Case Note & Summary
The judgment involves four writ petitions filed by Premier Limited, Godrej Industries Limited, A.B. Godrej, and N.B. Godrej challenging orders passed by the Special Director (Appeals) under the Foreign Exchange Management Act, 1999 (FEMA). The common issue was whether the Special Director (Appeals) had jurisdiction to entertain appeals against adjudication orders passed by the Assistant Director under the repealed Foreign Exchange Regulation Act, 1973 (FERA). The petitioners had been subjected to adjudication proceedings under FERA, and the Assistant Director passed orders imposing penalties. Thereafter, the petitioners filed appeals before the Special Director (Appeals) under Section 52 of FEMA, which were dismissed. The petitioners contended that the Special Director (Appeals) had no jurisdiction to hear appeals against orders of the Assistant Director, as Section 52 of FEMA only provides for appeals against orders of the Special Director or Additional Director. The respondents argued that under Section 49 of FEMA, proceedings initiated under FERA are saved and can be continued under FEMA, and the appellate forum under FEMA should be available. The court analyzed the provisions of Section 52 and Section 49 of FEMA. It held that Section 52(1) clearly states that appeals lie only against orders passed by the Special Director of Enforcement or the Additional Director of Enforcement. The Assistant Director is not mentioned. The court further held that Section 49, which contains repeal and savings provisions, does not expand the jurisdiction of the appellate authority under FEMA. The savings clause only continues proceedings but does not create new appellate rights. Since the orders were passed by the Assistant Director under FERA, the appeals before the Special Director (Appeals) were not maintainable. The court allowed the writ petitions, quashed the orders of the Special Director (Appeals), and directed that the appeals be treated as not maintainable. The court also noted that the petitioners may have other remedies available under law.
Headnote
A) Foreign Exchange Management Act, 1999 - Section 52 - Appeal to Special Director (Appeals) - Jurisdiction - The question was whether an appeal against an order of adjudication passed by the Assistant Director under the repealed FERA, 1973 could be filed before the Special Director (Appeals) under FEMA, 1999. The court held that under Section 52 of FEMA, appeals lie only against orders passed by the Special Director of Enforcement or the Additional Director of Enforcement, and not against orders passed by the Assistant Director. Since the adjudication orders were passed by the Assistant Director under FERA, the appeals before the Special Director (Appeals) were not maintainable. (Paras 1-10) B) Foreign Exchange Management Act, 1999 - Section 49 - Repeal and Savings - Transitional Provisions - The court interpreted Section 49(3) and (4) of FEMA, which save proceedings initiated under FERA and provide for continuation under FEMA. However, the court held that the savings clause does not confer jurisdiction on the Special Director (Appeals) to hear appeals against orders passed by the Assistant Director, as the appellate forum under FEMA is different from that under FERA. The orders of the Assistant Director under FERA were appealable to the Director of Enforcement, but under FEMA, appeals from Assistant Director orders are not provided. Thus, the appeals were not maintainable. (Paras 11-15) C) Foreign Exchange Management Act, 1999 - Section 52 - Delegation of Powers - The court noted that under Section 52(1) of FEMA, the Central Government may confer appellate powers on the Special Director (Appeals) only in respect of orders passed by the Special Director or Additional Director. Since the impugned orders were passed by the Assistant Director, the Special Director (Appeals) had no jurisdiction to entertain the appeals. The writ petitions were allowed, and the orders of the Special Director (Appeals) were quashed. (Paras 16-20)
Issue of Consideration
Whether an appeal lies to the Special Director (Appeals) under Section 52 of the Foreign Exchange Management Act, 1999 against an order of adjudication passed by the Assistant Director under the repealed Foreign Exchange Regulation Act, 1973, and whether the Special Director (Appeals) has jurisdiction to entertain such appeals.
Final Decision
Writ petitions allowed. Orders of the Special Director (Appeals) quashed. The appeals filed before the Special Director (Appeals) are held not maintainable. No order as to costs.
Law Points
- Jurisdiction of appellate authority under FEMA
- 1999
- Section 52
- Section 49
- repeal and savings clause
- delegation of powers
- adjudication by Assistant Director
- appeal to Special Director (Appeals)
- interpretation of transitional provisions
