SHANTI PRASAD JAIN vs THE DIRECTOR OF ENFORCEMENT

The Supreme Court ruled that Section 4(1) of the Foreign Exchange Regulation Act, 1947 prohibits residents in India from lending foreign exchange without Reserve Bank permission. The Court upheld the Foreign Exchange Appellate Tribunal's finding that the appellant did not contravene Section 4(1) as there was no loan to the Deutsche Bank. Additionally, the Court found that the power of the Director under Section 23D to transfer cases to court does not violate Article 14 of the Constitution, affirming the constitutionality of the penalty provisions.