UNION OF INDIA v. ABN ·AMRO BANK AND OTHERS

A also sold gold coins to the company without being reasonably satisfied about the nature of the business of the company. The adjudicating authority took the view that the Bank as an -- authorized dealer, should have ascertained whether the company had got necessary permission from the RBI in dealing with the gold coins. The Bank, it is seen, had imported the gold on its own behalf and sold the same to the company and if the Bank was acting as an agent of the company, it would not have sold the gold to the company, but would have charged the commission for acting as an agent. No materials have been placed before us to show that the Bank was acting as an agent of the company. On facts, the Tribunal as well as the High Court took the view that the Bank had not misused the permission granted by the RBI for importing gold coins. We do not find any reason to interfere with those finding of facts. o 62. In such circumstances, we find no error in the view taken by the Tribunal as well as the High Court that the proceedings initiated against the Bank that it had violated Sections 6(4) and (5) of FERA was illegal. The appeal filed by the Union of India, so far as the Bank is concerned, stands dismissed.

63Copy pinpoint63. We notice trading in gold is not an activity covered under Notification dated 13.01.1998 and 20.01.1998; perhaps for that reason, fourth respondent also took some steps to establish its 100% subsidiary in India and an application to that effect was filed on 24.08.1998 to FIPB by the company but it was not pursued further, but sought to achieve the same as if RBI had granted automatic permission which cannot be sustained in the eye of law.

64Copy pinpoint64. The appeals are accordingly allowed as above and the order of the tribunal, affirmed by the High Court, is set aside and the Adjudicating Authority is free to proceed in accordance with law.

Kalpana K. Tripathy Appeals allowed. •