The Calcutta High Court has formally affirmed that appeals challenging financial penalties imposed under the repealed Foreign Exchange Regulation Act (FERA), 1973, must be adjudicated within its Criminal Appellate Jurisdiction. In a decisive ruling, the court rejected a preliminary objection raised by the Enforcement Directorate, which had argued that such challenges should instead be filed as civil revenue matters under the court's Original Side Registry. By clarifying this procedural path, the court has ensured that the penal character of liabilities accrued under the older legislative framework remains preserved, even when those challenges reach the appellate stage under the modern Foreign Exchange Management Act (FEMA), 1999.

Justice Ananya Bandyopadhyay, presiding over the matter, emphasized that the transition between the two legislative regimes did not serve to extinguish the fundamental criminal nature of contraventions initiated under FERA. The decision provides essential clarity for litigants seeking to challenge long-standing adjudication orders, confirming that the procedural route for these appeals is governed by the historical context of the penalty rather than the current civil administrative structure of FEMA.

Preserving Penal Continuity Through Statutory Savings

The core of the legal dispute revolved around whether Section 35 of FEMA, which allows appeals to the High Court, necessitated a civil characterization of the proceedings. The Enforcement Directorate contended that since these appeals arise under FEMA-era rules, they must follow the established procedure for civil revenue appeals. However, the court found that the legislative intent embedded in Section 49(4) of FEMA, when read in conjunction with Section 6 of the General Clauses Act, 1897, provides a robust shield for the status of pending legal actions.

Section 6 of the General Clauses Act is explicitly designed to ensure that the repeal of an enactment does not adversely affect any rights, obligations, or liabilities incurred during its operation. The court observed that because FERA contraventions were inherently penal and subject to criminal procedural oversight, that character remains intact. As stated by the court in its order: "The underlying cause of action in the present matter is an accrued penal liability arising under the repealed FERA regime, saved by Section 49(4) of FEMA read with Section 6(e) of the General Clauses Act, 1897 ."

This reasoning effectively distinguishes the current cases from pure civil revenue disputes. The court explicitly noted that the Special Bench decision in Union of India v. Jagadish Prasad Nandalal , which is often cited to mandate the use of the Original Side Registry for FEMA appeals, applies only to matters initiated under the modern, civil framework of FEMA. It does not extend to the unique class of pre-repeal FERA adjudications where the penal consequences were already crystallized.

The Principle of Judicial Parity

A significant factor in the court's decision was the principle of judicial parity. The court highlighted that similar appeals involving co-accused parties and identical adjudication orders had been entertained by the High Court of Delhi under its Criminal Appellate Jurisdiction. In those instances, the High Court of Delhi had allowed the appeals on their merits, effectively setting aside the penalties.

By maintaining that these matters should be treated as criminal appeals, the Calcutta High Court has ensured consistency in the administration of justice. The court noted that treating the current appellants’ challenges as civil revenue matters would create an unnecessary and illogical procedural divide for parties involved in the exact same legal dispute. The history of the current appellants’ efforts—including their initial filing before the High Court of Delhi and their subsequent move to the Calcutta High Court following a grant of liberty—underscored the persistent character of these challenges as criminal appeals throughout their decade-long trajectory.

"Substantive penal liabilities accrued under FERA do not lose their criminal character merely because the final appellate challenge is brought after the enactment of FEMA," the court reasoned. By aligning its procedure with the precedent established in comparable cases, the court has effectively harmonized its approach with other judicial bodies handling the transition from FERA to FEMA.

Moving Toward Final Adjudication

With the preliminary jurisdictional hurdle cleared, the court has paved the way for the substantive merits of the four appeals to be heard. The appeals, which challenge the order of the Appellate Tribunal for Foreign Exchange, seek to contest a pecuniary penalty of ₹2,00,000 imposed upon the appellants in relation to findings from 2007. The initial adjudication order, issued by the Special Director of the Enforcement Directorate, had been upheld by the Appellate Tribunal in 2008, setting the stage for the long-standing legal battle that has now been validated for full hearing.

The court has scheduled the matter for a hearing on the merits on December 11, 2026. This date marks the beginning of the final phase of litigation for the appellants, who have maintained their challenge against the state for nearly two decades. By validating the criminal appellate route, the court has provided the appellants with the appropriate forum to argue the substance of their case without the impediment of procedural technicalities. The resolution of this matter will be closely watched by legal professionals as it clarifies the intersection of repealed statutes and modern procedural rules, reinforcing the principle that legislative changes should not undermine the fundamental procedural rights associated with the specific nature of a penalty.