Karnataka High Court
M/S Canadian International School ... vs Directorate Of Enforcement on 10 February, 2026
Author: M.G.S. Kamal
Bench: M.G.S. Kamal
-1-
NC: 2026:KHC:8176
WP No. 47051 of 2018
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF FEBRUARY, 2026
BEFORE
THE HON'BLE MR. JUSTICE M.G.S. KAMAL
WRIT PETITION NO. 47051 OF 2018 (GM-FE)
BETWEEN:
1. M/S. CANADIAN INTERNATIONAL
SCHOOL PRIVATE LIMITED,
NO.4 & 20, MANCHENAHALLI
YELAHANKA, BENGALURU - 560 064
REPRESENTED BY ITS DIRECTOR
SMT. SHWETA SASTRI.
2. MR. RAMANI SASTRI
S/O LATE SRI. SUBRAMANIAM SASTRI
AGED ABOUT 61 YEARS,
NO.701, STERLING ORCHARDS
RMV EXTENSION,BANGALORE - 560 080.
...PETITIONERS
(BY SRI. UDAY HOLLA, SR. COUNSEL FOR
SRI. VIVEK HOLLA, ADVOCATE)
Digitally
signed by AND:
SUMA B N
Location:
HIGH COURT 1. DIRECTORATE OF ENFORCEMENT
OF
KARNATAKA MINISTRY OF FINANCE, DEPARTMENT OF
REVENUE, BENGALURU ZONAL OFFICE
3RD FLOOR, B BLOCK, BMTC BUILDING,
SHANTHINAGAR, K.H. ROAD,
BENGALURU - 560 027.
2. DEPUTY DIRECTOR
ADJUDICATING AUTHORITY
OFFICE OF JOINT DIRECTOR,
DIRECTORATE OF ENFORCEMENT,
BENGALURU ZONAL OFFICE, 3RD FLOOR,
B-BLOCK, BMTC, SHANTHINAGAR
-2-
NC: 2026:KHC:8176
WP No. 47051 of 2018
HC-KAR
TTMC, K H ROAD, BENGALURU - 560 027.
3. ASSISTANT DIRECTOR
DIRECTORATE OF ENFORCEMENT
MINISTRY OF FINANCE
DEPARTRMENT OF REVENUE,
BENGALURU ZONAL OFFICE
3RD FLOOR, B BLOCK,
BMTC BUILDING, SHATINAGAR,
K.H. ROAD, BENGALURU - 560 027.
...RESPONDENTS
(BY SRI. H. JAYAKARA SHETTY, ADVOCATE FOR R1 TO R3)
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO-QUASH THE
ORDER DATED 04.09.2018 PASSED BY THE DEPUTY DIRECTOR,
ADJUDICATING AUTHORITY, DIRECTORATE OF ENFORCEMENT,
BENGLAURU ZONAL OFFICE, THE R-2 HEREIN (ANNEXURE-P)
AND ETC.,
THIS PETITION, COMING ON FOR FURTHER HEARING,
THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE M.G.S. KAMAL
ORAL ORDER
Petitioners are before this Court being aggrieved by the order dated 04.09.2018 passed by the Deputy Director Adjudicating Authority, Director of Enforcement, Bengaluru Zonal Office, produced at Annexure-'P' in terms of which, it has been held that in the investigation conducted by the -3- NC: 2026:KHC:8176 WP No. 47051 of 2018 HC-KAR Department of Secondary and Higher Education and Department of Industrial Policy and Promotion, it is found that M/s. Canadian School of India Private Limited, has admitted Indian students in violation of clause (5 )of the FC (Foreign Collaboration) Approval dated 12.09.1996 and the said violation has been reported to Reserve Bank of India for necessary action. It has further directed the school not to admit Indian students excluding NRIs in future. The operative portion of the order alleging violation of FEMA further reads as under:
"On the basis of above mentioned discussion of the facts and findings, I am of the considered view that the alleged contravention against which the subject proceeding was initiated under FEMA against the said six Noticees has been established in the manner and to the extent as discussed in para supra. Hence, in exercise of the powers conferred on me under section 16 of FEMA read with the Rule 4 of Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000,
i) I impose a penalty of Rs.8,00,000/- (Rupees eight lakhs) on M/s. Canadian School of India Pvt Ltd.
(Notice No.1); for contravention of provisions of Section 8 of FEMA, 1999 read with provisions of Section 3(b) of Foreign Exchange Management (Realization, Repatriation & Surrender of Foreign Exchange) Regulations, 2000 to the extent of Rs.1,84,03,862/- & Para 2 of Schedule under Regulation 4 of Foreign Exchange Management -4- NC: 2026:KHC:8176 WP No. 47051 of 2018 HC-KAR (Foreign Currency Account by a person resident in India) Regulations, 2000 to the extent of USD 56,219;
ii) I also impose a penalty of Rs.7,00,000/- each (Rupees seven lakhs each) on Noticee No.2, Sh Bernard Goodman; Notice 3 Sh Janothan Goodman, Noticee 4 Ms. Catherine Timothy & Noticee 5 Sh Ramani Sastri for contravention of provisions of Section 8 of FEMA, 1999 read with provisions of Section 3(b) of Foreign Exchange Management (Realization, Repatriation & Surrender of Foreign Exchange) Regulations, 2000 to the extent of Rs.1,84,03,862/- & para 2 of Schedule under Regulation 4 of Foreign Exchange Management (Foreign Currency Account by a person resident in India) Regulations, 2000 to the extent of USD 56,219;
iii) I also impose penalty to the tune of Rs.1,50,000/- (Rupees one lakh and fifty thousand only) on Noticee 6 M/s. standard Chartered Bank for contravention of provisions of Regulation 4 of Foreign Exchange Management (Foreign Currency Account by a person resident in India) Regulations 2000 read with Section 10(4) and 10(5) of FEMA, 1999 to the extent of USD 56,219.
iv) Aforesaid penalty amount aggregating to Rs.37,50,000/- (Rupees Thirty seven lakhs fifty thousand only) should be deposited in the office of the Directorate of Enforcement, Bangalore by means of a demand draft drawn in favour of "The Drawing and Disbursing officer, payable at Bangalore" within 45 days from the date of receipt of this order."
2. Since the petitioners claimed that they have nothing to do with the affairs of M/s. Canadian School of India Private Limited, after hearing the learned senior -5- NC: 2026:KHC:8176 WP No. 47051 of 2018 HC-KAR counsel, this Court by order dated 06.01.2026 had directed as under:
"The petitioners are called upon to file an affidavit to the aforesaid effect, namely that M/s. Canadian International School Pvt. Ltd., (petitioner No.1) is different and distinct M/s. Canadian School of India Pvt. Ltd., and that petitioners herein have no concern or connection of any nature whatsoever with regard to the affairs and/or assets of M/s. Canadian School of India Pvt. Ltd. Such affidavit shall be filed by the next date of hearing."
3. In furtherance to the same, affidavits of one Swetha Shastri as well as Ramani Shastri, who are the Directors of the first petitioner company namely Canadian International School Private Limited has been filed. The said affidavits read as under:
AFFIDAVITS I Swetha Sastri, wife of Sri. Kiran John, aged about 43 years, Director, M/s. Canadian International School Private Limited No.4 & 20, Manchenahalli, Yelahanka, Bengaluru-560 064, do hereby solemnly affirm and state as follows:
1. I am the Director of the first petitioner herein and I know the facts of the case. In terms of the order dated 06.01.2026 passed by this Hon'ble Court, I am filing the present affidavit.
The memorandum of writ petition may kindly be read as part and parcel of the present affidavit. -6-
NC: 2026:KHC:8176 WP No. 47051 of 2018 HC-KAR
2. Canadian International School Pvt. Ltd., the first petitioner herein ('Indian Company' for short) is a private limited company incorporated under the provisions of the Companies Act, 1956. The first petitioner is completely different and distinct from the other entity namely Canadian School of India Private Limited ('Canadian Company' for short). The first petitioner has no connection whatsoever with the said Canadian Company and the assets and affairs of the petitioner Indian company are completely different and it has nothing to do with the Canadian Company.
I Ramani Sastri, Son of late Sri. Subramaniam Sastri, aged about 69 years, residing at No.701, Sterling Orchards, RMV Extension, Bangalore-560 080, do hereby solemnly affirm and state on oath as follows:
1. I am the second petitioner herein and I know the facts of the case. In terms of the order dated 06.01.2026 passed by the memorandum of writ petition may kindly be read as part and parcel of the present affidavit.
2. Canadian International School Pvt. Ltd., the first petitioner herein ('Indian Company' for short) is a private limited company incorporated under the provisions of the Companies Act, 1956. The first petitioner is completely different and distinct from the other entity namely Canadian School of India Private Limited ('Canadian Company' for short). The first petitioner has no connection whatsoever with the said Canadian company and the assets and affairs of the first petitioner Indian Company are completely different and it has nothing to do with the Canadian Company.-7-
NC: 2026:KHC:8176 WP No. 47051 of 2018 HC-KAR
3. I was never a director or an employee or an officer of the Canadian Company namely Canadian School of India Private Limited and I was never incharge or was involved in the affairs or decision making of the said company, in any manner. I have no connection or concern of any nature whatsoever with regard to the affairs and/or assets of the Canadian Company."
4. Obviously, the aforesaid two Directors of the first petitioner company have on oath deposed that neither the first petitioner company nor they as its Director have any connection whatsoever either with the affairs on the assets of the Canadian School of India Private Limited.
5. In response to the said affidavits, the counsel for the respondent's authorities today filed a counter affidavit which reads as under:
"1. Durgesh Singh, S/o. Kailash Singh, aged about 37 years, currently working as Assistant Director. Directorate of Enforcement having office at CNC Building. HMT Machine Tools Limited Compound, Bangalore Complex, Jalahalli, Bengaluru-560013, most respectfully submit as under:
1 That I am working as Assistant Director in the office of respondents no. 1 to 3 and I have been authorised by respondents no.1 to 3 to swear to the contents of this affidavit and that I am well conversant with the facts and -8- NC: 2026:KHC:8176 WP No. 47051 of 2018 HC-KAR circumstances of the case on the basis of the records maintained by the Respondents Department.
2. That in the above case, the Petitioners have sought for quashing of the order Annexure-P dated 04.09.2018 made in No. DD/BGZO/03/2018-DD-AB passed by the 2nd respondent.
3 It is submitted that on 19.01.2026, Ms. Shweta Sastri, Director, M/s Canadian International School Private Limited has filed her affidavit in the above case and stated in para 2 of her affidavit that the 1st petitioner is private limited company incorporated under the provisions of the Companies Act, 1956 and the 1st petitioner is completely different and distinct from the other entity namely Canadian School of India Pvt. Ltd (Canadian Company) and that 1st petitioner has no connection whatsoever with the said Canadian Company and assets and affairs of the first petitioner Indian company are completely different and it has nothing to do with the Canadian Company which statements made by her in para 2 of her affidavit are totally incorrect, false and baseless because it is humbly submitted that the name of M/s Canadian School of India Limited was subsequently changed to M/s Canadian International School and that the letter dated 03.12.2004 issued by the Ministry of Education Field Services Branch Toranto confirm the same and the copy of the said letter is attached herewith as ANNEXURE-R1 That on 19.01.2026, Shri Ramani Sastri, Managing Director of the 1st petitioner, namely M/s Canadian International School Private Limited has also filed his affidavit in para 2 of his affidavit that the 1st petitioner is private -9- NC: 2026:KHC:8176 WP No. 47051 of 2018 HC-KAR limited company incorporated under the provisions of the Companies Act, 1956 and the 1st petitioner is completely different and distinct from the other entity namely Canadian School of India Pvt. Ltd (Canadian Company) and that 1st petitioner has no connection whatsoever with the said Canadian Company and assets and affairs of the first petitioner Indian company are completely different and it has nothing to do with the Canadian Company which statements made by him in para 2 of his affidavit are totally incorrect, false and baseless because it is humbly submitted that the name of M/s Canadian School of India Private Limited was subsequently changed to M/s Canadian International School and that the ibid letter dated 03.12.2004 (attached as ANNEXURE-R1) issued by the Ministry of Education Field Services Branch Toranto confirms the same.
5. That Shri Ramani Sastri at the time of filing the above petition in para 1 of the petition clearly stated that he is also Managing Director of the 1st petitioner but in the present affidavit he has not stated about the same deliberately. Further, it is submitted that even as per letter dated 05-12-2001 signed by Chairman of Delta Systems Ltd., Shri Ramani Sastri was authorised to act as the representative of school namely M/s. Canadian School of India Pvt. Ltd. and the said letter dated 05-12-2001 is attached herewith as ANNEXURE-R2. In this regard, it is submitted that since the name of the earlier Canadian School of India Private Limited was changed to present M/s. Canadian International School Private Limited, now it is not open either for Ms. Sweta Sastri or for Shri Ramani Sastri to contend that Canadian International School Private Limited has nothing to do with
- 10 -
NC: 2026:KHC:8176 WP No. 47051 of 2018 HC-KAR Canadian School India Private Limited. It is submitted that only name of the school has been changed and the Director Ms. Swetha Sastri and Managing Director, Shri Ramani Sastri cannot disown the liability and responsibility of the earlier School namely Canadian School of India Private Limited and hence there is no truth or substance in the statements made by both Ms. Sweta Sastri and Shri Ramani Sastri in their affidavits and that in view of the above facts and circumstances, it is submitted that petitioners are trying to mislead this Hon'ble Court to escape the clutches of law.
Therefore, it is prayed that this Hon'ble Court may be pleased to reject the statements made by Ms. Swetha Sastri and Shri Ramani Sastri in their affidavits and kindly dismiss the petition, in the interest of justice."
6. Thus, referring to the contents of the affidavits and the document more particularly Annexure-R1 the learned counsel for the respondents-authorities insists the stand taken by the petitioners of they not having any connection whatsoever with the Canadian School India Ltd., cannot be accepted as there was a change of name which has been suppressed. The contents of Annexure-R1 and R2 now produced reads as under:
"This letter is in response to your e-mail message sent to me on December 3, 2004 and confirms
- 11 -
NC: 2026:KHC:8176 WP No. 47051 of 2018 HC-KAR that the Ministry of Education has changed its records. The school formerly known as Canadian School of India will be changed to the Canadian International School. The Ministry of Education's identification for the school is 879169.
The principal of the Canadian International School is authorized to grant credits towards the Ontario Secondary School Diploma.
I wish the school continued success. Resolved that pursuant to Section 187 of the Companies Act, 1956 and in suppression of all the previous resolutions in that behalf of in connection therewith, Mr. Ramini Sastri son of Sri. K N S Sastri, Major residing at No.32, Sankey Court, Sadashivanagar, Bangalore be and is hereby authorized to act as the representative of this Company at any meeting of the members or at any meeting of any class of members of M/s. Canadian School of India Pvt., Ltd., in which our company holds. Thirty Three Lakh Seventy Five Thousand equity shares representing 90% of the issued, subscribed and paid up capital of the said company and that a certified copy of this resolution signed by the chairman be lodged with M/s. Canadian School of India Pvt., Ltd."
7. In response, learned Senior counsel appearing for the petitioners draws attention of this Court to Annexure-A and A1 more particularly to the date of incorporation of Canadian International School Private Limited which is '02/07/2003', shown to be 'Active' even as on 31.03.2017. He thereafter compares the same with the contents of Annexure A1 wherein the date of
- 12 -
NC: 2026:KHC:8176 WP No. 47051 of 2018 HC-KAR incorporation of Canadian School of India Private Limited is shown as '22.03.1996' and the status of company is shown as 'Strike off' as on 31.03.2006. He therefore, submitted that there is no logic or reason in the respondents taking the stand of both the companies being one and the same and that only there is a name change, when the said two Companies are different and distinct.
8. Heard and perused the records.
9. The whole premise on which the impugned order appears to have been passed is that the name of the "Canadian School of India Private Limited" has been changed to "Canadian International School Private Limited", and the persons at the helms of affair of both the companies were one and the same, who had allegedly violated the conditions of admission of the Foreign students and the Indian students.
10. In the light of the affidavit filed by the Directors of first petitioner as extracted above and in the light of the
- 13 -
NC: 2026:KHC:8176 WP No. 47051 of 2018 HC-KAR contents of Annexure-A and A1 noted hereunder, this Court is of the considered view that the two entities appears to be different and distinct. The petitioners have made out a case for interference. Respondent-authorities have not been able to place specific material showing involvement of petitioners. Having said so, respondent- authorities are at liberty to proceed against "Canadian School of India Private Limited" and its Directors in accordance with law. Accordingly, the following:
ORDER a. Writ petition is partly allowed.
b. The impugned order to the extent implicating the petitioner No.1 and its Directors is quashed.
c. Respondent authorities are in any case, at liberty to proceed against the Canadian School of India Private Limited and its Directors, if they have violated any provisions of law.
d. It is also made clear that if in the inquiry any credible material is found against the Directors of petitioners
- 14 -
NC: 2026:KHC:8176 WP No. 47051 of 2018 HC-KAR herein, they shall be given an opportunity of being heard and proceed thereafter, in accordance with law.
Sd/-
(M.G.S. KAMAL) JUDGE SSD List No.: 1 Sl No.: 14