- 1 - HC-KAR NC: 2025:KHC:30739 WP No. 5186 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO.5186 OF 2021 (GM-FE) BETWEEN: MR. BINU JACOB, SON OF JACOB CHORKAVANGAL GEORGE, AGED ABOUT 45 YEARS, RESIDING AT: 4043, SOBHA CINNAMON, HARLUR, KODLU GATE, BANGALORE-560068. …PETITIONER (BY SRI. SHARAN A. KUKREJA AND SMT. ABHIJNA SOMASHEKHAR, ADVOCATES) AND: 1. OFFICE OF THE SPECIAL DIRECTOR OF ENFORCEMENT, DIRECTORATE OF ENFORCEMENT AND ADJUDICATING AUTHORITY, SOUTHERN REGIONAL OFFICE, 3RD FLOOR, MURUGESAN COMPLEX, NO. 84, GREAMS ROAD, CHENNAI 600006. REPRESENTED BY THE SPECIAL DIRECTOR. 2. OFFICE OF THE JOINT DIRECTOR, DIRECTORATE OF ENFORCEMENT, BANGALORE, ZONAL OFFICE, 3RD FLOOR, ‘B’ BLOCK, BMTC, SHANTHINAGAR TTMC, K. H. ROAD, SHANTHINAGAR, Digitally signed by VINAYAKA B V Location: High Court of Karnataka, Dharwad Bench - 2 - HC-KAR NC: 2025:KHC:30739 WP No. 5186 of 2021 BENGALURU-560027, REPRESENTED BY THE JOINT DIRECTOR. 3. ASSISTANT DIRECTOR, DIRECTORATE OF ENFORCEMENT, BANGALORE ZONAL OFFICE, 3RD FLOOR, ‘B’ BLOCK, BMTC, SHANTHINAGAR TTMC, K. H. ROAD, SHANTHINAGAR, BENGALURU-560027, REPRESENTED BY THE ASSISTANT DIRECTOR. 4. DIRECTORATE OF ENFORCEMENT, SOUTHERN REGIONAL OFFICE, 3RD FLOOR, SHANTRI BHAWAN, NO.26, HADDOWS ROAD, CHENNAI-600006, REPRESENTED BY THE DIRECTOR. …RESPONDENTS (BY SRI. DHRUVA KUMAR, ADVOCATE FOR SRI. M. UNNIKRISHNAN, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 AND 227 OF CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF CERTIORARI OR ANY OTHER WRIT, ORDER OR DIRECTION QUASHING THE SHOW-CAUSE NOTICE DATED FEBRUARY 25, 2020 BEARING F.NO.T-4/SRO/SDE/BGZO/01/2020 ISSUED BY RESPONDENT NO.1 (ANNEXURE-B) AND ISSUE A WRIT OF CERTIORARI OR ANY OTHER WRIT, ORDER OR DIRECTION, QUASHING THE COMPLAINT DATED OCTOBER 25, 2019 BEARING NO.T-3/BGZO/96/2018 FILED BY THE RESPONDENT NO.3 BEFORE THE RESPONDENT NO.1 (ANNEXURE-C) AND ETC. THIS WRIT PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S SUNIL DUTT YADAV - 3 - HC-KAR NC: 2025:KHC:30739 WP No. 5186 of 2021 ORAL ORDER (PER: THE HON'BLE MR. JUSTICE S.SUNIL DUTT YADAV) The present petition has been filed calling in question the validity of the show-cause notice dated 25.02.2020 at Annexure-B as well as complaint dated 25.10.2019 at Annexure-C and notice dated 22.02.2021 at Annexure-F. 2. The facts made out are that show-cause notice was issued to the petitioner in respect of a complaint and the petitioner submitted a reply. It is further made out that show-cause notice at Annexure-B was issued in connection with other Noticees as well. 3. It is submitted that without entering into detailed adjudication, in light of legal contention as raised in the present petition having been advanced and considered in a petition filed by Mrs.Kshithija Urs in W.P.No.1418/2021 dated 06.12.2024, in which this court has set aside the show-cause notice as regards Noticee no.8, adopting the - 4 - HC-KAR NC: 2025:KHC:30739 WP No. 5186 of 2021 same reasons, the present show-cause notice requires to be set aside. 4. Sri.Dhruva Kumar, learned counsel appearing on behalf of the respondents submits that the order passed in W.P.No.1418/2021 is a matter of record and has not been appealed and the present petition may also be disposed off on similar lines. 5. The order passed by the Coordinate Bench in W.P.No.1418/2021 dated 06.12.2024 is extracted below: “3. It is submitted by the learned counsel for the petitioner that the short point, which arises for consideration in this writ petition is whether the respondents were justified in initiating proceedings against the petitioner on the basis of provision which stood omitted by the Finance Act, 2015. It is submitted that the complaint had been filed on 25.10.2019 and the proceedings were initiated as against the petitioner alleging violation of Section 6(3)(b) of the Foreign Exchange Management Act, 1999(for short "FEMA" Act) in the year 2021. It is submitted by the learned counsel for the petitioner that the said provision i.e., Section 6(3)(b) stood - 5 - HC-KAR NC: 2025:KHC:30739 WP No. 5186 of 2021 omitted by the Finance Act, 2015, which was notified on 15.10.2019. The text of the Finance Act, 2015 is also produced along with the memo. The relevant portion i.e., Section 139 reads as follows:- "139. In Section 6 of the Foreign Exchange Act,- (A) x x x x x (B) x x x x x (C) sub-section (3) shall be omitted;" 4. It is submitted that there is no savings clause provided and that Section 6(3) therefore stands totally omitted. In the above view of the matter, the contention is that the action taken on a complaint which was submitted on 25.10.2019 and the show cause notice issued on 25.02.2020 specifically referring to 6(3)(b) of the FEMA Act, which stood omitted with effect from 15.10.2019 is completely without jurisdiction and is illegal and unsustainable. 5. Learned Central Government Counsel appearing for first respondent as well as the learned standing counsel for respondents No.2 to 4 would, on the other hand, contend that the liability under the Foreign Exchange Management Act is admittedly a Civil liability and that the liabilities under the Act would continue even despite the omission of the - 6 - HC-KAR NC: 2025:KHC:30739 WP No. 5186 of 2021 provisions of Section 6(3)(b) with effect from 15.10.2019. It is submitted that the complaint which was preferred against the petitioner was in respect of inward remittances for the period from December 2016 to November 2018. It is submitted that since those inward remittances would attract the liabilities under the Act, at the relevant time, the omission of the provision would not make any difference and that the petitioner would be liable for the consequences of such remittances even in spite of the appeal under provisions. 6. Learned Central Government Counsel would also placed reliance on the judgment of the Apex Court in Suborno Bose v. Enforcement Directorate in Civil Appeal No.6267/2020, in support of the said contention. 7. Having considered the contentions advanced, it is noticed that Section 6 (3) (b) of the FEMA Act as is stood before the omission read as follows: "Section 6(3) in the Foreign Exchange Mangagement Act, 1999 (3) Without prejudice to the generally of the provisions of sub-section (2), the Reserve Bank may, by regulations, prohibit, restrict or regulate the following - 7 - HC-KAR NC: 2025:KHC:30739 WP No. 5186 of 2021 (a) x x x x x (b) transfer or issue of any security by a person resident outside India;" 8. The provisions of the Finance Act, 2015 are quite specific. It provides for amendments to the FEMA Act and by Section 139 of Finance Act, 2015, Section 6(3) of the FEMA Act stood omitted. The said omission was effective from the date of notification i.e., 15.10.2019. 9. Learned counsel for the petitioner has also placed reliance on the decision of the Apex Court in Kolhapur Canesugar Works Ltd. V. Union of India reported in (2000) 2 SCC 536, where the effect of Section 6 of the General Clauses Act vis-a-vis and omission by amendment of provision has been specifically considered. It is held by the Apex Court that the decision of the Constitution Bench in MESSRS RAYALA CORPORATION (P) LTD. AND M.R.PRATAP V. DIRECTOR OF ENFORCEMENT, NEW DELHI reported in (1969) 2 SCC 412 is directly on the question of applicability of Section 6 of the General Clauses Act, in a case where a rule is deleted or omitted by a notification and the Bench held that "Section 6 only applies to repeals and not to omissions, and applies when the repeal is of a Central Act or Regulation and not of a rule". In the - 8 - HC-KAR NC: 2025:KHC:30739 WP No. 5186 of 2021 instant case also the contention raised by the panel counsel for respondents No.2 to 4 is specifically referable to Section 6 of the General Clauses Act. The decision relied on by the learned panel counsel is with regard to the liability of a person who was not the director of the company in question at the time when the offence was allegedly committed. The Apex Court held that the liability under the FEMA Act is a continuing liability and that the liability is civil in nature and that therefore learned panel counsel contends that the enactment being civil in nature, the principal (sic) of prosecution for an offence under appeal (sic) law would not arise in the instant case. It is in the above circumstances that it is contended that Section 6 of the General Clauses Act would apply. 10. Having considered the contentions advanced, we notice that the complaint as well as the show cause notice issued to the petitioner were specifically referable to Section 6(3)(b) of the FEMA Act. It is clear that the complaint itself was made on 25.10.2019 and the show cause notice was issued on 25.02.2020. It is also clear that Section 6(3)(b) stood omitted by the Finance Act, 2015 as notified on 15.10.2019. In view of the clear language of the omission, I am of the considered opinion that the contentions raised by the learned panel counsel that - 9 - HC-KAR NC: 2025:KHC:30739 WP No. 5186 of 2021 Section 6 of the General Clauses Act would come to the aid of the respondents cannot be accepted. The Apex Court has clearly held that Section 6 only applies to repeals and not to omissions and since the present case is specifically one of omission, we are of the opinion that Section 6 would not have any application in the instant case. In view of the fact that what has been specifically referred in the complaint and the show cause notice is Section 6(3)(b), which stood omitted even as on the date, when the complaint was filed, I am of the opinion that the entire action as against the petitioner on the basis of infraction of Section 6(3)(b) was without jurisdiction. Accordingly:- ORDER (i) The writ petition is allowed. (ii) The show cause notice dated 25.02.2020 issued on the basis of complaint dated 25.10.2019 shall stand quashed.” 6. It is noticed that in W.P.No.1418/2021, the court had noticed that the complaint was filed on 25.10.2019 while Section 6 (3) (b) of the FEMA Act was omitted on 15.10.2019. While noticing so, the court has set aside the - 10 - HC-KAR NC: 2025:KHC:30739 WP No. 5186 of 2021 show-cause notice. The said action it was held did not stood protected in terms of Section 6 of the General Clauses Act. The observation made above in the order passed in W.P.No.1418/2021 is clear and unambiguous. In light of the reasons as made out in the present case as well, the petitioner who is Noticee no.2, on parity is also entitled for the same relief. 7. Accordingly, the show-cause notice at Annexure-B dated 25.02.2020 is set aside. Needless to state, taking note of the omission of Section 6 (3) (b) of the FEMA Act and noticing that the complaint was filed subsequent to such omission, complaint also would stand set aside. Office to show the name of Sri.Sharan A Kukreja and Smt.Abhijna Somashekar as learned counsels for petitioner. Sd/- (S SUNIL DUTT YADAV) JUDGE NP /CT-AN List No.: 19 Sl No.: 2