Esplanade Court Acquits Diamond Firm and MD in 32-Year-Old Rs 17 Crore FERA Case
The Metropolitan Magistrate Court at Esplanade, Mumbai, has acquitted a diamond export firm and its Managing Director of all charges in a 32-year-old Foreign Exchange Regulation Act (FERA) violation case on June 27. The court cleared M/s Mahendra Vakharia and Co. and its Managing Director, Mahendra Vakharia, due to a lack of sufficient evidence.
The case originated from allegations dating back to July 1993. The Enforcement Directorate had registered three separate cases against the firm and Vakharia in April 1994.
According to the prosecution, the firm had exported shipments of polished diamonds worth a total of Rs 17 crore to overseas buyers. These consignments were declared under the cover of a Guaranteed Remittance (GR) Form in July 1993.
Under FERA regulations, the GR Form served as a mandatory statutory declaration that exporters had to submit before shipping physical goods out of India. This process was designed to ensure that the full export value of the goods was repatriated to India within a strict timeframe prescribed by the Reserve Bank of India (RBI).
The prosecution alleged that the firm failed to realize the export proceeds within six months of shipping the polished diamonds. Consequently, authorities issued a notice to the firm, demanding a response within seven days to clarify whether it had obtained the necessary permission from the RBI.
Because the firm allegedly failed to respond to the notice and did not realize the export value, FERA violation cases were registered against the firm and its Managing Director in April 1994.
After more than three decades of legal proceedings, the court ruled that the evidence presented was insufficient to prove the charges.
The court noted that the evidence was not sufficient to hold that the notice was received by the accused, or that they refrained from taking action to secure the receipt of the full export proceeds within the extended time allowed by the RBI despite receiving such a notice.
As a result of the insufficient evidence, the court acquitted Mahendra Vakharia and the firm of all charges, concluding the long-standing legal dispute.
