The Indian Hotels Company LimitedversusDirectorate of Enforcement

                                                      45. WP 3953-2026(1).doc

              IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                  ORDINARY ORIGINAL CIVIL JURISDICTION

                       WRIT PETITION NO.3953 OF 2026

The Indian Hotels Company Limited         …Petitioner
          Versus
Directorate of Enforcement & Anr.         …Respondents
                                …..
Mr. Amit Desai, Senior Advocate a/w Mr. Gopal Shenoy, Mr. Jay
Zaveri, Ms. Rhea Parkash, Mr. Suraj Agarwal i/b Crawford Bayley
and Co., for the Petitioner.

Mr. Anil D. Yadav, for Respondent No.1- E.D.
                                …..

                                 CORAM : M.S. KARNIK &
                                         SANDESH D. PATIL, JJ.
                                 DATED : 16th SEPTEMBER 2026


JUDGEMENT (PER SANDESH D. PATIL, J.) :


1.        Heard learned Counsel for the parties.



2.        Rule. Rule is made returnable forthwith and with the consent

of the parties the matter is taken up for final hearing.



3.        By the present Petition, the Petitioner is challenging the Show

Cause Notices bearing Nos. T-4/169-B/SDE (AKB)/2002 (SCN-I) and


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T-4/169-B/SDE(AKB)/2002 (SCN-II) (at Exhibit C1 to C2), issued by

the Respondents upon the Petitioner. The Petitioner is also seeking a

consequential order that the amount deposited in furtherance of the

order dated 3rd February 2025 issued by the Appellate Tribunal at

New Delhi be refunded.



4.        The case of the Petitioner is that the Foreign Exchange

Regulation Act, 1973 (hereinafter referred to as ‘FERA’) was repealed

with effect from 1st June, 2000 and Foreign Exchange Management

Act, 1999 (hereinafter referred to as ‘FEMA’) was brought into force

replacing FERA. Section 49(3) of the FEMA provided that no Court

and no Adjudicating Officer shall take notice of any contravention

under Section 51 of FERA after the expiry of a period of 2 years from

the date of commencement of FEMA.



5.        The bone of contention of the Petitioner is that the Foreign

Exchange Management Act, 1999 (FEMA) came into effect on 1st

June, 2000. The officer by the name- Shri. A.K. Bal issued two Show

Cause Notices, which are impugned herein, on 31st May 2002.




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6.        The contention of the Petitioner is that after the FEMA came

into effect, the officer- Mr. A.K. Bal did not have jurisdiction to issue

the notices. The learned Counsel appearing for the Petitioner

contended that on the date of repeal of FERA, the officer was not an

Adjudicating Officer and that after the FERA stood repealed from 1 st

June 2000, the Show Cause Notices could not have been issued.



7.        The learned Senior Counsel appearing for the Petitioner relied

upon the judgment passed by this Court in the case of First Global

Stockbroking Pvt. Ltd. & Ors. Vs. R.M. Ramchandani & Ors. [2022

SCC OnLine Bom 11771]. He also relied upon the judgment in the

matter of The Indian Hotels Company Ltd. and Ors. Vs. Directorate of

Enforcement & Anr. passed by this Court on 17th June 2026 in Writ

Petition No.389 of 2026. He contended that both the Division

Benches of this Court have taken a similar view.



8.        As far as the issue of pendency of the appeal is concerned, he

contended that the pendency of appeal could not come into his way

because the Show Cause Notices were issued without jurisdiction. He

relied upon the judgment of the Apex Court in the matter of Godrej


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Sara Lee Ltd. v. Excise and Taxation Officer-cum-Assessing Authority

and Ors. [2023 SCC OnLine SC 95] contending that there is a

difference between maintainability and entertainability. He, further

relying upon the judgment of the Apex Court in the matter of J. Sri

Nisha v. Special Director, Adjudicating Authority, Directorate of

Enforcement & Anr. [2026 SCC OnLine SC 517], contended that

where Show Cause Notice suffers from patent lack of jurisdiction,

reflects non-application of mind or amounts to abuse of process of

law, the court would be justified in exercising jurisdiction under

Article 226 of the Constitution of India.



9.        The learned Counsel appearing for the Directorate of

Enforcement on the other hand contended that, the action taken by

the officer is within the jurisdiction. He contended that the petition is

not maintainable in light of the fact that the Petitioner has

challenged the proceedings before the Appellate Authority and that

the same is pending. He submitted that as the Appellate Authority is

seized with the matter and that the Petitioner has also obtained an

interim order dated 3rd February, 2025 by depositing 10% of the

penalty as a pre-deposit. The Petitioner having complied with the


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                                                     45. WP 3953-2026(1).doc

order dated 3rd February, 2025, the present petition is not

maintainable. He contended that the Show Cause Notices were

issued on 31st May, 2002 and the proceedings have remained pending

for a considerable period. Ultimately, the adjudication pursuant to

the Show Cause Notices commenced and it culminated into common

Adjudication Order dated 13th March, 2019. He prayed for dismissal

of the petition.



10.       We have heard the learned Counsel appearing for the Petitioner

as well as the Respondents. We have perused the documents on

record.



11.       This Court in The Indian Hotels Company Ltd. & Ors. (supra)

has considered the effect of issuance of the Show Cause Notice after

the repeal of FERA. This Court has considered in detail the

judgments of the co-ordinate benches of this Court. In First Global

Stockbroking Pvt. Ltd. & Ors. (supra) identical challenge was raised

to the Show Cause Notices issued by the very same officer- Mr. A.K.

Bal under the provisions of FERA. The Co-ordinate Bench upon

interpretation of Section 50 of the FERA, and Repeal and saving


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provisions contained in Section 49 of the FEMA held that, Mr. A.K.

Bal was not specially empowered to act as an Adjudicating Officer

under FERA, and consequently, he lacked authority to issue the Show

Cause Notice thereunder after the repeal of the enactment. The

Division Bench of this Court concluded that the Show Cause Notices

were issued without jurisdiction.



12.       The judgments in the matter of First Global Stockbroking Pvt.

Ltd. & Ors. (supra) and The Indian Hotels Company Ltd. & Ors.

(supra) are squarely applicable in the case in hand. Hence, we

conclude that the impugned Show Cause Notices are without

jurisdiction and that they deserve to be quashed and set aside. Once

we have held that the Show Cause Notices in question are without

jurisdiction then the consequences must follow. The Show Cause

Notices impugned herein are quashed and set aside. The present Writ

Petition is allowed in terms of prayer clause (a) which reads as

under:

                “(a) That this Hon'ble court be pleased to issue a writ
                of certiorari or a writ in the nature of certiorari or any
                other writ, order or direction under Articles 226 of the
                Constitution of India calling for the records and
                proceedings relating to the said Show Cause Notices
                bearing nos. T-4/169-B/SDE(AKB)/2002 (SCN-I) and

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                T-4/169-B/SDE(AKB)/2002 (SCN-II) (at Exhibit C1 to
                C2 hereto) issued by Respondents upon the Petitioner,
                and after examining the legality and validity of
                thereof, to quash and set aside the same and all
                consequential orders and steps taken thereon and
                direct the refund of the amount deposited in
                furtherance of order dated 3rd February 2025 issued
                by the Hon'ble Appellate Tribunal at New Delhi with
                the Respondent No. 1;”


14.       Rule is made absolute in aforesaid terms.



15.       The Writ Petition No.3953 of 2026 is disposed of accordingly.



      (SANDESH D. PATIL, J.)                     (M.S. KARNIK, J.)




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             Digitally signed
             by RAJESH
RAJESH       VASANT
VASANT       CHITTEWAN
CHITTEWAN    Date: 2026.09.23
             15:46:13 +0530