2019 INSC 0082
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3529 OF 2008
Union of India & Ors.             ….Appellant(s)
VERSUS
M/s Premier Limited (Formerly    …Respondent(s)
Premier Automobiles Ltd.) & Ors.
J U D G M E N T
Abhay Manohar Sapre, J.
1.  This   appeal   is   filed   by   the   Union   of   India
against   the   final   judgment   and   order   dated
13.07.2006 passed by the High Court of Judicature
at Bombay in Writ Petition Nos. 1567 of 2005, 2780,
2781   &   2782   of   2004   wherein   the   High   Court
allowed   the   writ   petitions   and   quashed   the   orders
passed by the Special Director (Appeals).
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2. The   controversy   involved   in   this   appeal   is
short.     However,   in   order   to   appreciate   the   same,
few undisputed facts need mention hereinbelow.
3. On 01.05.1991, a memorandum to show cause
notice   was   issued   by   the   Special   Director   to
respondent   Nos.   2,   3   and   4,   namely,   M/s   Godrej
Industries   Ltd.   [formerly   known   as   Godrej   Soaps
Ltd.   (R­2)]   and   its   two   Directors   (R­3   and   R­4)   for
allegedly committing contravention of Sections 9 (1)
(a),   9(1)(c)   and   Section   16(1)   of   the   Foreign
Exchange Regulation Act, 1973 (hereinafter referred
to   as    “FERA”)   in   respect   of   imports   and   exports   of
certain   commodities   made   with   two   foreign   parties,
viz.,   M/s   Fingrain,   S.A.,   Geneva   and   M/s
Continental   Grain   Export   Corporation,   New   York
during the year 1977­78.
4. During the pendency of the proceedings, FERA
was   repealed   with   effect   from   01.06.2000.   It   was,
however,   replaced   by   Foreign   Exchange
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Management   Act,   1999   (hereinafter   referred   to   as
“FEMA”).  
5. On   05.12.2003,   an   adjudication   order   was
passed   by   the   Deputy   Director   of   Enforcement
under FEMA read with FERA in relation to the show
cause   notice   dated   01.05.1991.   By   this   order,
penalty   of   Rs.15,50,000/­     was   imposed   on   M/s
Godrej   Industries   Ltd.   and   its   two   Directors   for
contravening  the provisions of Sections 9 (1)(a)  and
9(1)(c) read with Section 16 (1) of FERA.
6. On 15.01.2004, the respondent Nos. 2 to 4 felt
aggrieved   by   the   adjudication   order   dated
05.12.2003   and   filed   appeal   before   the   Special
Director (Appeals) under Section 17 of FEMA.
7. On   08.09.2004   and   08.11.2004,   the   Special
Director   (Appeals)   dismissed   the   appeals   as   being
not maintainable. He held that the Special Director
(Appeals)   has   no   jurisdiction   to   hear   the   appeals
against the adjudication order passed under Section
51 of FERA.
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8. Respondent Nos. 2 to 4 felt aggrieved by orders
dated   08.09.2004   and   08.11.2004   and   filed   writ
petitions   before   the   High   Court   of   Bombay   at
Mumbai.     By   impugned   common   order,   the   High
Court   allowed   the   writ   petitions   and   quashed   the
orders   of   the   Special   Director   (Appeals).   The   High
Court   held   that   the   appeals   filed   by   respondent
Nos.2   to   4   before   the   Special   Director   (Appeals)
against   the   adjudication   order   dated   05.12.2003
were maintainable inasmuch as the Special Director
(Appeals)   possessed   the   jurisdiction   to   decide   the
appeals on merits. 
9. It is against  this order  of the  High Court,   the
Revenue   has   felt   aggrieved   and   filed   the   present
appeal by way of  special leave before this Court.  
10. Heard learned counsel for the parties.
11. Learned   counsel   for   the   appellant   (Union   of
India)   while   assailing   the   legality   of   the   impugned
order   contended   that   on   proper   reading   of   relevant
provisions   of   FERA   and   FEMA   and   especially
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Section   81   of   FERA   and   Sections   17,   19   and   49   of
FEMA   in   juxtaposition ,   it   is   clear   that   the   appeal
against   the   order   dated   05.12.2003   passed   by   the
Deputy   Director   of   Enforcement   (Adjudicating
Officer)   under   Section   51   of   FERA   read   with   FEMA
would   lie   only   to   the   Appellate   Tribunal   under
Section   19   of   FEMA   but   not   before   the   Special
Director (Appeals) under Section 17 of FERA. 
12. It   is   this   submission,   the   learned   counsel
elaborated   in   his   argument   by   referring   to   various
provisions of FERA and FEMA.
13. In   reply,   learned   counsel   for   the
respondents(assessees)     supported   the   view   taken
by   the   High   Court   and   contended   that   the   appeal
was   rightly   held   maintainable   under   Section   17   of
FEMA   before   the   Special   Director   (Appeals)   against
the   order   dated   05.12.2003   passed   by   Deputy
Director   of   Enforcement   as   an   Adjudicating   Officer
for its disposal.  Learned counsel also referred to the
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provisions   of   FERA   and   FEMA   to   support   his
arguments.
14. Having   heard   the   learned   counsel   for   the
parties   and   on   perusal   of   the   record   of   the   case
including   the   written   submissions,   we   find   force   in
the   submissions   of   learned   counsel   for   the
appellants­UOI. 
15. The question, which arises for consideration in
this   appeal,   is   ­   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.
16. In   other   words,   the   question   is,   if   the
Adjudicating   Officer   has   passed   an   order   after   the
repeal  of  FERA  in  the  proceedings  initiated  prior   to
01.06.2000,   whether   an   appeal   against   such   order
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will lie before the “Special Director (Appeals)” under
Section   17   of   FEMA   or   before   the   “Appellate
Tribunal” under Section 19 of FEMA.
17. In order to answer the question involved in this
appeal, it is necessary to take note of some relevant
provisions   of   FERA   (since   repealed)   and   FEMA
under   which   the   issue   was   dealt   with.     Though
Rules   are   also   framed   under   FEMA   prescribing   the
manner   in   which   the   appeals   are   to   be   prosecuted
but   for   deciding   the   question,   it   may   not   be
necessary to examine the Rules.  
18. The  relevant  Sections  are Sections 50, 51, 52,
54 and 81 of FERA and Sections 17, 18, 19 and 49
of FEMA which read as under:
“ FERA
Section 50
Penalty ­If   any   person   contravenes   any   of   the
provisions of this Act other than section 13, clause (a)
of   sub­section   (1)   of   section   18,   section   18   A   and
clause   (a)   of   sub­section   (   1   )   of   section   19     or   of   any
rule,   direction   or   order   made   thereunder,   he   shall   be
liable   to   such   penalty   not   exceeding   five   times   the
amount or value involved in any such contravention or
five   thousand   rupees,   whichever   is   more   as   may   be
adjudged by the Director of Enforcement or any other
officer   of   Enforcement   not   below   the   rank   of   an
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Assistant   Director   of   Enforcement   specially
empowered   in   this   behalf   by   order   of   the   Central
Government   (in   either   case   hereinafter   referred   to   as
the adjudicating officer).
Section 51
Power   to   adjudicate   ­   For   the   purpose   of   adjudging
under section 50 whether any person has committed a
contravention   of   any   of   the   provisions   of   this   Act
(other than those referred to in that section) or of any
rule,   direction   or   order   made   thereunder,   the
adjudicating   officer   shall   hold   an   inquiry   in   the
prescribed   manner   after   giving   that   person   a
reasonable opportunity for making a representation in
the matter and if, on such inquiry, he is satisfied that
the   person   has   committed   the   contravention,   he   may
impose   such   penalty   as   he   thinks   fit   in   accordance
with the provisions of that section.
Section 52
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   1)   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 forty­five 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   forty­five   days,   but   not   after   ninety   days   from   the
date   aforesaid   if   it   is   satisfied   that   the   appellate   was
prevented by sufficient cause from filing the appeal in
time: 
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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. 
(3)   On   receipt   of   an   appeal   under   sub­section   (2)   the
Appellate   Board   may,   after   making   such   further
inquiry   as   it   deems   fit,   confirm,   modify   or   set   aside
the   order   appealed   against   and   the   decision   of   the
Appellate   Board   shall,   subject   to   the   provisions   of
section 54, be final and if the sum deposited by way of
penalty   under   sub­section   (2)   exceeds   the   amount
directed to be paid by the Appellate Board, the excess
amount shall be refunded. 
(4)   The   Appellate   Board   may,   for   the   purpose   of
examining the legality, propriety or correctness of any
order   made   by   the   adjudicating   officer   under   section
50 read with section 51 in relation to any proceeding,
on its own motion or otherwise, call for the records of
such proceeding and make such order in the case as it
thinks fit.
 
(5)   No   order   of   the   adjudicating   officer   made   under
section 50 read with section 51 shall be varied by the
Appellate Board so as to prejudicially affect any person
without   giving   such   person   a   reasonable   opportunity
for making a representation in the matter; and subject
thereto   the   Appellate   Board   shall   follow   such
procedure,   in   respect   of   the   proceedings   before   it,   as
may be prescribed. 
(6)   The   powers   and   functions   of   the   Appellate   Board
may   be   exercised   and   discharged   by   Benches
consisting   of   two   members   and   constituted   by   the
Chairman of the Appellate Board: 
Provided   that   if   the   members   of   the   Bench
differ on any point or points, they shall state the point
or points on which they differ and refer the same to a
third   member   (to   be   specified   by   the   Chairman)   for
hearing   on   such   point   or   points   and   such   point   or
points   shall   be   decided   according   to   the   opinion   of
that member: 
Provided   further   that   it   shall   be   competent   for
the   Chairman   or   any   other   member   of   the   Appellate
Board   authorised   by   the   Chairman   in   this   behalf   to
exercise the powers and discharge the functions of the
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Appellate   Board   in   respect   of   any   appeal   against   an
order  imposing  a  penalty  of  an  amount  not  exceeding
two lakhs and fifty thousand rupees.
Section 54
Appeal to High Court   ­ An appeal shall lie to the High
Court   only   on   questions   of   law   from   any   decision   or
order   of   the   Appellate   Board   under   sub­section   (3)   or
sub­section (4) of section 52: 
Provided   that   the   High   Court   shall   not
entertain   any   appeal   under   this   section   if   it   is   filed
after   the   expiry   of   sixty   days   of   the   date   of
communication   of   the   decision   or   order   of   the
Appellate Board, unless the High Court is satisfied that
the   appellant   was   prevented   by   sufficient   cause   from
filing the appeal in time. 
Explanation. —In this section and in section 55, "High
Court" means­ 
(i) the High Court within the jurisdiction of which the
aggrieved   party   ordinarily   resides   or   carries   on
business or personally works for gain; and
(ii)   where   the   Central   Government   is   the   aggrieved
party, the High Court within the jurisdiction of which
the respondent, or in a case where there are more than
one   respondent,   any   of   the   respondents,   ordinarily
resides   or   carries   on   business   or   personally   works   for
gain. 
Section 81
Repeal   and   Saving   ­   (1)   The   Foreign   Exchange
Regulation Act, 1947 (7 of 1947) is hereby repealed. 
(2) Notwithstanding such repeal­ 
(a) 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,
authorisation   or   exemption   granted   or   any   document
or   instrument   executed   or   any   direction   given   or   any
proceedings taken or any confiscation adjudged or any
penalty or fine imposed) under the Act hereby repealed
shall,   in   so   far   as   it   is   not   inconsistent   with   the
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provisions of this Act, be deemed to have been done or
taken under the corresponding provisions of this Act;
(b) the provisions of section 60 of this Act shall apply
in   relation   to   the   contravention   of   any   of   the
provisions   of   the   Act   hereby   repealed   or   of   any   rule,
direction or order made thereunder; 
(c)   any   appeal   preferred   to   the   Foreign   Exchange
Regulation   Appellate   Board   under   sub­section   (2)of
section   23E   of   the   Act   hereby   repealed   but   not
disposed of before the commencement of this Act and
any   appeal   that   may   be   preferred   to   the   said   Board
against   any   order   made   or   to   be   made   under   section
23   of   the   Act   hereby   repealed   may   be   disposed   of   by
any member of the Appellate Board constituted under
this   Act   in   accordance   with   the   provisions   of   sub­
section (6) of section 52 of this Act;
(d)   every   appeal   from   any   decision   or   order   of   the
Foreign   Exchange   Regulation   Appellate   Board   under
sub­section (3) or sub­section (4) of section 23E of the
Act   hereby   repealed   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 any
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. 
(3) The mention of particular matters in sub­section (2)
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.
FEMA
Section 17
  Appeal to Special Director (Appeals) .—
(1    )   The   Central   Government   shall,   by   notification,
appoint   one   or   more   Special   Directors   (Appeals)   to
hear   appeals   against   the   orders   of   the   Adjudicating
Authorities under this section and shall also specify in
the said notification the matter and places in relation
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to   which   the   Special   Director   (Appeals)   may   exercise
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).
(3)   Every   appeal   under   sub­section   (1)   shall   be   filed
within forty­five days from the date on which the copy
of   the   order   made   by   the   Adjudicating   Authority   is
received   by   the   aggrieved   person   and   it   shall   be   in
such   form,   verified   in   such   manner   and   be
accompanied by such fee as may be prescribed: 
Provided   that   the   Special   Director   (Appeals)
may   entertain   an   appeal   after   the   expiry   of   the   said
period   of   forty­five   days,   if   he   is   satisfied   that   there
was sufficient cause for not filing it within that period.
(4)   On   receipt   of   an   appeal   under   sub­section   (1),   the
Special Director (Appeals) may after giving the parties
to the appeal an opportunity of being heard, pass such
order   thereon   as   he   thinks   fit,   confirming,   modifying
or setting aside the order appealed against.
(5)   The  Special  Director  (Appeals)  shall  send  a  copy  of
every order made by him to the parties to appeal and
to the concerned Adjudicating Authority.
(6)   The   Special   Director   (Appeals)   shall   have   the   same
powers   of   a   civil   court   which   are   conferred   on   the
Appellate   Tribunal  under   sub­section  (2)   of  section   28
and—
(a)   all   proceedings   before   him   shall   be   deemed   to   be
judicial   proceedings   within   the   meaning   of   sections
193 and 228 of the Indian Penal Code (45 of 1860);
(b)   shall be deemed to be a civil court for the purposes
of   sections   345   and   346   of   the   Code   of   Criminal
Procedure, 1973 (2 of 1974).
Section 18
Appellate   Tribunal .—   The   Appellate   Tribunal
constituted   under   sub­section(1)   of   Section   12   of   the
Smugglers   and   Foreign   Exchange   Manipulators
(Forfeiture   of   Property)   Act,   1976   (13   of   1976),   shall,
on   and   from   the   commencement   of   Part   XIV   of
Chapter VI of the Finance Act, 2017, be the Appellate
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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. 
Section 19
Appeal to Appellate Tribunal .—
(1)   Save   as   provided   in   sub­section   (2),   the   Central
Government or any person aggrieved by an order made
by   an   Adjudicating   Authority,   other   than   those
referred   to   in   sub­section   (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.
(2)   Every   appeal   under   sub­section   (1)   shall   be   filed
within   a   period   of   forty­five   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
and   it   shall   be   in   such   form,   verified   in   such   manner
and be accompanied by such fee as may be prescribed: 
Provided   that   the   Appellate   Tribunal   may
entertain an appeal after the expiry of the said period
of   forty­five   days   if   it   is   satisfied   that   there   was
sufficient cause for not filing it within that period.
(3)   On   receipt   of   an   appeal   under   sub­section   (1),   the
Appellate Tribunal may, after giving the parties to the
appeal an opportunity of being heard, pass such orders
thereon   as   it   thinks   fit,   confirming,   modifying   or
setting aside the order appealed against.
(4)   The   Appellate   Tribunal   shall   send   a   copy   of   every
order   made   by   it   to   the   parties   to   the   appeal   and   to
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the   concerned   Adjudicating   Authority   or   the   Special
Director (Appeals), as the case may be.
(5)   The   appeal   filed   before   the   Appellate   Tribunal
under   sub­section   (1)   shall   be   dealt   with   by   it   as
expeditiously as possible and endeavour shall be made
by   it   to   dispose   of   the   appeal   finally   within   one
hundred   and   eighty   days   from   the   date   of   receipt   of
the appeal: 
Provided   that   where   any   appeal   could   not   be
disposed of within the said period of one hundred and
eighty   days,   the   Appellate   Tribunal   shall   record   its
reasons   in   writing   for   not   disposing   of   the   appeal
within the said period.
(6)   The   Appellate   Tribunal   may,   for   the   purpose   of
examining the legality, propriety or correctness of any
order   made   by   the   Adjudicating   Authority   under
section   16   in   relation   to   any   proceeding,   on   its   own
motion   or   otherwise,   call   for   the   records   of   such
proceedings   and   make   such   order   in   the   case   as   it
thinks fit.
Section 35
Appeal   to   High   Court .—Any   person   aggrieved   by   any
decision or order of the Appellate Tribunal may file an
appeal   to   the   High   Court   within   sixty   days   from   the
date of communication of the decision or order of the
Appellate   Tribunal   to   him   on   any   question   of   law
arising out of such order:
Provided   that   the   High   Court   may,   if   it   is
satisfied that the appellant was prevented by sufficient
cause   from   filing   the   appeal   within   the   said   period,
allow   it   to   be   filed   within   a   further   period   not
exceeding sixty days. 
Explanation.—In   this   section   “High   Court”
means—
(a)   the High Court within the jurisdiction of which the
aggrieved   party   ordinarily   resides   or   carries   on
business or personally works for gain; and
(b)   where   the   Central   Government   is   the   aggrieved
party, the High Court within the jurisdiction of which
the respondent, or in a case where there are more than
one   respondent,   any   of   the   respondents,   ordinarily
resides   or   carries   on   business   or   personally   works   for
gain.
14

Section 49
Repeal and saving .—
(1)   The   Foreign   Exchange   Regulation   Act,   1973   (46   of
1973)   is   hereby   repealed   and   the   Appellate   Board
constituted   under   sub­section   (1)   of   section   52   of   the
said   Act   (hereinafter   referred   to   as   the   repealed   Act)
shall stand dis solved.
(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
law   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.
(4)   Subject   to   the   provisions   of   sub­section   (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,—
(a)   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,
authorisation   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
sub­section   (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;
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(c)   every   appeal   from   any   decision   or   order   of   the
Appellate   Board   under   sub­section   (3)   or   sub­section
(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   sub­section   (3),   the
mention   of   particular   matters   in   sub­sections   (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.”
19. Section   49   (5)(b)   of   FEMA   deals   with   repeal
and saving in relation to the action taken and to be
taken   under   FERA,   1973.   Reading   of   this   Section
shows that the legislature has 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. 
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20. The   reason   as   to   why   a   specific   provision   for
transfer of such pending appeals was made for their
disposal   from   the   Appellate   Board   to   the   Appellate
Tribunal   was   that   the   Appellate   Board   constituted
under   FERA   stood   dissolved   by   Section   49(1)   of
FEMA with effect from 01.06.2000. 
21. It   is   this   dissolution   of   the   Appellate   Board,
which   necessitated   the   legislature   to   make   a
corresponding   provision   in   the   new   Act   (FEMA)   so
that the consequences arising out of the dissolution
of   the   Appellate   Board   constituted   under   FERA   is
taken   care   of   by   another   appellate   authority
constituted   under   the   FEMA   and   all   pending
appeals   are   automatically   transferred   to   the
Appellate Board for their disposal under FEMA. 
22. Having   examined   the   relevant   provisions   of
FERA   and   FEMA,   we   are   of   the   considered   opinion
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
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under FERA would lie before the Appellate Tribunal
under   Section   19   of   FEMA.   This   we   say   for   more
than one reason set out in detail hereinbelow.
23. First, if the Adjudicating Officer had passed an
order   under   Section   51   of   FERA   prior   to
01.06.2000, then the appeal against such order was
required to be filed before the Appellate Board under
Section 52 (2) of FERA. In   other   words,   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. 
24. Second,   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. 
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25. Indeed,   there   can   be   no   dispute   to   the   legal
position   mentioned   in   the   First   and   Second
reasoning  supra .
26. 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.      
27. 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.
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28. In   other   words,   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).   In our view, there does not appear to be
any   justifiable   reason   to   make   such   distinction   for
filing   of   appeals   filed   against   the   similar   order
passed   under   FERA   before   two   different   appellate
authorities under FEMA.
29. In our opinion, this intention of the legislature
is   strengthened   when   we   read   Section   49   (5)(b)   of
FEMA and Section 81(c) of FERA.  
30. So   far   as   Section   49(5)(b)   of   FEMA   is
concerned,     as   mentioned   above,   it   specifically
provides that the appeals filed under Section 52 (2)
of FERA against the order passed under Section 51
20

of   FERA   will   be   decided   by   the   Appellate   Tribunal
under FEMA. 
31. So   far   as   Section   81(c)   of   FERA,   1973   is
concerned, it deals with Repeal and Saving of FERA,
1947.   Clause (c) of Section 81 specifically  provides
that all the appeals filed under Section 23 of FERA,
1947, whether pending on the date of Repeal or/and
those   filed   after   the   repeal   of   FERA,   1947,   shall   be
disposed   of   by   the   Appellate   Board   constituted
under FERA, 1973.
32. It is true that Section 49 (5)(b) of FEMA is not
worded   alike   Section   81   (c)   of   FERA,     yet,   in   our
view, it shows the intention of the legislature that all
such   appeals   have   to   be   heard   by   the   Appellate
Board   under   the   FERA.   The   legislative   intent
contained   in   Section   81   (c)   can   be   taken   into
account   for   interpreting   the   relevant   provisions   of
FERA and FEMA for deciding the question which is
the subject matter of this appeal.
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33.   We cannot, therefore, accept the submission of
learned counsel for the respondents(assessees) 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. 
34. In other words, it is not possible to accept the
submission   of   learned   counsel   for   the
respondents(assessees)   that   by   interpretative
process   this   Court   can   uphold   creation   of   another
appellate   authority   for   the   disposal   of   the   appeals
filed   against   the   order   passed   under   Section   51   of
FERA   after   01.06.2000   which   do   not   fall   under
Section 49 (5)(2) of FEMA.
35.   Indeed,     as   mentioned   above,   when   similar
occasion   arose   at   the   time   of   repealing   of   FERA,
1947 by a new Act­ FERA, 1973 on 01.01.1974, the
legislature   provided   in   Section   81(c)   of   FERA,   1973
that   all   appeals   filed   under   Section   23   (E)(2)   of
22

FERA, 1947 and pending before the Appellate Board
including   those   appeals   which   are   filed   against   the
order   passed   after   01.01.1974   shall   be   disposed   of
by the Appellate Board under FERA, 1973.
36. Keeping in view this legislative intent, we are of
the view that there is no reason as to why the same
legislative intent while interpreting the provisions of
FERA, 1973 and FEMA, 1999 is applied for deciding
the identical question now arising in the case. 
37. The   aforementioned   submission   is   not
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 under Section 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
23

hierarchy   to   the   Appellate   Board.     Such   distinction
does not stand for any logic.
38. This   question   can   be   examined   from   another
angle also.  If the submission of the learned counsel
for   the   respondents   is   accepted   that   the   appellate
forum   in   this   case   for   filing   appeal   is   ­     “Special
Director (Appeals)” and not the  “Appellate Tribunal”
under   FEMA     then   it   will   result   in   anomalous
situations which will again be incongruous.
39. The anomalous situation would be,  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   under   Section   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
24

suffered   dismissal   of   his   appeal   from   Special
Director   (Appeals)   against   whose   order   appeal   does
not   lie   under   Section   35   to   the   High   Court.   In   our
view,   such   anomalous   situation   while   interpreting
the provisions of the Act should always be avoided.
40. Applying   the   principle   of   purposive
interpretation, we are of the view 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.
41. In  view  of the  foregoing  discussion, we  cannot
concur   with   the   view   taken   by   the   High   Court   and
accordingly hold that the appeal filed by respondent
Nos.   2   to   4   against   the   order   dated   05.12.2003
passed   by   Deputy   Director   of   enforcement   under
Section   51   of   FERA   will   lie   and   was,   therefore,
maintainable   only   before   the   Appellate   Tribunal
under Section 19 of FEMA. 
25

42. The   appeals   bearing   Nos.SD/A/MUM/04­
05/38,39,40   and   SD/A/MUM/03­04/22   which
respondent   Nos.   2   to   4   had   filed   before   the   Special
Director (Appeals) are accordingly transferred to the
concerned   Appellate   Tribunal   constituted   under
Section   18   of   FEMA   for   their   disposal   on   merits   in
accordance with law. 
43. The   appeal   is   accordingly   allowed.   The
impugned order is set aside. 
    …………………………………J.
      [ ABHAY MANOHAR SAPRE ]
                         
                                        
....…..................................J.
             [INDIRA BANERJEE]
New Delhi;
January 29, 2019.       
     
 
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