Case Note & Summary
The Supreme Court allowed the appeal filed by the Union of India against the judgment of the Bombay High Court. The controversy centered on the proper appellate forum for appeals against an adjudication order passed under Section 51 of the Foreign Exchange Regulation Act, 1973 (FERA) after its repeal on 01.06.2000. The proceedings were initiated prior to repeal, but the adjudication order was passed on 05.12.2003 under FERA read with the Foreign Exchange Management Act, 1999 (FEMA). The respondents, M/s Godrej Industries Ltd. and its directors, had been penalized for contravening Sections 9(1)(a), 9(1)(c), and 16(1) of FERA. They appealed to the Special Director (Appeals) under Section 17 of FEMA, but the Special Director dismissed the appeals as not maintainable, holding that he lacked jurisdiction. The respondents then filed writ petitions in the Bombay High Court, which quashed the Special Director's orders and held that the appeals were maintainable before the Special Director (Appeals). The Union of India appealed to the Supreme Court. The Supreme Court examined the relevant provisions of FERA and FEMA, particularly Sections 50, 51, 52, 54, and 81 of FERA, and Sections 17, 18, 19, and 49 of FEMA. The Court noted that under FERA, appeals against adjudication orders lay to the Foreign Exchange Regulation Appellate Board under Section 52, and further appeals to the High Court under Section 54. After repeal, FEMA established a new appellate structure: Section 17 provides for appeals to the Special Director (Appeals) against orders of Adjudicating Authorities under FEMA, while Section 19 provides for appeals to the Appellate Tribunal against orders of Adjudicating Officers under FERA read with FEMA. The saving clause in Section 49 of FEMA saves only actions taken under FERA but does not preserve the appellate forum under FERA for orders passed after repeal. The Court held that since the adjudication order was passed after the repeal, the appeal must be filed before the Appellate Tribunal under Section 19 of FEMA, not before the Special Director (Appeals) under Section 17. The Supreme Court set aside the High Court's order and dismissed the respondents' writ petitions, restoring the Special Director's orders of dismissal.
Headnote
A) Foreign Exchange Law - Repeal and Saving - Appellate Jurisdiction - Sections 17, 19, 49 of FEMA, 1999; Sections 50, 51, 52, 81 of FERA, 1973 - The issue was whether an appeal against an adjudication order passed under Section 51 of FERA after its repeal lies before the Special Director (Appeals) under Section 17 of FEMA or before the Appellate Tribunal under Section 19 of FEMA - The Supreme Court held that the appeal lies only before the Appellate Tribunal under Section 19 of FEMA, as the saving clause in Section 49 of FEMA does not preserve the appellate forum under FERA for orders passed after repeal - The High Court's order allowing appeals before the Special Director (Appeals) was set aside (Paras 15-24). B) Foreign Exchange Law - Transitional Provisions - Section 49 of FEMA, 1999 - Section 49(3) of FEMA saves only 'anything done or any action taken' under FERA, but does not extend to preserving the appellate forum under FERA for orders passed after repeal - The adjudication order dated 05.12.2003 was passed after repeal, so the appeal must be under FEMA's provisions (Paras 19-22). C) Foreign Exchange Law - Appellate Forum - Section 17 vs. Section 19 of FEMA, 1999 - Section 17 of FEMA provides for appeal to Special Director (Appeals) only against orders of Adjudicating Authority under FEMA, not against orders under FERA - Section 19 of FEMA provides for appeal to Appellate Tribunal against orders of Adjudicating Officer under FERA read with FEMA - The Supreme Court clarified that the appellate forum under FEMA is determined by the date of the order, not the date of initiation of proceedings (Paras 23-24).
Issue of Consideration
Whether an appeal against an adjudication order passed under Section 51 of FERA after its repeal on 01.06.2000 lies before the Special Director (Appeals) under Section 17 of FEMA or before the Appellate Tribunal under Section 19 of FEMA.
Final Decision
The Supreme Court allowed the appeal, set aside the impugned order of the High Court, and dismissed the writ petitions filed by the respondents. The Court held that the appeals against the adjudication order dated 05.12.2003 lie only before the Appellate Tribunal under Section 19 of FEMA, not before the Special Director (Appeals) under Section 17 of FEMA.
Law Points
- Interpretation of saving clause
- Repeal and saving provisions
- Transitional provisions under FERA and FEMA
- Appellate jurisdiction after repeal
