BENGALURU: The Karnataka High Court on Wednesday issued notice to the Union Government on an appeal filed by Xiaomi Technology India Private Limited against the dismissal of its petition by a single judge. The petition was filed against the seizure of Rs 5,551.27 crore by the Enforcement Directorate (ED).
A division bench of Chief Justice Prasanna B Varale and Justice MGS Kamal issued the notice after hearing the appeal against the single judge’s order passed on April 21, 2023. Ruling that there was little scope under Section 37A of the Foreign Exchange Management Act (FEMA), 1999, to strike it down, the single judge granted liberty to Xiaomi Technology India Private Limited to approach the Appellate Tribunal with an appeal for remedy under Section 37A(5) of the Act.
The order was passed while rejecting the petition filed by Xiaomi, a company that is incorporated in India, though it is a subsidiary of a company in China, and all transactions have happened in India. Under Section 37A of the Act, an adjudicating officer passed an order on April 29, 2022, to seize the money and the same was confirmed on September 19, 2022, by the competent authority under the Act.
While raising a challenge to the seizure order and the confirmation order, Xiaomi also challenged the constitutional validity of Section 37A of the Act before the single judge.