Scrutinise SCB for forex violation

Justice Balasubramnayan writing the judgment for the bench said that the entire penalty for Fera violations could be recovered from the bank as well as its officers ‘‘incharge’’ of a transaction ‘‘or those connived at or were instrumental in the contravention of the provisions of the Act’’.

The court reiterated that a company, in the instant case SCB, did not ‘‘enjoy any immunity from prosecution’’ in respect of offences for which a mandatory punishment of imprisonment is prescribed.

ED had earlier issued notices to SCB and some of its officers to face adjudication proceedings under Sections 50 and 51 of Fera. Further notices were also sent under section 61 giving an opportunity to the bank and its officers to show that they had necessary permission for the foreing exchange transaction involved in the case. The bank and its officers assailed Sections 50, 51, 56 and 68 of Fera.

While upholding the validity of all the provisions, the Apex bench in its 54-page judgment pointed out that notice under Section 61 was ‘merely notices of enquiry’ giving an opportunity to the appellants to show that they had necessary permission from the concerned authority under Fera in respect of a particular transaction (of foreign exchange).

The Apex bench also said that if the appellants (SCB and its officers) were not able to show any permission, complaints have to be filed before the concerned magistrate and arguments on behalf of the accused could be advanced in the criminal trial. ‘‘We see no justification for the issue of a wit of prohibition restraining the authority under Fera from proceeding further with the adjudication’’ the Apex judges ruled making it clear that SCB and its officers have to face the adjudication.