1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO. 3740 OF 2006 IN FEMA APPEAL (LDG.) NO. 2 OF 2006 Lalit D. Sheth of Mumbai. ... Appellant. V/s. Union of India and others. ... Respondents. H.R.Shetty for the appellant. A.S.Rao for the respondents. CORAM : V.C.DAGA AND K.K.TATED, JJ. DATED : 12th March 2010. P.C. : 1. This appeal is filed by the appellant under section 49(5)(c) of the Foreign Exchange Management Act, 1999 (“FEMA Act” for short) against the order dated 2nd December, 2005 passed by the second respondent (Tribunal) in Appeal No.533/1991. 2. The factual matrix reveals that the appellant had initially filed Writ Petition No.546/2006 on 9th January, 2006. The said writ petition was heard for admission by the Division Bench of this Court. The learned Division Bench finding alternate remedy by way of appeal available to the petitioner allowed the petitioner, vide order dated 7th April, 2006 to withdraw the said petition with liberty to file appeal with further liberty to make out ground for condonation of delay. The appellant armed with the aforesaid order of the learned Division Bench has preferred this appeal on 24th July, 2008 along with notice of motion praying for condonation of delay of 154 days in preferring appeal. An affidavit in support of notice of motion is filed bringing the aforesaid facts on record. 3. On being noticed, respondents appeared through Mr.A.S.Rao, Advocate. He did not file any affidavit in reply to the notice of motion. Consequently, there is no strong opposition. He, however, orally urged absence of power in this Court to condone delay in filing appeal. 2 4. Learned Counsel for the appellant urged that the show cause notice dated 27th October, 1988 was issued under the provisions of FERA,1973 for having contravened the provisions of Section 18(2) of the FERA,1973. He, thus, submits that the day on which the show cause notice was issued, right of appeal was crystalized on that day. In his submission, right of appeal is not merely a matter of procedure. It is a substantive right. This right of appeal from the decision of an inferior Tribunal to a Superior Tribunal becomes vested in a party when the proceedings are first initiated, and before a decision is taken by the inferior Court. The right of appeal also carried with it right to seek condonation of delay, if any, in filing the appeal. A pre-existing right of appeal is not destroyed by an amendment unless the amendment is shown to have been made to operate retrospectively by express words of necessary intendment. Reliance is placed on the judgment of Madras High Court in the case of State of Tamil Nadu Vs. Aristo Paints (P) Ltd. 1992 (85) STC 54. 5. In rejoinder, Mr.Rao tried to contend that the appeal will be referable to section 35 of the FEMA Act and not to section 49(5)(c). Without going into the question raised by Mr.Rao, assuming that he is right, even then the delay is liable to be condoned applying section 14 of the Limitation Act, 1963. 6. Having heard both the parties, provision of appeal under FERA was, as under: 54. Appeal to High Court An appeal shall lie to the High Court only on questions of law from any decision or order of the Appellate Board under sub- section (3) or sub-section (4O of Section 52: Provided that the High Court shall not entertain any appeal under this section if it is filed after the expiry of sixty days of the date of communication of the decision or order of the Appellate Board, unless the High Court is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time. 7. Aforesaid provision would show that the appellate authority was 3 given a power to condone delay without specifying any outer limit. Consequently, it is clear that there was no fetter on the power of the appellate authority to condone delay if satisfied with the explanation furnished or if given sufficient cause to the satisfaction of the appellate authority is made out by the appellant. 8. FERA stood repealed with an enactment of FEMA 1999. The repealing and saving provisions read as under: 49. Repeal and saving.- (1) ..... ..... ..... (2) ..... ..... ..... (3) ..... ..... ..... (4) ..... ..... ..... (5) Not withstanding such repeal,- (a) ..... ..... ..... (b) ..... ..... ..... (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. 9. Having heard both the parties, the learned Counsel for the appellant is right in placing reliance on the judgment of the Madras High Court in the case of Aristo Paints (P) Ltd. (supra), wherein, it is observed that; The right of appeal is not merely a matter of procedure. It is a matter of substantive right. This right of appeal from the decision of an inferior Tribunal to a superior Tribunal becomes vested in a party when proceedings are first initiated, and before a decision is taken by the inferior Court. The assessee’s right to appeal also carried with it right to seek condonation of delay, if any, in filing the appeal under the unamended proviso aforequoted and on a sufficient cause shown by him, it was open to the Tribunal to condone the delay. The power of the Appellate Assistant Commissioner to condone the delay was not limited to any period whether fifteen days or thirty days as found in the 4 first amendment by Act 76 of 1986 or the second amendment by Act 18 of 1989. It is also clear that the period of fifteen days introduced by Act 76 of 1986 before its substitution by a period of thirty days by Act 18 of 1989 had already expired before the amendment came into force with effect from December 17, 1986. If there was a vested right in the assessee to prefer an appeal and seek condonation of delay on sufficient cause having been shown by him, that right was available to him as if there was no amendment by Act 76 of 1986. Otherwise just by a stroke of the amendment which came just a day before the filing of the appeal by the assessee, the right stood obliterated. A pre-existing right of appeal is not destroyed by an amendment unless the amendment is shown to have been made to operate retrospectively by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. 10. In the case in hand, one can conveniently turn to Section 49(5) of the FEMA and if contrasted with the provision of section 35 of the same Act, then it would be clear that under section 49(5)(c) the appeal is required to be filed within sixty days from the date of commencement of the FEMA Act, if already not filed before the commencement of the said Act. With this if one turns to proviso to clause (c) of sub-section (5) of section 49, there is no outer limit prescribed for condonation of delay. High Court is given liberty to entertain appeal even after expiry of sixty days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within specified period. With this, if one turn to section 35 of the FEMA Act which provides for appeal to the High Court within sixty days from the date of communication of the decision or order of the Tribunal, the power of condonation of delay given to the High Court is circumstanced by outer limit of sixty days. Comparison of section 35 and section 49(5)(c) would unequivocally show that in section 35 there is outer limit provided for condonation of delay, whereas in section 49(5)(c) the said outer limit is absent. He sought to rely upon the judgment of the Apex Court in the case Commissioner of Customs, Central Excise v. Hongo India Pvt.Ltd., (2009) 5 SCC 791 and order of this Court dated 8th July, 2009 passed in N.M.No. 787/2009 in ITXAL No.3592/2008 (unreported). In our considered view, the reliance placed by Mr.Rao is misplaced. 5 11. The present appeal is obviously under section 49(5)(c) of the FEMA Act since the Foreign Exchange Regulation Act, 1973 has already been repealed. In this view of the matter, it is clear that this Court has power to condone delay in filing appeal under section 49(5)(c) of the FEMA Act. 12. Mr.Rao tried to contend that the appeal will be referable to section 35 of the FEMA Act and not to section 49(5)(c). Without going into the question raised by Mr.Rao, assuming that he is right, even then the delay is liable to be condoned applying section 14 of the Limitation Act, 1963. 13. The order impugned in the appeal is dated 2nd December, 2005. The writ petition was filed on 9th January, 2006 which was well within the period prescribed for appeal. The said petition was withdrawn on 7th April, 2006. It is, thus, clear that this petition was pending in this Court for the period from 9th January, 2006 to 7th April, 2006 i.e. for the period of 88 days. The said period is required to be excluded under section 14 of the Limitation Act since the appellant was prosecuting remedy in wrong forum. Having excluded the said period of 88 days, the question of remaining 66 days is required to be considered for condonation. The said period, obviously, being less than 120 days, even if section 35 of the FEMA Act is applied, still delay needs to be condoned for having made out sufficient cause. 14. Considered from any angle, the delay having been explained to the satisfaction of this Court, the same is also liable to be condoned on its own merits. 15. In the result, notice of motion is made absolute. Delay is condoned. Registry is directed to register appeal and place it for admission. No order as to costs. (K.K.TATED, J.) (V.C.DAGA J.)