Appellate forum for appeals against order u/s 51 of FERA whether filed prior or after 01.06.2000 is Appellate Tribunal under FEMA – SC
ABCAUS Case Law Citation:
ABCAUS 2759 (2019) (01) SC
The Foreign Exchange Regulation Act, 1973 (FERA) was repealed with effect from 01.06.2000 and replaced by Foreign Exchange Management Act, 1999 (FEMA).
The issue involved in this case was which is the proper appellate authority for deciding the appeals filed after repeal of FERA on 01.06.2000 against the order passed under Section 51 of FERA in the proceedings initiated prior to 01.06.2000, viz., is it the “Special Director (Appeals)” under Section 17 of FEMA or is it the “Appellate Tribunal” under Section 19 of FEMA?
The Hon’ble Supreme Court stated that the legislature had equated the Appellate Board constituted under FERA with the Appellate Tribunal constituted under FEMA for disposal of the appeals filed under Section 52(2) of FERA against an order passed under Section 51 of FERA which were pending before the Appellate Board as on 01.06.2000. Such appeals stood transferred from the Appellate Board to the Appellate Tribunal for their disposal in accordance with law.
The Hon’ble Supreme Court opined that that any appeal filed after 01.06.2000 against the order of the Adjudicating Officer passed under Section 51 of FERA in the proceedings initiated under FERA would lie before the Appellate Tribunal under Section 19 of FEMA. The Hon’ble Court assigned the following reasoning for holding so:
First, if the Adjudicating Officer had passed the order under Section 51 of FERA prior to 01.06.2000 when FERA was in force, the appeal against such order was maintainable only under Section 52(2) before the Appellate Board under FERA.
Secondly, if such appeal had remained pending before the Appellate Board on 01.06.2000, the same would have been transferred to the Appellate Tribunal constituted under FEMA in terms of Section 49 (5)(b) of FEMA for its disposal.
Third, a fortiori, any appeal, if filed after 01.06.2000 and against the similar order, i.e., an order passed under Section 51 of FERA should also be held to lie before the Appellate Tribunal under Section 19 of FEMA alike the appeals filed prior to 01.06.2000 and which were transferred to the Appellate Tribunal by virtue of Section 49(5)(b) of FEMA.
Fourth, the reason behind this simultaneous statutory transfer of pending appeals to the Appellate Tribunal under FEMA appears to be that the legislature did not intend to provide two separate Appellate Authorities under FEMA for challenging the adjudication order passed under Section 51 of the FERA, i.e., one appeal before the Special Director (Appeals) and the other appeal before the Appellate Tribunal under FEMA.
The Hon’ble Supreme Court opined that the legislature did not intend to make a distinction between the two appeals for their disposal by two different appellate authorities under FEMA only because one appeal was filed prior to 01.06.2000, therefore, it will lie before the Appellate Tribunal whereas the other appeal which was filed after 01.06.2000 though against the similar order, it will lie before the Special Director (Appeals).
The Hon’ble Supreme Court rejected the contention that since Section 49(5)(b) of FEMA is not identically worded on the pattern of Section 81(c) of FERA, that itself would justify that the legislature intended to provide two appellate authorities in FEMA for filing two types of appeals arising out of a similar order.
The Hon’ble Supreme Court pointed out that the submission of the respondent could not be acceptable for yet another reason. Perusal of Scheme of FEMA would show that the Special Director (Appeals) is subordinate in hierarchy to the Appellate Tribunal prescribed u/s 49(5)(2) of FEMA. It is, therefore, not possible to hold that one appeal would be maintainable before the Appellate Tribunal and the other appeal arising out of similar order would be maintainable before the Special Director (Appeals), who is subordinate in hierarchy to the Appellate Board. Such distinction does not stand for any logic.
The Hon’ble Supreme Court pointed out that accepting the contention of the respondents would give rise to an anomalous situation wherein the orders passed by the Appellate Tribunal in the appeals, which stood transferred to the Appellate Tribunal by virtue of Section 49 (5)(b), are appealable to the High Court under Section 35 of FEMA whereas the orders passed by the Special Director (Appeals) in the appeals filed after 01.06.2000 are not appealable to the High Court u/s 35 of FEMA. So, against the same order, one appellant has a right of appeal to the High Court but the other appellant has no such right of appeal because he suffered dismissal of his appeal from Special Director (Appeals) against whose order appeal does not lie under Section 35 to the High Court.
The Hon’ble Supreme Court, applying the principle of purposive interpretation, opined that the appellate forum for deciding the appeals arising out of the order passed under Section 51 of FERA whether filed prior to 01.06.2000 or filed after 01.06.2000 must be the same, i.e., Appellate Tribunal under FEMA.
