TULSI RAMKRISHNANI Vs. UNION OF INDIA

JUDGEMENT

(1.) This is an appeal under section 54 of the Foreign Exchange Regulation Act, 1973, against the order dated 23rd April, 2010, upholding an order dated 17th June, 2008, passed by the Appellate Tribunal for Foreign Exchange which, in turn, confirmed an order dated 3rd November, 2004, passed by the respondents. For the purpose of this judgment, it is sufficient to admit the appeal on the following substantial question of law.

(2.) The matter is covered in favour of the appellant in view of the judgment of the Supreme Court in the case of Tulip Star Hotels Ltd. v. Special Director of Enforcement : [2014] 124 SCL 160 : 41 taxmann.com 41. The basis on which the authorities proceeded against the appellant is clear from the memorandum dated 29th April, 2002, issued by the Special Director. It was alleged that a full fledged money changer (FFMC) M/s. Hotel Zam Zam had purchased foreign currency from M/s. Namaskar Forex Services Pvt. Ltd. through unauthorized persons deputed by M/s. Hotel Zam Zam for the said purpose. M/s. Namaskar Forex Services Pvt. Ltd. is also an FFMC. There is no dispute that the transaction was between M/s. Namaskar Forex Services Pvt. Ltd. and M/s. Hotel Zam Zam. The appellant is a director of M/s. Namaskar Forex Services Pvt. Ltd. The only allegation is that the persons deputed by M/s. Hotel Zam Zam were not authorized persons. The authorities contended that the purchase by M/s. Hotel Zam Zam from M/s. Namaskar Forex Services Pvt. Ltd. was in an unauthorized manner to persons who were not authorized dealers in foreign exchange in India without the previous general or special permission of the Reserve Bank of India.

(3.) The important point to note is that the transaction was between to FFMCs. The mere fact that they had deputed their personnel would not make any difference in view of the judgment of the Supreme Court. It is nobody's case that they were not authorized by their respective employers. The Supreme Court, inter-alia, held:--