Xiaomi approaches Karnataka HC again over seizure of assets
Bengaluru(PTI): Chinese consumer electronics company Xiaomi Technology India Private Limited has once again approached the Karnataka High Court.
In a petition filed on October 3, the company challenged the September 29, 2022 order of the Foreign Exchange Management Act (FEMA) Competent Authority which confirmed the April 29 seizure order of the Enforcement Directorate (ED).
The ED had earlier this year ordered the seizure of Rs 5,551.27 crore in the accounts of Xiaomi for allegedly violating FEMA rules and transferring money in the guise of royalty to three companies outside India.
The company had approached the HC earlier this year against this order. The HC had, however, ordered it to approach the Competent Authority under FEMA.
On Thursday, the vacation bench of Justice N S Sanjay Gowda heard the petition by Xiaomi. Xiaomi sought an interim order but had not produced the Competent Authority's order copy. It sought for dispensation of the same.
The HC however ordered, "Request made for dispensation of production of certified copies of impugned seizure order is granted subject to production of the certified copies within a period of four weeks."
Notices for the respondents, Ministry of Finance, and Directorate of Enforcement were ordered to be issued.
Additional Solicitor General M B Nargund and advocate Madhukar Deshpande pointed out to the HC that the company had to approach the Appellate Authority against the Competent Authority order, rather than approach the HC.
In the new petition, Xiaomi has challenged the Competent Authority's order on grounds that a representative of a foreign bank was not allowed to be examined during the hearing. The company's advocate argued that since the petition has also challenged the validity of Section 37A of FEMA which relates to assets held outside India by a company, the petition was maintainable.
On the other hand, Deshpande submitted that the company had already withdrawn most of the money that was seized. The HC had in the petition filed earlier this year allowed the company to use the money for its day-to-day activities but forbade it to use it to make payment of royalties.
The advocate pointed out that there was only Rs 1,900 crore in the accounts from the earlier Rs 5,551.27 crore.
The court orally observed that an interim order in favor of the company cannot be granted unless it provides a bank guarantee for the entire amount that was originally ordered to be seized by the ED.
The hearing of the case was adjourned to October 14.
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Karnataka: SP’s gunman among two arrested for extorting money from rice smuggler
Ballari (Karnataka) (PTI): An armed police constable serving as the district superintendent of police’s personal gunman, along with his accomplice, was arrested for allegedly extorting money from a rice smuggler, police said on Friday.
Devaraj, who had been serving as the SP’s gunman for the past four and a half years, was identified as the mastermind behind the incident.
Following an investigation, Devaraj and his accomplice Sairam were arrested on May 6, while efforts are underway to nab a third accused, Gadilinga, a practising advocate in Ballari, who is absconding, police said.
The matter came to light after a complaint was filed by Sharabappa, a habitual offender allegedly involved in illegal rice transport, they added.
According to police, the incident occurred on the intervening night of April 27 and 28, when a group of masked men intercepted Sharabappa’s rice-laden vehicles near the Moka forest area.
The accused allegedly introduced themselves as members of an “SP squad”, threatened to seize the vehicles and file criminal cases, and demanded money to avoid legal action.
Police said the accused initially demanded Rs 5 lakh and later extorted around Rs 3 lakh from the complainant.
Investigation revealed that Devaraj was the main person involved in demanding and collecting the money, while Sairam and Gadilinga were also involved in the offence. Sairam was allegedly involved in similar activities earlier as well.
Devaraj and Sairam were arrested under Sections 308(2) (extortion) and 3(5) (common intention) of the Bharatiya Nyaya Sanhita.
Police also seized the extorted cash, the four-wheeler, and mobile phones allegedly used in the crime. Efforts are underway to trace Gadilinga.
Addressing a press conference, Ballari Superintendent of Police Suman D Pennekar described the incident as a serious offence that has tarnished the image of the police department.
"There is no official ‘SP squad’ or ‘DSP squad’ operating in the district. Such labels are often misused by impostors or corrupt individuals to commit extortion," the SP clarified.
She said no involvement of other police officers has been found so far.
Departmental proceedings have been initiated against Devaraj, and suspension proceedings are underway. The SP added that strict action will be taken against anyone involved in such offences.
Police said Sharabappa, the complainant, is a known habitual offender involved in illegal rice smuggling, and several cases have already been registered against him in the Moka and Peddihalli areas. A separate case has also been registered against him in connection with rice smuggling on the night of the incident.
Authorities are also exploring the possibility of initiating externment proceedings against him under applicable legal provisions.
The SP urged the public to report any extortion attempts by persons claiming to be part of an “SP squad”, assuring that the identity of informants will be kept confidential.
