Thirumalai Chemicals Ltd vs Union Of India & Ors

Thirumalai Chemicals Limited ....Appellant

Versus

Union of India & Ors. ..Respondents

J U D G E M E N T

K. S. PANICKER RADHAKRISHNAN, J.

Leave granted.

2. The question that has come up for consideration in this

case is whether the Appellate Tribunal constituted under the Foreign

Exchange Management Act 1999 (in short FEMA) was right in

rejecting a belated appeal filed under Section 19 of FEMA, applying

the first proviso to sub section (2) of Section 52 of Foreign Exchange

Regulation Act 1973 (in short FERA), instead of following the proviso

to sub section (2) to Section 19 of FEMA.

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3. M/s Tirumalai Chemicals Limited (in short 'the Company')

had imported various consignments of benezene, orthoxalene etc. for

home consumption. For the said purpose, the Company had opened

Letters of Credit bearing No.MLCO 4359096 and No.529/960487 on

28.09.96 and 07.08.96 respectively on their bankers ICICI Bank and

Standard Chartered Bank (authorized dealers). By letters dated

07.12.96 and 18.01.97 Exchange Control Copies of bills of entry (in

short, ECC - bills of entry) in relation to those imports were forwarded

by the Company to the above mentioned Banks. As per the

provisions of Exchange Control Manual (in short ECM), the

authorized dealers had to submit the ECC-bills of entry submitted by

the importers (the Company) to the Reserve Bank of India (in short

RBI). The Company was under the bonafide impression that the

documents submitted by it were forwarded by the authorized dealers

to the RBI and that the RBI in turn had given due intimation to the

Enforcement Directorate. The Company on 22.04.2004 received a

telephonic communication from the office of the 3rd respondent viz.,

Directorate of Enforcement, stating that it had passed various orders

on 27.01.04 imposing a total penalty of Rs.9,33,63,453/- on the

Company on the ground that it had contravened the provisions of

3 Sections 8(3), 8(4) of FERA read with sub-sections (3) and (4) of

Section 49 of FEMA. Copies of the orders dated 27.01.04 were then

received by the Company on 22.04.04 on request. From those

orders the Company came to know that the Directorate of

Enforcement had issued four show cause notices dated 14.05.02

stating that the Company had contravened Section 8(3), Section 8(4)

of FERA read with para 7A.20 (Chapter 7) of ECM and was required

to show cause why adjudication proceedings be not initiated against

the Company under Section 49 of FEMA for contravention of the

above mentioned provisions. Further, it was also stated that the

Company had failed to furnish the required

bills/information/documents and did not avail of the opportunity of

hearing in spite of notices issued to them on 29.08.02, 27.10.03 and

01.12.03. Orders dated 27.01.04 also indicated that an appeal would

lie before the Appellate Tribunal after depositing the amount of

penalty imposed within 45 days from the date on which the order was

served. Reference was also made to Section 19 read with Section

49(5)(a) of FEMA.

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4. The Company on receipt of the above mentioned orders

dated 27.01.04 approached the authorized dealers and enquired

whether they had forwarded the ECC of bills of entry to the RBI as

required under the provisions of ECM. The ICICI Bank vide their

letters dated 12.05.04 informed the Company that it had received

ECC of bills of entry on 20.01.97 with difference of value. The ICICI

Bank then forwarded a letter dated 15.05.04 to the RBI seeking its

permission to accept the bills of entry stating that the Company had

submitted the relevant documents on 20.01.97 with shortfall of value.

The Standard Chartered Bank also vide their letter dated 12.05.04

informed the RBI that they had also received the Exchange Control

Copy of bills of entry for the import in question from the appellant

Company on 09.12.96, but due to an inadvertent mistake had

reported in their BEF Return that bills of entry were not submitted.

The RBI vide letter dated nil of May, 2004 sent by registered AD

informed the Enforcement Directorate as follows:-

"........Please refer to the outstanding entries reported in

their respective BEF Statement by the captioned banks in respect

of M/s Tirumalai Chemicals Ltd., which was forwarded to you by us.

In this connection we advise that, based on the documents and

evidence submitted by authorized dealer, we have deleted the

entries from our records and regularized the transactions at our end

as under :-

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i) ICICI Bank confirmed that they had received EC copies of

Bill of Entry in respect of the transactions reported at

Sr.No.40 and Sr.No.1 of their BEF Statement referred to

above and the entry at Sr. No.28 of their BEF Statement was

a repetition of entry at Sr.No.40 of the same statement.

ii) Standard Chartered Bank has also confirmed to us that the

relative EC copy of the Bill of Entry in respect of the

transaction reported in their BEF Statement was received by

them....".

5. The Company had also sent a letter dated 17.05.04 to the

Enforcement Directorate stating that it was not due to the mistake of

the Company that the ECC of bills of entry were not forwarded to the

Directorate of Enforcement in time, but due to the mistake of the

authorized dealer (Bank). RBI had subsequently carried out

necessary corrections and deleted the entries from their records and

regularized the transactions and requested to drop the proceedings

initiated against the Company.

6. The Company stated that it was under the bonafide

impression that respondents would drop the proceedings since RBI

had deleted the entries from the records and informed the same to

the Enforcement Directorate but nothing was heard from the

Directorate and hence the Company was constrained to file appeals

against those orders on 02.08.04 before the Appellate Tribunal for

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Foreign Exchange (in short the Tribunal) vide Appeal nos. 787, 788,

789 and 790 of 2004 with an application under Section 5 of the

Limitation Act read with Section 19 and Section 49(5) (a) of FEMA for

condonation of delay.

7. The Tribunal, however, without going into the merits of

the case dismissed the appeals on the ground of delay by its order

dated 25.10.2007. The operative portion of the said order reads as

follows:-

".....Therefore, these appeals when filed after 90 days from

the date of receipt of the order has to be dismissed and the

exceeding period cannot be condoned by this Tribunal because of

legislative mandate couched in clear language.

For the reasons stated herein above, these appeals are

dismissed because these appeals have been filed after a total

period of 90 days from the date of receipt of impugned order

beyond which this Tribunal is not empowered to condone the

delay."

8. The Company aggrieved by the above mentioned order

preferred writ petitions nos. 692, 1528, 1531 and 693 of 2008 before

the Bombay High Court for quashing the order dated 25.10.2007 of

the Tribunal as also the order dated 27.01.04 passed by the third

respondent contending that the Tribunal was not justified in

dismissing the appeals on the ground of delay. The High Court,

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however, dismissed all the writ petitions by the following order dated

24.07.2008:-

"There is no dispute that the appeal was filed beyond the

period of 90 days. Therefore, the tribunal did not have jurisdiction

to condone the delay. The learned counsel, then, submitted that

we should consider these petitions as the petitions against the

original order.

In our opinion, it will not be appropriate to entertain these

petitions as petitions against the original order. The Parliament has

provided remedy of an appeal against the original order and has

provided for period of limitation for filing that appeal. The

Parliament has also provided that delay beyond a certain period

cannot be condoned by the Tribunal/Appellate authority. The

Petitioners have allowed that remedy of appeal to be barred,

therefore, now to entertain these petitions as petitions against the

original order would amount to permitting the Petitioners to frustrate

the scheme of the Legislation. The scheme of the statute is that a

challenge to the original order is to be raised by an appeal which is

to be filed within a particular period. The extra ordinary jurisdiction

of this court under the Constitution cannot be permitted to be used

by the Petitioners, who have allowed their ordinary remedy to be

barred. Petitions are, therefore, rejected."

9. Mr. Harish Salve, learned senior counsel appearing on

behalf of the appellants submitted that the authorized dealer (Bank)

had owned up their mistake and had informed the RBI accordingly

and hence there was no reason to penalize the Company for no fault

of it. Learned counsel also submitted that the Tribunal had

committed a mistake in holding that it had no power to condone the

delay beyond 90 days. He also submitted that even if the Tribunal

has no power to condone the delay the High Court could have

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entertained the writ petitions under Article 226 of the Constitution of

India when the impugned order of the Tribunal was manifestly illegal.

Learned counsel further submitted that in any view of the matter High

Court under Article 226 of the Constitution of India has the power to

condone delay in exercise of its extra ordinary jurisdiction and then

direct the Tribunal to consider the appeal on merits. Reference was

made to the judgments of this Court in Harbanslal Sahnia & Anr. vs.

IOC Ltd. & Ors. (2003) 2 SCC 107, L.K. Verma vs. HMT Ltd. & Anr.

(2006) 2 SCC 269.

10. Shri Vivek Tankha, Learned Additional Solicitor General,

appearing for the respondents referred to the first proviso to sub

section (2) of Section 52 of FERA and submitted that the Tribunal

was justified in holding that it had no power to condone the delay

beyond a period of 90 days. Ld. ASG also submitted that when a

party has availed of the statutory remedy of appeal and lost on the

ground of delay the High Court can not exercise its extraordinary

jurisdiction under Article 226 / 227 of the Constitution of India.

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11. We are in this case called upon to decide the question

whether the Tribunal was right in dismissing the appeals preferred

under Section 19(1) of FEMA, by applying the first proviso to sub

section (2)of Section 52 of FERA holding that it had no power to

condone the delay beyond 90 days from the date on which the order

was served on the person committing the contravention. The

Tribunal and the High Court proceeded on the premises that since

the cause of action arose when FERA was in force the period of

limitation for filing an appeal before the Tribunal even after coming

into force of FEMA is as provided under the first proviso to sub

section (2) of Section 52 of FERA. Admittedly, in this case the cause

of action arose when FERA was in force, but show cause notices and

impugned orders were issued when FEMA was in force and the

appeals were also preferred under sub section (1) of Section 19 of

FEMA. Therefore, the important question that arises for

consideration is whether limitation for filing the appeal has to be

considered under the proviso to sub section (2)of Section 19 of FEMA

or under the first proviso to sub section ( 2) of Section 52 of FERA. In

order to answer the above question, it is necessary to examine the

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scope and ambit of Section 52 of FERA, Section 19 , 49 of FEMA and

Section 6 of the General Clauses Act, 1897.

12. FERA was enacted to consolidate and amend the law

relating to certain payments dealing in foreign exchange and

securities, transactions indirectly affecting the foreign exchange and

import and export and import of currency, for conservation of foreign

exchange resources of the country and proper utilization thereof in

the interest of economic development of the country. Sections 50

and 51 of FERA were the penal provisions which empowered the

authority to impose penalty on persons who had contravened some of

the provisions of the Act. An appeal was provided under FERA

against the order of adjudication before the Foreign Exchange

Regulation Appellate Board (in short the `Board') under Section 52 of

that Act within a period of 45 days from the date on which the order

was served on the person committing the contravention. The Board

was also empowered to entertain any appeal after the expiry of the

said period of 45 days but not after 90 days from the date on which

the order was served on the person if it was satisfied that the person

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was prevented by sufficient cause in not filing the appeal in time. It is

useful to extract that provision for easy reference :-

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 I) 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 45 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 45 days, but not after 90 days, from

the date aforesaid if it is satisfied that the appellant was prevented

by sufficient cause from filing the appeal in time:

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.

....... ........ ........."

13. FERA was repealed by FEMA which came into force with

effect from 01.06.2000. Chapter IV of FEMA deals with contravention

of penalties. Section 13 of FEMA empowers the authorized officers

to impose penalties for contravention of certain provisions of the Act.

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Failure to make full payment of penalty, may attract civil

imprisonment subject to the provisions of sub section (2) of Section

19. Chapter V of the Act deals with adjudication and appeal. Section

19 deals with the appeal to the Appellate Tribunal. Sub section (2) of

Section 19 says that every appeal under sub-section(1) shall be filed

within a period of 45 days from the date on which the copy of the

order made by the adjudicating authority or the Special Director

(Appeals) is received by the aggrieved person. The Appellate

Tribunal is also empowered to entertain the appeals filed after the

expiry of the said period of 45 days if it is satisfied that there was

sufficient cause for not filing the appeal within that period. Law is well

settled that the manner in which the appeal has to be filed, its form

and the period within which the same has to be filed are matters of

procedure, while the right conferred on a party to file an appeal is a

substantive right. The question is, while dealing with a belated

appeal under Section 19(2) of FEMA, the application for condonation

of delay has to be dealt with under the first proviso to sub- section (2)

of Section 52 of FERA or under the proviso to sub section (2) of

Section 19 of FEMA. For answering that question it is necessary to

examine the law on the point.

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Substantive and Procedural Law:

14. Substantive law refers to body of rules that creates,

defines and regulates rights and liabilities. Right conferred on a party

to prefer an appeal against an order is a substantive right conferred

by a statute which remains unaffected by subsequent changes in law,

unless modified expressly or by necessary implication. Procedural

law establishes a mechanism for determining those rights and

liabilities and a machinery for enforcing them. Right of appeal being

a substantive right always acts prospectively. It is trite law that every

statute prospective unless it is expressly or by necessary implication

made to have retrospective operation. Right of appeal may be a

substantive right but the procedure for filing the appeal including the

period of limitation cannot be called a substantive right, and

aggrieved person cannot claim any vested right claiming that he

should be governed by the old provision pertaining to period of

limitation. Procedural law is retrospective meaning thereby that it will

apply even to acts or transactions under the repealed Act.

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15. Law on the subject has also been elaborately dealt with

by this Court in various decisions and reference may be made to few

of those decisions. This Court in Garikapati Veeraya vs. N. Subbiah

Choudhry & Ors. AIR 1957 SC 540, New India Insurance Company

Limited Vs. Smt. Shanti Mishra (1975) 2 SCC 840, Hitendra Vishnu

Thakur & Ors. vs. State of Maharashtra & Ors. (1994) 4 SCC 602;

Maharaja Chintamani Saran Nath Shahdeo vs. State of Bihar &

Ors. (1999) 8 SCC 16; Shyam Sundar & Ors. vs. Ram Kumar & Anr.

(2001) 8 SCC 24, has elaborately discussed the scope and ambit of

an amending legislation and its retrospectivity and held that every

litigant has a vested right in substantive law but no such right exists in

procedural law. This court has held the law relating to forum and

limitation is procedural in nature whereas law relating to right of

appeal even though remedial is substantive in nature.

16. Therefore, unless the language used plainly manifests in

express terms or by necessary implication a contrary intention a

statute divesting vested rights is to be construed as prospective, a

statute merely procedural is to be construed as retrospective and a

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statute which while procedural in its character, affects vested rights

adversely is to be construed as prospective.

17. Right of appeal conferred under Section 19(1) of FEMA is

therefore a substantive right. The procedure for filing an appeal

under sub-section (2) of Section 19 as also the proviso to sub-section

(2) of Section 19 conferring power on the Tribunal to condone delay

in filing the appeal if sufficient cause is shown, are procedural rights.

18. We have already indicated that the proviso to sub-

section(2) of Section 19 operates retrospectively, but the question is

in that process, whether it impairs or takes away any accrued right, to

plead a time bar and on facts whether the Company has lost its right

of appeal to the Tribunal under FEMA.

Law of Limitation

19. Law of limitation is generally regarded as procedural and

its object is not to create any right but to prescribe periods within

which legal proceedings be instituted for enforcement of rights which

exist under substantive law. On expiry of the period of limitation, the

right to sue comes to an end and if a particular right of action had

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become time barred under the earlier statute of limitation the right is

not revived by the provision of the latest statute. Statutes of limitation

are thus retrospective insofar as they apply to all legal proceedings

brought after their operation for enforcing cause of action accrued

earlier, but they are prospective in the sense that neither have the

effect of reviving the right of action which is already barred on the

date of their coming into operation, nor do they have effect of

extinguishing a right of action subsisting on that date. Bennion on

Statutory Interpretation 5th Edn.(2008) Page 321 while dealing with

retrospective operation of procedural provisions has stated that

provisions laying down limitation periods fall into a special category

and opined that although prima facie procedural, they are capable of

effectively depriving persons of accrued rights and therefore they

need be approached with caution.

20. Learned author in order to establish the above proposition

referred to the decision of the Court of Appeal in The Ydun case

[THE YDUN (1899) Probate Division at page 236 (The Court of

Appeal) where the Court held that the amending legislation dealt with

procedure only and therefore applied to all actions whether

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commenced before or after the passing of the Act and even in

respect of previously accrued rights. The principle laid down in `The

Ydun' was applied in The King vs. Chandra Dharma (1905) 2 KB

335 and it was held that if a statute shortening the time within which

proceedings can be taken is retrospective then it is impossible to give

good reason, why a statute extending the time within which

proceedings be taken, should not be held to be retrospective. The

Judicial Committee of Privy Council in Yew Bon Tew v. Kenderaan

Bas Mara (1982) 3 All E.R. 833, opined that whether statute has

retrospective effect, cannot in all cases safely be applied by

classifying statute as procedural or substantive and pointed out in

certain situation the Court would rule against a retrospective

operation. Limitation provisions therefore can be procedural in the

context of one set of facts but substantive in the context of different

set of facts because rights can accrue to both the parties. In such a

situation, test is to see whether the statute, if applied retrospectively

to a particular type of case, would impair existing rights and

obligations. An accrued right to plead a time bar, which is acquired

after the lapse of the statutory period, is nevertheless a right, even

though it arises under an Act which is procedural and a right which is

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not to be taken away pleading retrospective operation unless a

contrary intention is discernible from the statute Therefore, unless the

language clearly manifests in express terms or by necessary

implication, a contrary intention a statute divesting vested rights is to

be construed as prospective. A statute, merely procedural is to be

construed as retrospective and a statute while procedural in nature

affects vested rights adversely is to be construed as prospective. The

manner of filing an appeal, under sub section (2) of Section 19 of

FEMA and the time within which such an appeal has to be preferred

and the power conferred on the Tribunal to condone delay under the

proviso to sub-section (2) of Section 19 are matters of procedure and

act retrospectively, so as to cover causes of action which arose under

FERA. Since the appeal was filed under FEMA with an application

for condonation of delay such an appeal has to be considered by the

Tribunal under the proviso to sub-section(2) of Section 19 FEMA and

if the Company shows sufficient cause for not filing the appeal in time

then the Tribunal can condone the delay and entertain the appeal,

especially when there is no accrued right to the respondent to plead a

time bar. The legal position is summarized thus by Justice G.P.

Singh in Principles of Statutory Interpretation (12th Edition-Page 541)

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thus:-

"Statutes of Limitation are thus retrospective in so far as they apply

to all legal proceedings brought after their operations for enforcing

causes of action accrued earlier...."

21. We may also examine whether Section 49 of FEMA,

which is the repealing and saving clause, has in any way taken away

the right of appeal under FEMA for cause of action which arose under

FERA expressly or by necessary implication and also whether it has

any effect on the retrospectivity of the procedural provision under the

proviso to sub-section (2) of section 19. For easy reference we may

extract Section 49 of FEMA and Section 6 of the General Clauses

Act, 1897.

"49. Repeal and Saving ---(1) The Foreign Exchange

Regulation Act, 1973 (46 of 1973) is hereby repealed and the

Appellate Board constituted under sub-section (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 laws 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.

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(4) Subject to the provisions of sub-section (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, authorization 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

sub-section (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;

(c) every appeal from any decision or order of the

Appellate Board under sub-section (3) or sub-section (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 sub-section(3), the mention of

particular matters in sub-sections (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."

Section 6 of the General Clauses Act reads as under:-

6. Effect of repeal -- Where this Act, or any [Central Act ] or

Regulation made after the commencement of this Act, repeals any

enactment hitherto made or hereafter to be made, then, unless a

different intention appears, the repeal shall not --

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(a) revive anything not in force or existing at the time at

which the repeal takes effect; or

(b) affect the previous operation of any enactment so

repealed or anything duly done or suffered

thereunder; or

(c) affect any right, privilege obligation or liability

acquired, accrued or incurred under any enactment

so repealed; or

(d) affect any penalty, forfeiture or punishment incurred in

respect of any offence committed against any

enactment so repealed; or

(e) affect any investigation legal proceeding or remedy in

respect of any such right, privilege, obligation, liability,

penalty, forfeiture or punishment as aforesaid; and

any such investigation, legal proceeding or remedy may be

instituted, continued or enforced, and any such penalty, forfeiture or

punishment may be imposed as if the repealing Act or Regulation

had not been passed."

Repealing and saving clause is a residuary provision which

envisages that notwithstanding such repeal of FERA there would be

application of Section 6 of the General Clauses Act with regard to the

effect of repeal which is discernible from sub section (6) of Section 49

of the Act. Sub-section (1) of Section 49 of FEMA states that FERA

stands repealed and the Appellate Board constituted under sub-

section (1) of Section 52 of the said Act stands dissolved. Sub-

section (3) of Section 49 incorporates a sunset clause. The said sub-

section begins with a non-obstante clause overriding any other

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enactment and states that no court shall take notice of any

contravention under Section 51 of the repealed Act after the expiry of

two years from the date of commencement of FEMA on 1.6.2000.

Sub-section (4) of Section 49 stipulates that subject to the provisions

of sub-section(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.

22. Sub-section (5) of Section 49 of FEMA consists of three

clauses (a), (b) and (c). Clause (a) states that 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 license,

permission, authorization or exemption granted or any document or

instrument executed under the repealed act i.e. FERA to the extent

they are not inconsistent with the provisions of this Act, are deemed

to be done or taken under the corresponding provisions of this Act.

The said provision has the effect of incorporating or making a general

declaration that the existing rules, notifications, declarations,

authorization and exemptions granted under FERA will continue to

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apply in spite of repeal of FERA and after enactment of FEMA as

long as they are not in consistent with FEMA. Clause (b) of sub-

section (5) of Section 49 states that any appeal preferred before the

Appellate Board under sub-section (2) of Section 52 of FERA 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. Sub-section (6) to Section 49 of FEMA

deals with the application of Section 6 of the General Clauses Act.

The first part of the said sub-section protects the sunset clause and

the two year limitation period for commencement of proceedings. The

expression "save as otherwise provided in sub-section (3)" protects

the sunset clause in spite of second portion of sub-Section 6 and the

second portion of sub-section (6) of Section 49 expressly makes

Section 6 of the General Clauses Act, 1897 applicable in spite of

repeal of FERA.

23. Section 6 of the General Clauses Act, 1897 which

protects the rights, obligations and actions and liabilities applies in

spite of repeal of FERA subject to two years limitation period

specified in sub-section (3) of Section 49 for initiation of proceedings.

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Therefore, in view of Section 6 of the General Clauses Act read with

sub-section (3) of Section 49 of FEMA, proceedings for violation of

FERA can be instituted within the sunset period of two years with

effect from 1.6.2000 till 31.5.2002. But for sub-section(3) there will be

no limitation period of two years in view of Section 6 of General

Clauses Act, 1897 read with sub-section (4) of Section 49 of FEMA.

24. We have dealt with the above mentioned repeal and

saving clause to highlight the application of Section 6 of the General

Clauses Act, 1897 which provides that where an Act is repealed then

unless a different intention appears, the repeal shall not affect any

right or liability acquired or incurred under the repealed enactment or

any legal proceeding initiated in respect of such right or liability and

the legal proceedings may continue as if the repealing Act has not

been passed. The saving clause thus aimed to preserve the legal

effect and consequence of things done though those effects and

consequences projected at the time when FERA was in force. The

scope and ambit of such repeal and saving clauses have been

considered by this Court in various decisions. Reference may be

made to the decisions of this Court reported in Anant Gopal Sheorey

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v. State of Bombay, AIR 1958 SC 915, Rao Shiv Bahadur Singh &

Anr. vs. State of Vindhya Pradesh, AIR 1953 SC 394, State of

Punjab v. Mohar Singh S/o Pratap Singh, AIR 1955 SC 84, T.S.

Baliah v. T.S. Rangachari, ITO, AIR 1969 SC 701; Gajraj Singh

& Ors. vs. State Transport Appellate Tribunal & Ors. (1997) 1 SCC

650; Gammon India Ltd. vs. Special Chief Secretary & Ors. (2006) 3

SCC 354.

25. The appellate Board under FERA, it may be noted stood

dissolved and ceased to function when FEMA was enacted.

Therefore, any appeal against the order of the adjudicating officer

made under FERA, after FEMA came into force, had to be filed

before the Appellate Tribunal constituted under FEMA and not to the

Appellate Board under FERA. Section 52 of FERA stipulates the

limitation for an appeal against the orders of the adjudicating officer to

the Appellate Board. It provides the period of limitation as 45 days

but the Board may entertain an appeal after the expiry of 45 days but

not beyond 90 days. Under FEMA, an appeal lies to the appellate

tribunal constituted under that Act and Section 19(2) provides that

every appeal shall be filed within 45 days from the date on which a

2

copy of the order of the adjudicating authority is received. The

appellate is however empowered to entertain appeals filed after the

expiry of 45 days if it is satisfied that there was sufficient cause for

the delay in filing the appeal. Though both Section 52(2) of FERA and

Section 19(2) of FEMA provide a limitation of 45 days and also give

the discretion to the appellate authority to entertain an appeal after

the expiry of 45 days, if the appellant was prevented by sufficient

cause from filing an appeal in time, the appellate authority under

FERA could not condone the delay beyond 45 days whereas under

FEMA, if the sufficient cause is made out, the delay can be condoned

without any limit. The question we have already pointed out is

whether Section 52(2) of FERA or Section 19(2) of FEMA will govern

the appeal. As noticed above, any provision relating to limitation is

always regarded as procedural and in the absence of any provision to

the contrary, the law in force on the date of the institution of the

appeal, irrespective of the date of accrual of the cause of action for

the original order, will govern the period of limitation.

26. Section 52(2) can apply only to an appeal to the appellate

Board and not to any appellate tribunal. Therefore, irrespective of the

2

fact that the adjudicating officer had passed the orders with reference

to the violation of the provisions of FERA, as the appeal against such

order was to the appellate tribunal constituted under FEMA,

necessarily Section 19(2) of FEMA alone will apply and it is not

possible to import the provisions of Section 52(2) of FERA. As we

are not concerned with the appeals to Appellate Board, but appeals

to the Appellate Tribunal, limitation being a matter of procedure, only

that law that is applicable at the time of filing the appeal, would apply.

Therefore, Section 19(2) of FEMA and not Section 52(2) of FERA will

apply. As noticed above, under Section 19(2), there is no ceiling in

regard to the period of delay that could be condoned by the appellate

tribunal. If sufficient cause is made out, delay beyond 45 days can

also be condoned. The tribunal and the High Court misdirected

themselves in assuming that the period of limitation was governed by

Section 52(2) of FERA.

27. We have already indicated that clause (b) of sub-section

(5) of Section 49 refers to appeal preferred and pending before the

Appellate Board under FERA at the time of repeal. The said clause

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does not specifically refer to appeals preferred against adjudication

orders passed under FEMA with reference to causes of action which

arose under FERA. We have already noticed the right of appeal

under FEMA has already been saved in respect of cause of action

which arose under FERA however subject to the proviso to sub-

section (2) of Section 19, in the case of belated appeals.

28. Above discussion will clearly demonstrate that Section 49

of FEMA does not seek to withdraw or take away the vested right of

appeal in cases where proceedings were initiated prior to repeal of

FERA on 01.06.2000 or after. On a combined reading of Section 49

of FEMA and Section 6 of General Clauses Act, it is clear that the

procedure prescribed by FEMA only would be applicable in respect of

an appeal filed under FEMA though cause of action arose under

FERA. In fact, the time limit prescribed under FERA was taken away

under the proviso to sub-section (2) of Section 19 and the Tribunal

has been conferred with wide powers to condone delay if the appeal

is not filed within forty-five days prescribed, provided sufficient cause

is shown. Therefore, the findings rendered by the Tribunal as well as

the High Court that the Tribunal does not have jurisdiction to condone

2

the delay beyond the date prescribed under FERA is not a correct

understanding of the law on the subject.

29. We, therefore, hold that the Appellate Tribunal can

entertain the appeal after the prescribed period of 45 days if it is

satisfied, that there was sufficient cause for not filing the appeal

within the said period. We are therefore inclined to set aside the

orders passed by the Tribunal and the High Court and remit the

matter back to the Tribunal for fresh consideration in accordance with

law on the basis of the findings recorded by us. We order

accordingly.

30. The appeals stand disposed of accordingly.

........................................J

(R.V. Raveendran)

........................................J

(K.S. Panicker Radhakrishnan)

New Delhi

April 11, 2011