The agency, the Enforcement Directorate, had in July issued a so-called show cause notice to Flipkart, its founders and some investors asking them to explain why they should not face a penalty of $1.35 billion for alleged violation of foreign investment laws between 2009 and 2015, Reuters reported last month.Court records and media reports on Saturday showed Sachin Bansal has urged a state court in the southern state of Tamil Nadu to quash the agency’s notice, arguing that it was issued after an inordinate delay.

The judge in the case, R Mahadevan, heard the matter on Friday and asked the Enforcement Agency to file a response, reports said.Sachin Bansal, the Enforcement Directorate and Flipkart did not immediately respond to requests for comment. Flipkart has previously said it was “in compliance with Indian laws and regulations” and would cooperate with authorities.The Enforcement Directorate has been investigating e-commerce giants Flipkart and Amazon.com Inc for years for allegedly bypassing foreign investment laws that strictly regulate multi-brand retail and restrict such companies to operating a marketplace for sellers.Walmart took a majority stake in Flipkart for $16 billion in 2018, its biggest deal ever. Sachin Bansal sold his stake to Walmart at that time, while the other co-founder, Binny Bansal, retained a small stake.The case concerned an investigation into allegations that Flipkart attracted foreign investment and a related party, WS Retail, then sold goods to consumers on its shopping website, which was prohibited under the law, Reuters has reported.In February, a Reuters investigation based on Amazon documents showed it had given preferential treatment for years to a small group of sellers, publicly misrepresented ties with them and used them to bypass Indian law. Amazon says it gives no preferential treatment to any seller.