Delhi High Court Disposes of Petition Seeking Purpose Code for Academic Awards After RBI's Intervention

Delhi High Court Disposes of Petition Seeking Purpose Code for Academic Awards After RBI's Intervention

Introduction

The Delhi High Court has disposed of a writ petition filed by Karuna Krishan Thareja, seeking a direction to the Reserve Bank of India (RBI) to notify a specific purpose code for inward foreign remittances pertaining to academic prize money and educational awards from foreign institutions. The court's decision came after the RBI allotted a purpose code, rendering the petitioner's relief moot.

Factual Background

The petitioner, an advocate, had been awarded an academic monetary prize by the University of London. However, remittance of the same was prevented due to the absence of a specific purpose code for such remittance. The petitioner was required to comply with the Foreign Exchange Management Act (FEMA) regulations, which mandate the use of purpose codes for foreign inward remittances.

Procedural Background

The petitioner filed a writ petition before the Delhi High Court, seeking judicial direction to the RBI to notify a dedicated purpose code for inward remittances pertaining to academic prize money or educational awards. The petition was filed under Article 226 of the Constitution of India, which empowers the high courts to issue writs for the enforcement of fundamental rights and other legal rights.

Contentions of the Parties

Petitioner’s Contentions: The petitioner contended that the absence of a specific purpose code for academic prize money or educational awards was causing hardship and preventing the remittance of the prize money. The petitioner argued that the RBI's failure to provide a specific purpose code was arbitrary and unreasonable, and that it was necessary to create a separate code to facilitate such remittances.

Respondent's Contentions: The respondents, including the RBI and the Union of India, did not contest the petitioner's contentions. Instead, the RBI took steps to address the issue by allotting a purpose code, which is 1099, after the petition was filed.

Relief Sought

The petitioner sought the following reliefs:

• Issue a writ of mandamus directing the RBI to examine and notify a dedicated purpose code for inward remittances pertaining to academic prize money or educational awards.
• Direct the RBI to initiate regulatory amendments addressing the classification of such inward remittances.
• Direct the respondents to treat all such remittances uniformly across all banks and financial institutions in the country.

Developments After Filing the Petition

After filing the petition, the petitioner received the appropriate purpose code, which is 1099. The petitioner's counsel submitted that the relief sought in the present petition has been satisfied, and that the petitioner was able to receive the remittance.

Court's Decision

The bench of Hon’ble Mr. Justice Vikas Mahajan disposed of the petition as satisfied, noting that the relief sought had been fully satisfied. The court observed that the RBI's allotment of the purpose code had addressed the petitioner's grievance, and that no further directions were necessary. The petition was disposed of on 31st July, 2025.

Implications

The allotment of Purpose Code 1099 has enabled the petitioner to receive the remittance. However, there is still no formal code specifically titled for Academic Awards, and the petitioner has expressed hope that a codified classification will be created in the future to prevent similar hardships for Indian scholars. The court's decision highlights the importance of regulatory flexibility and the need for authorities to respond to emerging issues in a timely manner.

In this case the petitioner was represented by Mr. Shishir Prakash, Ms. Karuna Krishan Taneja, Mr. Shyam Kumar and Ms. Niharika Mathur, Advocates. Meanwhile Respondent 1 was represented by Ms. Tanya Chowdhary, Advocate. Respondent 2 was represented by Mr. Vikrant N. Goyal with Mr. Sumit Goswami and Mr. Arun Kumar Yadav and Respondent 3 was represented by Mr. Rachit Bigghe, Advocates.