LI Network
Published on: October 10, 2023 at 00:13 IST
The Telangana High Court has temporarily stayed an inquiry and investigation initiated by the Enforcement Directorate (ED) under the Foreign Exchange Management Act (FEMA) against Brightcom Group Ltd.
The court’s decision is based on allegations of non-compliance with legal procedures and the absence of specific complaints.
Justice Surepalli Nanda, presiding over the case, directed the respondent to submit a detailed response in the form of a counter-affidavit during the upcoming proceedings.
The court’s decision was grounded in the belief that, before initiating an inquiry, the Adjudicating Authority (officers appointed by the ED) should have issued a show cause notice to the petitioners. Such a notice was conspicuously absent in this case.
The court also noted that the inquiry initiated by the ED was in violation of Section 16 of the Act, which necessitates that the Adjudicating Authority initiate an inquiry upon receiving a written complaint.
Additionally, the court cited the Supreme Court’s decision in Natwar Singh v Director of Enforcement and another, emphasizing that when a legal procedure is established, authorities must adhere to it.
Justice Nanda also noted that the inquiry initiated against Brightcom by the ED did not comply with Rule 4 and 16 of the Foreign Exchange Management (Adjudicating Proceedings and Appeal) Rules, 2000.
The court concluded by ordering a stay on the ongoing inquiry and investigation initiated by the ED against the petitioners.
This stay is effective for four weeks from the date of the court’s order. Additionally, the court directed the Central Government’s Standing Counsel to file a detailed counter-affidavit in response to the petition.
The case is scheduled for further proceedings on October 17.
Case Title: M/s Brightcom Group Ltd v. Directorate of Enforcement
