SANJAY JHUNJHUNWALA Vs. RESERVE BANK OF INDIA

JUDGEMENT

(1.) Communication of the Reserve Bank of India (RBI) returning the application made by the petitioner seeking compounding of the offence adjudicated by the adjudicating authority under the Foreign Exchange Management Act, 1999 (FEMA) in September, 2024 and the subsequent demand notice issued by the Assistant Director (PRC), Government of India are impugned in the instant writ petition.

(2.) The petitioner was found to have contravened certain provisions of FEMA. An adjudication order was passed by the adjudicating authority. After the adjudication process was complete and an order of penalty was passed on 27/3/2024 the petitioner filed an application for compounding under Rule 4 of the Foreign Exchange (Compounding Proceedings) Rules, 2000 on 6/5/2024.

(3.) RBI returned the said application in September, 2024 on the ground that since the adjudication order was already passed by the adjudicating authority in respect of the contraventions detected, the compounding application cannot be processed. Subsequent thereto a demand notice was issued on 17/1/2025 directing the petitioner to pay the outstanding penalty or to submit order of the appellate authority dispensing deposit of the imposed penalty.