Citibank .N.A vs Assistant Director Of Enforcement
- Court
- Delhi High Court
- Case type
- Not found
- Decided on
- 12-03-2026
$~15 to 21, 29 and 30
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
Date of decision: 12 March, 2026
15
+ MISC. APPEAL (FEMA) 25/2025
CITIBANK N.A. .....Appellant
Through: Mr. Rajeev K. Virmani, Sr.
Adv, Ms. Rashmi Virmani, Mr.
Krishan Tewary, Ms. Shriya
Gambhir, Ms. Diva Saigal,
Advs.
versus
SPECIAL DIRECTOR OF ENFORCEMENT
.....Respondent
Through: Mr. Vivek Gurnani, Panel
Counsel, Mr Kanishk Maurya
Adv. for DoE.
16
+ MISC. APPEAL (FEMA) 26/2025
HONGKONG AND SHANGHAI BANKING
CORPORATION LTD. .....Appellant
Through: Mr. Ateev Mathur, Mr. Amol
Sharma, Mr. Sanjay Gupta Mr.
Anmol Mehta & Ms. Tanya
Baijla, Advs.
versus
ENFORCEMENT DIRECTORATE .....Respondent
Through: Mr. Vivek Gurnani, Panel
Counsel, Mr Kanishk Maurya
Adv. for DoE.
17
+ MISC. APPEAL (FEMA) 27/2025
CITIBANK, N.A. .....Appellant
Through: Mr. Rajeev K. Virmani, Sr.
Adv., Ms. Rashmi Virmani,
Mr. Krishan Tewary, Ms.
Signature Not Verified
MISC. APPEAL (FEMA) 25/2025 & Conn. Matters Page 1 of 10
Signed By:VAISHALI
PRUTHI
Signing Date:17.03.2026
11:20
Shriya Gambhir, Ms. Diva
Saigal, Advs.
versus
SPECIAL DIRECTOR OF ENFORCEMENT
.....Respondent
Through: Mr. Vivek Gurnani, Panel
Counsel, Mr Kanishk Maurya
Adv. for DoE.
18
+ MISC. APPEAL (FEMA) 28/2025 & CRL.M.A. 10747/2009
THE BANK OF TOKYO MITSUBISHI, UFJ LTD.
.....Appellant
Through: Mr. Varun Chandiok, Mr.
Yashwant Sanenbam, Advs.
versus
DIRECTOR OF ENFORCEMENT .....Respondent
Through: Mr. Vivek Gurnani, Panel
Counsel, Mr Kanishk Maurya
Adv. for DoE.
19
+ MISC. APPEAL (FEMA) 29/2025 & CRL.M.A. 10749/2009
THE BANK OF TOKYO MITSUBISHI, UFJ LTD.
.....Appellant
Through: Mr. Varun Chandiok, Mr.
Yashwant Sanenbam, Advs.
versus
DIRECTOR OF ENFORCEMENT .....Respondent
Through: Mr. Vivek Gurnani, Panel
Counsel, Mr Kanishk Maurya
Adv. for DoE.
20
+ MISC. APPEAL (FEMA) 30/2025
CITIBANK .N.A .....Appellant
Through: Mr. Rajeev K. Virmani, Sr.
Adv., Ms. Rashmi Virmani,
Mr. Krishan Tewary, Ms.
Shriya Gambhir, Ms. Diva
Signature Not Verified
MISC. APPEAL (FEMA) 25/2025 & Conn. Matters Page 2 of 10
Signed By:VAISHALI
PRUTHI
Signing Date:17.03.2026
11:20
Saigal, Advs.
versus
ASSISTANT DIRECTOR OF ENFORCEMENT
.....Respondent
Through: Mr. Vivek Gurnani, Panel
Counsel, Mr Kanishk Maurya
Adv. for DoE
21
+ MISC. APPEAL (FEMA) 31/2025
CITI BANK N.A. .....Appellant
Through: Mr. Rajeev K. Virmani, Sr.
Adv., Ms. Rashmi Virmani,
Mr. Krishan Tewary, Ms.
Shriya Gambhir, Ms. Diva
Saigal, Advs.
versus
SPECIAL DIRECTOR OF ENFORCEMENT
.....Respondent
Through: Mr. Vivek Gurnani, Panel
Counsel, Mr Kanishk Maurya
Adv. for DoE.
29
+ MISC. APPEAL (FEMA) 7/2026
STATE BANK OF INDIA NRI BRANCH .....Appellant
Through: Mr. AP Singh, Mr. Varnit
Vashistha, Advs.
versus
SPECIAL DIRECTOR OF ENFORCEMENT
.....Respondent
Through: Mr. Vivek Gurnani, Panel
Counsel, Mr Kanishk Maurya
Adv. for DoE.
30
+ MISC. APPEAL (FEMA) 8/2026
STATE BANK OF INDIA, MAIN BRANCH
..... Appellant
Through: Mr. AP Singh, Mr. Varnit
Signature Not Verified
MISC. APPEAL (FEMA) 25/2025 & Conn. Matters Page 3 of 10
Signed By:VAISHALI
PRUTHI
Signing Date:17.03.2026
11:20
Vashistha, Advs.
versus
SPECIAL DIRECTOR OF ENFORCEMENT
.....Respondent
Through: Mr. Vivek Gurnani, Panel
Counsel, Mr Kanishk Maurya
Adv. for DoE.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
NAVIN CHAWLA, J. (ORAL)
1. These appeals have been filed under Section 35 of the Foreign
Exchange Management Act, 1999, challenging the orders passed by
the learned Appellate Tribunal for Foreign Exchange, New Delhi in
the appeals reference of which is being given in the form of chart
herein under.
Appeals before the
Original
Appeals listed
learned Tribunal and
Criminal
before us.
date of impugned
Appeal
order
MISC. APPEAL
CRL.A.
Appeal No. 183/2008
(FEMA) 25/2025
510/2009
Date: 28.05.2009
MISC. APPEAL
CRL.A.
Appeal No. 210/2008
(FEMA) 26/2025
609/2009
Date: 28.05.2009
MISC. APPEAL
CRL.A.
Appeal No. 987/2004
(FEMA) 27/2025
610/2009
Date: 30.06.2009
MISC. APPEAL
CRL.A.
Appeal No. 189/2008
(FEMA) 28/2025
673/2009
Date: 28.05.2009
Signature Not Verified
MISC. APPEAL (FEMA) 25/2025 & Conn. Matters Page 4 of 10
Signed By:VAISHALI
PRUTHI
Signing Date:17.03.2026
11:20
MISC. APPEAL
CRL.A.
Appeal No. 209/2008
(FEMA) 29/2025
674/2009
Date: 28.05.2009
MISC. APPEAL
CRL.A.
Appeal No. 184/2005
(FEMA) 30/2025
741/2009
Date: 28.07.2009
MISC. APPEAL
CRL.A.
Appeal No. 961/2004
(FEMA) 31/2025
1007/2009
Date: 16.09.2009
MISC. APPEAL
Appeal No. 187/2008
CRL.A. 8/2010
(FEMA) 7/2026
Date: 28.05.2009
MISC. APPEAL
Appeal No. 188/2008
CRL.A. 9/2010
(FEMA) 8/2026
Date: 28.05.2009
2. As all the appeals raise same question of law on the
maintainability of the proceedings, they are being disposed of by this
common judgment.
3. The learned Senior Counsel appearing for the appellants in
MISC. APPEAL (FEMA) 25/2025, MISC. APPEAL (FEMA)
27/2025, MISC. APPEAL (FEMA) 30/2025, MISC. APPEAL
(FEMA) 31/2025 and the learned counsels appearing for the
appellants in the other appeals, jointly submit that the common issue
of law that arises for consideration in the present appeals is whether
the Show Cause Notice(s) issued to the appellants for the alleged
contravention of various provisions of The Foreign Exchange
Regulation Act, 1973( FERA Act, 1973 ), as well as of Para 13B.22 of
Chapter 13 of the Exchange Control Manual, 1993 in some of the
appeals, are liable to be quashed on the ground of delay alone. In
support of their plea, they have placed reliance on a judgment of the
Signature Not Verified
MISC. APPEAL (FEMA) 25/2025 & Conn. Matters Page 5 of 10
Signed By:VAISHALI
PRUTHI
Signing Date:17.03.2026
11:20
Supreme Court in Union of India and Anr. Vs. Citi Bank N.A.,
(2022) 19 SCC 188.
4. On the other hand, the learned counsel for the respondent
submits that the above judgment would have no application on the
facts of the present case, inasmuch as the inquiry against the
appellants had been initiated in the year 1995 itself. The appellants,
therefore, cannot take the plea of destruction of the records in terms of
the applicable rules, as they were required to preserve the same for the
purposes of the inquiry. He submits that the judgment of the Supreme
Court, therefore, would not apply to the facts of the present case.
5. We have considered the submissions made by the learned
counsels for the parties.
6. We would first, in form of a chart, display the period of the
alleged transactions and the date of the issuance of the Show Cause
Notice(s) to the appellants in each of the appeals as under:
Period of
Issuance Date of Show
Appeals
Transaction
Cause Notices
MISC. APPEAL
08.08.1992 to
04.04.2002
(FEMA) 25/2025
10.05.1994
MISC. APPEAL
17.09.1992 to
04.04.2002
(FEMA) 26/2025
18.07.1994
MISC. APPEAL
24.01.1992 to
15.03.2002
(FEMA) 27/2025
01.02.1992
MISC. APPEAL
21.04.1994 to
04.04.2002
24.08.1994
(FEMA) 28/2025
Signature Not Verified
MISC. APPEAL (FEMA) 25/2025 & Conn. Matters Page 6 of 10
Signed By:VAISHALI
PRUTHI
Signing Date:17.03.2026
11:20
MISC. APPEAL
22.03.1993 to
04.04.2002
(FEMA) 29/2025
01.02.1995
MISC. APPEAL
21.11.1989 to
25.02.2002
(FEMA) 30/2025
30.03.1992
MISC. APPEAL
02.02.1990 to
20.05.2002
21.11.1992
(FEMA) 31/2025
MISC. APPEAL
24.07.1993 to
04.04.2002
(FEMA) 7/2026
28.08.1994
MISC. APPEAL
12.01.1993 to
04.04.2002
(FEMA) 8/2026
30.07.1994
7. The Supreme Court in Citi Bank (supra) in a batch of appeals
was also considering the case where a Show Cause Notice dated
25.02.2002 had been issued to the bank alleging contravention for a
period from October, 1992 to January, 1993. The Supreme Court after
considering the submissions made by the counsels for the parties held
that, even where a period of limitation is not provided in the statute,
the authorities are required to initiate the proceedings within a
reasonable period; the reasonable period would depend upon the facts
and circumstances of each case. The Supreme Court then relied upon
Rule 2, 3 and 4 of the Banking Companies (Period of Preservation of
Records) Rules, 1985 and held that as the said rules require the
preservation of records for a period of 5/8 years unless otherwise
directed by the Reserve Bank of India for the record to be preserved
for a longer period. The Show Cause Notice(s) issued therein were
held to be liable to be quashed on the ground of delay alone. We quote
Signature Not Verified
MISC. APPEAL (FEMA) 25/2025 & Conn. Matters Page 7 of 10
Signed By:VAISHALI
PRUTHI
Signing Date:17.03.2026
11:20
from the judgment as under:
“19. It is a settled proposition of law that
when the proceedings are required to be
initiated within a particular period provided
under the statute, the same are required to be
initiated within the said period. However,
where no such period has been provided in the
statute, the authorities are required to initiate
the said proceeding within a reasonable
period. No doubt that what would be a
reasonable period would depend upon the
facts and circumstances of each case.
xxx xxx xxx
24. Admittedly, in the present cases, the
alleged transactions had taken place during
Financial Years 1992 and 1993. Show-cause
notices for the said transactions were issued in
the year 2002 and that too just before the
sunset period of FERA was to expire i.e. on 1-
6-2002. We are therefore of the considered
view that show-cause notices and the
proceedings continued thereunder are liable to
be set aside on this short ground.
xxx xxx xxx
26. It can thus clearly be seen that the said
Rules require every banking company to
preserve records stated in Rule 2 for five years
and eight years for records mentioned in Rule
3, respectively. No doubt that under Rule 4 of
the said Rules, RBI, having regard to the
factors specified in sub-section (1) of Section
35-A, by an order in writing, is empowered to
direct any banking company to preserve any of
the books, accounts or other documents, etc.
for a period longer than the period specified
under the said Rules.
27. Undisputedly, no such order has been
placed on record which required the
respondent Banks to preserve records
concerning the transactions in question for a
period longer than eight years.
28. It could thus be seen that even under the
said Rules, the Banks are required to preserve
the record for five years and eight years,
Signature Not Verified
MISC. APPEAL (FEMA) 25/2025 & Conn. Matters Page 8 of 10
Signed By:VAISHALI
PRUTHI
Signing Date:17.03.2026
11:20
respectively. On this ground also, permitting
the show-cause notices and the proceedings
continued thereunder of the transactions
which have taken place much prior to eight
years would be unfair and unreasonable.”
8. In the present batch of appeals, though for some the period in
question is extending till August, 1994, the initial period ranges from
January, 1990 onwards. The Show Cause Notice(s), the dates of which
have been mentioned hereinabove, have been issued just before expiry
of the sunset period of the FERA Act. Therefore, in our view, these
appeals are covered by the judgment of the Supreme Court in Citi
Bank (supra).
9. The submission of the learned counsel for the respondent that
inquiries had been initiated in the year 1995, would not come to the
aid of the respondent inasmuch as it has not been shown that any
instructions were also issued to the appellants to preserve their records
while the inquiry is ongoing. Even otherwise there is a further delay of
almost seven years between 1995 to 2002 for issuing the Show Cause
Notice(s).
10. The impugned orders passed by the learned Appellate Tribunal
are hereby quashed.
11. The learned counsels for the parties submit that pursuant to the
interim orders passed by the learned Appellate Tribunal, and as
extended by this Court in the appeals as were originally numbered, the
appellants had provided Bank Guarantees for the amount of penalty
imposed on them. As the appeals have been allowed, the Bank
Guarantees are hereby discharged. They shall be released by the
Adjudicating Authority forthwith to the appellants.
Signature Not Verified
MISC. APPEAL (FEMA) 25/2025 & Conn. Matters Page 9 of 10
Signed By:VAISHALI
PRUTHI
Signing Date:17.03.2026
11:20
12. The appeals, along with pending applications, if any,
accordingly stands disposed of in terms of aforesaid orders.
NAVIN CHAWLA, J
RAVINDER DUDEJA, J
MARCH 12, 2026/lks/sk/pb/ik
Signature Not Verified
MISC. APPEAL (FEMA) 25/2025 & Conn. Matters Page 10 of 10
Signed By:VAISHALI
PRUTHI
Signing Date:17.03.2026
11:20