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On Monday, the Supreme Court granted the Enforcement Directorate (ED) an extension to address its plea against New Delhi Television (NDTV), with the case scheduled for a crucial hearing on August 12, 2024. This development follows a significant ruling by the Bombay High Court regarding NDTV’s attempt to resolve allegations of Foreign Exchange Management Act (FEMA) violations through compounding.
The case, Directorate of Enforcement v. New Delhi Television Limited, centers on NDTV’s efforts to resolve allegations of FEMA violations through a compounding process. The Bombay High Court had previously allowed NDTV to pursue this avenue before the Reserve Bank of India (RBI), a decision which the ED has contested.
NDTV, a major Indian media company, has been under scrutiny for alleged contraventions of FEMA, which regulates foreign exchange and cross-border transactions. NDTV faced adjudication proceedings initiated by the ED for alleged FEMA contraventions. In response, NDTV sought to enter into compounding proceedings, a legal option for settling violations by paying a penalty. However, the Reserve Bank of India (RBI) returned NDTV’s compounding applications, leading NDTV to file a writ petition challenging both the RBI’s action and the ED’s ongoing adjudication process.
The Bombay High Court, in its ruling, directed that NDTV’s compounding proceedings should continue before the RBI in accordance with the law. A bench comprising Justice SC Dharmadhikari and Justice Bharati Dangre issued this order, emphasizing the need for adherence to legal procedures.
The High Court’s ruling also addressed concerns raised by Senior Advocate Janak Dwarkadas, representing NDTV. Dwarkadas had argued that the statutory positions of high functionaries such as the RBI, ED, and the Central Bureau of Investigation (CBI) were being undermined. Although the High Court did not accept this argument, it expressed concern over the implications of such doubts on the credibility of these institutions. The court stressed the importance of maintaining public trust and confidence in these bodies, highlighting their role in safeguarding India’s financial and constitutional framework.
The Supreme Court’s decision to grant the ED a final extension underscores the case’s importance and the ongoing scrutiny of how FEMA violations and related legal proceedings are managed. The August 12 hearing will be pivotal in determining the future course of action for both NDTV and the Enforcement Directorate.