Karnataka High Court tells Xiaomi to approach competent authority over Bank account seizure by ED
ED allegedly claimed that the corporation breached section 4 of the FEMA by sending money outside the nation without authorization under the pretense of paying royalties, leading to the freezing of the Chinese mobile phone company's bank accounts.
The Karnataka High Court has ordered Xiaomi Technology India Private Limited to move before the competent authority responsible under the Foreign Exchange Management Act (FEMA) over its dispute with the Enforcement Directorate (ED) on the seizure of Rs 5,551, 27 crore in its bank accounts.
ED allegedly claimed that the corporation breached section 4 of the FEMA by sending money outside the nation without authorization under the pretense of paying royalties, leading to the freezing of the Chinese mobile phone company's bank accounts.
However, Xiaomi had approached the High Court against this seizure order.
A bench of Justice SG Pandit noted, "The authorised officer, after passing seizure order, is required to place the seizure order with entire/relevant material before the competent authority within a period of 30 days from the date of such seizure,
The Court further directed ED to issue a notice of hearing to the petitioner, hear the parties concerned and pass appropriate order either confirming or setting aside the seizure order within a period of 60 days from the date of making available a copy of this order.
Additionally, the bench has allowed interim protection to the company to use the money in its seized account.
The High Court also opined that "Interest of justice would be met, if the interim order is continued till orders are passed by the competent authority as stated above. The interim order passed by this court on May 5, 2022, and clarified on May 12, 2022, would enure to the benefit of the petitioner, till the competent authority passes order under sub-section (3) of Section 37-A of FEMA."
[Source: PTI]
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