Raj Kumar Shivhare vs Asst.Dir.Directorate Of Enfort.& Anr

Raj Kumar Shivhare ..Appellant(s)

Versus

Assistant Director, Directorate of Enforcement & Another ..Respondent(s)

J U D G M E N T

GANGULY, J.

1. Leave granted.

2. This appeal arises out of the Division Bench

judgment of the High Court of Delhi in WP No.

6527/2008 filed by the appellant-Rajkumar Shivhare.

3. A Writ Petition was filed challenging the order

dated 17.7.2008 of the Appellate Tribunal for

Foreign Exchange, Janpath, New Delhi, (hereinafter

`the Tribunal'), on various grounds with which this

1 Court is not concerned. By that order, the

Tribunal refused to dispense with the pre-deposit

of penalty by the appellant and the concluding

portion of that order is:

"...Therefore, the application for dispensation of pre-deposit of penalty is dismissed and rejected but the appellant is permitted to deposit full amount of penalty within thirty days from the date of receipt of the order failing which the appeal will be dismissed on this ground alone. The appeal is fixed for hearing on 4th September, 2008".

4. The facts of the case in brief are as follows:

The appellant, along with another person, were

issued a notice dated 12.1.2005 under Section 3(c) of

the Foreign Exchange Management Act, 1999 (FEMA) for

receiving unauthorized payments worth Rs.5 crores

under instructions from persons living outside India

in connection with his illegal cricket betting

operation. He was also asked to explain why the amount

of Rs.1 lac, confiscated during search from his

residence, should not be credited to the account of

the Central Government under Section 13(2) of FEMA,

1999.

2 5. As the charges were proved against him, a penalty

of Rs.2 crores was imposed on him and the

confiscated money was disposed of according to

Section 13(2) vide order dated 29.02.2008.

6. On appeal to the Appellate Tribunal under Section

19(2) of the Act, the Tribunal passed the order

dated 17.7.2008, the concluding portion whereof is

quoted above.

7. Then, a writ petition came to be filed challenging

the order dated 17.7.2008.

8. The High Court, without going into the merits of

the petition, accepted the preliminary objection

raised by the respondent that the High Court of

Delhi did not have territorial jurisdiction to

decide the matter. High Court of Delhi rejected

the writ petition on that ground and gave liberty

to approach the appropriate High court.

9. While dismissing the writ petition, on the ground

that it lacked territorial jurisdiction, the High

Court relied on the decision of this Court rendered

3 in Ambica Industries vs. Commissioner of Central

Excise, (2007) (6) SCC 769, on the interpretation

of Section 35 of FEMA.

10.The High Court in its judgment gave the following

reasoning:

"The position is analogous to that of the Union Government. The statement that the Union Government is located throughout every part of Indian Territory and hence can be sued in any Court of the country, brooks no cavil. This does not, however, inexorably lead to the consequence that a litigant can pick and choose between any Court as per his caprice and convenience..."

11. It held that in exercising its powers under Article

226, a High Court must consider that the person,

Authority or Government is located within its

territories or a significant part of the cause of

action has arisen within its territories. It

referred to Ambica Industries (supra) again where

this Court held that

".....the aggrieved person is treated to be the dominus litis, as a result whereof, he elects to file the appeal before one or the other High Court, the

4 decision of the High Court shall be binding only on the authorities which are within its jurisdiction. It will only be of persuasive value on the authorities functioning under a different jurisdiction. If the binding authority of a High Court does not extend beyond its territorial jurisdiction and the decision of one High Court would not be a binding precedent for other High Courts or courts or tribunals outside its territorial jurisdiction, some sort of judicial anarchy shall come into play. An assessee, affected by an order of assessment made at Bombay, may invoke the jurisdiction of the Allahabad High Court to take advantage of the law laid down by it and which might suit him and thus he would be able to successfully evade the law laid down by the High Court at Bombay. ...

It would also give rise to the problem of forum shopping. ....For example, an assessee affected by an assessment order in Bombay may invoke the jurisdiction of the Delhi High Court to take advantage of the law laid down by it which may be contrary to the judgments of the High Court of Bombay".

12.High Court also relied on the Explanation (a) to

Section 35 of FEMA, which states that "High Court",

to which an appeal from an order of the Appellate

Tribunal under Section 35 of the Act lies, means

"the High Court within the jurisdiction of which

the aggrieved party ordinarily resides or carries

on business or personally works for gain".

5

13.Though High Court dismissed the writ petition on

the issue of territorial jurisdiction, it missed a

rather fundamental issue which is discussed

hereunder.

14.At the commencement of the hearing, this Court

questioned the very maintainability of the Writ

Petition against an order of the Tribunal in view

of the provisions of Section 35 of FEMA.

15.The Learned Counsel for the appellant sought to

answer this query by contending that (a) the remedy

under Section 35 of FEMA is only against a final

order, (b) this question was not raised before the

High Court, (c) the writ jurisdiction of the High

Court is part of the basic structure of the

Constitution and such jurisdiction cannot be ousted

in view of Section 35 of FEMA, (d) all the High

Courts in India, are entertaining writ petitions

challenging an interim order passed by such

Tribunals.

6

16.In our judgment, none of the answers given by the

learned counsel are tenable for the reasons

discussed below.

17.FEMA is a complete Code in itself. The long title

of FEMA would indicate that the same is an "Act to

consolidate and amend the law relating to foreign

exchange with the objective of facilitating

external trade and payments and for promoting the

orderly development and maintenance of foreign

exchange market in India".

18.The Act has seven Chapters and 49 Sections and out

of which, Chapter V, which deals with adjudication

and Appeal, contains detailed provisions starting

from Sections 16 to 35, thus spanning 20 Sections.

A rule styled as the Foreign Exchange Management

(Adjudication Proceedings and Appeal) Rules, 2000

have been framed in exercise of powers under

Section 46 read with sub-section (1) of Section 16,

sub-section (3) of Section 17 and sub-section (2)

of Section 19 of FEMA.

7

19.It is thus clear that Chapter V of FEMA, read with

the aforesaid rules, provides a complete network of

provisions adequately structuring the rights and

remedies available to a person who is aggrieved by

any adjudication under FEMA.

20.The statutory scheme under Section 34 of FEMA is to

exclude the jurisdiction of the Civil Court in

express terms. Section 35, which calls for

interpretation in this case, runs as follows:

"35. Appeal to the 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,

8 ordinarily resides or carries on business or personally works for gain.

21.A reading of Section 35 makes it clear that

jurisdiction has been clearly conferred on the High

Court to entertain an appeal within 60 days from

`any decision or order of the appellate authority'.

But such appeal has to be on a question of law.

22.The proviso empowers the High Court to entertain

such an appeal after 60 days provided the High

Court is satisfied that the appellant was prevented

by sufficient cause from appealing earlier.

23.The argument that under Section 35 only appeals

from final order can be filed has been advanced on

a misconception of the clear provision of the

Section itself. The Section clearly says that from

`any decision or order' of the Appellate Tribunal,

appeal can be filed to the High Court on a question

of law.

24.The word `any' in this context would mean `all'. We

are of this opinion in view of the fact that this

Section confers a right of appeal on any person

9 aggrieved. A right of appeal, it is well settled,

is a creature of Statute. It is never an inherent

right, like that of filing a suit. A right of

filing a suit, unless it is barred by Statute, as

it is barred here under Section 34 of FEMA, is an

inherent right (See Section 9 of the Civil

Procedure Code) but a right of appeal is always

conferred by Statute. While conferring such right

Statute may impose restrictions, like limitation or

pre-deposit of penalty or it may limit the area of

appeal to questions of law or sometime to

substantial questions of law. Whenever such

limitations are imposed, they are to be strictly

followed. But in a case where there is no

limitation on the nature of order or decision to be

appealed against, as in this case, the right of

appeal cannot be further curtailed by this Court on

the basis of an interpretative exercise. Under

Section 35 of FEMA, the legislature has conferred a

right of appeal to a person aggrieved from `any'

`order' or `decision' of the Appellate Tribunal. Of

course such appeal will have to be on a question of

law. In this context the word `any' would mean

`all'.

10

25. Justice Chitty in Beckett vs. Sutton (51 Law

Journal 1882 Chancery Division 432) had to

interpret "any decree or order" in Section 1 of the

Trustee Extension Act, 1852 and His Lordship held:-

"..the words of the section are as wide as possible, and appear to me to apply adopting the language the Legislature has used - to "any decree or order" by which the Court directs a sale".

26. The word `any dispute' is somewhat akin to `any

order' or `any decision'. Any dispute, occurring in

Section 51 of Arbitration Act 1975, has been

interpreted to have a wide meaning to cover all

situations where one party makes a request or

demand and which is refused by the other party [See

Ellerine Bros (Pty) Ltd and another vs. Klinger,

1982 (2) AER 737].

27. Justice Bachawat, while in Calcutta High Court, in

the case of Satyanarain Biswanath vs. Harakchand

Rupchand, reported in AIR 1955 Calcutta 225,

interpreted the word `any' in Rule 10 of Bengal

Chamber of Commerce, Rules of the Tribunal of

11 Arbitration. Construing the said rule, the learned

Judge held that the word `any' in Rule 10 means one

or more out of several and includes all and while

doing so the learned Judge relied on an old

decision of the Calcutta High court in the case of

Jokhiram Kaya vs. Ganshamdas Kedarnath, AIR 1921

Cal 244 at page 246. This Court is in respectful

agreement with the aforesaid view of the learned

Judge.

28. In Black's Law Dictionary the word `any' has been

explained as having a `diversity of meaning' and

may be "employed to indicate all and every as well

as some or one and its meaning in a given Statute

depends upon the context and subject matter of

Statute". The aforesaid meaning given to the word

`any' has been accepted by this Court in Lucknow

Development Authority vs. M.K. Gupta [(AIR) 1994 SC

787]. While construing the expression "service of

any description" under Section 2(o) of Consumer

Protection Act, 1986 this Court held that the

meaning of the word `any' depends upon the context

and the subject matter of the Statute and held that

the word `any' in Section 2(o) has been used in

12 wider sense extending from one to all (para 4 at

page 793 of the report). In the instant case also

when a right is conferred on a person aggrieved to

file appeal from `any' order or decision of the

Tribunal, there is no reason, in the absence of a

contrary statutory intent, to give it a restricted

meaning.

29.Therefore, in our judgment in Section 35 of FEMA,

any `order' or `decision' of the Appellate Tribunal

would mean all decisions or orders of the

Appellate Tribunal and all such decisions or orders

are, subject to limitation, appealable to the High

Court on a question of law.

30.In a case where right of appeal is limited only

from a final order or judgment and not from

interlocutory order, the Statute creating such

right makes it clear [See Section 19 of the Family

Courts Act, 1984] which is set out below:

"(19). Appeal

(1) Save as provided in sub-section (2) and notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908) or in the Code of Criminal

13 Procedure, 1973 (2 of 1974) or in any other law, an appeal shall lie from every judgment or order, not being an interlocutory order, of a Family Court to the High Court both on facts and on law.

(2) No appeal shall lie from a decree or order passed by the Family Court with the consent of the parties [or from an order passed under Chapter IX of the Code of Criminal Procedure, 1973 (2 of 1974):

PROVIDED that nothing in this sub- section shall apply to any appeal pending before a High Court or any order passed under Chapter IX of the Code of Criminal Procedure, 1973 (2 of 1974) before the commencement of the Family Courts (Amendment) Act, 1991] (3) Every appeal under this section shall be preferred within a period of thirty days from the date of judgment or order of a Family Court.]

(Emphasis supplied)

31.Similarly, under Section 104 of the Code of Civil

Procedure read with Order XLIII Rule 1 thereof, it

has been indicated from which interlocutory order

an appeal will lie. But it has been made clear

that no Second Appeal from such order will lie [See

Section 104 Sub-section (2) of the Code].

But in Debt Recovery Tribunal Act, as in FEMA, an

appeal lies from an interlocutory order and this has

been made clear in Section 20(1) of the Act.

14

32.By referring to the aforesaid schemes under

different Statutes, this Court wants to underline

that the right of appeal, being always a creature

of a Statute, its nature, ambit and width has to be

determined from the Statute itself. When the

language of the Statute regarding the nature of the

order from which right of appeal has been conferred

is clear, no statutory interpretation is warranted

either to widen or restrict the same.

33. The argument that writ jurisdiction of the High

Court under Article 226 of the Constitution is a

basic feature of the Constitution and cannot be

ousted by Parliamentary legislation is far too

fundamental to be questioned especially after the

judgment of the Constitution Bench of this Court in

L. Chandra Kumar vs. Union of India and others -

[(1997) 3 SCC 261]. However, that does not answer

the question of maintainability of a writ petition

which seeks to impugn an order declining

dispensation of pre-deposit of penalty by the

Appellate Tribunal.

15

34. When a statutory forum is created by law for

redressal of grievance and that too in a fiscal

Statute, a writ petition should not be entertained

ignoring the statutory dispensation. In this case

High Court is a statutory forum of appeal on a

question of law. That should not be abdicated and

given a go bye by a litigant for invoking the forum

of judicial review of the High Court under writ

jurisdiction. The High Court, with great respect,

fell into a manifest error by not appreciating the

aspect of the matter. It has however dismissed the

writ petition on the ground of lack of territorial

jurisdiction.

35.No reason could be assigned by the appellant's

counsel to demonstrate why the appellate

jurisdiction of the High Court under Section 35 of

FEMA does not provide an efficacious remedy. In

fact there could hardly be any reason since High

Court itself is the appellate forum.

36. Reference may be made to the Constitution Bench

decision of this Court rendered in Thansingh

Nathmal and others vs. The Superintendent of Taxes,

16 Dhubri, reported in AIR 1964 SC 1419, which was

also a decision in a fiscal law. Commenting on the

exercise of wide jurisdiction of the High Court

under Article 226, subject to self imposed

limitation, this Court went on to explain:

"The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up."

(Emphasis added)

37. The decision in Thansingh (supra) is still holding

the field.

38. Again in Titaghur Paper Mills Co. Ltd. and another

vs. State of Orissa and another [AIR 1983 SC 603]

in the background of taxation laws, a three judge

Bench of this Court apart from reiterating the

principle of exercise of writ jurisdiction with the

17 time-honoured self imposed limitations, focused on

another legal principle on right and remedies. In

paragraph 11, at page 607 of the report, this Court

laid down:

"It is now well recognized that where a right or liability is created by a statute which gives a special remedy for enforcing it, the remedy provided by that statute only must be availed of. This rule was stated with great clarity by Willes, J. in Wolverhampton New Water Works Co. v. Hawkesford [1859] 6 C.B (NS) 336 at page 356 in the following passage:

"There are three classes of cases in which a liability may be established founded upon statute.... But there is a third class, viz., where a liability not existing at common law is created by a statute which at the same time gives a special and particular remedy for enforcing it...the remedy provided by the statute must be followed, and it is not competent to the party to pursue the course applicable to cases of the second class. The form given by the statute must be adopted and adhered to." The rule laid down in this passage was approved by the House of Lords in Neville v. London Express Newspaper Ltd. [1919] AC 368 and has been reaffirmed by the Privy Council in Attorney-General of Trinidad and Tobago v. Gordon Grant and Co. [1935] AC 532 and Secretary of State v. Mask and Co. AIR 1940 PC 105. It has also been held to be equally applicable to enforcement of rights, and has been followed by this Court throughout. The High Court was therefore justified in dismissing the writ petitions in limine".

18 39. In this case, liability of the appellant is not

created under any common law principle but, it is

clearly a statutory liability and for which the

statutory remedy is an appeal under Section 35 of

FEMA, subject to the limitations contained therein.

A writ petition in the facts of this case is

therefore clearly not maintainable. Again another

Constitution Bench of this Court in Mafatlal

Industries Ltd. and others vs. Union of India and

other [(1997) 5 SCC 536], speaking through Justice

B.P. Jeevan Reddy, delivering the majority

judgment, and dealing with a case of refund of

Central Excise Duty held:

"So far as the jurisdiction of the High Court under Article 226 -- or for that matter, the jurisdiction of this Court under Article 32 -- is concerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising the power under Article 226/Article 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their jurisdiction consistent with the provisions of the enactment" (para 77 page 607 of the report).

40.In the concluding portion of the judgment it was

further held:

19

"The power under Article 226 is conceived to serve the ends of law and not to transgress them" [Para 108 (x), p. 635].

41. In view of such consistent opinion of this Court

over several decades we are constrained to hold

that even if High Court had territorial jurisdiction

it should not have entertained a writ petition

which impugns an order of the Tribunal when such an

order on a question of law, is appealable before

the High Court under Section 35 of FEMA.

42. Learned counsel for the respondents relied on a

judgment of this Court in Seth Chand Ratan vs.

Pandit Durga Prasad (D) By Lrs. and Ors. - (2003) 5

SCC 399. Learned counsel relied on paragraph (13)

of the said judgment which, inter alia, lays down

the principle, namely, when a right or liability is

created by a Statute, which itself prescribes the

remedy or procedure for enforcing the right or

liability, resort must be had to that particular

statutory remedy before seeking the discretionary

remedy under Article 226 of the Constitution.

However, the aforesaid principle is subject to one

exception, namely, where there is a complete lack

20 of jurisdiction of the tribunal to take action or

there has been a violation of rules of natural

justice or where the tribunal acted under a

provision of law which is declared ultra vires. In

such cases, notwithstanding the existence of such a

tribunal, the High Court can exercise its

jurisdiction to grant relief.

43. In the instant case none of the aforesaid

situations are present.

44. Therefore, principle laid down in the Ratan's case

(supra) applies in the facts and circumstances of

this case. If the appellant in this case is allowed

to file a writ petition despite the existence of an

efficacious remedy by way of appeal under Section

35 of FEMA this will enable him to defeat the

provisions of the Statute which may provide for

certain conditions for filing the appeal, like

limitation, payment of court fees or deposit of

some amount of penalty or fulfillment of some other

conditions for entertaining the appeal. (See para

13 at page 408 of the report). It is obvious that a

writ court should not encourage the aforesaid trend

of by-passing a statutory provision. 21

45. Learned counsel for the appellant relied on a

decision of this Court in Monotosh Saha vs. Special

Director, Enforcement Directorate and Anr. - (2008)

12 SCC 359. That was a decision entirely on

different facts. In that decision Saha preferred an

appeal before the appellate tribunal with a request

for dispensing with requirement of pre-deposit, but

the tribunal directed the deposit of 60% of the

penalty amount before entertaining the appeal. When

an appeal was preferred before the High Court under

Section 35 of the FEMA, the same was dismissed by

the High Court holding that no case for hardship

was made out either before the tribunal or before

it. In the background of those facts, this Court

observed that since pursuant to this Court's

interim order Rs.10 lacs have been deposited with

the Directorate, the appellant was directed to

furnish further such security as may be stipulated

by the tribunal and directed that on such deposit

tribunal is to hear the appeal without requiring

further deposit.

46. It is obvious from the aforesaid discussion that in

Monotosh Saha (supra) proper procedure was followed

22 by filing an appeal under Section 35. On that this

Court made certain observations. The said decision

is, therefore, not relevant to the facts and

circumstances of the case in hand.

47. Learned counsel for the appellant also relied on a

decision of this Court in Kusum Ingots and Alloys

Ltd. vs. Union of India and Anr. - (2004) 6 SCC

254. That was a decision on the question of "part

of the cause of action" under Article 226 (2) of

the Constitution. Since this Court is of the

opinion that the writ petition itself is not

maintainable for the reasons discussed above, the

question of part of cause of action is not

relevant. So the aforesaid decision is not

attracted to the points in issue in this case.

48. The decision in Ambica Industries (supra) is also

on the question of part of cause of action under

Article 226 (2) of the Constitution of India. For

the aforesaid reasons, the decision in Ambica

Industries (supra) is not of much relevance in the

facts of the case in hand.

23

49.For the reasons discussed above, this Court is of

the opinion a writ petition is not ordinarily

maintainable to challenge an order of the Tribunal.

We, therefore, dismiss the appeal, of course for

reasons which are different from the ones given by

the High Court in dismissing the writ petition.

50.In view of this Court's jurisdiction under Article

136 of the Constitution, we give liberty to the

appellant, if so advised, to file an appeal before

an appropriate High Court within the meaning of

Explanation to Section 35 of FEMA and if such an

appeal is filed within a period of thirty days from

today, the appellate forum will consider the

question of limitation sympathetically having

regard to the provision of Section 14 of the

Limitation Act and also having regard to the fact

that the appellant was bona-fide pursuing his case

under Article 226 of the Constitution before the

Delhi High Court and then its appeal before this

Court.

24

51.With the aforesaid direction, the appeal is

dismissed. The parties are left to bear their own

costs.

.....................J. (G.S. SINGHVI)

.....................J. (ASOK KUMAR GANGULY)

New Delhi April 12, 2010

25