FILING APPEAL BEFORE APPELLATE TRIBUNAL UNDER ‘FEMA’

[Mr. M. GOVINDARAJAN]

Appellate Tribunal

Section 18 of the Foreign Exchange and Management Act, 1999 (‘Act’ for short) provides for the constitution of Appellate Tribunal to decide appeal under the Act.  The said section that the Appellate Tribunal constituted under sub-section (1) of section 12 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976, shall, be the Appellate Tribunal for the purposes of this Act and the said Appellate Tribunal shall exercise the jurisdiction, powers and authority conferred on it by or under this Act.

Procedure for filing appeal

The following is the procedure in filing appeal before the Appellate Tribunal-

• the Central Government or any person aggrieved by an order made by an Adjudicating Authority, other than those referred to in sub-section (1) of section 17, or the Special Director (Appeals), may prefer an appeal to the Appellate Tribunal.
• Every appeal shall be filed within a period of 45 days from the date on which a copy of the order made by the Adjudicating Authority or the Special Director (Appeals) is received by the aggrieved person or by the Central Government.
• The Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period.
• Where the appeal is presented after the expiry of the period of 45 days it shall be accompanied by a petition, in triplicate, duly verified and supported by the documents, if any, relied upon by the applicant, showing cause how the applicant had been prevented from preferring the appeal within the said period of 45 days.
• Every appeal presented to the Appellate Tribunal shall be in the Form II signed by the applicant.
• The appeal shall be sent in triplicate and accompanied by three copies of the order appealed against.
• Every appeal shall be accompanied by a fee of Rs.10,000/- in the form of cash or demand draft payable in favor of ‘The Registrar, Appellate Tribunal for Foreign Exchange, New Delhi’.
• The applicant shall deposit the amount of penalty imposed by the Adjudicating Authority or the Special Director (Appeals) as the case may be, to such authority as may be notified under the Act.
• If  the Appellate Tribunal is of the opinion that the deposit of such penalty would cause undue hardship to such person, the Appellate Tribunal may dispense with such deposit subject to such conditions as it may deem fit to impose so as to safeguard the realization of penalty.

Disposal of appeal

• On receipt of an appeal the Appellate Tribunal shall send a copy of the appeal, together with a copy of the order appealed against, to the Director of Enforcement.
• The Appellate Tribunal shall, then, issue notices to the applicant and the Director of Enforcement fixing a date for hearing of the appeal.
• Any applicant who has filed an appeal before the Appellate Tribunal may appoint a legal practitioner or a charted accountant to appear and plead and act on his behalf before the Special Director (Appeal) under the Act.
• On the date fixed for hearing of the appeal, or any other day to which the hearing of the appeal may be adjourned, the applicant as well as the presenting officer of the Directorate of Enforcement shall be heard.
• Where on the date fixed, or any other day to which the hearing of the appeal may be adjourned, the applicant or the presenting officer fail to appear when the appeal is called on for hearing, the Appellate Tribunal may decide the appeal on the merits of the case.
• The order of Appellate Tribunal shall be in writing and shall state briefly the grounds for the decision.
• The order) shall be signed by the Chairman or Member of the Appellate Tribunal hearing the appeal.
• The Appellate Tribunal shall send a copy of every order made by it to the parties to the appeal and to the concerned Adjudicating Authority or the Special Director (Appeals), as the case may be.
• The appeal filed before the Appellate Tribunal shall be dealt with by it as expeditiously as possible and endeavor shall be made by it to dispose of the appeal finally within 180 days from the date of receipt of the appeal.
•  Where any appeal could not be disposed of within the said period 185 days, the Appellate Tribunal shall record its reasons in writing for not disposing of the appeal within the said period.
• The Appellate Tribunal may, for the purpose of examining the legality, propriety or correctness of any order made by the Adjudicating Authority in relation to any proceeding, on its own motion or otherwise, calls for the records of such proceedings and makes such order in the case as it thinks fit.

Service of notices/orders

A notice or an order issued under these rules shall be served on any person in the following manner:

• by delivering or tendering the notice or requisition or order to that person or his duly authorised person,
• by sending the notice or requisition or order to him by registered post with acknowledgement due to the address of his place of residence or his last known place or residence or the place where he carried on, or last carried on, business or personally works or last worked for gain, or
• by affixing it on the outer door or some other conspicuous part of the premises in which the person resides or is known to have last resided or carried on business or personally works or last worked for gain and that written report thereof should be witnesses by two persons; or
• if the notice or requisition or order cannot be served as above,  by publishing in a leading newspaper (both in vernacular and in English) having vide circulation of area or jurisdiction in which the person resides or is known to have last resided or carried on business or personally works or last worked for gain.

Delay condonation

In P.K. DIDWANIA VERSUS THE DY. DIRECTOR, DIRECTORATE OF ENFORCEMENT, GOVT. OF INDIA - 2023 (7) TMI 636 - CALCUTTA HIGH COURT, an adjudication order was passed against the appellant by the Adjudicating Authority on 21.01.2000.  But the said order was received by the appellant during the year 2010.  The appellant filed an appeal before the Appellate Authority.  The Appellate Authority dismissed the appeal on 12.10.2010.  The appellant filed the present appeal against the order of the appellate authority.

The appellant submitted the following before the High Court-

• The Appellate Tribunal erred in law in dismissing the appeal on the ground of provisions of Section 52 of the Foreign Exchange Regulation Act, 1973.
• The appellant received the copy of the order-in-original sometime in 2010 when the order-in-original was served upon the advocate for the appellant. Immediately thereafter, the appellant preferred the appeal. 
• The appeal before the Appellate Tribunal was governed by the provisions of the Foreign Exchange Management Act, 1999 in view of Foreign Exchange Regulations Act, 1973 being repealed by the Act of 1999. 

The High Court observed that the appellant suffered an order-in-original dated January 21, 2000. The order-in-original records the address at which, the raid took place. The order-in-original also records that, such address was the residential address of the appellant. The order-in-original was dispatched by registered post to the appellant at such address as will appear from the documents produced before the Court. The dispatch was made on March 13, 2000.

The High Court held that non-entertainment of the appeal by the Appellate Tribunal on the ground of Section 52(2) of the Act of 1973 was erroneous.   However, the High Court found from the materials produced on record that, the appellant was served with the order-in-original dated January 21, 2000 by registered post which was dispatched on March 13, 2000. The appellant is unable to show any reasonable cause as to why, the appellant did not file the appeal within the time prescribed under the Act of 1973. No explanation is put forward under the Act of 1999 for condonation of delay in preferring the appeal.  The High Court found no merit in the appeal and dismissed the appeal.

Informer - a complainant?

In VIVEK. S. VERSUS DEPUTY DIRECTOR, DIRECTORATE OF ENFORCEMENT, DIRECTOR OF ENFORCEMENT, ENFORCEMENT DIRECTORATE, ASSISTANT DIRECTOR OF ENFORCEMENT (ADJUDICATING AUTHORITY) , ENFORCEMENT DIRECTORATE - 2022 (12) TMI 1110 - KERALA HIGH COURT, adjudication order has been passed by the Adjudicating Authority based on the complaint filed by the appellant.  The appellant sought for the order of Adjudicating Authority before the Directorate of Enforcement.  The request was rejected.  Therefore the appellant filed a writ petition before the High Court.  The High Court held that the writ petitioner (appellant) is not entitled to the copy of the adjudication order as he was only an informer and not the complainant.  Against this order the appellant filed the present appeal. 

The High Court framed the question to decide the appeal as to the appellant is an aggrieved person or not does not arise in the context of the claim for a copy of the order.  The High Court observed that  is a matter to be considered by the Appellate Authority when the appeal is preferred under Sec.17 of the Act.  The High Court analyzed the provisions of section 74, 75 and 76 of the Evidence Act.  The High Court observed that it is evident from the above statutory provisions, that the adjudication order copy of which was applied for is a public document.   The High Court did not accept the contentions of the appellant that he should be deemed as a complainant and that therefore, order passed on adjudication should be furnished.  As per the statutory provisions, by no stretch of imagination, appellant/petitioner can be termed as a complainant and consequentially entitled to a copy of the adjudicatory order.  The appellant cannot be said to be personally aggrieved over a decision taken by the Adjudicating Authority.   The High Court found no error or infirmity in the impugned judgment, warranting interference.  The High Court dismissed the appeal.