W.P. (C) No. 112/2004 1 + connected matters * IN THE HIGH COURT OF DELHI AT NEW DELHI + WRIT PETITION (CIVIL) NOS. 112/2004, 1651/2004, 8615/2005, 3633/2008, 4913/2008, 4914/2008 & 4916/2008. % Date of decision: MAY 26th , 2009 S.K. MITTAL .... Petitioner in W.P. (C) No. 112/2004 UMESH MENDIRATTA ….Petitioner in W.P. (C) No. 1651/2004 A.S. ANEJA ….. Petitioner in W.P. (C) No. 8615/2005 ADITYA AGARWAL …. Petitioner in W.P. (C) No. 3633/2008 DR. V.D. JAISWAL ….. Petitioner in W.P. (C) Nos. 4913, 4914/2008 & 4916/2008 Through Mr. Pawan Narang & Mr. Sharat Kapoor, Advocates. Versus UNION OF INDIA & ANR. ….. Respondents Through Ms. Rajdipa Behura, Mr. Vineet Malhotra, Mr. Deepak Anand & Mr. Chhimubhal Singh, Advocates. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporter or not ? YES 3. Whether the judgment should be reported in the Digest ? YES SANJIV KHANNA, J: 1. A common question of law; Court fees payable by the petitioners on their appeals filed before the Appellate Tribunal for Foreign Exchange arises for consideration in the present set of writ petitions. I am not dilating upon facts of individual cases as it is not necessary for the decision of the legal question. The petitioners herein are appellants who have filed appeals before the Appellate Tribunal for Foreign Exchange. These appeals are against penalty W.P. (C) No. 112/2004 2 + connected matters orders passed under the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as FERA, for short) but were preferred after the repeal of the aforesaid Act by Foreign Exchange Management Act, 1999 (hereinafter referred to as FEMA, for short) with effect from 1st June, 2000. As per FERA read with Adjudication Proceedings and Appeal Rules, 1974, the Court fees payable on an appeal depends upon the quantum of fine and is subject to maximum Court fees of Rs.2,000/-. As per FEMA read with Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000, the Court fees payable on an appeal before the Foreign Exchange Appellate Tribunal is Rs.10,000/-. The relevant provisions of FERA, FEMA and the two Rules read as under:- FERA 52. Appeal to Appellate Board (1) xxxx (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 forty-five 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 forty-five days, but not after ninety 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 W.P. (C) No. 112/2004 3 + connected matters 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. The Adjudication Proceedings and Appeal Rules, 1974: 6. Form of Appeal: (1) Every appeal presented to the Appellate Board under section 52 shall be in the form of a memorandum signed by the appellant. The memorandum shall be sent in triplicate and accompanied by the three copies of the order appealed against. On every appeal the amount of fee as given in the table below shall be paid in the form of demand draft payable in favour of the Registrar, Foreign Exchange Regulation Appellate Board, New Delhi. Table S.No. (1) Amount of penalty involved (2) Amount of fee payable (3) (Rs.) 1. Where the amount of penalty involved is Rs. 1 lakh or less than Rs. 1 lakh. 750 2. Where the amount of penalty involved is more than Rs. 1 lakh and up to Rs. 5 lakhs. 1,500 3. Where the amount of penalty involved is above Rs. 5 lakh. 2,000 FEMA “Section 19. Appeal to Appellate Tribunal. (1) Save as provided in sub-section (2), the Central Government or any person aggrieved by an order made by an Adjudicating Authority, other than those referred to in sub-section (1) of Section 17, or the Special Director (Appeals), may prefer an appeal to the Appellate Tribunal: Provided that any person appealing against the order of the Adjudicating Authority or the Special Director (Appeals) levying any penalty, shall while filing the appeal, deposit the amount of such penalty with such W.P. (C) No. 112/2004 4 + connected matters authority as may be notified by the Central Government: Provided further that where in any particular case, the Appellate Tribunal is of the opinion that the deposit of such penalty would cause undue hardship to such person, the Appellate Tribunal may dispense with such deposit subject to such conditions as it may deem fit to impose so as to safeguard the realisation of penalty.” The Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000: “10. Form of Appeal: Every appeal presented to the Appellate Tribunal under section 19 of the Act shall be in the Form II signed by the applicant. The appeal shall be sent in triplicate and accompanied by three copies of the order appealed against. Every appeal shall be accompanied by a fee of rupees ten thousand in the form of cash or demand draft payable in favour of the Registrar, Appellate Tribunal for Foreign Exchange, New Delhi. Provided that the applicant shall deposit the amount of penalty imposed by the Adjudicating Authority or the Special Director (Appeals) as the case may be, to such authority as may be notified under the first proviso to section 19 of the Act: Provided further that where in a particular case, the Appellate Tribunal is of the opinion that the deposit of such penalty would cause undue hardship to such person, the Appellate Tribunal may dispense with such deposit subject to such conditions as it may deem fit to impose so as to safeguard the realization of penalty.” 2. The legal question which arises for consideration is whether Rule 6 of the Adjudication Proceedings and Appeal Rules, 1974 framed under FERA or Rule 10 of the Foreign Exchange Management (Adjudication Proceedings and Appeal) Rules, 2000 framed under FEMA will apply to the present appeals in cases where adjudicating orders are passed under FERA but after repeal of FERA on 1st June, W.P. (C) No. 112/2004 5 + connected matters 2000. The answer to this legal question depends upon interpretation of Section 49 of FEMA and Section 6 of the General Clauses Act, 1897. The said provisions read as under:- General Clause Act, 1897 “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— (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 any thing 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.” Foreign Exchange Management Act, 1999 “49. Repeal and saving.—(1) The Foreign Exchange Regulation Act, 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 law 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 W.P. (C) No. 112/2004 6 + connected matters after the expiry of a period of two years from the date of the commencement of this Act. (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 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 with regard to the effect of repeal.” 3. Repeal of a statute has the effect of obliterating the earlier statute as if the Law never existed, (except to transactions passed and closed), unless the repealing statute contains some provision preserving the earlier statute. However, when Section 6 of the General Clauses Act, 1897 applies rights, privileges or liabilities W.P. (C) No. 112/2004 7 + connected matters acquired, accrued or incurred under the repealed Act are protected. In such cases, the existing rights, privileges or liabilities incurred are not affected, unless it is expressly or by necessary implication stipulated to the contrary. An act or event is governed by the law that was in force when the act or the event happened, unless a different intention appears. (Keshavan Madhava Menon Vs. State of Bombay, AIR 1951 SC 128). All provisions of the repealed Act, as per Section 6 of the General Clauses Act, 1897, continue to be in force even after the repeal, for the purpose of enforcing right, liability or obligation incurred, accrued or acquired when the repealed Act was in force. Section 6 is comprehensive and wide. It protects previous operation of the repealed Act; penalty imposed, forfeiture or punishment incurred; investigation, legal proceedings or remedy available and such investigation, legal proceedings may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if the repealing Act had not been passed. A new legislation in view of section 6 of the General Clauses Act, 1897 is presumed to be prospective only, unless intended to have retrospective operation. Further inquiry is made from the angle whether the new legislature destroys liabilities and rights for past transactions and acts and not whether the new legislation preserves rights and liabilities. In State of Punjab v. Mohar Singh Pratap Singh, AIR 1955 SC 84 the Supreme Court has stated: W.P. (C) No. 112/2004 8 + connected matters “Whenever there is a repeal of an enactment, the consequences laid down in Section 6 of the General Clauses Act will follow unless, as the section itself says, a different intention appears. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject we would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention. The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them. We cannot therefore subscribe to the broad proposition that Section 6 of the General Clauses Act is ruled out when there is repeal of an enactment followed by a fresh legislation. Section 6 would be applicable in such cases also unless the new legislation manifests an intention incompatible with or contrary to the provisions of the section. Such incompatibility would have to be ascertained from a consideration of all the relevant provisions of the new law and the mere absence of a saving clause is by itself not material. It is in the light of these principles that we now proceed to examine the facts of the present case.” 4. In T.S. Baliah v. ITO, AIR 1969 SC 701 again the Supreme Court has held: “The principle of this section is that unless a different intention appears in the repealing Act, any legal proceeding can be instituted and continued in respect of any matter pending under the repealed Act as if that Act was in force at the time of repeal. In other words, whenever there is a repeal of an enactment the consequences laid down in Section 6 of the General Clauses Act will follow unless, as the section itself says a different intention appears in the repealing statute. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by fresh legislation on the same subject the Court would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention. The question is not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them. Section 6 of the General Clauses Act therefore will be applicable unless the new legislation manifests an intention incompatible with or contrary to the provisions of the section. Such incompatibility would have to be ascertained from a consideration of all W.P. (C) No. 112/2004 9 + connected matters the relevant provisions of the new statute and the mere absence of a saving clause is by itself not material. In other words, the provisions of Section 6 of the General Clauses Act will apply to a case of repeal even if there is a simultaneous re-enactment unless a contrary intention can be gathered from the new statute.” 5. The words “anything duly done or suffered there under” used in Section 6 (b) of the General Clauses Act, 1897 are wide and comprehensive enough to not only take into account the things done, but also the legal consequences that flow therefrom. (Refer, Universal Imports Agency Vs. Chief Controller of Imports and Exports, AIR 1961 SC 41). 6. It is not disputed that FERA and FEMA were/are Central Act and therefore effect and impact of Section 6 of the General Clauses Act, 1897 has to be examined. 7. Sub-section 1 of Section 49 of FEMA states that FERA stands repealed and the Appellate Board constituted under Section 52(1) of the said Act stands dissolved. Sub-section 2 provides that the person appointed as Chairman or Member of the erstwhile Appellate Board shall vacate their office and will not be entitled to claim any compensation for premature termination of his office or contract of service upon repeal of FERA on 1st June, 2000. Sub-section 3 to Section 49 incorporates a sunset clause and stipulates and begins with a non obstante phrase overriding any other enactment and predicates that no “court‟ shall take notice of any contravention under Section 51 of FERA after expiry of period of two years from the W.P. (C) No. 112/2004 10 + connected matters date of commencement of FEMA on 1st June, 2000. Sub-section 4 to Section 49 stipulates that “all offences” subject to sub-section 3 shall continue to be governed by the provisions of the repealed Act as if the repealed Act still continues as Law after 1st June, 2000. 8. Sub-section 5 to Section 49 of FEMA consists of three clauses (a), (b) and (c). Clause (a) of sub-section 5 to Section 49 enumerates that any action done or taken or purported to be done or taken including rule, notification, inspection, order or notice or any declaration made permission or 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 FEMA are deemed to be done or taken under the corresponding provisions of FEMA. 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 apply inspite of repeal of FERA and after enactment of FEMA as long they are not inconsistent with FEMA. It does away with the necessity and requirement to issue fresh or new authorizations, rules, notifications, exemptions general or particular, etc. all over again because FERA has been repealed with enactment of FEMA. However, this is subject to the condition that the said rules, notifications, exemptions, etc. should not be in conflict with the provisions of FEMA. Section 24 of the General Clauses Act, 1897 also preserves the continuity of subordinate legislation upon re-enactment, W.P. (C) No. 112/2004 11 + connected matters unless there are express words to the contrary and the subordinate legislation is not inconsistent with the law enacted. In Chief Inspector of Mines Vs. Karam Chand Thapar, AIR 1961 SC 838 the object and purpose behind section 24 of the General Clauses Act, 1897 has been explained as under: “However efficient the rule-making authority may be it is impossible to avoid some hiatus between the coming into force of the re-enacted statute and the simultaneous repeal of the old Act and the making of regulations. Often, the time lag would be considerable. It is conceivable that any legislature, in providing that regulations made under its statute will have effect as if enacted in the Act, could have intended by those words to say that if ever the Act is repealed and re-enacted (as is more than likely to happen sooner or later), the regulations will have no existence for the purpose of the re-enacted statute, and thus the re-enacted statute, for some time at least, will be in many respects, a dead letter. The answer must be in the negative. Whatever the purpose be which induced the draftsmen to adopt this legislative form as regards the rules and regulations that they will have effect „as if enacted in the Act‟, it will be strange indeed if the result of the language used, be that by becoming part of the Act, they would stand repealed, when the Act is repealed. One can be certain that that could not have been the intention of the legislature. It is satisfactory that the words used do not produce that result.” The aforesaid are apposite and explain the purpose behind section 49(5) (a) of FEMA. 9. Clause (b) of sub-section 5 to Section 49 states that any appeal preferred before the Appellate Board under Section 52(2) of FERA shall stand transferred and will be disposed of by the Appellate Tribunal constituted under Section 18 of FEMA. Clause (c) of Sub W.P. (C) No. 112/2004 12 + connected matters Section 5 is not relevant and it pertains to filing of the appeals before the High Court with which we are not concerned. 10. Sub-section 6 to Section 49 is the most crucial and the cornerstone of the contentions raised. The first part of the said sub- section protects the sunset clause and the two year limitation period for commencement of proceedings. It begins and ends with the words “save as otherwise provided in sub-section 3”. Thus, the limitation period in the sunset clause of two years is expressly protected, inspite of the second part of sub-section 6. Sub-section 3 to Section 49, which provides for the limitation period of two years for commencement of proceedings, overrides the second portion of sub-section 6. 11. The second portion of sub-section 6 of Section 49 reads as “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 with regard to the effect of repeal.” The second part expressly makes Section 6 of the General Clauses Act, 1897 applicable in spite of repeal of FERA by FEMA. Section 6 of the General Clauses Act, 1897 will apply in spite of sub-sections 2, 4 and 5 of Section 49 of FEMA. 12. Combined reading of the aforesaid sub-sections and interpretation given to sub-section 6 to Section 49 makes the intention of the legislature clear. FERA is replaced by FEMA with effect from 1st June, 2000 and the Appellate Board under FERA under W.P. (C) No. 112/2004 13 + connected matters Section 52 of FERA is replaced by Appellate Tribunal under Section 18 of FEMA. Rules, notifications, directions, exemptions etc. granted under FERA continue to apply to the extent they are not in conflict with the provisions of FEMA. Section 6 of the General Clauses Act, 1987, which protects rights, obligations and actions and liabilities applies inspite of repeal of FERA but subject to two year limitation period specified in sub-section 3 of section 49 of FEMA for initiation of proceedings. Therefore, in view of sub-section 6 of the General Clauses Act, 1897, read with sub section 3 of Section 49 of FEMA proceedings for violation of the provisions of FERA can be initiated within the sunset period of two years with effect from 1st June, 2000 till 31st May, 2002 and not thereafter. But for sub-section 3, there would be no limitation period of two years, in view of Section 6 of the General Clause Act, 1897 readwith Sub-section 4 and 6 of the Section 49 of FEMA. By express stipulation effect of Section 6 of the General Clauses Act, 1897 is excluded to the extent indicated in sub-section 3 of section 49 of FEMA. 13. Sub-sections 3 and 4 and Clause (b) of sub-section 5 of Section 49 are not happily worded. On one hand, sub-section 3 refers to “Court” and sub-section 4 refers to “offences” yet at the same time sub-section 3 also refers to contravention under Section 51 of FERA. Contravention under Section 51 of FERA is not adjudicated by Courts but the adjudicating authorities under FERA. Criminal offences under FERA were tried in Courts under Sections 56 and 62 of the said Act. W.P. (C) No. 112/2004 14 + connected matters However, before me the respondent-Enforcement Directorate has not disputed that the adjudicating orders are covered