Karnataka HC directs Google India, executives to furnish 50% of FEMA penalties as bank guarantee
Bengaluru (PTI): The Karnataka High Court has directed Google India and three of its senior executives to deposit 50 per cent of the penalties imposed, for alleged Foreign Exchange Management Act (FEMA) violations, as bank guarantees.
The Enforcement Directorate (ED) had earlier levied a penalty of Rs 5 crore on Google India, along with a combined penalty of Rs 45 lakh on the three officials.
The case pertains to alleged violations of section 6(3)(d) of FEMA, involving transactions worth Rs 364 crore.
According to the ED, the violations relate to payments made by Google India to Google Ireland as distributor fees and for the acquisition of equipment from Google US.
The agency contended that Rs 363 crore, payable to Google Ireland, remained unpaid for over four years until May 2014, while payment for Rs 1 crore worth equipment sourced from Google US remained unsettled for more than seven years until January 2014.
The ED classified these as commercial loans, which would require prior approval from the Reserve Bank of India (RBI).
Google India, however, contested these allegations, asserting that the transactions in question were not foreign exchange borrowings.
The company emphasized that there were no loan agreements, deferred payments, or interest involved, and claimed adherence to an RBI circular issued on July 1, 2014.
Earlier, on January 11, 2019, the Appellate Tribunal for FEMA in Delhi had granted a stay on the penalties, citing that Google India's appeal appeared to have merit. The ED subsequently filed second appeals challenging the stay.
A division bench comprising Justices V Kameshwar Rao and S Rachaiah observed that the tribunal's stay was based only on a preliminary view.
They have now instructed Google India and the concerned officials to provide bank guarantees for half the total penalties within two weeks.
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High Court halts mandatory installation of smart meters by BESCOM
Bengaluru: The Karnataka High Court passed an interim order on Friday staying the mandatory installation of smart meters for electricity supply connection by the Bengaluru Electricity Supply Company (BESCOM) and the state government.
The petition was filed by M Jayalakshmi, a resident of Doddaballapur town in Bengaluru Rural district, challenging the BESCOM communication to her asking for a payment of Rs 8,800 for the installation of the smart meter. She had said that, on March 29, she had submitted a requisition to convert the single-phase meter connection for her house located at TB Natayanappa Layout to a three-phase meter connection.
Jayalakshmi’s advocate, Prabhuling Navadgi, argued that, although the Karnataka Electricity Regulatory Commission (KERC) has said that smart meters are optional, except for temporary connections, BESCOM has made it mandatory.
The installation charges, which were earlier Rs 2,000 in Karnataka, now cost Rs 8,510, proving to be a huge burden on the consumers. Also, the charges for the new meters are only Rs 900 in the neighbouring states, Navadgi pointed out. He opined that, the entire process being outsources to private agencies, making the installation of smart meters mandatory would be harsh on the consumers.
Justice M Nagaprasanna, who heard the case, questioned the respondents and also asked if the problem was an outcome of the freebies by the government.
"Advocates say that in Andhra Pradesh, Maharashtra, Uttar Pradesh, and Chhattisgarh, it costs Rs 900. Where will poor people go? Who asked for free electricity? This is what you should reduce. You have outsourced the thing. Now if you say all permanent connections must have smart meters, where will the poor go?" the judge said.
The case has been adjourned till June 4.
