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PIA New Delhi office receives closure notice from Indian authorities

Updated January 18, 2015

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— Reuters/file
— Reuters/file

NEW DELHI: India's Directorate of Enforcement has issued a notice to Pakistan International Airlines (PIA) asking it to “dispose of” its properties in New Delhi calling their purchase as “unauthorised”, according to a report on The Hindu.

The notice sent to PIA said the properties in New Delhi were acquired in contravention of the Foreign Exchange Management Act and without prior permission from the Reserve Bank of India.

“We are at a loss to understand why they are acting now, and how we will operate without a marketing and sales offices,” PIA Manager in North India, Saeed Ahmad Khan, was quoted in the report.

He added that the airline had been operating at the New Delhi premises since the past nine years and the Reserve Bank of India had been duly informed at the time of purchase in 2005.

PIA spokesman Rana Hanif told Dawn that its staff in New Delhi would appear before Indian authorities on January 29 and present the record and documents pertaining to the purchase, which had been carried out in accordance with the law.

Commenting on the denial of visa extension to PIA staff, Hanif said that, "Given the relations between India and Pakistan, denial of visa extension is a routine issue faced by the airline's staff; the visas are normally extended via diplomatic means."

He added that the staff had been instructed to maintain contact with the Pakistan High Commission in New Delhi in this regard.

Nine years since RBI first wrote to the Finance Ministry, notifying it about the PIA acquisition, the Department of Economic Affairs (DEA) had informed RBI in June 2014 that “the proposal has been examined and rejection of the Government of India is hereby conveyed to the proposal of M/s Pakistan International Airlines for acquisition of immovable property at New Delhi, India”.

PIA had bought four flats in Kailash Building in Kasturba Gandhi Marg totaling 2,576 square feet in 2005 from the “surplus funds of Pakistan International Airlines, New Delhi”, according to the declaration the PIA submitted with the RBI in 2005. In the declaration, PIA had stated that the property was bought for its offices.

Directorate of Enforcement is a specialised financial investigation agency under the Department of Revenue, Ministry of Finance, Government of India, which enforces the following laws: -

Foreign Exchange Management Act,1999 (FEMA) - A Civil Law, with officers empowered to conduct investigations into suspected contraventions of the Foreign Exchange Laws and Regulations, adjudicate, contraventions, and impose penalties on those adjudged to have contravened the law.

Officials said FEMA laws stipulate that "no person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran, China, Nepal or Bhutan without prior permission of the RBI shall acquire or transfer immovable property in India other than lease, not exceeding five years."

PIA, they said, was allegedly found contravening the above mentioned clause and hence ED has issued summons to it for scrutiny of official documents and records after which the agency will decide the further course of action to be taken.