Partly allowed

FPA-FE-70/KOL/2011 of Ms. S.R. Ramamani v. Special Director Directorate of Enforcement, Kolkata

ATFP4 Mar 2025FPA-FE-70/KOL/2011

Case brief

AI extract

What is this about?

Appellant sought waiver of penalty predeposit for maintaining appeal under FEMA, 1973. Tribunal rejected full waiver due to lack of medical proof and her senior manager status but reduced predeposit to 50% and listed the appeal for 08.04.2025.

What did the court decide?

Condition of predeposit reduced to 50% of penalty amount to maintain appeal; application for waiver disposed of.

FPA-FE-70/KOL/2011 of Ms. S.R. Ramamani Vs. Special Director… — Banking and Recovery | ATFP (2025)

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APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

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FPA-FE-70/KOL/2011 Ms. S.R. Ramamani … Appellant Versus Special Director Directorate of Enforcement, Kolkata … Respondent

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Advocates/Authorized Representatives who appeared

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For the Appellant : Proxy counsel appeared For the Respondent : Mr. Pranav Mishra, Adv.

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CORAM

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JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI V. ANANDARAJAN : MEMBER

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FINAL ORDER 04.03.2025

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FPA-FE-70/KOL/2011

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The appellant has filed an application to seek waiver from deposit of penalty amount to maintain the appeal filed under Section 19 of the Foreign Exchange Regulations Act, 1973 (in short `the Act of 1973). The application aforesaid was filed along with the prayer for condonation of delay. The waiver from predeposit has been sought on financial condition of the appellant. The application was filed along with document to show appellant’s financial condition who remained Senior Manager in Allahabad Bank.

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FPA-FE-70/KOL/2011

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Page 1 of 6

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It was stated that the appellant suffered departmental proceedings and she was even terminated but proceedings were thereupon dropped. She was otherwise acquitted in the criminal case, as stated. The appellant was given opportunity to place on record the order dropping departmental proceedings after termination vide the order dated 25.11.2024. The documents were not presented till the date of hearing and accordingly on 10.12.2024, the matter was further adjourned to 13.02.2025. The documents have not been produced as yet despite expiry of the period of more than two and half months and otherwise there exists no document to show the poor financial condition of the appellant.

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The allegations against the appellant are otherwise for contravention of Section 6 (4) read with Section 49 of the Act of 1973 and Non-Resident External Accounts Rules, 1970 and Central Govt. Notification dated 10.02.1970 as amended upto 21.02.1985 read with Chapter 13.B 4(1) and 14A.3 of Exchange Control Manual Vol.I, 1993. It was a case where in the year 1994-95, appellant had undertaken certain transactions not in conformity with the Exchange Control Manual while dealing with the Foreign Current Non-Resident (FCNR) Accounts and NonResident External (NRE) Accounts. Gross irregularities/discrepancies were found in opening and maintenance of those accounts. The investigation revealed that the appellant opened several NRE and FCNR accounts without

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FPA-FE-70/KOL/2011

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Page 2 of 6

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receiving the remittance of Foreign Exchange from the account holder abroad. The details of seven such accounts were given for NRE accounts and other seven for FCNR accounts. The appellant was even involved for opening the accounts in contravention to the Regulation. The appellant was accordingly served with the notice for adjudication. Reply to the notice was given where allegations were denied but finding that all the accounts were opened in contravention of the Act and Regulation, the Special Director of Investigation imposed the penalty of Rs.25,00,000/on the appellant while the penalty of Rs.5,00,000/- was imposed on the Allahabad Bank.

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The learned counsel argued the appeal touching prima facie merit in the case and submitted that no contravention was made by the appellant. To analyze the issue, we have gone through the order as well as the record and find that during the tenure of the appellant, six NRE accounts were opened in the Branch without the receipt of corresponding inward remittance. It was found that NRE account deposit were pledged as security with State Bank of India, Kolkata. The receipts were issued during the tenure of the appellant. The receipts could not have been allowed for premature payment as there was no corresponding credit in those accounts. The appellant had otherwise admitted that she worked as Senior Manager in Southern Avenue Branch of Allahabad Bank between 1991 and 1996. She could not explain the allegations made against her other than a vague denial. Zerox

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FPA-FE-70/KOL/2011

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Page 3 of 6

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copies of the ledger sheets pertaining to the NRE accounts in original had been seized by the CBI. The appellant in her statement on 04.09.1996 did not dispute that these being true copies of the original otherwise supplied to her. The appellant, however, denied the allegations without clarifying as to how the accounts were opened during her tenure without corresponding credits in those accounts. Allahabad Bank otherwise informed about seven fake NRE accounts and the ledger sheets relating to five accounts out of seven were written and initiated by the appellant. The ledger sheets relating to two other accounts were written by the appellant and zerox copies of the original were supplied because original copy was seized by the CBI.

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At this stage, we would only touch prima facie case on merit. The appellant has failed to show a prima facie case on merit in her favour. It may be clarified that even if the appellant has been acquitted in criminal case, it would not have bearing on the proceedings in civil side because standard of proof remain different and otherwise a detailed speaking order has been passed by the Special Director. The counsel for the appellant was unable to make out a prima facie case on merit and thus submitted that let application for waiver be granted considering the financial condition of the appellant.

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The counsel for the appellant could not refer to any document to show poor condition of the appellant. The appeal is otherwise pending for the last 10 years. Thus, the appellant was

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FPA-FE-70/KOL/2011

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Page 4 of 6

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having sufficient opportunity to submit the relevant documents. The failure of the appellant to produce the relevant material to show her alleged poor financial condition cannot be to her benefit. The appellant remained Senior Manager of the bank and accordingly we do not find that appellant has suffered from financial adversity to deposit the amount of penalty.

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At this stage, learned counsel submitted that instead of a direction to deposit the entire amount of the penalty, let an appropriate amount be directed.

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We have considered the submissions and find that the penalty of Rs.25,00,000/- has been imposed on the appellant for contravention of the provisions of the Act of 1973 and Regulations, which is reasonable as against the huge amount transacted in this case, the details of which are given as under in the statement form:

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“N.R.E. Accounts

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Sl.No.	ReceiptNo.	Amount	Inthename of
1.	808894/NRE/115	Rs.21000000	Ramdev Mohan & Asha Rani Mohan
2.	808896/NRE/117	Rs.7300000	Gita Mohanda Mukhi & Iurai Ranjan Mukhi
3.	808897/NRE/118	Rs.8200000	Kalubhai Sanjani & Ranu Mala Sanjani
4.	808899/NRE/121	Rs.7300000	Gita Mohandas Ramchandani
5.	808898/NRE/130	Rs.4350000	V.S.Kulkarni
6.	8088900/NRE/131	Rs.7040000	MalaRani Kulkarni
7.	808897/NRE/149	Rs.8200000	KalubhaiSanjani

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F.C.N.R. Accounts

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S.L.	Ledger Folio	Amount	Dt. of	In the case of
No			opening
1.	FCNR3/42A	GBP147516	20.2.94	Jaya B.Shanghavi
2.	FCNR 4/62	USD 41940	8.3.94	Balraj Singh
3.	FCNR 4/61	USD 75508	28.1.94	Baljit Singh

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FPA-FE-70/KOL/2011

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Page 5 of 6

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4.	FCNR 4/39	USD112218.35	-	-
5.	FCNR 4/43	GBP371651.99	-	-
6.	FCNR2/61	USD62716.22	13.12.95	S.T. Mehtani
7.	FCNR2/63	USD1200000	4.12.95	K.U. Hinani

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The amount involved in this case has been reflected. As against the amount involved in the case, penalty of Rs.25,00,000/- has been imposed. The prayer of the appellant is, however, to make the condition equitable so as to pursue the appeal and accordingly the appellant is directed to deposit only 50% of the amount to satisfy the condition of pre-deposit. The amount would be deposited within a period of 3 weeks from the date of the order. The application for waiver is disposed of accordingly.

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