Seizure Under 37A FEMA Cannot Continue After Repatriation Of Foreign Exchange: SAFEMA Tribunal

On 14 May, the Appellate Tribunal under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act (SAFEMA) held that seizure of an equivalent asset in India under Section 37A of the Foreign Exchange Management Act (FEMA) cannot continue once the resident no longer holds the overseas asset and the equivalent foreign exchange value has been repatriated to India. A Bench comprising Members Balesh Kumar and Rajesh Malhotra allowed the appeal filed by Devendra N. Desai and set...

SAFEMA Appellate Tribunal Restores Seizure Of DMK MP Jagathrakshakan's Children's Properties In FEMA Case

The Appellate Tribunal under SAFEMA has partly allowed the ED's appeal in the foreign assets case involving DMK MP S. Jagathrakshakan and his family. It restored seizure of properties belonging to his children over shareholdings in a Singaporean company. It, however, upheld the release of properties belonging to Jagathrakshakan and his late wife. The Tribunal said the same shares could not be used to justify repeated attachment. The coram of Members Balesh Kumar and Rajesh Malhotra passed the...

SAFEMA Appellate Tribunal Upholds ₹3 Crore FEMA Penalty Against Thomas Cook India

The Appellate Tribunal under SAFEMA at New Delhi has upheld penalties of Rs. 1.5 crore each imposed on Thomas Cook India Ltd. for contraventions relating to the issuance of forex cards worth over Rs. 14.29 crore to 255 persons while exonerating its General Manager Amit Bhatia. The tribunal, comprising members Balesh Kumar and Rajesh Malhotra, was dealing with appeals filed by Thomas Cook India Ltd. and Bhatia against the adjudication order dated March 30, 2020, passed by the Additional...

SAFEMA Appellate Tribunal Upholds ₹83 Lakh FEMA Penalty On Tata Capital Forex In ₹8.36 Crore Forex Card Case

The Appellate Tribunal under SAFEMA has upheld an Rs. 83 lakh penalty imposed on Tata Capital Forex Ltd. for violating foreign exchange laws in a case involving forex prepaid cards worth over Rs. 8.36 crore. It, however, granted partial relief to the company's former regional manager, Ashwin Savoor, by reducing his penalty from Rs. 83 lakh to Rs. 16.6 lakh. A coram of Members Balesh Kumar and Rajesh Malhotra observed: “Even though being an Authorised Person, they not only failed to be prudent...

SAFEMA Tribunal Upholds ₹5 Crore Penalty on J.B. Diamonds For FEMA Violation

The Appellate Tribunal under SAFEMA, New Delhi, has upheld a penalty of Rs. 5 crore imposed on J.B. Diamonds Ltd. for failure to realise export proceeds exceeding USD 117 million within the prescribed period under the Foreign Exchange Management Act, 1999, while also affirming the liability of its directors. The tribunal, however, granted relief to one director—a homemaker holding that she was not involved in the day-to-day affairs of the company. A coram led by Chairman Justice Munishwar...

SAFEMA Tribunal Confirms ₹50 Lakh ED Attachment In Syndicate Bank Bribery Case Linked To Former CMD

The Appellate Tribunal under SAFEMA on 12 March held that the provisional attachment of Rs. 50 lakh recovered from the close relatives of Syndicate Bank's former CMD constitutes proceeds of crime under the Prevention of Money Laundering Act (PMLA). A Bench comprising Members Balesh Kumar and Rajesh Malhotra allowed the appeal filed by the Directorate of Enforcement (ED), setting aside the order of the Adjudicating Authority, which had earlier declined to confirm the provisional attachment of...

SAFEMA Tribunal Sets Aside Forfeiture Of Property Bought Nine Years Before Smuggling Offence

A property purchased nine years before a smuggling offence cannot be forfeited on mere assumption that it was funded through illegal earnings, the Appellate Tribunal under SAFEMA has held, setting aside a 2023 forfeiture order against a Karaikal resident. The tribunal held that the competent authority failed to establish any “link or nexus” between the 1990 purchase of the property and a 1999 smuggling case. Member V. Anandarajan observed that the authority had acted on assumption without...

FEMA Can Be Invoked For EEZ Exports With Foreign Exchange Implications: SAFEMA Tribunal, New Delhi

The Appellate Tribunal under SAFEMA at New Delhi has held that, in the facts of the case, activities carried out in India's Exclusive Economic Zone (EEZ) that have foreign exchange implications can be proceeded against under the Foreign Exchange Management Act (FEMA), even in the absence of a specific notification extending FEMA to the EEZ. Rejecting the argument that FEMA could not apply without such a notification, the tribunal held: “We do not find it necessary in the set of facts and...