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2019 Supreme(SC) 88
SUPREME COURT OF INDIA
ABHAY MANOHAR SAPRE, INDIRA BANERJEE, JJ.
Union of India & Ors. – Appellant(s)
VERSUS
M/s Premier Limited (Formerly Premier Automobiles Ltd.) & Ors. – Respondent(s)
CIVIL APPEAL NO. 3529 OF 2008
Decided On : 29-01-2019
For Appellant : Ms. Sunita Rani Singh,Adv. Ms. Rashmi Malhotra,Adv. Ms. Saudamini Sharma,Adv. Mr. Chakitan Vikram Shekher Papta,Adv. For Mr. B. Krishna Prasad, AOR
For Respondent: Mr. Ajay Aggarwal,Adv. Ms. Mallika Joshi,Adv. Mr. Rajan Narain, AOR Mr. Manish K. Bishnoi, AOR Mr. Archit Gupta,Adv.
IMPORTANT POINT
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.
Headnote:Foreign Exchange Regulation Act, 1973 – Section 51, 52(2), 17 and 81© r/w section 19 and 49(5)(b), Foreign Exchange Management Act, 1999 – Appeal filed u/s 52(2), against adjudication u/s 51 passed after repeal of FERA in a proceeding initiated before 01.06.2000 – Appellate Board constituted under FERA stood dissolved by section 19(1), FEMA – Therefore Appellate Board under FERA equated with Appellate Tribunal under FEMA by section 49(5)(b) – Such appeals stood transferred to from Appellate Board to Appellate Tribunal – Held, 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 – Purposive interpretation. (Para 19, 20, 21, 22, 29, 39)
Facts of the case:
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. (R-2)] and its two Directors (R-3 and R-4) for allegedly committing contravention of Sections 9 (1) (a), 9(1)© and Section 16(1) of the Foreign Exchange Regulation Act, 1973 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 1977-78.
During the pendency of the proceedings, FERA was repealed and replaced by Foreign Exchange Management Act, 1999.
An adjudication order was passed by the Deputy Director of Enforcement under FEMA read with FERA in relation to the show cause notice. Penalty of Rs.15,50,000/- was imposed on M/s Godrej Industries Ltd. and its two Directors.
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.
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 were maintainable inasmuch as the Special Director (Appeals) possessed the jurisdiction to decide the appeals on merits.
Finding of the Court:
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.
Result: Appeal disposed of.
JUDGMENT
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).
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. (R-2)] and its two Directors (R-3 and R-4) 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 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.
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 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 provisions of FERA and FEMA to support his arguments.
