Thirumalai Chemicals
Limited Vs. Union of India & Ors.
U D G E M E N T
K. S. PANICKER
RADHAKRISHNAN, J.
1.
Leave
granted.
2.
The
question that has come up for consideration in this case is whether the
Appellate Tribunal constituted under the Foreign Exchange Management Act 1999 (in
short FEMA) was right in rejecting a belated appeal filed under Section 19 of
FEMA, applying the first proviso to sub section (2) of Section 52 of Foreign
Exchange Regulation Act 1973 (in short FERA), instead of following the proviso to
sub section (2) to Section 19 of FEMA.
3.
M/s
Tirumalai Chemicals Limited (in short 'the Company') had imported various
consignments of benezene, orthoxalene etc. for home consumption. For the said
purpose, the Company had opened Letters of Credit bearing No.MLCO 4359096 and
No.529/960487 on 28.09.96 and 07.08.96 respectively on their bankers ICICI Bank
and Standard Chartered Bank (authorized dealers). By letters dated 07.12.96 and
18.01.97 Exchange Control Copies of bills of entry (in short, ECC - bills of
entry) in relation to those imports were forwarded by the Company to the above mentioned
Banks. As per the provisions of Exchange Control Manual (in short ECM), the
authorized dealers had to submit the ECC-bills of entry submitted by the
importers (the Company) to the Reserve Bank of India (in short RBI).
The Company was under
the bonafide impression that the documents submitted by it were forwarded by
the authorized dealers to the RBI and that the RBI in turn had given due intimation
to the Enforcement Directorate. The Company on 22.04.2004 received a telephonic
communication from the office of the 3rd respondent viz., Directorate of
Enforcement, stating that it had passed various orders on 27.01.04 imposing a total
penalty of Rs.9,33,63,453/- on the Company on the ground that it had contravened
the provisions of 3Sections 8(3), 8(4) of FERA read with sub-sections (3) and (4)
of Section 49 of FEMA. Copies of the orders dated 27.01.04 were then received by
the Company on 22.04.04 on request.
From those orders the
Company came to know that the Directorate of Enforcement had issued four show cause
notices dated 14.05.02 stating that the Company had contravened Section 8(3),
Section 8(4) of FERA read with para 7A.20 (Chapter 7) of ECM and was required
to show cause why adjudication proceedings be not initiated against the Company
under Section 49 of FEMA for contravention of the above mentioned provisions. Further,
it was also stated that the Company had failed to furnish the required
bills/information/documents and did not avail of the opportunity of hearing in
spite of notices issued to them on 29.08.02, 27.10.03 and 01.12.03. Orders
dated 27.01.04 also indicated that an appeal would lie before the Appellate Tribunal
after depositing the amount of penalty imposed within 45 days from the date on
which the order was served. Reference was also made to Section 19 read with Section
49(5)(a) of FEMA.
4.
4.
The Company on receipt of the above mentioned orders dated 27.01.04 approached the
authorized dealers and enquired whether they had forwarded the ECC of bills of
entry to the RBI as required under the provisions of ECM. The ICICI Bank vide their
letters dated 12.05.04 informed the Company that it had received ECC of bills
of entry on 20.01.97 with difference of value. The ICICI Bank then forwarded a letter
dated 15.05.04 to the RBI seeking its permission to accept the bills of entry
stating that the Company had submitted the relevant documents on 20.01.97 with
shortfall of value.
The Standard Chartered
Bank also vide their letter dated 12.05.04 informed the RBI that they had also
received the Exchange Control Copy of bills of entry for the import in question
from the appellant Company on 09.12.96, but due to an inadvertent mistake had
reported in their BEF Return that bills of entry were not submitted. The RBI vide
letter dated nil of May, 2004 sent by registered AD informed the Enforcement
Directorate as follows:- "........Please refer to the outstanding entries reported
in their respective BEF Statement by the captioned banks in respect of M/s
Tirumalai Chemicals Ltd., which was forwarded to you by us. In this connection we
advise that, based on the documents and evidence submitted by authorized dealer,
we have deleted the entries from our records and regularized the transactions
at our end as under :-
i) ICICI Bank confirmed
that they had received EC copies of Bill of Entry in respect of the transactions
reported at Sr.No.40 and Sr.No.1 of their BEF Statement referred to above and
the entry at Sr. No.28 of their BEF Statement was a repetition of entry at
Sr.No.40 of the same statement. ii) Standard Chartered Bank has also confirmed
to us that the relative EC copy of the Bill of Entry in respect of the transaction
reported in their BEF Statement was received by them....".
5.
The
Company had also sent a letter dated 17.05.04 to the Enforcement Directorate
stating that it was not due to the mistake of the Company that the ECC of bills
of entry were not forwarded to the Directorate of Enforcement in time, but due to
the mistake of the authorized dealer (Bank). RBI had subsequently carried out
necessary corrections and deleted the entries from their records and
regularized the transactions and requested to drop the proceedings initiated
against the Company.
6.
6.
The Company stated that it was under the bonafide impression that respondents would
drop the proceedings since RBI had deleted the entries from the records and informed
the same to the Enforcement Directorate but nothing was heard from the
Directorate and hence the Company was constrained to file appeals against those
orders on 02.08.04 before the Appellate Tribunal for 6Foreign Exchange (in
short the Tribunal) vide Appeal nos. 787, 788, 789 and 790 of 2004 with an application
under Section 5 of the Limitation Act read with Section 19 and Section 49(5)
(a) of FEMA for condonation of delay.
7.
The
Tribunal, however, without going into the merits of the case dismissed the
appeals on the ground of delay by its order dated 25.10.2007. The operative
portion of the said order reads as follows:- ".....Therefore, these
appeals when filed after 90 days from the date of receipt of the order has to be
dismissed and the exceeding period cannot be condoned by this Tribunal because
of legislative mandate couched in clear language. For the reasons stated herein
above, these appeals are dismissed because these appeals have been filed after a
total period of 90 days from the date of receipt of impugned order beyond which
this Tribunal is not empowered to condone the delay."
8.
8.
The Company aggrieved by the above mentioned order preferred writ petitions
nos. 692, 1528, 1531 and 693 of 2008 before the Bombay High Court for quashing
the order dated 25.10.2007 of the Tribunal as also the order dated 27.01.04 passed
by the third respondent contending that the Tribunal was not justified in
dismissing the appeals on the ground of delay. The High Court, however,
dismissed all the writ petitions by the following order dated 24.07.2008:- "There
is no dispute that the appeal was filed beyond the period of 90 days. Therefore,
the tribunal did not have jurisdiction to condone the delay. The learned counsel,
then, submitted that we should consider these petitions as the petitions against
the original order. In our opinion, it will not be appropriate to entertain these
petitions as petitions against the original order. The Parliament has provided remedy
of an appeal against the original order and has provided for period of limitation
for filing that appeal. The Parliament has also provided that delay beyond a certain
period cannot be condoned by the Tribunal/Appellate authority. The Petitioners have
allowed that remedy of appeal to be barred, therefore, now to entertain these
petitions as petitions against the original order would amount to permitting
the Petitioners to frustrate the scheme of the Legislation. The scheme of the
statute is that a challenge to the original order is to be raised by an appeal
which is to be filed within a particular period. The extra ordinary
jurisdiction of this court under the Constitution cannot be permitted to be
used by the Petitioners, who have allowed their ordinary remedy to be barred. Petitions
are, therefore, rejected."
9.
Mr.
Harish Salve, learned senior counsel appearing on behalf of the appellants
submitted that the authorized dealer (Bank) had owned up their mistake and had informed
the RBI accordingly and hence there was no reason to penalize the Company for
no fault of it. Learned counsel also submitted that the Tribunal had committed
a mistake in holding that it had no power to condone the delay beyond 90 days. He
also submitted that even if the Tribunal has no power to condone the delay the High
Court could have entertained the writ petitions under Article 226 of the
Constitution of India when the impugned order of the Tribunal was manifestly
illegal. Learned counsel further submitted that in any view of the matter High
Court under Article 226 of the Constitution of India has the power to condone delay
in exercise of its extra ordinary jurisdiction and then direct the Tribunal to
consider the appeal on merits. Reference was made to the judgments of this
Court in Harbanslal Sahnia & Anr. vs. IOC Ltd. & Ors. (2003) 2 SCC 107,
L.K. Verma vs. HMT Ltd. & Anr. (2006) 2 SCC 269.
10.
Shri
Vivek Tankha, Learned Additional Solicitor General, appearing for the respondents
referred to the first proviso to sub section (2) of Section 52 of FERA and submitted
that the Tribunal was justified in holding that it had no power to condone the delay
beyond a period of 90 days. Ld. ASG also submitted that when a party has
availed of the statutory remedy of appeal and lost on the ground of delay the High
Court can not exercise its extraordinary jurisdiction under Article 226 / 227
of the Constitution of India.
11.
We
are in this case called upon to decide the question whether the Tribunal was right
in dismissing the appeals preferred under Section 19(1) of FEMA, by applying the
first proviso to sub section (2)of Section 52 of FERA holding that it had no power
to condone the delay beyond 90 days from the date on which the order was served
on the person committing the contravention. The Tribunal and the High Court proceeded
on the premises that since the cause of action arose when FERA was in force the
period of limitation for filing an appeal before the Tribunal even after coming
into force of FEMA is as provided under the first proviso to sub section (2) of
Section 52 of FERA. Admittedly, in this case the cause of action arose when
FERA was in force, but show cause notices and impugned orders were issued when FEMA
was in force and the appeals were also preferred under sub section (1) of Section
19 of FEMA. Therefore, the important question that arises for consideration is whether
limitation for filing the appeal has to be considered under the proviso to sub
section (2)of Section 19 of FEMA or under the first proviso to sub section ( 2)
of Section 52 of FERA. In order to answer the above question, it is necessary to
examine the 1scope and ambit of Section 52 of FERA, Section 19 , 49 of FEMA and
Section 6 of the General Clauses Act, 1897.
12.
12.
FERA was enacted to consolidate and amend the law relating to certain payments dealing
in foreign exchange and securities, transactions indirectly affecting the
foreign exchange and import and export and import of currency, for conservation
of foreign exchange resources of the country and proper utilization thereof in
the interest of economic development of the country. Sections 50 and 51 of FERA
were the penal provisions which empowered the authority to impose penalty on
persons who had contravened some of the provisions of the Act. An appeal was provided
under FERA against the order of adjudication before the Foreign Exchange
Regulation Appellate Board (in short the `Board') under Section 52 of that Act
within a period of 45 days from the date on which the order was served on the
person committing the contravention. The Board was also empowered to entertain
any appeal after the expiry of the said period of 45 days but not after 90 days
from the date on which the order was served on the person if it was satisfied
that the person 1was prevented by sufficient cause in not filing the appeal in
time. It is useful to extract that provision for easy reference :-
Appeal to Appellate Board
---(1) The Central Government may, by notification in the Official Gazette,
constitute an Appellate Board to be called the Foreign Exchange Regulation Appellate
Board consisting of a Chairman [being a person who has for at least ten years held
a civil judicial post or who has been a member of the Central Legal Service (not
below Grade I) for at least three years or who has been in practice as an
advocate for at least ten years] and such number of other members, not
exceeding four, to be appointed by the Central Government for hearing appeals against
the orders of the adjudicating officer made under Section 51. (2) Any person aggrieved
by such order may, [on payment of such fee as may be prescribed and] after depositing
the sum imposed by way of penalty under Section 50 and within 45 days from the date
on which the order is served on the person committing the contravention, prefer
an appeal to the Appellate Board:
Provided that the
Appellate Board may entertain any appeal after the expiry of the said period of
45 days, but not after 90 days, from the date aforesaid if it is satisfied that
the appellant was prevented by sufficient cause from filing the appeal in time:
Provided further that where the Appellate Board is of opinion that the deposit
to be made will cause undue hardship to the appellant, it may, in its own discretion,
dispense with such a deposit either unconditionally or subject to such
conditions as it may deem fit. ....... ........ ........."
13.
13.
FERA was repealed by FEMA which came into force with effect from 01.06.2000. Chapter
IV of FEMA deals with contravention of penalties. Section 13 of FEMA empowers
the authorized officers to impose penalties for contravention of certain provisions
of the Act. 1Failure to make full payment of penalty, may attract civil
imprisonment subject to the provisions of sub section (2) of Section 19. Chapter
V of the Act deals with adjudication and appeal. Section 19 deals with the
appeal to the Appellate Tribunal. Sub section (2) of Section 19 says that every
appeal under sub-section(1) shall be filed within a period of 45 days from the date
on which the copy of the order made by the adjudicating authority or the Special
Director (Appeals) is received by the aggrieved person.
The Appellate
Tribunal is also empowered to entertain the appeals filed after the expiry of the
said period of 45 days if it is satisfied that there was sufficient cause for
not filing the appeal within that period. Law is well settled that the manner
in which the appeal has to be filed, its form and the period within which the
same has to be filed are matters of procedure, while the right conferred on a
party to file an appeal is a substantive right. The question is, while dealing with
a belated appeal under Section 19(2) of FEMA, the application for condonation
of delay has to be dealt with under the first proviso to sub- section (2) of Section
52 of FERA or under the proviso to sub section (2) of Section 19 of FEMA. For
answering that question it is necessary to examine the law on the point. 1Substantive
and Procedural Law:
14.
Substantive
law refers to body of rules that creates, defines and regulates rights and
liabilities. Right conferred on a party to prefer an appeal against an order is
a substantive right conferred by a statute which remains unaffected by
subsequent changes in law, unless modified expressly or by necessary implication.
Procedural law establishes a mechanism for determining those rights and
liabilities and a machinery for enforcing them. Right of appeal being a
substantive right always acts prospectively. It is trite law that every statute
prospective unless it is expressly or by necessary implication made to have retrospective
operation. Right of appeal may be a substantive right but the procedure for
filing the appeal including the period of limitation cannot be called a substantive
right, and aggrieved person cannot claim any vested right claiming that he
should be governed by the old provision pertaining to period of limitation. Procedural
law is retrospective meaning thereby that it will apply even to acts or
transactions under the repealed Act.
15.
Law
on the subject has also been elaborately dealt with by this Court in various
decisions and reference may be made to few of those decisions. This Court in
Garikapati Veeraya vs. N. Subbiah Choudhry & Ors. AIR 1957 SC 540, New
India Insurance Company Limited Vs. Smt. Shanti Mishra (1975) 2 SCC 840, Hitendra
Vishnu Thakur & Ors. vs. State of Maharashtra & Ors. (1994) 4 SCC 602;
Maharaja Chintamani Saran Nath Shahdeo vs. State of Bihar & Ors. (1999) 8
SCC 16; Shyam Sundar & Ors. vs. Ram Kumar & Anr. (2001) 8 SCC 24, has elaborately
discussed the scope and ambit of an amending legislation and its retrospectivity
and held that every litigant has a vested right in substantive law but no such
right exists in procedural law. This court has held the law relating to forum and
limitation is procedural in nature whereas law relating to right of appeal even
though remedial is substantive in nature.
16.
Therefore,
unless the language used plainly manifests in express terms or by necessary implication
a contrary intention a statute divesting vested rights is to be construed as prospective,
a statute merely procedural is to be construed as retrospective and a 1statute which
while procedural in its character, affects vested rights adversely is to be
construed as prospective.
17.
Right
of appeal conferred under Section 19(1) of FEMA is therefore a substantive right.
The procedure for filing an appeal under sub-section (2) of Section 19 as also
the proviso to sub-section (2) of Section 19 conferring power on the Tribunal
to condone delay in filing the appeal if sufficient cause is shown, are
procedural rights.
18.
We
have already indicated that the proviso to sub-section(2) of Section 19
operates retrospectively, but the question is in that process, whether it
impairs or takes away any accrued right, to plead a time bar and on facts
whether the Company has lost its right of appeal to the Tribunal under FEMA.Law
of Limitation
19.
Law
of limitation is generally regarded as procedural and its object is not to create
any right but to prescribe periods within which legal proceedings be instituted
for enforcement of rights which exist under substantive law. On expiry of the
period of limitation, the right to sue comes to an end and if a particular right
of action had 1become time barred under the earlier statute of limitation the
right is not revived by the provision of the latest statute. Statutes of
limitation are thus retrospective insofar as they apply to all legal
proceedings brought after their operation for enforcing cause of action accrued
earlier, but they are prospective in the sense that neither have the effect of reviving
the right of action which is already barred on the date of their coming into operation,
nor do they have effect of extinguishing a right of action subsisting on that date.
Bennion on Statutory Interpretation 5th Edn.(2008) Page 321 while dealing with
retrospective operation of procedural provisions has stated that provisions laying
down limitation periods fall into a special category and opined that although
prima facie procedural, they are capable of effectively depriving persons of accrued
rights and therefore they need be approached with caution.
20.
20.
Learned author in order to establish the above proposition referred to the decision
of the Court of Appeal in The Ydun case [THE YDUN (1899) Probate Division at page
236 (The Court of Appeal) where the Court held that the amending legislation
dealt with procedure only and therefore applied to all actions whether 1commenced
before or after the passing of the Act and even in respect of previously
accrued rights. The principle laid down in `The Ydun' was applied in The King vs.
Chandra Dharma (1905) 2 KB 335 and it was held that if a statute shortening the
time within which proceedings can be taken is retrospective then it is
impossible to give good reason, why a statute extending the time within which
proceedings be taken, should not be held to be retrospective.
The Judicial Committee
of Privy Council in Yew Bon Tew v. Kenderaan Bas Mara (1982) 3 All E.R. 833, opined
that whether statute has retrospective effect, cannot in all cases safely be applied
by classifying statute as procedural or substantive and pointed out in certain situation
the Court would rule against a retrospective operation. Limitation provisions therefore
can be procedural in the context of one set of facts but substantive in the
context of different set of facts because rights can accrue to both the
parties. In such a situation, test is to see whether the statute, if applied
retrospectively to a particular type of case, would impair existing rights and
obligations. An accrued right to plead a time bar, which is acquired after the lapse
of the statutory period, is nevertheless a right, even though it arises under
an Act which is procedural and a right which is not to be taken away pleading retrospective
operation unless a contrary intention is discernible from the statute
Therefore, unless the
language clearly manifests in express terms or by necessary implication, a
contrary intention a statute divesting vested rights is to be construed as prospective.
A statute, merely procedural is to be construed as retrospective and a statute while
procedural in nature affects vested rights adversely is to be construed as
prospective. The manner of filing an appeal, under sub section (2) of Section 19
of FEMA and the time within which such an appeal has to be preferred and the
power conferred on the Tribunal to condone delay under the proviso to
sub-section (2) of Section 19 are matters of procedure and act retrospectively,
so as to cover causes of action which arose under FERA. Since the appeal was filed
under FEMA with an application for condonation of delay such an appeal has to
be considered by the Tribunal under the proviso to sub-section(2) of Section 19
FEMA and if the Company shows sufficient cause for not filing the appeal in
time then the Tribunal can condone the delay and entertain the appeal,
especially when there is no accrued right to the respondent to plead a time bar.
The legal position is
summarized thus by Justice G.P. Singh in Principles of Statutory Interpretation
(12th Edition-Page 541) 1thus:- "Statutes of Limitation are thus
retrospective in so far as they apply to all legal proceedings brought after
their operations for enforcing causes of action accrued earlier...."
21.
21.
We may also examine whether Section 49 of FEMA, which is the repealing and
saving clause, has in any way taken away the right of appeal under FEMA for
cause of action which arose under FERA expressly or by necessary implication
and also whether it has any effect on the retrospectivity of the procedural
provision under the proviso to sub-section (2) of section 19. For easy
reference we may extract Section 49 of FEMA and Section 6 of the General Clauses
Act, 1897. "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 or
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 laws for the time being in force, no court shall
take cognizance of an offence under the repealed Act and no adjudicating
officer 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. 2(4) Subject to the provisions of sub-section (3) all offences
committed under the repealed Act shall continue to be governed by the provisions
of the repealed Act as if that Act had not been repealed.(5) Notwithstanding
such repeal, ---
anything done or any action
taken or purported to have been done or taken including any rule, notification,
inspection, order or notice made or issued or any appointment, confirmation or
declaration made or any licence, permission, authorization or exemption granted
or any document or instrument executed or any direction given under the Act
hereby repealed shall, in so far as it is not inconsistent with the provisions
of this Act, be deemed to have been done or taken under the corresponding
provisions of this Act; (b) any 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 this Act shall stand transferred to and shall be disposed
of by the Appellate Tribunal constituted under this act; (c) every appeal from any
decision or order of the Appellate Board under sub-section (3) or sub-section
(4) of section 52 of the repealed Act shall, if not filed before the
commencement of this act, be filed before the High Court within a period of sixty
days of such commencement;
Provided that the
High Court may entertain such appeal after the expiry of the said period of
sixty days if it is satisfied that the appellant was prevented by sufficient
cause from filing the appeal within the said period.(6) save as otherwise
provided in sub-section(3), the mention of particular matters in sub-sections
(2), (4) and (5) shall not be held to prejudice or affect the general application
of section 6 of the General Clauses Act, 1897 (10 of 1897), with regard to the
effect of repeal."Section 6 of the General Clauses Act reads as under:- 6.
Effect of repeal -- Where this Act, or any [Central Act ] or Regulation made
after the commencement of this Act, repeals any enactment hitherto made or hereafter
to be made, then, unless a different intention appears, the repeal shall not --
2 (a) revive anything not in force or existing at the time at which the repeal
takes effect; or (b) affect the previous operation of any enactment so repealed
or anything duly done or suffered thereunder; or (c) affect any right, privilege
obligation or liability acquired, accrued or incurred under any enactment so
repealed; or (d) affect any penalty,
forfeiture or
punishment incurred in respect of any offence committed against any enactment
so repealed; or (e) affect any investigation legal proceeding or remedy in respect
of any such right, privilege, obligation, liability, penalty, forfeiture or
punishment as aforesaid; and any such investigation, legal proceeding or remedy
may be instituted, continued or enforced, and any such penalty, forfeiture or punishment
may be imposed as if the repealing Act or Regulation had not been
passed."Repealing and saving clause is a residuary provision which
envisages that notwithstanding such repeal of FERA there would be application
of Section 6 of the General Clauses Act with regard to the effect of repeal
which is discernible from sub section (6) of Section 49 of the Act. Sub-section
(1) of Section 49 of FEMA states that FERA stands repealed and the Appellate Board
constituted under sub-section (1) of Section 52 of the said Act stands dissolved.
Sub-section (3) of Section 49 incorporates a sunset clause. The said
sub-section begins with a non-obstante clause overriding any other 2enactment and
states that no court shall take notice of any contravention under Section 51 of
the repealed Act after the expiry of two years from the date of commencement of
FEMA on 1.6.2000. Sub-section (4) of Section 49 stipulates that subject to the
provisions of sub-section(3) all offences committed under the repealed Act
shall continue to be governed by the provisions of the repealed Act as if that
Act had not been repealed.
22.
Sub-section
(5) of Section 49 of FEMA consists of three clauses (a), (b) and (c). Clause
(a) states that anything done or any action taken or purported to have been
done or taken including any rule, notification, inspection, order or notice made
or issued or any appointment, confirmation or declaration made or any license,
permission, authorization or exemption granted or any document or instrument
executed under the repealed act i.e. FERA to the extent they are not inconsistent
with the provisions of this Act, are deemed to be done or taken under the
corresponding provisions of this Act. The said provision has the effect of
incorporating or making a general declaration that the existing rules, notifications,
declarations, authorization and exemptions granted under FERA will continue to apply
in spite of repeal of FERA and after enactment of FEMA as long as they are not in
consistent with FEMA. Clause (b) of sub-section (5) of Section 49 states that
any appeal preferred before the Appellate Board under sub-section (2) of
Section 52 of FERA but not disposed of before the commencement of this Act shall
stand transferred to and shall be disposed of by the Appellate Tribunal
constituted under this Act. Sub-section (6) to Section 49 of FEMA deals with the
application of Section 6 of the General Clauses Act. The first part of the said
sub-section protects the sunset clause and the two year limitation period for
commencement of proceedings. The expression "save as otherwise provided in
sub-section (3)" protects the sunset clause in spite of second portion of
sub-Section 6 and the second portion of sub-section (6) of Section 49 expressly
makes Section 6 of the General Clauses Act, 1897 applicable in spite of repeal
of FERA.
23.
Section
6 of the General Clauses Act, 1897 which protects the rights, obligations and actions
and liabilities applies in spite of repeal of FERA subject to two years limitation
period specified in sub-section (3) of Section 49 for initiation of
proceedings. 2Therefore, in view of Section 6 of the General Clauses Act read
with sub-section (3) of Section 49 of FEMA, proceedings for violation of FERA can
be instituted within the sunset period of two years with effect from 1.6.2000
till 31.5.2002. But for sub-section(3) there will be no limitation period of two
years in view of Section 6 of General Clauses Act, 1897 read with sub-section
(4) of Section 49 of FEMA.
24.
We
have dealt with the above mentioned repeal and saving clause to highlight the
application of Section 6 of the General Clauses Act, 1897 which provides that
where an Act is repealed then unless a different intention appears, the repeal shall
not affect any right or liability acquired or incurred under the repealed
enactment or any legal proceeding initiated in respect of such right or
liability and the legal proceedings may continue as if the repealing Act has not
been passed. The saving clause thus aimed to preserve the legal effect and consequence
of things done though those effects and consequences projected at the time when
FERA was in force. The scope and ambit of such repeal and saving clauses have been
considered by this Court in various decisions. Reference may be made to the
decisions of this Court reported in Anant Gopal Sheorey v. State of Bombay, AIR
1958 SC 915, Rao Shiv Bahadur Singh & Anr. vs. State of Vindhya Pradesh, AIR
1953 SC 394, State of Punjab v. Mohar Singh S/o Pratap Singh, AIR 1955 SC 84, T.S.
Baliah v. T.S. Rangachari, ITO, AIR 1969 SC 701; Gajraj Singh & Ors. vs. State
Transport Appellate Tribunal & Ors. (1997) 1 SCC 650; Gammon India Ltd. vs.
Special Chief Secretary & Ors. (2006) 3 SCC 354.
25.
25.
The appellate Board under FERA, it may be noted stood dissolved and ceased to function
when FEMA was enacted. Therefore, any appeal against the order of the adjudicating
officer made under FERA, after FEMA came into force, had to be filed before the
Appellate Tribunal constituted under FEMA and not to the Appellate Board under FERA.
Section 52 of FERA stipulates the limitation for an appeal against the orders
of the adjudicating officer to the Appellate Board. It provides the period of
limitation as 45 days but the Board may entertain an appeal after the expiry of
45 days but not beyond 90 days. Under FEMA, an appeal lies to the appellate
tribunal constituted under that Act and Section 19(2) provides that every
appeal shall be filed within 45 days from the date on which a 2copy of the order
of the adjudicating authority is received. The appellate is however empowered
to entertain appeals filed after the expiry of 45 days if it is satisfied that
there was sufficient cause for the delay in filing the appeal.
Though both Section
52(2) of FERA and Section 19(2) of FEMA provide a limitation of 45 days and
also give the discretion to the appellate authority to entertain an appeal after
the expiry of 45 days, if the appellant was prevented by sufficient cause from filing
an appeal in time, the appellate authority under FERA could not condone the
delay beyond 45 days whereas under FEMA, if the sufficient cause is made out,
the delay can be condoned without any limit. The question we have already pointed
out is whether Section 52(2) of FERA or Section 19(2) of FEMA will govern the
appeal. As noticed above, any provision relating to limitation is always
regarded as procedural and in the absence of any provision to the contrary, the
law in force on the date of the institution of the appeal, irrespective of the
date of accrual of the cause of action for the original order, will govern the
period of limitation.
26.
Section
52(2) can apply only to an appeal to the appellate Board and not to any
appellate tribunal. Therefore, irrespective of the 2fact that the adjudicating
officer had passed the orders with reference to the violation of the provisions
of FERA, as the appeal against such order was to the appellate tribunal constituted
under FEMA, necessarily Section 19(2) of FEMA alone will apply and it is not
possible to import the provisions of Section 52(2) of FERA. As we are not
concerned with the appeals to Appellate Board, but appeals to the Appellate
Tribunal, limitation being a matter of procedure, only that law that is
applicable at the time of filing the appeal, would apply. Therefore, Section
19(2) of FEMA and not Section 52(2) of FERA will apply. As noticed above, under
Section 19(2), there is no ceiling in regard to the period of delay that could
be condoned by the appellate tribunal. If sufficient cause is made out, delay
beyond 45 days can also be condoned. The tribunal and the High Court misdirected
themselves in assuming that the period of limitation was governed by Section
52(2) of FERA.
27.
27.
We have already indicated that clause (b) of sub-section (5) of Section 49
refers to appeal preferred and pending before the Appellate Board under FERA at
the time of repeal. The said clause 2does not specifically refer to appeals preferred
against adjudication orders passed under FEMA with reference to causes of
action which arose under FERA. We have already noticed the right of appeal
under FEMA has already been saved in respect of cause of action which arose under
FERA however subject to the proviso to sub-section (2) of Section 19, in the
case of belated appeals.
28.
28.
Above discussion will clearly demonstrate that Section 49 of FEMA does not seek
to withdraw or take away the vested right of appeal in cases where proceedings were
initiated prior to repeal of FERA on 01.06.2000 or after. On a combined reading
of Section 49 of FEMA and Section 6 of General Clauses Act, it is clear that the
procedure prescribed by FEMA only would be applicable in respect of an appeal filed
under FEMA though cause of action arose under FERA. In fact, the time limit
prescribed under FERA was taken away under the proviso to sub-section (2) of Section
19 and the Tribunal has been conferred with wide powers to condone delay if the
appeal is not filed within forty-five days prescribed, provided sufficient
cause is shown. Therefore, the findings rendered by the Tribunal as well as the
High Court that the Tribunal does not have jurisdiction to condone 2the delay beyond
the date prescribed under FERA is not a correct understanding of the law on the
subject.
29.
We,
therefore, hold that the Appellate Tribunal can entertain the appeal after the prescribed
period of 45 days if it is satisfied, that there was sufficient cause for not filing
the appeal within the said period. We are therefore inclined to set aside the
orders passed by the Tribunal and the High Court and remit the matter back to
the Tribunal for fresh consideration in accordance with law on the basis of the
findings recorded by us. We order accordingly.
30.
The
appeals stand disposed of accordingly.
........................................J
(R.V. Raveendran)
........................................J
(K.S. Panicker Radhakrishnan)
New
Delhi
April
11, 2011
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