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was repealed with effect from 01.06.2000.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

Penalty­If   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.

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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 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

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

17

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

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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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