The Division Bench of the High Court of Delhi has issued a notice to Jindal Steel & Power Ltd on a petition moved by the RBI challenging single Judge bench order in a matter related to the JSPL's transfer of money to its foreign subsidiary.
On Wednesday, the Bench of Justices Vibhu Bakhru & Prateek Jalan issued a notice to Jindal Steel & sought reply on RBI plea challenging single bench order & slated the matter for Jan 15, 2021.
Earlier this month, the High Court of Delhi had allowed Jindal Steel & Power Limited (JSPL) to transfer money to its foreign subsidiaries.
The single bench of HC in a recent judgement clarified Regulation 6 & 9 of the RBI FEMA Regulations 2004.
It said that "The powers & discretion of the RBI in providing approval for remittance by an Indian company to its foreign subsidiaries have been clarified & reinforced by the judgement. If an Indian entity does not fall in the ambit of Regulation 6 for making direct investment in a joint venture or wholly owned subsidiary outside India under the automatic route, Regulation 9 provides that it may apply to RBI as per specified process".
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Advocate Parag P Tripathi & Advocate Vijay Aggarwal represented the JSPL. The matter was remanded back to RBI to reconsider the application made by the firm afresh as per law in accordance with the principles noted above.
The Court's judgement had said that RBI cannot revoke its nod to remit money at behest of ED.
The Court Order reads, "RBI cannot stop remittance of money merely on basis of ED's probe against JSPL. Manifest from the reading of Regulation 6 & 9 is that mere existence of an investigation by an investigation/enforcement agency or regulatory body ipso facto does not debar an Indian party from direct investment in a joint venture or wholly owned subsidiary outside India, etc".
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It said that "For approvals under Regulation 9, Regulation 9(3) spells out the criteria to be adopted by RBI while considering an application. It is a settled position in law that an authority cannot share its power with someone else or allow someone else to dictate to it by declining an act or by submitting to their wishes & instructions. If such be the case, then the resulting decision is ultra vires & void. In the present case RBI acting on behest of the ED amounts to the impugned order being clearly vitiated".
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