Fera vs M/s. Premier Limited (Formerly Premier Automobiles Ltd.) & Ors.

HELD: 1.1 Section 49(5)(b) of Foreign Exchange Management Act, 1999 (FEMA) deals with repeal and saving in relation to the action taken and to be taken under Foreign Exchange Regulation Act, 1973 (FERA). 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. 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. [Paras 19, 20][566-G-H; 567-A]

1.2 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. 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. [Paras 21, 22][567-B-D]

1.3 This is f or more than one reason. 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. 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. 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. [Paras 22-27][567-D-F; G; 568-A-B]

1.4 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). 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. This intention of the legislature is strengthened when one reads Section 49 (5)(b) of FEMA and Section 81(c) of FERA.[Paras 28, 29][568-C-D]

1.5 Section 49(5)(b) of FEMA specifically provides that the appeals filed under Section 52(2) of FERA against the order passed under Section 51 of FERA will be decided by the Appellate Tribunal under FEMA. Section 81(c) of FERA, 1973 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. It is true that Section 49(5)(b) of FEMA is not worded alike Section 81(c) of FERA, yet, it shows the intention of the legislature that all such appeals have to be heard by the Appellate Board under the FERA. Indeed, 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 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. [Paras 30-32, 35] [568-E-G; 569-C]

1.6 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 hierarchy to the Appellate Board. Such distinction does not stand for any logic. [Para 37][569-E, F]

1.7 Applying the principle of purposive interpretation, 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. The view taken by the High Court cannot be concurred with and accordingly it is held 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. [Paras 40, 41][570-C-D]

1.8 The appeals which respondent Nos.2 to 4 had filed before the Special Director (Appeals) are accordingly transferred to the concerned Appellate Tribunal constituted under FEMA for their disposal on merits in accordance with law. [Para 42][570-E]