The Calcutta High Court has formally clarified that appeals challenging penalties stemming from alleged contraventions of the now-repealed Foreign Exchange Regulation Act, 1973 (FERA), are to be adjudicated under the court’s Criminal Appellate Jurisdiction. Justice Ananya Bandyopadhyay overruled a preliminary objection raised by the Enforcement Directorate, which had argued that such appeals, filed under the Foreign Exchange Management Act, 1999 (FEMA), should be classified as civil revenue matters on the High Court’s Original Side. The decision ensures that cases involving substantive penal liabilities originating under the older statutory regime do not lose their criminal character due to the change in administrative legislation.

The legal challenge was brought before the court by four appellants—Barun Kumar Chattopadhyay, Chandranath Chatterjee, Pradyot Kumar Dutta, and Gurupada Chowdhary—who were seeking to contest an adjudication order originally dated May 28, 2007. This order, passed by the Special Director of the Enforcement Directorate, had imposed a pecuniary penalty of ₹2,00,000 on each of the appellants. The Appellate Tribunal for Foreign Exchange had previously upheld these penalties in a judgment delivered on March 5, 2008. The appellants subsequently sought to challenge these findings before the High Court, asserting that their rights to criminal appeal were preserved by the transitional provisions of the law.

The Enforcement Directorate had relied heavily on the precedent established in the case of Union of India v. Jagadish Prasad Nandalal , arguing that because the appeal was filed under Section 35 of FEMA, it must follow the procedural routing reserved for civil revenue matters. The agency contended that modern exchange control violations are essentially civil in nature and that the court's Original Side rules should govern the proceedings.

However, the Court rejected this classification, emphasizing that the underlying cause of action in the present matter remains a penal liability accrued under the repealed FERA. Justice Bandyopadhyay’s ruling centered on the specific protections afforded by Section 49(4) of FEMA, read in conjunction with Section 6 of the General Clauses Act, 1897. The court observed that these provisions serve as a vital legislative bridge, ensuring that the transition from FERA to FEMA did not extinguish the penal nature of past contraventions or the procedural remedies associated with them.

Legacy of Penal Liabilities and Transitional Justice

In her order, Justice Bandyopadhyay articulated that the legislative intent behind the repeal of FERA was never to strip ongoing legal disputes of their substantive character. While Section 35 of FEMA provides a path for appeals to the High Court, the procedural routing is intrinsically linked to the origin of the liability itself. The court stated: " Sub-section (3) and sub-section (4) of Section 49 preserve the clear legislative intent that offences and penal contraventions committed under the repealed FERA continue to be governed by FERA provisions, thereby avoiding the obliteration of the criminal or penal nature of accrued liabilities."

By applying this logic, the court concluded that invoking Section 35 of FEMA does not transform a criminal-originating penalty into a civil revenue matter. The survival of the liability, as guaranteed by the saving clauses, necessitated that the procedural remedy remain within the framework of the Code of Criminal Procedure, 1973. This distinction prevents the procedural "obliteration" of the legal status of the appellants' cases, allowing them to maintain their challenge as criminal appeals.

Upholding Judicial Parity Across State Lines

A significant component of the court's reasoning involved the principle of judicial parity. The court noted that co-accused entities involved in the same set of circumstances—specifically, the corporate entity MMTC Ltd. and an employee named Sri B.C. Mallick—had already successfully challenged the identical adjudication and appellate orders before the High Court of Delhi. In those instances, the Delhi High Court had accepted the challenges under its Criminal Appellate Jurisdiction and subsequently set aside the impugned orders on their merits.

The Calcutta High Court emphasized that it would be fundamentally inconsistent to treat the present appellants differently than their co-accused simply based on a jurisdictional technicality. The record further clarified that one of the appellants had originally filed a criminal appeal before the Delhi High Court, which granted them the liberty to withdraw and file in the appropriate High Court within West Bengal. Maintaining the criminal character of the appeal was essential to ensure that identical penal adjudications received consistent judicial treatment across different jurisdictions.

Finalizing the Procedural Pathway for Future Hearings

The court’s final order is a definitive dismissal of the Enforcement Directorate’s attempt to reclassify the appeals. By upholding the applicability of the General Clauses Act, 1897, the ruling provides clarity for similar legacy cases that may still be working their way through the appellate process decades after the transition to the modern FEMA regime.

"In view of the statutory scheme of Section 49(4) of FEMA , 1999 read with Section 6 of the General Clauses Act, 1897 , and supported by the judicial parity established in CRLA No. 330 of 2008, this Court holds that the present appeals, assailing a penal sanction rooted in FERA contraventions, are maintainable as a Criminal Appeal before this Court," the order concluded.

With the preliminary objection successfully overruled, the court has directed that the matters be listed for a substantive hearing on the merits on December 11, 2026. This date marks the next stage for the appellants, who will now have the opportunity to contest the validity of the original ₹2,00,000 penalties within the forum of a criminal appellate proceeding. The ruling serves as a reminder that even as legislative frameworks evolve, the fundamental character of historical penal liabilities remains protected by statutory saving clauses.