NINA PADMA SINGH Vs. UNION OF INDIA

JUDGEMENT

(1.) THE challenge in the petition is to the order dated 8 th September, 2009 of the Appellate Tribunal for Foreign Exchange, inter alia allowing the appeals of respondent No.7 Sh. B.N. Jha, Senior Manager, Bank of Baroda, Aliganj, Lucknow and of respondent No.4 Bank of Baroda, Aliganj, Lucknow against the order dated 15th October, 2007 of the Special Director, Enforcement Directorate, levying penalty of `5,00,000/- on respondent No.7 Sh. B.N. Jha and of `20,00,000/- on respondent No.4 Bank of Baroda in terms of Section 68 of the Foreign Exchange Regulation Act, 1973 (FERA). THE said penalties were imposed for contravention of Sections 6(4) & 6(5) read with Section 13A-10 of Exchange Control Manual, 1993 i.e. of granting of loan to the petitioner, a Non Resident Indian (NRI) and relending of the same to the respondent No.5 M/s Prime Petro Products Ltd. through its Chairman and Managing Director Sh. R.K. Mishra impleaded as respondent No.6.

(2.) THE petitioner had earlier filed a writ petition before the High of Judicature at Allahabad, Lucknow Bench for getting the matter investigated from the Central Bureau of Investigation and / or the Central Revenue Intelligence. THE said writ petition was disposed of on 3 rd April, 2000 with the direction that upon the petitioner approaching the agencies, they would consider the case and pass appropriate orders.

(3.) THE Appellate Tribunal has allowed the appeals of Mr. B.N. Jha and Bank of Baroda holding that on the material on record, the due diligence practiced by the Bank and its officer Mr. B.N. Jha was established and the findings of the Enforcement Directorate of contravention of statutory provisions by them were based on wrong assumptions. It was held that the Bank had at the time of granting loan to the petitioner obtained her undertaking that she was not taking the loan for further committing loan transaction and had also complied with the other instructions issued by the Reserve Bank of India in this regard. It was thus held that the Bank and its official could not be said to be privy to or in the know of the illegality committed and no case for imposition of penalty against them was made out.