SHRI D VENUGOPAL Vs. THE ASSISTANT DIRECTOR

JUDGEMENT

(1.) Petitioner is a company incorporated under the provisions of the Companies Act , 1956. Two other separate writ petitions, one by the present Director of the Company Sri D.Venugopal and another by the Former Director by name Sri M.Umesh have also been filed in respectively. All these writ petitions have been heard together and are disposed of by this common order as common questions arise for consideration. Facts as enumerated in are referred to for the sake of convenience.

(2.) Petitioner has filed this writ petition under Articles 226 and 227 of Constitution of India seeking a declaration that proceedings initiated by the respondents herein under the provisions of Foreign Exchange Management Act , 1999 (for short, 'FEMA') are without jurisdiction. Petitioner has also sought for quashing the complaint dated 31.05.2016 filed against it under Section 16(3) of FEMA vide Annexure-B and the show-cause notice dated 06.06.2016 issued by the Special Director, Directorate of Enforcement, Government of India, Ministry of Finance, Chennai, vide Annexure-A.

(3.) Facts leading to this writ petition, briefly stated are that petitioner was engaged in the business of developing, operating and marketing integrated hybrid satellite terrestrial communication system and providing internet based multimedia and interactive data services. Petitioner entered into an agreement dated 28.01.2005 with Antrix Corporation Limited, a Government of India undertaking set up under the Department of Space. Petitioner applied to the Foreign Investment Promotion Board (for short, 'FIPB') on 02.02.2006 for approval of contemplated investments to be made by two US based investment firms and their subsidiaries in the petitioner Company. On 16.03.2006, petitioner along with other shareholders entered into a share subscription agreement with the subsidiary companies of the two US based investment firms setting out the terms and conditions of their investment. On 18.05.2006, FIPB granted approval to the application filed by the petitioner on 02.02.2006 with certain standard form conditions. The conditions imposed and the correspondence made between the parties, according to the petitioner, made it clear that all the concerned persons had accepted that the agreement shall be subject to Indian law. Petitioner claimed to have made further investments.