the information called for. Her statement was also recorded and that was followed by six show-cause notices on 30-8-1982 imputing violation of certain provisions of the foreign exchange regulation act. She submitted her replies and by order dated 27-12-1982 despatched on 15-2-1983 the petitioner was held guilty of the charges and total penalty of Rs. 26,500/- was levied in respect of five show-cause notices.

(3.) it was urged before the learned single judge that the deputy director, enforcement directorate, had rejected the explanation offered by the petitioner solely relying upon the notification issued by the reserve bank of India as per annexure-h by which the petitioner who had been married to a person of indian origin had been deemed to be a person of indian origin and the provisions of the act are not applicable to persons who are non-citizens of India either residing in India or outside India and the notification issued by the reserve bank of India is beyond its legislative competence and it is ultra vires of the provisions of the act.