1

BEFORE THE HON’BLE APPELLATE TRIBUNAL UNDER

THE PREVENTION OF MONEY LAUNDERING ACT, 2002
LOK NAYAK BHAWAN, KHAN MARKET, NEW DELHI
APPEAL NO. 461 OF 2024 IN OA NO. 958 OF 2023

APPEAL NO. FPE-FE-66/BNG/2021

IN THE MATTER OF:

M/s Chaturvedi and Shah LLP

…Appellant
VERSUS
Shri Sudhanshu Srivastava,
Assistant Director, Directorate of Enforcement …Respondent

REJOINDER ON BEHALF OF THE APPLICANT QUA THE

REPLY DATED 22 JULY 2024 FILED BY RESPONDENT

MOST RESPECTFULLY SHOWETH:

PRELIMINARY SUBMISSIONS:

1. The present Rejoinder is filed by the Appellant/ Applicant in

response to the Reply dated 22.07.2024 filed by Respondent
(“Reply”) to the appeal seeking to quash / set aside the Impugned
Order dated 04.01.2024 which confirms the retention of properties,
passed by the Ld. Adjudicating Authority in Original Application
No. 958 of 2021(“OA”).
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2. At the outset, the Appellant hereby denies all the allegations and
averments as contained in the Reply that are contrary, inconsistent,
or repugnant to what has been stated in the present. It is submitted
that the Reply filed by the Respondent raises false, frivolous, and
untenable submissions, which are liable to be rejected in limine.
Nothing herein contained shall be deemed to constitute an admission
on the part of the Appellant for want of a specific denial.

3. The Appellant repeats, reiterates, and adopts the contents of the

Memorandum of Appeal, which for the sake of brevity has not been
reproduced herein. The Applicant prays that the contents of the
Memorandum of Appeal be read as forming a part and parcel of this
Rejoinder.

PRELIMINARY SUBMISSION AND OBJECTIONS: -

I. REQUIREMENTS OF SECTION 19(1) OF FOREIGN EXCHANGE

MANAGEMENT ACT, 1999

4. Section 19(1) of the Foreign Exchange Management Act, 1999

(“FEMA”) vests discretion with this Hon’ble Tribunal to dispense
with a deposit of penalty if it would cause undue and excessive
hardship to the Applicant/Appellant.

5. The Applicant will prima facie demonstrate that the Impugned Order
suffers from errors, highlighting that if the penalty lacks a valid
foundation, then mandating a pre-deposit of this penalty inherently
causes undue hardship to the Applicant.

II. ALLEGATION IMPOSED UPON THE APPLICANT:-

6. The Impugned Order erroneously holds that the Applicant:-

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i. Failed to repatriate the full export proceeds to India within the

stipulated time period and thus violated Section 7 of FEMA read
with Regulations 8, 9 and 13 of the Foreign Exchange
Management (Export of Goods and Services) Regulations, 2000
and Regulations 8, 9 and 12 of the Foreign Exchange
Management (Export of Goods and Services) Regulations, 2015
to the extent of USD 42,499,391/- equivalent to INR
276,41,22,392/- and thereby imposes penalty to the extent of Rs.
30,00,00,000/- upon the Applicant, in the capacity of being the
Director [Allegation 1]; and
ii. Exceeded the 10% limit set for Indian Companies to remit funds
to their foreign branches for covering recurring expenses and
thus violated Section 9(b) of the FEMA read with Regulation
7(4A) (b) (ii) of the Foreign Exchange Management (Foreign
Currency Accounts by a person resident in India) Regulations,
2000, to the extent of USD 15,433,991/- equivalent to INR
84,21,88,959/-. and thereby imposes penalty to the extent of Rs.
10,00,00,000/- upon the Applicant, in the capacity of being the
director [Allegation 2].

III. NO AVERMENTS/ FINDINGS AGAINST THE APPELLANT IN THE

IMPUGNED ORDER

7. A bare perusal of the Impugned Order dated 12.03.2024 indicates

that there are no specific allegations against the Applicant and it is
imperative to note that to fulfil the requirement under the provision
of the FEMA, 1999 specific allegations have to be made and also,
the same has to be proven by the ED.
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8. Merely stating that the Applicant has committed an offence under

Section 42 of the FEMA, 1999 cannot hold an individual liable. It is
submitted that the allegations with respect to the Applicant are vague
and it can thus be clearly seen that there is no averment to the effect
that the present Applicant has been involved or was responsible for
the contravention which occurred due to neglect, connivance or
consent of the Applicant. Section 42 of the Act cannot be invoked
until and unless the commission of the contravention by the acts of
the Appellant has been proven which can be clearly observed on the
perusal of the provision Section 42 of FEMA, 1999 under which the
Applicant has been held liable.
Section 42 is reproduced hereinbelow for your ready reference:-

42. CONTRAVENTION BY COMPANIES.

1. Where a person committing a contravention of any of the provisions of

this Act or of any rule, direction or order made thereunder is a company,
every person who, at the time the contravention was committed, was in
charge of, and was responsible to, the company for the conduct of the
business of the company as well as the company, shall be deemed to be
guilty of the contravention and shall be liable to be proceeded against and
punished accordingly:
Provided that nothing contained in this sub-section shall render any such
person liable to punishment if he proves that the contravention took place
without his knowledge or that he exercised all due diligence to prevent
such contravention.
2. Notwithstanding anything contained in sub-section (1), where a
contravention of any of the provisions of this Act or of any rule, direction
or order made thereunder has been committed by a company and it is
proved that the contravention has taken place with the consent or
connivance of, or is attributable to any neglect on the part of, any
director, manager, secretary or other officer of the company, such
director, manager, secretary or other officer shall also be deemed to be
guilty of the contravention and shall be liable to be proceeded against and
punished accordingly.
3. Explanation. - For the purposes of this section
i. Company means anybody corporate and includes a firm or other
association of individuals; and
ii. director, in relation to a firm, means a partner in the firm.
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THE RESPONDENT FAILED TO DISCHARGE ITS BURDEN

OF PROOF

9. It is stated that the Enforcement Directorate has cast liability against

the Applicant under Section 42 (1) of FEMA, on the allegation that
the Applicant was in charge of and was responsible to the company
for the conduct of its business. It is apposite to mention that for a
complaint against an officer of the company, it is essential to detail
the specific ways in which the officer was in charge of or was
responsible for the alleged contravention and a mere bald statement
that the officer was in charge of and was responsible to the company
for the conduct of its business is not sufficient.
10. In the present case, the complaint dated 14.09.2018 filed by the
Enforcement Directorate, particularly at para 4.3, merely repeats the
language of Section 42(1) of FEMA. It alleges that the Applicant is
“in charge of and was responsible for the conduct of the business of
the company during the above said period, has also contravened the
above provisions”, without delineating the precise nature of the
Applicant’s responsibility. A similar bare-bone language is
employed in the show cause notice dated 14.09.2018. Therefore, the
Respondent has never discharged its initial burden of proving that
the Applicant was responsible for the alleged contravention.

11. It is apposite to mention here that merely because a person is a

director of the company, it does not necessarily mean that he shall be
held liable for the offence committed by the company. It is further
submitted that a person cannot be made liable unless there are
specific averments/ findings against the person that the person was
in charge of the conduct of the business and merely being a director
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of the company does not mean that at the time of the offence, the
director was responsible for the day-to-day affairs of the company.
Reliance is placed on the judgment titled “M/s. Jaipur IPL Cricket
Pvt. Ltd. v. The Special Director Directorate of Enforcement”,
Mumbai in FPA-FE-9/MUM/2013 passed by the Appellate Tribunal
for SAFEMA, FEMA, NDPS, PMLA & PBPT Act at New Delhi on
11.07.2019 wherein, the Hon’ble Appellate Tribunal has laid down a
two-fold test for imposition of penalty over the person as stated
under section 42. The two-fold test stipulated in the aforesaid
judgment is reproduced herein below:

“61. Section 42 of FEMA governs the imposition of penalty upon

persons in charge of, and responsible to, the company for the
conduct of the business of the company. In order to invoke the
said provision, the following preconditions are required to be
satisfied cumulatively:

a) Firstly, it must be established that the company has committed

contraventions of FEMA or Regulations made thereunder;
b) Secondly, it must be established that the person sought to be
made liable to the penalty was in charge of, and responsible to,
the company for the conduct of the business of the company, at
the time the contravention was committed and not conducted its
diligence in relation to the transaction;”

However, neither of the tests as stated above has been fulfilled by

the Ld. Adjudicating Authority, qua the Applicant. The Ld.
Adjudicating Authority has failed to prove that the Applicant was in
charge of, and responsible for the conduct of the business of the
company, at the time the contravention was committed and not
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conducted its diligence in relation to the transaction. Accordingly,

the Impugned Order deserves to be set aside and the Appellant may
be dispensed from depositing the pre-deposit amount.

12. The Hon’ble Tribunal in Jaipur IPL Cricket Pvt. (Supra) has further
held that the burden of proof to establish and substantiate both the
above requirements for imposition of penalty under Section 42(1) of
FEMA is upon the Enforcement Directorate at the first instant.
Thereafter, it is to be shifted to the private party which is liable to
discharge the same. It is further held in the judgment that it is not
open to the Enforcement Directorate or the Ld. Adjudicating
Authority to invoke Section 42 (1) of FEMA and impose a penalty
on individuals on the sole basis that such individuals held the
position of directors in the respective companies. It has been
consistently held by the Hon’ble Supreme Court and various High
Courts that specific findings are required to be recorded against any
individual sought to be penalized under the deemed liability
provisions such as Section 42 (1) of FEMA, particularly as their
specific role and function in the company. The mere fact that an
individual is a director in a company cannot be the sole basis for the
imposition of penalty upon such individuals under Section 42 (1) of
FEMA
Accordingly, when there is no evidence brought on record, nor is
there any reasoning qua the specific role of director/Appellant,
which may justify the invocation of Section 42 of FEMA,
irrespective of the merit of the case, the Applicant may be dispensed
with pre-depositing the penalty amount.
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13. It is further submitted that sub-section (1) to Section 42,

conspicuously does not use the term ‘director, manager, secretary or
another officer of the company’ to bring them within the ambit of
the vicarious liability provision, every person in charge of and
responsible to the company for the conduct of its business at the time
of the commission of the offence in question is deemed to be
additionally liable. The words ‘in charge of the company’ and
‘responsible to the company’ are pivotal to sub-section (1). This
requirement has to be satisfied for the deeming effect of subsection
(1) to apply and for rendering the person liable to be proceeded
against and, on such position being proved and penalized.

ALTERNATIVELY, BURDEN OF PROOF/ NO –

NEGLIGENCE BY THE APPLICANT IN TERMS OF
SECTION 42(2) OF FEMA ACT, 1999.

14. On bare perusal of Section 42 of the FEMA, 1999, it is clear that the
allegations have to be proven by the Directorate of Enforcement
against a company or an individual associated with the company
wherein the contravention of the provisions of the FEMA, 1999 had
been committed. It is respectfully submitted that the burden to prove
and provide evidence with respect to the allegations lies with the
Directorate of Enforcement. However, nowhere in the entire
Impugned Order, it has been proved that merely because the
Applicant is a director, he can be held liable without any evidence
against him on record for negligence, connivance or wilful
contravention of the provisions of FEMA Act, 1999.

15. Moreover, to prove the neglect on the part of the Applicant, specific
allegations need to be made against the Applicant as to how the
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neglect has been committed by an individual. In view of the same, it

is submitted that no such allegations were proved or mentioned in
the Impugned Order. The Impugned Order fails to explain the basis
for imposing a penalty on the Applicant, attributing liability simply
because the Applicant is the director of the company, as mentioned
in Para 5.18 of the Impugned Order which is reproduced herein
below for your ready reference:
“5.18 […] was the founder and whole-time director in the
company.”
Section 42(1) and (2) of FEMA casts liability only on the persons
who may have something to do with the transaction complained of
and not merely on the basis of holding a designation or office in a
company. The same has been settled in the catena of judgments.

16. The fact that the Applicant was neither negligent nor was in
connivance or has given consent qua the contravention of the
provisions of the FEMA ACT, 1999 is evident from the fact that as
soon as the Applicant was made aware of the technical
contravention/ defect by the company, the Applicant suo-moto in
2016 i.e. much prior to any action taken by the Respondent,
approached the Reserve Bank of India seeking conciliation of the
accounts held with AD Banks.

17. As such, the liability cannot be foisted on an officer of a company if

the contravention took place without any negligence committed by
the officer (Appellant herein). The initial burden of proof to
establish and substantiate that the Appellant was responsible for the
alleged contravention is upon the Respondent. Thereafter, it shifts to
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the Appellant. However, in the present case, the Respondent never

discharged its burden of proof and could not prove the involvement
of the Appellant herein and as such the Impugned Order deserves to
be set aside qua the Applicant. Therefore, it would cause the
Appellant excessive hardship if he is called upon to pre-deposit the
penalty for an alleged contravention that was not a result of the
Appellant’s conduct.

18. Lastly, it is concluded that vide, the Impugned Order, the Ld.
Adjudicating Authority has imposed the penalty upon the Applicant
without providing;-
(i) reason to indicate that the Applicant has committed a
contravention of any provision of the FEMA Act,
(ii) that the contravention has been conducted with consent to
the Applicant,
(iii) that the contravention has been conducted in connivance
with the Applicant, and/ or
(iv) that the contravention has been conducted because of
negligence of the Applicant,

Nowhere, in the entire Impugned Order the above-stated requisite as

mandated under section 42 of the FEMA, Act, has been fulfilled by
the Ld. Adjudicating Authority and as such, the penalty imposed by
the Ld. Adjudicating authority deserves to be set aside. The penalty
has been imposed merely on the ground that the Applicant is the
director of the company. Therefore, the penalty upon the Applicant
is liable to be set aside.
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Without prejudice to the rights of the Appellant, the following

submissions are made herein below:

19. In light of the above submissions made, we hereby proceed to

answer the allegation (as stated in para 7) imposed upon the
Applicant vide impugned order dated 21.07.2021

A. ANSWER TO ALLEGATION 1-
Technical issues faced by AD Banks led to incorrect reporting of
excess outstanding amounts.

20. As regards Allegation 1, the Impugned Order alleges that Emids

failed to repatriate a sum of USD 42,499,391/- to India within a
stipulated period, and thereby contravened FEMA. This was because
Kotak Mahindra Bank and IndusInd Bank (“AD Banks”) reported a
cumulative outstanding amount of USD 42,499,391/- on the Export
Data Processing and Monitoring System (“EDPMS”). The EDPMS
software was introduced by RBI in 2014, for AD banks to record
transactions of exporters online. As it was a new system, the rollout
led to errors/technical issues in the AD banks’ reporting, as admitted
by IndusInd Bank in its emails of June 2018 and May 2023, which
are being produced herein. As of May 2018, the EDPMS reflected a
cumulative outstanding amount of USD 42,499,391/-, which is
evidenced by (a) Kotak Mahindra Bank’s letter dated 10.05.2018
reflecting an outstanding offshore invoiced amount of USD
9,691,005/- and (b) IndusInd Bank’s letter dated 04.05.2018
reflecting an outstanding invoiced amount of USD 32,808,386/-.
However, out of the cumulative outstanding amount in EDPMS, a
sum of USD 20,523,043/- was shown outstanding due to technical
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issues faced by AD Banks in reporting the receipt of funds from the

US Bank account.

21. It is submitted that the sum of USD 20,523,043/- had been

repatriated to India, thus fulfilling the requirement of FEMA.
Consequently, the Appellant ought not to deposit penalty for this
specific amount. Copy of the list setting out the invoices raised by
the Appellant Company to overseas customers in the amount of USD
42,499,391 is marked and annexed herewith as Annexure-.

22. Upon discovering the abovesaid discrepancy, Emids promptly

worked with AD banks to resolve the technical issue. This
inadvertent error has also been acknowledged via email by IndusInd
Bank, and consequently, AD banks have taken corrective measures,
leading to a reduction in the outstanding sum on the EDPMS from
USD 42,499,391/- to USD 21,976,348/-. IndusInd Bank has
admitted that this discrepancy was a result of internal issues at their
end and as such, no fault can be found with Emids. The penalty
imposed by the Impugned Order is inclusive of the excess amount of
USD 20,523,043/-, and therefore for this reason alone, the appeal
ought to be heard on merits without the requirement of pre-
depositing the penalty amount or any portion thereof. Copy of
emails exchanged with IndusInd Bank in June 2018 is marked and
annexed herewith as Annexure-__. Copy of email dated 20.07.2021
issued IndusInd Bank is marked and annexed herewith as
Annexure- Copy of IndusInd Bank email dated 16.05.2023 along
with trail mail is marked and annexed herewith as Annexure-__.

23. It is submitted that after successfully resolving the technical issues

faced by AD Banks, the outstanding offshore invoiced amount was
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reduced from USD 42,499,391/- to USD 21,976,348/- as evidenced

by IndusInd Bank’s email dated 14.02.2023 and Kotak Mahindra
Bank’s email dated 17.02.2023. Kotak Mahindra Bank’s email dated
17.02.2023 mentions the invoice number and STPI number
outstanding in the EDPMS but does not mention the amounts
outstanding as against those invoices. As such, Appellant is
producing a list setting out the amounts against each of the said
invoice numbers mentioned in both the AD Banks emails amounting
to USD 21,976,348/-. The process of reconciliation against invoices,
and an application was also pending before RBI prior to the
Impugned Order being passed. However, RBI did not respond to
said application prior to the passing of the Impugned Order, and
moreover, the reconciliation process was only completed after the
Impugned Order was passed. The said reconciliation has been
verified by an international reputed accounting firm, namely MSKA
& Associates. Subsequent to filing the accompanying appeal, RBI
has communicated rejection of Emids’ reconsideration application
dated 03.03.2023 without a reasoned order. Emids has also filed a
writ petition, bearing WP No. 20004/2023 (GM-RES), before the
Hon’ble High Court of Karnataka challenging RBI’s failure to
decide the reconsideration application dated 03.03.2023 in
accordance with the principles of natural justice, which is presently
pending adjudication. Copy of IndusInd Bank’s email dated
14.02.2023 and Kotak Mahindra Bank’s email dated 17.02.2023 are
marked and annexed herewith as Annexure-1 and Annexure-
2respectively. A list setting out the amounts against each of the said
invoice numbers mentioned in both the AD Banks emails amounting
to USD 21,976,348/-, is marked and annexed herewith as
Annexure-3. Copy of the details of receipt of the payments in the
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foreign currency bank accounts of USD 21,976,348/-, which is

reflected as outstanding in EDPMS, is marked and annexed herewith
as Annexure-4. Copy of two reports both dated 24.08.2023 issued
by the Chartered Accountant certifying that they have traced receipt
of monies received from the customer by the US Branch are marked
and annexed herewith as Annexure-5 and Annexure-6. Copy of the
report dated 20.09.2023 issued by the Chartered Accountant
certifying the expenses incurred by the US Branch of Emids for the
years 2007 to 2018 is marked and annexed herewith as Annexure-7.

B. Monies utilized towards branch expenses.

24. As regards the remaining amount of USD 21,976,348/-, which is

reflected as outstanding on the EDPMS portal, it was utilised to meet
the expenses of the US Branch. It is submitted that Emids’ offshore
customers remitted the amounts due to both Emids and its US
Branch for the provision of both offshore and onshore services, in
the US Bank account maintained by the US Branch. As the offshore
client remitted payment for the invoiced services into the US Bank
account of the US Branch, the US Branch in turn remitted the
invoiced amount, net of USD 21,976,348/-, which was utilised
towards expenses, to Emids’ Rupee bank accounts maintained in
India with AD Banks.

25. It is submitted that the sum of USD 21,976,348/- was utilized

towards expenses such as (a) the direct cost for providing ‘onshore’
services, such as expenses for salary of the project development
team and client-related travel; and (b) the expenses of sales,
marketing, salaries of business development leaders, and other
business support services in USA, including, local hotel/travel
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expenses of Head Office employees and certain statutory dues to

generate new business for Emids. The aforementioned expenses
were duly recorded in the books of accounts of the US Branch.

26. It is imperative to note that the books of accounts of the US Branch

for each financial year underwent a thorough audit in accordance
with the US Generally Accepted Accounting Principles (GAAP).
These audited figures were then consolidated into the accounts of
Emids. The consolidated accounts of Emids, prepared as per Indian
GAAP, also underwent scrutiny by statutory auditor in India.

27. It is submitted that the US Branch functions as an extension of

Emids and is not a separate distinct entity. Even FEMA, under
Section 2(v), treats a foreign Branch Office of an Indian company as
a person resident in India. A foreign branch of an Indian company is
an extension of the Indian company and in law is not recognized as
having a separate or an independent existence from the Indian
company. Hence, because a foreign branch of an Indian company is
an extension of the Indian company itself, any export proceeds that
are received by a foreign branch of an Indian company in a foreign
currency bank account are, in effect, proceeds received by the Indian
company itself. Consequently, because the export proceeds related to
offshore services provided by Emids were received by its US Branch
in its US bank account, it can be said that Emids realized such export
proceeds.

28. Furthermore, since the payments towards branch expenses have been
made out of the export proceeds received by the US Branch in its
foreign currency accounts, these payments are akin to payments out
of Exchange Earners’ Foreign Currency Account (EEFC), to which
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restrictions imposed by Regulation 7(4A) of the FEM (Foreign

Currency Accounts by a person resident in India) (Amendment)
Regulations, 2007 and Regulation 5(B) of the FEM (Foreign
Currency Accounts by a person resident in India) Regulations, 2015
do not apply. Consequently, any export proceeds that are received by
a foreign branch of an Indian company in a foreign currency bank
account are, in effect, proceeds received by the Indian company
itself. It is submitted that Emids has substantially and in spirit
complied with its obligation under FEMA and received the entire
payment in respect of offshore invoiced services.

29. Assuming arguendo, one was to consider that the offshore invoiced
amount should have been remitted directly into the Indian bank
accounts within a stipulated period from the date of export and then
remitted to the US Branch for its operational expenses—instead of
the procedure adopted by Emids as explained hereinabove—the
same should be deemed as a mere procedural technicality as to the
manner in which Emids received such offshore invoiced amount.
This is especially true since there has been no net-loss of foreign
exchange to India due to this technicality. Thus, it is submitted that
in no case can such collection of offshore invoiced amounts in the
US bank accounts of the US Branch of Emids and remittance by the
US Branch (net of US Branch expenses) to Emids bank accounts be
deemed a substantive violation when there has been no loss of
foreign exchange, which is the basis of regulation under FEMA.

B. ANSWER TO ALLEGATION 2-
Limit on remitting monies towards ‘recurring expenses’.
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30. As regards Allegation 2, that Emids was permitted to remit to its US

Branch only 10% of its average sales/income or revenues earned for
the purpose of recurring expenses. It is submitted that Regulation
7(4A) of Foreign Exchange Management (Foreign Currency
Account by a Person Resident in India) (Amendment) Regulations,
2007 and Regulation 5(B)(b)(ii) of Notification No. FEMA
10(R)/2015-RB dated 21.01.2016, which caps ‘recurring expenses’
to 10% of annual sales is a general clause, which does not apply to
operating expenses.

31. It is submitted that the aforesaid FEMA Regulations do not apply to

the present case because the expenses incurred by the US Branch
were not ‘recurring branch expenses’ but rather ‘branch operating
expenses’. It is submitted that the 10% cap on permitted outward
remittances is only with respect to the recurring expenses defrayed
towards running a business, implying that a limit is set on the
amount of funds that can be transferred outside India for such
regular and recurring expenditure. The US Branch retained funds for
‘operating expenses’, specifically for activities such as servicing
offshore clients directly and collecting receivables. This is distinct
from ‘recurring expenses’, which involve expenditure for day-to-day
business functioning, such as electricity bills and rental payments,
rather than expenses incurred for providing services to overseas
customers directly. As detailed above, the sum of USD 21,976,348/-
was utilized towards expenses such as (a) the direct cost for
providing ‘onshore’ services, such as expenses for salary of the
project development team and client-related travel; and (b) the
expenses of sales, marketing, salaries of business development
leaders, and other business support services in USA, including, local
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hotel/travel expenses of Head Office employees and certain statutory

dues to generate new business for Emids. As such, these expenses
clearly fall within the bracket of ‘operating expenses’, and thus are
not covered by the 10% limit prescribed by the applicable FEMA
Regulation.

32. It is submitted that the retention of a portion of offshore invoiced

amount at the US Branch for its expenses was bona fide, which is
evident from the fact that all the transactions were undertaken
through normal banking channels and tax liabilities in both India and
overseas were duly discharged. Moreover, while the invoicing
procedure was executed through the US Branch for the sake of
convenience, taxes were diligently paid on the total foreign
exchange earnings, reaffirming Emids’ commitment to regulatory
compliance.

33. The aforesaid 10% limit for recurring expenses is also not applicable
to EEFC accounts as per the second proviso (1) to Regulation 5(B)
of Notification No. FEMA 10(R)/2015-RB dated 21.01.2016 (which
has been in place since 2001 vide Notification No. FEMA 10/2000
RB dated 03.05.2000). EEFC accounts are meant for Indian entities
earning foreign exchange, allowing them to hold foreign currency
without converting it to Indian rupees immediately. As the payments
towards branch expenses have been made out of the proceeds
received by the US Branch in its foreign currency accounts, these
payments are similar to payments out of EEFC accounts. This is
because both involve the use of foreign currency to meet branch
expenses without converting the currency into Indian rupees. Since
Emids’ situation (using foreign currency accounts for expenses)
resembles the economic realities of EEFC account holders, Emids
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ought to be similarly exempt from the 10% limit on recurring

expenses. Without prejudice to the above, at a minimum, this ought
to be considered as a strong ground for mitigation of penalty
imposed by the Ld. Adjudicating Authority.

34. That the cap of 10% on recurring expenses has no applicability to

the facts and circumstances of the present case as the US Branch of
Emids is nothing but an extended arm of Emids, wherein the
proceeds realized are in the foreign currency account itself – as such
Emids did not ‘remit’ any funds abroad for meeting recurring
expenses – and such funds were realised directly by the US Branch.
The US Branch, in addition to incurring ‘recurring’ expenses,
functioned as an independent profit center by providing services,
issuing invoices, and consequently expending funds associated with
these activities. The US Branch helps Emids in generating business,
conducting marketing activities and providing business support in
respect of issues faced by offshore clients related to any
software/program developed by Emids. Without prejudice, Emids’
business activities and transactions have not resulted in any net-loss
of foreign exchange to India nor any failure to repatriate funds
within the boundaries of FEMA and regulations framed thereunder.

35. For all these reasons stated above, it is submitted that has a prime
facie case against the Impugned Order and calling upon Applicant to
pre-deposit the penalty amount would itself cause undue hardship to
the Applicant.

36. It is submitted that the complaint and show cause notice were
followed by a notice dated 05.02.2021 stating that the Ld.
Adjudicating Authority on “going through the material available on
 20

record” has formed an opinion to hold an inquiry. It is submitted

that there was no material against the Applicant in order for the Ld.
Adjudicating Authority to hold an inquiry against the Applicant. It
was necessary for the Ld. Adjudicating Authority to have formed an
opinion that the Applicant could be covered by the substantive part
of Section 42(1) of FEMA. In the present case, neither the notice
dated 05.02.2021 nor the complaint or show cause notice contained
such particulars. Therefore, the very foundation of the Impugned
Order against the Applicant was erroneous. It is submitted that when
the genesis of the Impugned Order is wrong, the Impugned Order
cannot be sustained against the Applicant.

37. The Impugned Order fails to explain the basis for imposing a penalty
on the Applicant, attributing liability simply because the Applicant
“5.18 […] was the founder and whole-time director in the
company.” Section 42(1) of FEMA casts liability on a person who
may have something to do with the transaction complained of and
not merely on the basis of holding a designation or office in a
company.

38. There is no material produced by the Respondent nor any findings

by the Ld. Adjudicating Authority that the Applicant himself was
involved in the impugned transaction. That he was personally
involved or responsible for (allegedly) not repatriating the full
export proceeds to India within the stipulated time and/or that he
was responsible for remitting funds in excess of the 10% limit to the
US Branch for meeting recurring expenses of the US Branch.
Without arriving at any findings as to the Applicant’s role or
knowledge of the impugned transaction, a hefty penalty of INR
40,00,000/- has been imposed on the Applicant. Neither the
 21

Respondent nor the Ld. Adjudicating Authority considered the lack

of material against the Applicant before charging the Applicant and
passing the Impugned Order.

39. Applicant exercised all due diligence and care in the performance of
his obligations to the company.

40. It is submitted that Applicant’s conduct post facto must all be taken
into consideration while considering waiver of deposit of penalty.
This initiative included submitting an initial application to regularize
its accounts, participating in numerous discussions with RBI and AD
Banks, and even revising its applications in alignment with RBI’s
guidance. This pre-emptive outreach occurred prior to the
Enforcement Directorate’s intervention, which began with a show
cause notice dated 14.09.2018. Through these efforts with RBI and
AD Bank, the Applicant and Emids succeeded in bringing down the
outstanding entries from USD 110 million in October/December
2016 to USD 21,976,348/-.

41. It is submitted that any provision granting the right to appeal ought
to be interpreted in a manner that upholds the right of appeal rather
than defeats it. In light of the applicant's conduct, an insistence
on pre-deposit would deprive the Applicant of his statutory right of
appeal. Therefore, on this ground alone, this Hon’ble Tribunal may
kindly dispense with pre-deposit of penalty.

42. It is submitted that the Applicant has discharged his burden of

satisfying the conditions to seek dispensation of the penalty as
required under Section 19(1) of the FEMA.
 22

43. The Respondent has not provided any cogent reasons to justify why
the Applicant should not be granted dispensation with the
requirement to deposit of such a large penalty amount pending the
hearing and final disposal of the appeal, considering that the
accompanying Memorandum of Appeal is the first time where the
finding of contravention and penalty will be assessed by an
independent judicial mind, and not officers of the Enforcement
Directorate. It is submitted that facts stated above demonstrate that
Applicant has been bona fide in his conduct and that therefore
balance of convenience lies in his favour. Furthermore, the
Applicant will suffer grave and irreparable injury if he is called upon
to pre-deposit the penalty.

44. It is submitted that the Reply filed on behalf of the Respondent

merely copies and pastes the language employed in the Impugned
Order and fails to address the contentions raised by the Applicant in
both the appeal and the application. The Reply submitted by the
Respondent does not adequately address key points raised by the
Applicant, specifically concerning the nature and treatment of
foreign branches of Indian companies. Applicant’s argument is that
the US Branch should be regarded as an extension of Emids,
implying that any funds received by the branch are effectively
received by the company in India, to which the Respondent issues no
response. Similarly, the Respondent also neglects to address the
argument that payments made from invoiced amounts to the US
Branch for its expenses were akin to payments made from EEFC
Account, to which restrictions imposed by Regulation 7(4A) of the
FEM (Foreign Currency Accounts by a person resident in India)
(Amendment) Regulations, 2007 and Regulation 5(B) of the FEM
 23

(Foreign Currency Accounts by a person resident in India)

Regulations, 2015 do not apply. Furthermore, the Reply filed by
Respondent also neglects to address any argument on the system
integration issues faced by AD banks, which resulted in the excess
reporting of outstanding amounts. By neglecting to respond to any of
these contentions, the Respondent’s reply falls short of providing a
comprehensive rebuttal and fails to adequately address the legal
submissions of the Applicant.

45. Without prejudice to the fact that the Respondent merely copy-
pastes the findings from the Impugned Order, unsupported by any
arguments of its own, while also failing to address the contentions
raised by the Applicant, the Applicant is setting forth below a para-
wise response to the Reply filed by Respondent.

IV. PARA-WISE REPLY:

46. That the contents of paragraph 1 of the Reply are a matter of record
and hence need no response. Contents of the preliminary
submissions and the appeal may kindly be read as part and parcel of
this paragraph.

47. That the contents of paragraph 2 of the Reply do not call for a
specific traversal.

48. That the contents of paragraph 3 of the Reply are incorrect,

misleading, and misconceived, hence, they are vehemently denied. It
is alleged that the information was received from reliable sources,
whereas Emids has earnestly and in a bona fide manner been trying
to reconcile the matter since 2016, when it suo moto brought it to the
 24

attention of its AD banks for resolution and appropriate clarification.

Furthermore, it is denied that the overseas branch retained more than
10% of the average sales/income/turnover of Emids to meet its
‘recurring expenses’. It is submitted that the said cap of 10% was not
applicable to the facts of the present case. The overseas branch
retained funds for ‘operating expenses’, specifically for activities
such as servicing offshore clients directly and collecting receivables.
This is distinct from ‘recurring expenses’, which involve
expenditure for day-to-day business functioning, such as electricity
bills and rental payments, rather than expenses incurred for
providing services to overseas customers directly.

49. That the contents of paragraphs 4 and 5 of the Reply are incorrect,
misleading, and misconceived, hence they are vehemently denied. It
is denied that Emids incurred ‘recurring expenses’ in excess of the
permitted level prescribed under FEMA Regulation. It is denied that
the ‘recurring expenses’ during the period F.Y. 2007-2015 were to
the tune of USD 15,433,991/- (INR 84,21,88,959/-). As detailed
above, the FEMA regulation does not apply to the present case
because the expenses referred to for the US Branch were not
‘recurring branch expenses’ but rather ‘branch operating expenses’.
It is submitted that the 10% cap on permitted outward remittances is
only with respect to the recurring expenses defrayed towards
running a business, implying that a limit is set on the amount of
funds that can be transferred outside India for such regular and
recurring expenditure. Furthermore, in the instant case, the US
Branch was not merely providing administrative functions vis-à-vis
offshore services but also providing ‘onshore’ services to unrelated
customers directly outside India, for which separate invoices were
 25

generated and monies for both such services were credited to the
same US Branch account.

50. That the contents of paragraph 6 of the Reply are incorrect,

misleading, and misconceived, hence they are vehemently denied. It
is denied that no concrete steps were taken to resolve the outstanding
export proceeds as reflected in EDPMS. It is submitted that Emids
has already realized all the export invoices from its customers and
there are no export outstanding dues. The sole issue pertains to the
inter-se settlement between the head office and its US Branch and
the closure of outstanding EDPMS entries, which is a mere
procedural process. It is submitted that the offshore invoiced
amounts reflected on EDPMS as outstanding have been utilized by
the US Branch for payments of its expenses, which Emids would
have had to fund had such offshore invoiced amount been paid
directly into the Indian bank account. It is submitted that no
profit/undue advantage has been caused to Emids or any consequent
loss has been caused to the exchequer by virtue of this unintentional
technical/procedural irregularity, if at all.

51. That the contents of paragraph 7 of the Reply are incorrect,

misleading, and misconceived, hence they are vehemently denied. It
is submitted that the Applicant cannot be mulcted with penalty
simply by virtue of being a Director of Emids. The Respondent had
to necessarily arrive at a finding of fact, demonstrating the manner in
which the Applicant was in charge of or responsible for the conduct
of business of Emids. The failure of the Respondent to discharge
such obligation, coupled with the absence of any specific allegation
against the Applicant, renders the Impugned Order unsustainable.
 26

52. That the contents of paragraph 8 of the Reply are incorrect,

misleading, and misconceived, hence they are vehemently denied. It
is submitted that the representatives of Emids and Applicant
appeared before the Ld. Adjudicating Authority on numerous
occasions and apprised the Ld. Adjudicating Authority on the facts
and circumstances of the present case, including vide letter dated 08
March 2021. It is submitted that the Emids’ letter dated 08 March
2021 is akin to a reply to the show cause notice. In fact, Emids has
consistently furnished the Ld. Adjudicating Authority with updated
figures concerning outstanding amounts, following continuous
efforts to liaise with the AD Banks, which reflects the proactive
engagement of Emids and the Applicant in resolving the issues at the
earliest.

53. That the contents of paragraph 9 of the Reply are incorrect,

misleading, and misconceived, hence they are vehemently denied. It
is denied that the amount to meet the recurring expenses of the US
Branch exceeded the 10% limit since the said limit was not
applicable to the offshore invoiced amount retained by the US
Branch for its ‘operating expenses’. The said limit of 10% is solely
in connection with recurring expenses and not on non-recurring
expenses, which are expenses related to servicing offshore clients
and collection of receivables. It is submitted that the expression
‘recurring expenses’ does not include operational expenses for
providing onsite services, and that the said term is restricted to
recurring expenses required to run the branch-office. Further, it is
vehemently denied that the export proceeds are still outstanding for
an amount of USD 42,499,391/- (equivalent to INR
276,41,22,3921/-). It is pertinent to highlight here that a part of the
 27

cumulative outstanding amount in EDPMS was due to technical

issues faced by the AD Banks which has also been acknowledged by
them. After realizing this discrepancy, Emids worked with AD
Banks to rectify the same. As a result, the outstanding offshore
invoiced amount has now been reduced from USD 42,499,391/- to
USD 21,976,348/-. With respect to the cumulative outstanding
offshore invoiced amount of USD 21,976,348/-, it is submitted that
same represents the sum that was utilized to meet the expenses of the
US Branch, which sum Emids was obligated to pay.

54. That the contents of paragraph 10 of the Reply are incorrect,

misleading, and misconceived, hence they are vehemently denied.
Respondent claims that the Ld. Adjudicating Authority has recorded
findings against the Applicant at paragraphs 5. However, the Ld.
Adjudicating has recorded a bald finding at paragraph 5.18 that the
Applicant "5.18 [...] was the founder and whole-time director in the
company”. On the basis of this bald finding, the Ld. Adjudicating
Authority has erroneously imposed a penalty on the Applicant.

55. That the contents of paragraph 11 and 12 of the Reply are incorrect,
misleading, and misconceived, hence they are vehemently denied. It
is submitted that the proportionality (of the penalty imposed relative
to the alleged defence) is a basic principle to be adhered to while
interpreting any provision relating to any punishment with serious
consequences. While laws like the Securitisation and Reconstruction
of Financial Assets and Enforcement of Security Interest Act, 2002,
and the Employees State Insurance Act, 1948, mandate a pre-deposit
of a certain percentage of the penalty, the Foreign Exchange
Management Act (FEMA), 1999, provides a different approach
under Section 19(1). This section grants the Appellate Tribunal the
 28

discretion to either fully or partially waive the requirement for pre-

deposit of the penalty for entertaining appeals. While interpreting
this section, judicial precedents, including Monotosh Saha v. Special
Director, Directorate of Enforcement, (2008) 12 SCC 359 cited by
the Respondent, have recognised that if, as an initial matter, the
penalty demand has no legs to stand on, then the full or substantial
part of the penalty ought to be waived for purposes of entertaining
the appeal. It is submitted that the demand for 100% of the entire
export invoices of USD 42.49 million on Emids (and a further
penalty on the Applicant), under the presumption that such an
amount remains outstanding and unrealized has no legs to stand on
and, moreover, causes undue hardship, especially considering that a
portion of cumulative outstanding amounts were attributable to the
technical issues faced by the AD banks. As such the amount of USD
42.9 million already stands reduced to USD 21,976,348/- as
reflected in EDPMS portal. As regards the balance amount of USD
21,976,348/-, the Applicant has demonstrated hereinabove that there
has been no FEMA violation. Therefore, it is submitted that the
considerations for allowing for a waiver of the pre-deposit have been
satisfied.

56. That the contents of paragraph 13 of the Reply are incorrect,

misleading, and misconceived, hence they are vehemently denied. It
is denied that the application is defective. It is denied that the present
application deserves to be dismissed in totality. The Respondent has
not cited any legal precedent or provision of law which stipulates
that an application must include financial statements for it to be
considered valid.
 29

57. That the contents of paragraph 14 of the Reply are generic in nature
and not specific to any of the facts involved in the present matter. It
is settled law that in order to establish ‘undue hardship’, both the
existence of a prima facie case and the element of undue hardship is
required to be proved. The Applicant has discharged this burden of
proof in showing the presence of a strong prima facie case and
demonstrating that the Applicant will suffer grave hardship in
depositing the excessive and disproportionate penalty imposed on
him.

58. The contents of paragraph 15 of the Reply are incorrect, misleading,

and misconceived. The concern here is not about leniency but rather
whether, given the specifics of this case, a penalty should have been
imposed on the Applicant in the first place. This is because there has
been no FEMA violation since a part of the amount was marked as
outstanding due to technical issues encountered by the bank, while
the rest was used by the US Branch for operational expenses.

59. The contents of paragraph 16 of the Reply are incorrect, misleading,

and misconceived. Respondent claims that the Ld. Adjudicating
Authority has recorded findings against the Applicant at paragraphs
5.1 to 5.18. However, this is simply not true. It is only at paragraph
5.18 the Ld. Adjudicating Authority has noted that the Applicant
"5.18 [...] was the founder and whole-time director in the company”
and thus imposed a penalty on the Applicant. Such a bald finding
cannot be countenanced in law.

60. That the contents of paragraph 17 of the Reply are generic in nature
and not specific to any of the facts involved in the present matter.
The case law cited by the Respondent i.e. of Fayshaw Apparels v.
 30

the Appellate Tribunal for Foreign Exchange and The Special

Director [CMS No. 2101 of 2010 and MP Nos. 1 and 2 of 2010], is
not applicable to the facts at hand. In the cited case, a penalty of INR
50,00,000/- was levied on a firm and INR 10,00,000/- on the
Managing Director for a contravention involving twice that amount,
i.e., INR 1,13,20,461. It was in that context that the High Court
deemed that pre-deposit of penalty amount was not excessive since
“the adjudicating authority has imposed penalty much lesser that the
amount involved in the contravention”. Each judgment must be seen
in context of its specific facts and circumstances. In the
aforementioned case, the penalty imposed was approximately half of
the sum associated with the alleged violation. However, in the
present appeal, the Ld. Adjudicating Authority has imposed the
entire amount involved in the alleged contravention as penalty on the
Company and INR 40,00,000/- on the Applicant . Consequently, this
case does not bolster the Respondent’s position.

61. Moreover, Respondent overlooked a crucial part of the High Court’s

judgment, where the High Court held that “[o]nly where it appears
that the penalty imposed has no legs to stand or it would be
undesirable to ask the Appellant to pay the full or part of the
penalty, the Appellate Tribunal can dispense with the condition of
pre-deposit of penalty on such conditions as it may deem fit”. As
detailed in the earlier section, the Applicant has demonstrated that
out of the sum of USD 42,499,391/-, a sum of USD 20,523,043/-
was successfully repatriated to India from the US Branch, though it
was inaccurately reported as outstanding due to AD Banks’ technical
issues. The remainder amount of USD 21,976,348/- was received by
the US Branch in the US bank account from Emids’ customers and
 31

utilized towards branch expenses. Given these facts, the penalty is

unjustified, warranting a waiver of the pre-deposit requirement.

62. That the contents of paragraph 18 of the Reply are incorrect,

misleading, and misconceived, hence they are vehemently denied. It
is submitted that the reliance placed on Raj Kumar Shivkhare vs.
Assistant Directorate of Enforcement and Anr. (2010) 4 SCC 772 is
misplaced and not applicable in the facts and circumstances of the
present case. In the said case, the Hon’ble Supreme Court was
dealing with the issue as to whether the alternative statutory remedy
available under the FEMA can be bypassed and jurisdiction under
Article 226 of the Constitution could be invoked directly, which is
not at all relevant to the facts involved in the present matter.
Contents of the preliminary submissions and the appeal may kindly
be read as part and parcel of this paragraph.

V. REPLY TO PARA-WISE REPLY TO THE APPLICATION:

63. That the contents of paragraph 19 of the para-wise reply to the

application are incorrect, misleading, and misconceived, hence they
are vehemently denied. It is submitted that the penalty imposed on
the Applicant is disproportionate, arbitrary, and excessive. The Ld.
Adjudicating Authority has arbitrarily imposed an exorbitant penalty
of INR 40 Crores. Any attempt by Respondent to realize the full
payment of penalty during the pendency of the appeal would cause
undue hardship to the Applicant. Respondent’s reliance on Rule 9 of
FEM (Compounding Proceedings) Rules, 2000 is not applicable in
the facts of the present. The provision, which allows 15 days’ time
for payment of the penalty, would be applicable only where the
 32

Applicant sought, and was granted, the option to compound the

alleged violation, which is not the case here.

64. That the contents of paragraph 20 of the para-wise reply to the

application are incorrect, misleading, and misconceived, hence the
65. are vehemently denied. It is submitted that the discrepancies in AD
Banks’ records, particularly the misclassification of inward
remittance received from the US Branch, are at best procedural
irregularities rather than deliberate violations, and thus do not
warrant penal consequences. The AD Banks, in their formal
communications dated 23.04.2018 and 10.05.2018, provided explicit
confirmation that there were ‘Nil’ outstanding export dues
associated with Emids. Despite the explicit confirmation received
from the AD Banks affirming the absence of any outstanding
advance amount, the records of the said banks continue to show
outstanding amounts due solely due to system integration issues
within the infrastructure of the AD Banks. This was also admitted by
the AD Bank in its email dated 20.07.2021. This admission
highlights the technical nature of the discrepancy and substantiates
the Applicant’s assertion that the apparent outstanding dues are not a
result of non-compliance but rather a consequence of system-related
challenges within the AD Bank’s operational framework.

66. That the contents of paragraph 21 of the para-wise reply to the

application are incorrect, misleading, and misconceived, hence they
are vehemently denied. It is submitted that no permission from either
the RBI or the AD banks was obtained by Emids either for an
extension of time or for permission for writing off non-realised
export proceed, since no occasion arose as Emids had already
realized the full value of the offshore invoiced services in its foreign
 33

exchange account. It is denied that no concerted effort has been

made to rectify the export outstanding to the tune of USD
42,499,391/- reflected in the EDPMS. Emids and the Applicant have
consistently engaged with AD Banks and RBI, actively pursuing the
resolution of discrepancies in the EDPMS, and dedicating
considerable resources to its resolution, because of which the
outstanding amount has now been reduced to USD 21,976,348/-.
Subsequent to filing of the accompanying appeal, RBI has
communicated rejection of Emids’ reconsideration application dated
03.03.2023 without a reasoned order. Following that denial, Emids
filed a writ petition before the Hon’ble High Court of Karnataka
challenging RBI’s failure to decide the application in accordance
with the principles of natural justice, which is presently pending
adjudication. Contents of the preliminary submissions and the appeal
may kindly be read as part and parcel of this paragraph.

67. That the contents of paragraph 22 of the para-wise reply to the

application are incorrect, misleading, and misconceived, hence they
are vehemently denied. Any insistence on pre-deposit of the penalty
amount will cause undue hardship to the Applicant.

68. That the contents of paragraph 23 of the para-wise reply to the

application are incorrect, misleading, and misconceived, hence they
are vehemently denied. It is denied that the Ld. Adjudicating
Authority has taken a lenient view in levying penalty, as compared
to that of the contravention. To the contrary, the Ld. Adjudicating
Authority has blindly accepted the amount of contravention stated in
the Complaint without any independent application of mind and
proceeded to impose penalty on Emids and the Applicant, without
considering the submissions of Emids. It is further denied that no
 34

supporting evidence was produced on record. Extensive evidence

was placed before the Ld. Adjudicating Authority, vide letters dated
29.03.2018, 23.04.2018, 08.03.2021, including but not limited to CA
certificate certifying the details of the export proceeds received by
the Company, communications exchanged with the AD Banks,
representations made before RBI, latest audited financial statements
and annual returns, letters from AD Banks confirming ‘nil’
outstanding advance export dues. Despite the categorical
acknowledgement provided by the AD Banks, an exorbitant penalty
has been imposed upon Emids and the Applicant on an erroneous
presumption that offshore invoices amount are outstanding and yet
to be realized from the customers. The Applicant submits that such a
presumption is unfounded, as the confirmed information from the
AD Banks attests to the contrary. Without prejudice to the aforesaid,
the alleged contraventions are at their highest, merely technical in
nature and do not constitute a substantive violation. Despite any
such technical/procedural differences, there is no loss of foreign
exchange to India.

69. That the contents of paragraph 24 of the para-wise reply to the

application are incorrect, misleading, and misconceived, hence they
are vehemently denied. It is denied that the Applicant has failed to
establish a prima facie case of undue hardship. As detailed at para
12 of the application and the present rejoinder, the Applicant has
demonstrated that he would suffer grave hardship if he is required to
pre-deposit even a portion of the penalty amount.

70. That the contents of paragraph 25 of the para-wise reply to the

application are incorrect, misleading, and misconceived, hence they
 35

are vehemently denied. It is denied that the present Application

deserves to be dismissed in totality and that the present Application
does not qualify within the pre-requisite criteria as mandated under
Section 19(1) of FEMA. It is submitted that the Applicant has
instituted bona fide application in aid of pursuit of legitimate
statutory rights available in law. Contents of the preliminary
submissions and the appeal may kindly be read as part and parcel of
this paragraph.

71. With reference to the prayer clause set forth in the Reply, the
Applicant states that the present case is a fit case for grant of relief
set forth in the application. That it is expedient and in the interest of
justice that this Hon’ble Tribunal may dispense with the requirement
to pre-deposit the penalty amount or any portion thereof.

APPELLANT / APPLICANT

Through

Richa Sandilya, Bhavna Vijay

Advocates for the Appellant
C/o Tandon & Co.
X-3, Green Park Main,
New Delhi-110016
Phone-011-26520041-42
Email: richa@tandonandco.com
New Delhi
Dated: .04.2024
 36

BEFORE THE HON’BLE APPELLATE TRIBUNAL AT NEW

DELHI
(UNDER THE FOREIGN EXCHANGE MANAGEMENT ACT, 1999)

APPEAL NO. FPE-FE-66/BNG/2021

IN THE MATTER OF:

SAURABH SINHA
…APPLICANT/APPELLANT
VERSUS
THE SPECIAL DIRECTOR, DIRECTORATE OF ENFORCEMENT

…RESPONDENT

AFFIDAVIT

I, Saurabh Sinha, Son of ____________, aged about ____ years, Resident

of ______________workings as Director with Emids Technologies Pvt. Ltd., do
hereby solemnly affirm and declare as under:

1. That I, the abovenamed Deponent, am the Applicant/ Applellant in the

above noted matter and am fully conversant with facts and circumstances
of the case and am competent to swear the present affidavit.

2. That I have read and understood the contents of the accompanying

Rejoinder and state that the facts stated therein are true and correct to my
knowledge and legal submissions made therein as received from my
Counsel are believed to be true and no material fact has been concealed
therefrom.

DEPONENT
VERIFICATION
 37

Verified at New Delhi on this day of April, 2024 that the contents of the
above affidavit are true and correct to my knowledge, no part of it is false and
nothing material has been concealed therefrom.

DEPONENT