A penalty worth Rs 2 lakh levied on personal loan lender, Standard Chartered Bank by Enforcement Directorate has been set aside by the Delhi HC. The penalty was levied on charges of the bank taking deposit in NRI account via a person not an account holder 18 years ago.
When issuing the order, Justice S N Dhingra said that the law that prevents any person except the account holder to deposit money in NRI account was quite ambiguous when the event first took place in 1992-93.
The circular on this topic was introduced in the year 1995.
The court stated, “I consider that the Show Cause Notice and the consequent adjudication proceedings were not tenable and the liability of the bank to insist that only NRI should appear in person to make the deposits was not clear. This liability was clarified to the bank only in 1995 i.e. after impugned transaction”.
The court’s decision was given after the bank had filed an appeal against the Directorate’s decision.