April 3, 2012
Civil Application No. 140 of 2010 in Ferast No. 22067 of 2010 D Y Chandrachud, J. & M S Sanklecha, J. Decided on 07-02-2012 Section 52 of the Foreign Exchange Regulation Act, 1973 (FERA) read with Sections 19 of the Foreign Exchange Management Act, 1999(FEMA) - Appeal to High court from the order of the Tribunal - delay of 570 days - whether delay condonable - Held, No. Brief facts In the present case, a show cause notice was issued to the Respondent for violating the provisions of the FERA on 27 July, 2001. By an order dated 30th October, 2003, the Special Director in the Directorate of Enforcement, Mumbai, adjudicated upon the notice to show cause and did not impose any penalty upon the Respondent. A revision was filed by the Union of India to the Appellate Tribunal for Foreign Exchange constituted under the provisions of the FEMA. The Appellate Tribunal dismissed the revision on 30th September, 2008. The appeal before this Court was filed on 6th August, 2010.There was a delay of 570 days in filing the appeal. The issue is as to whether the delay can be condoned. Decision: Appeal dismissed. Reason In Thirumalai Chemicals Limited v. Union of India (2011) 6 SCC 739,the Supreme Court considered whether the Appellate Tribunal constituted under the FEMA could reject an appeal filed under Section 19 of the new Act by applying the first proviso to sub-section (2) of Section 52 of the FERA. Under Section 19(2) of the FEMA the Appellate Tribunal is empowered to entertain an appeal filed beyond the expiry of 45 days subject to sufficient cause being shown. Under Section 52 of the FERA, the erstwhile Appellate Board could entertain an appeal after the expiry of forty five days, but not beyond ninety days. The Supreme Court held that the Appellate Board under the FERA stood dissolved and ceased to function when the FEMA was enacted in 1999. Hence, an appeal against an order of an Adjudicating Officer made under the FERA had to be filed before the Appellate Tribunal after the FEMA came into force. Upon a combined reading of Section 49 of the FEMA and Section 6 of the General Clauses Act, 1897, the Supreme Court held that it was the procedure prescribed by the FEMA which would be applicable in respect of an appeal filed under the FEMA though the cause of action arose under the FERA. Hence, it was held that it was Section 19 of the FEMA that would apply and the Appellate Tribunal would be entitled to condone a delay beyond forty five days in accordance with the provisions made in the new Act. Limitation, it was reiterated, relates to procedure. Applying the principle enunciated by the Supreme Court to the facts of the present case, it is evident that an appeal against an order of adjudication passed on 30th October 2003 by the Special Director of Enforcement, which was after the repeal of the FERA had to be filed before the Appellate Tribunal constituted under the FEMA. An appeal against the order of the Appellate Tribunal would be governed by the provisions of Section 35 of the FEMA as per which the High Court does not have any jurisdiction to condone a delay in excess of sixty days beyond the period of sixty days prescribed for the filing of an appeal. For these reasons, the delay of 570 days in filing an appeal before this Court under Section 35 of the FEMA cannot be condoned.