The omission of a statutory provision does not negate the authority to issue notices for past actions, and the existence of a remedy under FEMA does not preclude judicial review on grounds of natural justice violations.

ORDER :

S. SOUNTHAR, J.

These writ petitions are filed challenging the complaint made by the 3^rd respondent against the petitioners complaining violation of Foreign Exchange Management Act (herein after called FEMA ) and Transfer or Issue of Security by a Person Resident Outside India, Regulations 2000 (herein after called as TISPRO Regulations) and the show cause notice issued by the second respondent dated 01.07.2021 against the petitioners based on the complaint of the 3^rd respondent. The writ petitions in W.P.Nos.18682, 24517, 23237, 23235, 23013 of 2021 are filed challenging the complaint of the 3^rd respondent by noticees 2, 3, 6, 7 and 10 respectively. The writ petitions in W.P.Nos.18630, 24511, 23231, 23236, 20721 and 23019 of 2021 are filed by noticees 2, 3, 6, 7, 9 and 10 respectively challenging the show cause notice issued by the second respondent based on the complaint of the 3^rd respondent.

2. The main allegation against the petitioners is that they have contravened the provisions of Section 6 (3) (b) r/w Section 47 of the Foreign Exchange Management Act, 1999 r/w Regulations 3, 4 and 5 and para-3 and para 9(1) (B) (i) of Schedule 1 of TISPRO Regulations 2000 and annexure – B to para 2 of schedule – 1 of TISPRO Regulations 2000 r/w consolidated FDI Policies dated 01.04.2010 and 01.10.2010.

3. The noticee No.1 M/s.Flipkart Online Services Private Limited was incorporated by noticee Nos. 2 and 3 namely Shri Sachin Bansal and Shri Binny Bansal. It is not in dispute that they were its first Directors and shareholders. The noticee No.10, M/s.WS Retail Services Limited was incorporated by very same persons namely noticee Nos.2 and 3 and they were its first Directors and shareholders. The main complaint of the 3^rd respondent against the noticees was that noticee No.1 was engaged in the business of wholesale cash and carry and received Foreign Director Investment (FDI) from Foreign Investors namely noticees Nos.6 and 8 equivalent to Rs.142,40,38,518/- and issued equity shares without prior approval of Government of India.

4. Similarly, noticee No.4 received FDI of Rs.6353,76,36,033/- from noticee No.5 and issued equity shares without prior approval of competent authority. The noticee No.5 also purchased equity shares to the above mentioned value without prior approval of competent authority and thereby contravened the above mentioned provisions of FEMA r/w TISPRO Regulations. Likewise, noticee No.8 and 6 by acquiring equity shares from noticee No.1 as mentioned above violated the relevant provisions. It is also stated that noticee No.10 was only a dummy company established by Shri Sachin Bansal and Shri Binny Bansal, Directors of noticee No.1 holding 100% equity shares of the said company. It was also stated that noticee No.1 sold goods exclusively to noticee No.10, who in turn sold the goods in retail to the ultimate customer. The noticee Nos.1 and 10 belonged to the same group of companies and controlled by same persons. It is also stated that noticee No.10 was created and continued as a corporate entity to bifurcate the business to customer transactions (of noticee No.1 to retail customers) into business to business (of noticee No.1 to noticee No.10) transactions and business to customer (of noticee No.10 to retail customers) transactions. Thus the noticees were