Civil Application No. 140 of 2010,Ferast No. 22607 of 2010

7th February, 2012

Petitioner Counsel: Mr. M.S. BHARDWAJ
Respondent Counsel: Mr. MILIND SATHEVMr. RISHIT BADHIYANI A.S.DAYAL & ASSOCIATES

Cases Cited:
Thirumalai Chemicals Limited Vs. Union of India, 2011 ALL SCR 1301 =(2011) 6 SCC 739 [Para 6]
Union of India Vs. Ashok J. Ramsinghani, 2011(4) ALL MR 45 =2011 Vol.113(3) Bom. L.R. 2052 [Para 7]

JUDGMENT

Dr. D.Y. CHANDRACHUD, J. :- The Civil Application has been filed for condoning a delay of 570 days in filing an appeal against an order dated 30 September 2008 passed by the Appellate Tribunal for Foreign Exchange.

2. The Foreign Exchange Regulation Act, 1973 (FERA, 1973) was repealed on 1 June 2000. Under the sunset provision incorporated in sub-Section (3) of Section 49 of the Foreign Exchange Management Act, 1999 (FEMA, 1999), a period of two years was prescribed for taking cognizance of an offence under the repealed Act and for taking notice of any contravention under Section 51 of the repealed Act. In the present case, a notice to show cause was issued to the Respondent for a violation of the provisions of the FERA, 1973 on 27 July 2001. By an order dated 30 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, 1999. The Appellate Tribunal dismissed the revision on 30 September 2008. The admitted position is that the Appellant received a communication of the order passed by the Tribunal on 24 November 2008. The appeal before this Court has been filed on 6 August 2010.

3. There is a delay of 570 days in filing the appeal. The issue is as to whether that delay can be condoned.

4. Section 49 of the FEMA, 1999 provides that the FERA, 1973 stands repealed and the Appellate Board constituted under Section 52 (1) of the repealed Act stands dissolved. However, as noted earlier, a sunset provision was made in sub-Section (3) of Section 49 in order to enable cognizance of offences to be taken and for notice of contraventions of the repealed Act within a period of two years from the commencement of the new Act. Under sub-section (5) of Section 49, it has been inter alia stipulated that an appeal preferred to the Appellate Board under sub-section (2) of Section 52 of the repealed Act, but not disposed of before the commencement of the new Act would stand transferred to the Appellate Tribunal constituted under the new Act.

5. Upon the enactment of the FEMA, 1999, the Appellate Board constituted under the FERA, 1973 stood dissolved. An appeal against an order of adjudication passed for violation of the provisions of the FERA, 1973 has to be filed upon the enactment of the FEMA, 1999 to the Appellate Tribunal under Section 19 where the appeal arises out of an order of adjudication passed by the Special Director. Against an order passed by the Appellate Tribunal, an appeal lies before this Court under Section 35 of the FEMA,1999. Section 35 stipulates that the appeal has to be filed within sixty days from the date of communication of the decision of the Appellate Tribunal. Under the proviso to Section 35, the High Court is empowered upon sufficient cause being shown to condone a delay not exceeding a period of sixty days. In other words, no appeal can be filed beyond the outer limit of 120 days from the date of communication of the order of the Tribunal, before the High Court. The appeal which has been filed in August 2010 is clearly beyond the outer limit of 120 days and is, therefore, not maintainable.

6. In Thirumalai Chemicals Limited vs. Union of India, (2011) 6 SCC 739 : [2011 ALL SCR 1301] the Supreme Court considered whether the Appellate Tribunal constituted under the FEMA, 1999 could reject an appeal filed under Section 19 of the new Act by applying the first proviso to subsection (2) of Section 52 of the FERA, 1973. Under Section 19(2) of the FEMA, 1999, the Appellate Tribunal is empowered to entertain an appeal filed beyond the expiry of forty five days subject to sufficient cause being shown. Under Section 52 of the FERA, 1973, 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, 1999 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.

7. Applying the principle which has been 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 30 October 2003 by the Special Director of Enforcement, which was after the repeal of the FERA, 1973 had to be filed before the Appellate Tribunal constituted under the FEMA, 1999. An appeal against the order of the Appellate Tribunal would be governed by the provisions of Section 35 of the FEMA, 1999. This 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. The view which we have taken is also consistent with a judgment of this Court in Union of India vs. Ashok J. Ramsinghani. 2011 Vol.113(3) Bom. L.R. 2052 : [2011(4) ALL MR 45] For these reasons, we are of the view that the delay of 570 days in filing an appeal before this Court under Section 35 of the FEMA, 1999 cannot be condoned. The Civil Application is accordingly dismissed.

8. In view of the dismissal of the Civil Application, the appeal shall not remain on the file and shall accordingly stand disposed of.

Application Dismissed.