Won't Insist On Physical Appearance Of Amazon Officials : Enforcement Directorate Tells Delhi High Court

The Delhi High Court on Wednesday adjourned to January 12 the hearing in the plea filed by Amazon Wholesale India Pvt. Ltd. challenging the jurisdiction of the Directorate of Enforcement to investigate the matters beyond the scope of powers prescribed under the Foreign Exchange Management Act (FEMA).

Justice Rekha Palli deferred the hearing after taking note of the fact that Senior Advocate Siddharth Luthra appearing for Amazon Wholesale India Pvt. Ltd. sought to rely upon certain judgments, copies of which were circulated early in the morning today.

An oral assurance was given by Additional Solicitor General SV Raju, appearing for ED, that in view of the rising Covid 19 cases it will not insist on physical appearance and will not call anyone to Delhi till the next date of hearing.

"Hold your hands in not calling them", the Court told the ED.

During the course of the hearing, Luthra, while referring to scope of ED's jurisdiction under FEMA, made two-fold submissions. One, that the ED will not insist on appearance and two, it ought not to seek legal opinions and legal advise.

The hearing was however adjourned.

Calling it a fishing and roving investigation, Amazon Wholesale India Private Limited has claimed that ED had issued various summons to its employees for a transaction which is completely unconnected. 

It has also been stated that the ED had sought, some of them, the legal advice and privileged legal opinions that have been received from time to time by Indian subsidiaries of Amazon.com, Inc in India.

Referring to the dispute between Amazon NV and Future Group, the plea states that a Directive was received by Amazon India from the ED seeking information pertaining to the Arbitration, and matters which were already being investigated by the Bangalore Regional Office of ED.

It was the case of the petitioner that 10 out of the 16 documents sought in the directive pertained to the transaction with the Future Group and Amazon NV and not Amazon India and Amazon Seller Services Private Limited.

Accordingly, it was submitted that the said directive was addressed to and received by Amazon India, who had nothing to do, directly or indirectly, with the Future Group or Amazon NV's investment in the Future Group.

"As stated in the summons, while the investigation relates only to the the "Future Group", the ED is seeking data regarding legal fees spent in the past 10 years from a number of entities not connected with the Future transaction. In this regard, it may be noted that the Future Group transaction with Amazon NV only took place in 2019. These questions raised along with other documents sought by ED point towards a fishing and roving enquiry," the plea reads.

Accordingly, the plea prays for cancellation of the Directive dated 19 February 2021 and all other proceedings commenced by ED in the matter.

It also prayed for directions on ED to not conduct a fishing and roving enquiry in matters covered by legal privilege and seek for information falling outside the purview of FEMA.

Case Title: Amazon Wholesale (India) Pvt. Ltd. and Anr. v. The Directorate of Enforcement, Through Director of Enforcement and Ors.