STANDERED CHARTERED BANK Vs. DIRECTORATE OF ENFORCEMENT
LAWS(SC)-2006-2-11
SUPREME COURT OF INDIA (FROM: BOMBAY)
Decided on February 24,2006

STANDARD CHARTERED BANK Appellant
VERSUS
DIRECTORATE OF ENFORCEMENT Respondents


Referred Judgements :-

STATE OF WEST BENGAL HABIB MOHAMMAD STATE OF HYDERABAD STATE OF MYSORE VS. ANWAR ALI SARKAR:ANWAR ALI SARKAR [REFERRED TO]
RAYALA CORPORATION PRIVATE LIMITED VS. DIRECTOR OF ENFORCEMENT NEW DELHI [REFERRED TO]
COLLECTOR OF CUSTOMS MADRAS NATHELLA SAMPATHU CHETTY PURAN SINGH KEWAL KRISHAN KRISHAN LAL ATTORNEY GENERAL FOR INDIA SONI NARANDAS NAGJIBHAI PUKHRAJ M S VENKITANARAYANA IYER VS. NATHELLA SAMPATHU CHETTY:THE COLLECTOR OF CUSTOMS MADRAS:THE STATE OF PUNJAB:THE STATE OF PUNJAB:THE STATE OF PUNJAB:THE STATE OF PUNJAB:THE STATE OF PUNJAB:D R KOHLI:THE COLLECTOR OF CENTRAL EXCISE MADRAS [REFERRED TO]
SHANTI PRASAD JAIN THE DIRECTOR OF ENFORCEMENT FOREIGN EXCHANGE REGULATION ACT SHANTI PRASAD JAIN VS. UNION OF INDIA [REFERRED TO]
EAST INDIA COMMERCIAL CO LIMITED CALCUTTA VS. COLLECTOR OF CUSTOMS CALCUTTA [REFERRED TO]
ASSISTANT COLLECTOR OF CUSTOMS BOMBAY BEHRAMJI MERWANJI DAMANIA VS. L R MELWANI :L R MELWANI [FOLLOWED ON]
P JAYAPPAN VS. S K PERUMAL FIRST INCOME TAX OFFICER TUTICORIN [FOLLOWED ON]
STATE OF UTTAR PRADESH VS. BRAHM DATT SHARMA [REFERRED TO]
SUBE SINGH VS. STATE OF HARYANA [REFERRED TO]
SANTRAM PAPER MILLS NADIAD VS. COLLECTOR OF CENTRAL EXCISE AHMEDABAD [REFERRED TO]
DEPOT MANAGER A P STATE ROAD TRANSPORT CORPORATION VS. MOHAMMAD YOUSUF MIYA [REFERRED TO]
ASSISTANT COMMISSIONER ASSESSMENT II BANGALORE VS. VEELLIAPPA TEXTILES LIMITED [OVERRULED]
K C BUILDERS VS. ASSISTANT COMMISSIONER OF INCOME TAX [DISTINGUISHED]
ANILKUMAR AGGARWAL VS. K C BABU [REFERRED TO]



Cited Judgements :-

H-PRIVATE UNIVERSITIES MANAGEMENT ASSOCIATION VS. STATE OF H.P. [LAWS(HPH)-2013-10-27] [REFERRED TO]
VASANTHI NELSON VS. ANTONY NELSON ALIAS A B H NELSON [LAWS(MAD)-2007-1-88] [REFERRED TO]
M/S. SHREE LABDHI PRINTS, SHRI B.H. VAKHARIA VS. COMMISSIONER OF CENTRAL EXCISE & S.T., SURAT [LAWS(CE)-2014-4-40] [REFERRED TO]
MILON KUMAR GHOSH VS. STATE OF WEST BENGAL [LAWS(CAL)-2011-9-154] [REFERRED]
S.K. TRADERS VS. ADDITIONAL COMMISSIONER [LAWS(ALL)-2007-7-238] [REFERRED TO]
O P CHAINS LTD VS. STATE OF U P [LAWS(ALL)-2014-5-565] [REFERRED TO]
ASHA DEVI VS. STATE OF U.P. [LAWS(ALL)-2020-12-123] [REFERRED TO]
SUBHASH MOTWANI VS. FRANK FINN MANAGEMENT CONSULTANTS [LAWS(DLH)-2008-2-62] [REFERRED TO]
BHUPENDRA V.SHAH VS. UNION OF INDIA (UOI) AND ORS. [LAWS(DLH)-2010-3-496] [REFERRED TO]
JOGINDER GULATI VS. IO DRI NEW DELHI [LAWS(DLH)-2010-1-273] [REFERRED TO]
S KHUSHBOO VS. KANNIAMMAL [LAWS(SC)-2010-4-74] [REFERRED TO]
SUNITA THAKRE VS. STATE OF M P [LAWS(MPH)-2013-10-123] [REFERRED TO]
DEPUTY COLLECTOR - COMPETENT AUTHORITY VS. AHMAD KUTTY [LAWS(KER)-2020-10-394] [REFERRED TO]
SANJAY AGARWAL VS. UNION OF INDIA AND OTHERS [LAWS(DLH)-2018-8-382] [REFERRED TO]
MAKEMYTRIP (INDIA) PVT LTD VS. UNION OF INDIA & ORS [LAWS(DLH)-2016-9-3] [REFERRED TO]
MESCO PHARMACEUTICALS LTD VS. R.K. RAWAL [LAWS(DLH)-2013-11-33] [REFERRED TO]
VINAY RAI VS. STATE [LAWS(DLH)-2007-4-262] [REFERRED]
TUSHAR R DESAI VS. R K SINGH [LAWS(BOM)-2011-1-166] [REFERRED TO]
THE GENERAL MANAGER, UCO BANK AND ORS. VS. JITENDRA KUMAR SHRIVASTAVA [LAWS(CHH)-2016-1-1] [REFERRED TO]
SURENDRALAL GIRDHARILAL MEHTA VS. UNION OF INDIA & ORS [LAWS(CAL)-2018-5-66] [REFERRED TO]
ASSISTANT DIRECTOR ENFORCEMENT DIRECTORATE GOVERNMENT OF INDIA CHENNAI VS. T T V DINAKARAN [LAWS(MAD)-2010-12-151] [REFERRED TO]
MODERN MALLEABLES LIMITED VS. B R SINKU [LAWS(CAL)-2007-3-23] [REFERRED TO]
HAR PAL SINGH VS. STATE OF U P THRU PRIN SECY DEPTT TECHNICAL EDUCATION [LAWS(ALL)-2017-8-426] [REFERRED TO]
V RAMA RAO VS. UNION OF INDIA [LAWS(BOM)-2011-2-7] [REFERRED TO]
ARVIND NAVINCHANDRA MAFATLAL VS. PALAKAVAYALLI JOSEPH THOMAS [LAWS(BOM)-2010-4-143] [REFERRED TO]
V BHASKARAN VS. SPECIAL DIRECTOR OF ENFORCEMENT ENFORCEMENT DIRECTORATE MINISTRY OF FINANCE NEW DELHI [LAWS(MAD)-2011-12-146] [REFERRED TO]
LUDHIANA STEEL LTD VS. ASSTT COLLECTOR, C EX DIVISION, LUDHIANA [LAWS(P&H)-2010-5-485] [REFERRED]
A J K FERNANDEZ VS. CENTRAL BUREAU OF INVESTIGATION [LAWS(DLH)-2009-5-72] [REFERRED TO]
NARENDER SINGH VS. ENFORCEMENT DIRECTORATE [LAWS(DLH)-2009-4-295] [REFERRED TO]
KANWAR JAGAT SINGH VS. DIRECTORATE OF ENFORCEMENT [LAWS(DLH)-2007-7-201] [REFERRED TO]
MAHAVIR ENTERPRISE VS. ASSISTANT COMMISSIONER OF STATE TAX [LAWS(GJH)-2020-6-1021] [REFERRED TO]
V RAMA RAO VS. UNION OF INDIA [LAWS(BOM)-2010-2-94] [REFERRED TO]
HEMENDRA M KOTHARI VS. W S VAIGANKAR [LAWS(BOM)-2007-4-79] [REFERRED TO]
STATE OF RAJASTHAN VS. SALMAN KHAN [LAWS(RAJ)-2012-7-116] [REFERRED TO]
J JAYALALITHA VS. ASST COMMISSIONER OF INCOME TAX [LAWS(MAD)-2006-12-8] [REFERRED TO]
JAY KUMAR LOHANI VS. COMMISSIONER OF CENTRAL EXCISE, INDORE [LAWS(MPH)-2012-3-142] [REFERRED TO]
ARUN MAMMEN VS. U O I [LAWS(MAD)-2018-2-273] [REFERRED TO]
AJAY GULATI VS. UNION OF INDIA [LAWS(DLH)-2008-4-14] [REFERRED TO]
OM PRAKASH SHRIVASTAVA ALIAS BABLOO SHRIVASTAVA VS. STATE OF NCT OF DELHI [LAWS(DLH)-2009-10-120] [REFERRED TO]
RAMESH TUKARAM VS. STATE OF MAHARASHTRA [LAWS(BOM)-2024-1-118] [REFERRED TO]
SANJAY MALVIYA VS. R.K. RAWAL [LAWS(DLH)-2015-2-309] [REFERRED TO]
J N KHANNA VS. R K RAWAL [LAWS(DLH)-2013-9-538] [REFERRED TO]
AKBARUDDIN OWAISI VS. GOVERNMENT OF ANDHRA PRADESH AND ORS [LAWS(APH)-2013-7-163] [REFERRED]
COIMBATORE STOCK EXCHANGE LIMITED VS. SECURITIES AND EXCHANGE BOARD OF INDIA [LAWS(MAD)-2006-8-66] [REFERRED TO]
EBIZ.COM PVT. LTD. VS. UNION OF INDIA & ORS. [LAWS(DLH)-2016-9-4] [REFERRED TO]
NATIONAL STOCK EXCHANGE OF INDIA LTD VS. STATE OF WEST BENGAL [LAWS(CAL)-2011-7-18] [REFERRED TO]
VIKAS MOHAN SINGHAL VS. DIRECTORATE OF REVENUE INTELLIGENCE [LAWS(DLH)-2009-8-82] [REFERRED TO]
D K MODI VS. K C ABRAHAM ENFORCEMENT OFFICER [LAWS(DLH)-2006-12-135] [REFERRED TO]
CAMBATA INDUSTRIES PVT LTD VS. ADDITIONAL DIRECTOR OF ENFORCEMENT MUMBAI [LAWS(BOM)-2010-1-97] [REFERRED TO]
MANOJ KUMAR SARANGI VS. DY COMMISSIONER OF CUSTOMS P R AND I [LAWS(BOM)-2007-6-158] [REFERRED TO]
DAKOR DUDH GRAHAK SAHAKARI MANDALI LTD VS. STATE OF GUJARAT [LAWS(GJH)-2008-4-204] [REFERRED TO]
A.N. DYANESWARAN AND ORS. VS. THE SPECIAL DIRECTOR OF ENFORCEMENT, ENFORCEMENT DIRECTORATE, GOVERNMENT OF INDIA AND ORS. [LAWS(MAD)-2015-8-206] [REFERRED TO]
M/S VIDEOCON INDUSTRIES LTD. & ANR. VS. STATE OF MAHARASHTRA & ORS. [LAWS(SC)-2016-4-82] [REFERRED TO]
MAHENDER SINGH VS. JOINT COMMISSIONER OF CUSTOMS [LAWS(P&H)-2007-5-36] [REFERRED TO]
DEPUTY COLLECTOR - COMPETENT AUTHORITY VS. JAYASREE [LAWS(KER)-2020-10-147] [REFERRED TO]
ASSISTANT COLLECTOR CUSTOMS AND CENTRAL EXCISE VS. NAGPUR ENGINEERING CO LTD [LAWS(MPH)-2009-3-43] [REFERRED TO]
K.N. MEENAKSHIKUTTY VS. THE DISTRICT COLLECTOR, (DISTRICT MAGISTRATE), COIMBATORE DISTRICT, COIMBATORE [LAWS(MAD)-2017-12-110] [REFERRED TO]
RANJIT RAJ VS. SANJAY MISHRA [LAWS(DLH)-2009-11-52] [REFERRED TO]
ENFORCEMENT OFFICER ENFORCEMENT DIRECTORATE GOVT OF TAMIL NADU CHENNAI VS. RANJIV BATRA DIRECTOR M/S KIRAN OVERSEAS LTD [LAWS(MAD)-2011-7-376] [REFERRED TO]
AMRITLAKSHMI MACHINE WORKS VS. COMMISSIONER OF CUSTOMS [LAWS(BOM)-2014-4-216] [REFERRED TO]
ALPHA COMMERCIALS VS. M G ATTRI CHIEF ENFORCEMENT [LAWS(DLH)-2007-1-175] [REFERRED TO]
COMMISSIONER OF CUSTOMS (GEN) VS. TAHKKER SHIPPING PVT LTD [LAWS(BOM)-2010-8-271] [REFERRED]
SHIRISH HARSHAVADAN SHAH VS. DEPUTY DIRECTOR, E D [LAWS(BOM)-2010-1-215] [REFERRED]
RAM SURAT SINGH VS. RAM MURAT SINGH [LAWS(ALL)-1954-12-3] [REFERRED TO]
PRAVIR KRISHN AND ORS. VS. K.K. DIXIT [LAWS(MPH)-2015-10-79] [REFERRED TO]
GHANSHYAM DAS MOOLRAJANI VS. ENFORCEMENT DIRECTORATE [LAWS(RAJ)-2007-4-70] [REFERRED TO]
N. ATHIMOOLAM VS. INCOME TAX OFFICER [LAWS(MAD)-2010-8-663] [REFERRED TO]
B SAMPATH KUMAR VS. RECOVERY OFFICER [LAWS(MAD)-2007-10-215] [REFERRED TO]
BANSAL INFRATECH SYNERGIES INDIA LTD VS. STATE OF M P [LAWS(MPH)-2012-9-266] [REFERRED TO]
HEMENDRA M KOTHARI VS. STATE OF MAHARASHTRA [LAWS(BOM)-2007-4-310] [REFERRED]
PRAKASH BUDOOR VS. REGISTRAR OF COMPANIES KARNATAKA [LAWS(KAR)-2019-7-81] [REFERRED TO]
KANWAR NATWAR SINGH VS. DIRECTOR OF ENFORCEMENT [LAWS(DLH)-2008-3-61] [REFERRED TO]
AVINASH KUMAR VS. STATE [LAWS(DLH)-2010-9-184] [REFERRED TO]
SASI ENTERPRISES VS. ASSISTANT COMMISSIONER OF INCOME TAX [LAWS(SC)-2014-1-68] [REFERRED TO]


JUDGEMENT

- (1.)Leave granted in SLP (Crl. ) No. 5892/2004. On receipt of notices under the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as the FERA) for showing cause why adjudication proceedings for imposition of penalty under Sections 50 and 51 of the FERA be not initiated against the appellant bank and some of its officers and further notices under Section 61 of the FERA giving an opportunity to the first appellant bank and its officers of showing that they had the necessary permission from the concerned authority for the transaction involved, the appellant bank filed Writ Petition No. 1972 of 1994, seeking a declaration that the relevant sections of the FERA are unconstitutional, being violative of Articles 14 and 21 of the Constitution of India and for writs of prohibition restraining the authorities under the FERA from proceeding with the proposed adjudication and the proposed prosecution, in terms of the Act. Yet another writ petition was filed by the officers of the bank as CWP No. 2377 of 1996 challenging the individual notices. The High Court of Bombay rejected the challenge to the constitutional validity of Sections 50, 51, 56 and 68 of the FERA, but clarified that Section 68 (1) of the FERA was not applicable to an adjudication proceeding and that it was confined to a prosecution for penal offences under the act. Being aggrieved, the appellant bank and its officers have filed Civil Appeal nos. 1748/99 and 1749/99. The Union of India, in its turn has filed C. A. Nos. 1751 and 1944 of 1999 challenging the very decision, to the extent the High Court restricted the application of Section 68 (1) of the FERA.
(2.)Civil Appeal No. 1750/1999 is filed by the Standard Chartered Bank to which also notices have been issued under the Act. That challenges the dismissal of the writ Petition No. 509/1994 filed by the appellant therein, which was disposed of along with Writ Petition No. 1972 of 1994, by a common judgment.
(3.)These appeals which came up before a Bench of two learned Judges, were referred to a Bench of three Judges by order dated 20-4-2004. When the matters came up before a three Judge Bench, the three Judge Bench doubted the correctness of a decision relied upon by the bank and its officers in Assistant Commissioner, assessment-II, Bangalore and others v. Valliappa Textiles Ltd. and another (2003 (II) SCC 405) which was a Judgment of a Bench of three judges and by order dated 16-7-2004 referred the question to a Constitution Bench. The matters, thus, came up before a Constitution Bench, which, by Judgment dated 5-5-05, (reported in 2005 (4) SCC 530) overruled the decision in Assistant Commissioner, assessment-II, Bangalore and others. v. Valliappa textiles Ltd. and another (2003 (11) SCC 405) and sent down these appeals for being heard on merits by a Division Bench. The question that was decided was whether in a case where an offence was punishable with a mandatory sentence of imprisonment, a company incorporated under the Companies Act, can be prosecuted, as the sentence of imprisonment cannot be imposed on the company. The majority in the Constitution Bench, held that there could be no objection to a company being prosecuted for penal offences under the FERA and the fact that a sentence of imprisonment and fine has to be imposed and no imprisonment can be imposed on a company or an incorporated body, would not make Section 56 of the fera inapplicable and that a company did not enjoy any immunity from prosecution in respect of offences for which a mandatory punishment of imprisonment is prescribed. In the light of the said decision of the Constitution Bench, the controversy before us has narrowed down and we have to proceed on the basis that the appellant banks are liable to be prosecuted for offences under the FERA.


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