TMI Blog2006 (7) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... he country and proper utilisation thereof in the interests of the economic development of the country. FERA was repealed and replaced by FEMA with effect from 1-6-2000. Section 49 of FEMA reads as follows : "49. Repeal and saving. (1) The Foreign Exchange Regulation Act, 1973 (46 of 1973) is hereby repealed and the Appellate Board constituted under sub-section (1) of section 52 of the said Act (hereinafter referred to as the repealed Act) shall stand dissolved. (2) On the dissolution of the said Appellate Board, the person appointed as Chairman of the Appellate Board and every other person appointed as Member and holding office as such immediately before such date shall vacate their respective offices and no such Chairman and other person shall be entitled to claim any compensation for the premature termination of the term of his office or of any contract of service. (3) Notwithstanding anything contained in any other law for the time being in force, no court shall take notice of any contravention under section 51 of the repealed Act after the expiry of a period of two years from the date of the commencement of this Act. (4) Subject to the provisions of sub-section (3) al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years from the date of commencement of FEMA, that is, upto 31-5-2002. In other words, as per section 49 of FEMA, action in respect of the offences committed under FERA could be taken even after the commencement of FEMA upto 31-5-2002 and once the action is initiated within the aforesaid stipulated time, the proceedings would continue as if FERA has not been repealed. It is not in dispute that once the proceedings are initiated under FERA, the substantive right of appeal vested in a litigant on commencement of the proceedings are not affected by the repeal of FERA. 3. Under FERA, appeals against the orders passed by all the Adjudicating Authorities were maintainable before the Appellate Board constituted under FERA. While repealing FERA and enacting FEMA with effect from 1-6-2000, the Legislature provided in section 49 of FEMA that the Appellate Board constituted under FERA shall stand dissolved and the persons appointed as Chairman and other members of the Appellate Board shall vacate their offices on commencement of FEMA. Thus, on repeal of FERA though the substantive right of appeal vested in a litigant in respect of the pending proceedings as well as the proceedings to be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercise jurisdiction. (2) Any person aggrieved by an order made by the Adjudicating Authority, being an Assistant Director of Enforcement or a Deputy Director of Enforcement, may prefer an appeal to the Special Director (Appeals)." "19. Appeal to Appellate Tribunal. (1) Save as provided in sub-section (2), 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 : Provided that any person appealing against the order of the Adjudicating Authority or the Special Director (Appeals) levying any penalty, shall while filing the appeal, deposit the amount of such penalty with such authority as may be notified by the Central Government : Provided further that where in any particular case, 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 realisation of penalty." 7. Thus, section 17 of FEMA provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case, the newly enacted FEMA provides that the appeals against the adjudication orders passed by the Assistant Director/Deputy Director of Enforcement shall be maintainable before the Special Director (Appeals) and, therefore, the appeals against adjudication orders passed by the Assistant Director/Deputy Director of Enforcement under FERA would be maintainable before the Special Director (Appeals). Accordingly, Mr. Nankani submits that the impugned orders passed by the Special Director (Appeals) are contrary to law and hence liable to be quashed and set aside. Mr. Milind Vasudev, learned counsel appearing on behalf of the petitioners in the company writ petitions has adopted the arguments advanced by Mr. Nankani. 10. Mr. Desai, learned Additional Solicitor General appearing on behalf of the revenue, on the other hand, submitted that the appeals against the orders passed by the Adjudicating Authorities under FERA are maintainable only before the Appellate Tribunal constituted under FEMA and not before the Special Director (Appeals). According to Mr. Desai, the words Adjudicating Authority in section 17(1) of FEMA read in the light of section 2( a ) and section 16 of FEM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the revenue submitted that appeals against the orders passed by the Adjudicating Authorities under FERA which would ordinarily lie before the Appellate Board under FERA but for its dissolution, would now lie only before the Appellate Tribunal as contemplated under section 19(1) of the FEMA. Accordingly, it is submitted that the Special Director (Appeals) was justified in dismissing the appeals filed by the petitioners. 12. On careful consideration of the rival submissions, we are of the opinion that the contention of the petitioners that the appeals against the order passed by the Assistant Director/Deputy Director of Enforcement under FERA are maintainable before the Special Director (Appeals) constituted under FEMA deserves acceptance. In the present case, there is no dispute that the proceedings under FERA were initiated within the stipulated time and that the petitioners have a substantive right of filing an appeal against the adjudication orders passed under FERA. However, the dispute is whether such appeals are maintainable before the Special Director (Appeals) or before the Appellate Tribunal constituted under FEMA. 13. Admittedly, there was one appellate forum pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FEMA, then it would mean that appeals under section 17 and section 19 of FEMA would be maintainable only against the orders passed under FEMA. That would in turn mean that there is no appellate forum provided under FEMA against the orders passed by the Adjudicating Authorities under FERA. As noted earlier, on repeal of FERA, the substantive right of appeal against the orders of the Adjudicating Authorities accrued under FERA are not destroyed but are preserved under FEMA. If the contention of the revenue that the words Adjudicating Authority means the Adjudicating Authority under FEMA is accepted, then it would mean that the appeals against the orders of the Adjudicating Authorities under FERA would neither be maintainable under section 17 nor under section 19 of FEMA. If section 17 and section 19 of FEMA are held not applicable, in these cases, then the appellate remedy preserved under FEMA against the orders passed by the Adjudicating Authorities under FERA would be meaningless. Such a construction put forth by the revenue which defeats or destroys the substantive right of appeal cannot be accepted. Similarly, the argument of the revenue that, because the Special Director (Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e instituted before the Appellate Tribunal constituted under FEMA. In our opinion, there is no merit in this contention as well. By dissolving the Appellate Board constituted under FERA and by constituting two appellate forums namely the Special Director (Appeals) and the Appellate Tribunal under FEMA, the Legislature has made it clear that on commencement of FEMA, all appeals against the adjudication orders passed whether under FERA or FEMA shall be instituted before either of the two appellate forums constituted under FEMA. In section 49(5)( a ) of FEMA the Legislature has provided that notwithstanding the repeal, actions taken under FERA shall be deemed to have been taken under the corresponding provisions of FEMA. In section 49(5)( b ) the Legislature has provided that the appeals pending before the Appellate Board shall be transferred to the Appellate Tribunal constituted under FEMA. Reading clauses ( a ) and ( b ) of section 49(5) of FEMA together, it is evident that unless specifically provided, all actions taken under FERA shall be deemed to have been taken under the corresponding provisions of FEMA. In this view of the matter, the adjudication orders passed by the Assistan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repeal of FERA, did not intend to continue with the single appellate forum provided under FERA against the orders passed by the Adjudicating Authorities under FERA. Accordingly, in the newly enacted FEMA, the Legislature provided that appeals against the orders passed by the Adjudicating Authorities such as Assistant Director/Deputy Director of Enforcement should be instituted before the Special Director (Appeals) and appeals against all other Adjudicating Authorities should be instituted before the Appellate Tribunal. 21. From the aforesaid analysis of the provisions contained in FEMA, we have no hesitation in holding that the appeals against the adjudication orders passed by the Assistant Director/Deputy Director (Appeals) under the repealed provisions of FERA read with section 49 of FEMA are maintainable before the Special Director (Appeals) and appeals against the orders of all other Adjudicating Authorities are maintainable before the Appellate Tribunal constituted under FEMA. 22. The Apex Court in the case of Gajraj Singh v. State Transport Appellate Tribunal [1997] 1 SCC 650 [which is reiterated in the case of Gammon India Ltd. v. 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