HC relief for Shankar Sharma, Devina Mehra

SHOW CAUSE NOTICES QUASHED IN FERA VIOLATION CASE

- ASHLEY COUTINHO

THE BOMBAY HC has quashed and set aside three show cause notices issued against First Global Stockbroking (FGSB), Shankar Sharma and Devina Mehra in 2002 in a matter pertaining to violation of the norms of the Foreign Exchange Regulation Act (FERA), 1973. The oral judgment was pronounced on November 18.

Sharma was vice chairman and joint managing director at First Global. Mehra is chairperson & managing director at the firm.

The court has ruled that AK Bal, special director, FEMA, Enforcement Directorate, had no authority to issue the show cause notices (SCNS), and consequently no order based on the notices could have been passed.

The Foreign Exchange Management Act, 2000 (FEMA) came into force on June 1, 2000, and repealed the FERA subject to certain saving provisions. Section 49(3) of FEMA provided a sunset period of two years from June 1, 2000 to May 31, 2002 for an adjudicating officer to take notice of any contravention under Section 51 of FERA.