FEMA violation: HC upholds reduction in penalty on Rajasthan Royals owners
Mumbai, Dec 14 (PTI) The Bombay High Court has upheld an order passed by a tribunal reducing the penalty imposed on the owners of the Indian Premier League (IPL) cricket franchise Rajasthan Royals from Rs 98 crore to Rs 15 crore for alleged financial irregularities.
A division bench of Justices K R Shriram and Neela Gokhale in its judgement on Wednesday dismissed an appeal filed by the Enforcement Directorate (ED) challenging the July 11, 2019 order passed by the tribunal.
The high court in its order noted the tribunal arrived at its conclusion based on evidence and analysis of the same.
"The findings are far from being perverse. Thus, no question of law arises in the case. We find that in fact no justification has been recorded by the special director (ED) to impose maximum penalty as opposed to the tribunal having considered relevant material has interfered and reduced the penalty," the court said in its order.
"We find that the special director has completely failed to apply the doctrine of proportionality, while choosing to impose maximum penalty on the respondents (owners)," the HC said.
The bench said it was in agreement with the tribunal's finding and does not find anything perverse in its reasoning and conclusion.
In 2013, the ED imposed a penalty of Rs 98.35 crores on the owners of the franchise team after its preliminary probe revealed alleged irregularities under provisions of the Foreign Exchange Management Act (FEMA).
The Rajasthan Royals team owners filed an appeal against this before the appellate tribunal which held the ED's order as unreasonable and reduced the amount to Rs 15 crore.
The high court in its order noted the tribunal held that no loss was caused to the public exchequer and the remittances have come into India and remained in the country.
"This is not a case where any foreign exchange has gone out of India. Also, the remittances were utilised for the purposes for which they were intended and there is not even an allegation of utilisation of the money for extraneous purposes," it said.
The HC further said the tribunal has also found no justification in the order passed by the ED's special director for imposing maximum penalty on the owners. PTI
