Videocon and it’s officers exonerated from proceedings under S. 18 of Foreign Exchange Regulation Act, 1973

DSC_5487

Supreme Court: In an appeal filed against the order of the Bombay High Court which had dislodged the order of discharge passed by the Chief Metropolitan Magistrate, Mumbai in the case where the company as well as its officer were facing trial for the offence punishable under Section 56(1)(i) of the Foreign Exchange Regulation Act, 1973 for the alleged contravention of the provisions of Sections 18(2) and 18(3) of FERA, the Court allowed the appeal, thereby, restoring the order of the Magistrate.

In the case where the appellants had purchased goods from Korea and Japan by spending foreign exchange, the Appellate Tribunal for Foreign Exchange (Tribunal) held that spending of foreign exchange in international trade by an Indian person is not forbidden by Section 19 of FERA. It was further held that there is no law whereby Indian resident is regulated from entering into international trade and hence, the appellant cannot be held guilty for Section 18(2) read with Section 18(3) of FERA. Hence, the Magistrate had discharged the appellants after application was filed under Section 245 of the Code of Criminal Procedure, 1973 for discharge of the accused. The High Court had, however, held that the order of the Tribunal was based on technical grounds and not merits.

The bench of Dipak Misra and Shiva Kirti Singh, JJ, hence, said that the High Court had totally erred in law as the judgment of the tribunal was decided on merits, inasmuch as findings had been recorded after analysis of facts and the conclusion had been arrived at that the appellants have not violated the provisions of the Act. [Videocon Industries Ltd.  v. State of Maharashtra, 2016 SCC OnLine SC 585, decided on 19.04.2016]

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