Union Of India vs M/S Premier Limited (Formerly Premier ...

2. The controversy involved in this appeal is short. However, in order to appreciate the same, few undisputed facts need mention hereinbelow.

3. On 01.05.1991, a memorandum to show cause notice was issued by the Special Director to respondent Nos. 2, 3 and 4, namely, M/s Godrej Industries Ltd. [formerly known as Godrej Soaps Ltd. (R­2)] and its two Directors (R­3 and R­4) for allegedly committing contravention of Sections 9 (1)

4. During the pendency of the proceedings, FERA was repealed with effect from 01.06.2000. It was, however, replaced by Foreign Exchange 2 Management Act, 1999 (hereinafter referred to as “FEMA”).

6. On 15.01.2004, the respondent Nos. 2 to 4 felt aggrieved by the adjudication order dated 05.12.2003 and filed appeal before the Special Director (Appeals) under Section 17 of FEMA.

7. On 08.09.2004 and 08.11.2004, the Special Director (Appeals) dismissed the appeals as being not maintainable. He held that the Special Director (Appeals) has no jurisdiction to hear the appeals against the adjudication order passed under Section 51 of FERA.

8. Respondent Nos. 2 to 4 felt aggrieved by orders dated 08.09.2004 and 08.11.2004 and filed writ petitions before the High Court of Bombay at Mumbai. By impugned common order, the High Court allowed the writ petitions and quashed the orders of the Special Director (Appeals). The High Court held that the appeals filed by respondent Nos.2 to 4 before the Special Director (Appeals) against the adjudication order dated 05.12.2003 were maintainable inasmuch as the Special Director (Appeals) possessed the jurisdiction to decide the appeals on merits.

(2) Any person aggrieved by an order made by the Adjudicating Authority, being an Assistant Director of Enforcement or a Deputy Director of Enforcement, may prefer an appeal to the Special Director (Appeals). (3) Every appeal under sub­section (1) shall be filed within forty­five days from the date on which the copy of the order made by the Adjudicating Authority is received by the aggrieved person and it shall be in such form, verified in such manner and be accompanied by such fee as may be prescribed:

(b) any appeal preferred to the Appellate Board under sub­section (2) of section 52 of the repealed Act but not disposed of before the commencement of this Act shall stand transferred to and shall be disposed of by the Appellate Tribunal constituted under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; 15

24. Second, if such appeal had remained pending before the Appellate Board on 01.06.2000, the same would have been transferred to the Appellate Tribunal constituted under FEMA in terms of Section 49 (5)(b) of FEMA for its disposal. 18

37. The aforementioned submission is not acceptable for yet another reason. Perusal of Scheme of FEMA would show that the Special Director (Appeals) is subordinate in hierarchy to the Appellate Tribunal prescribed under Section 49(5)(2) of FEMA. It is, therefore, not possible to hold that one appeal would be maintainable before the Appellate Tribunal and the other appeal arising out of similar order would be maintainable before the Special Director (Appeals), who is subordinate in 23 hierarchy to the Appellate Board. Such distinction does not stand for any logic.

38. This question can be examined from another angle also. If the submission of the learned counsel for the respondents is accepted that the appellate forum in this case for filing appeal is ­ “Special Director (Appeals)” and not the “Appellate Tribunal” under FEMA then it will result in anomalous situations which will again be incongruous.

40. Applying the principle of purposive interpretation, we are of the view that the appellate forum for deciding the appeals arising out of the order passed under Section 51 of FERA whether filed prior to 01.06.2000 or filed after 01.06.2000 must be the same, i.e., Appellate Tribunal under FEMA.

41. In view of the foregoing discussion, we cannot concur with the view taken by the High Court and accordingly hold that the appeal filed by respondent Nos. 2 to 4 against the order dated 05.12.2003 passed by Deputy Director of enforcement under Section 51 of FERA will lie and was, therefore, maintainable only before the Appellate Tribunal under Section 19 of FEMA.

42. The appeals bearing Nos.SD/A/MUM/04­ 05/38,39,40 and SD/A/MUM/03­04/22 which respondent Nos. 2 to 4 had filed before the Special Director (Appeals) are accordingly transferred to the concerned Appellate Tribunal constituted under Section 18 of FEMA for their disposal on merits in accordance with law.

43. The appeal is accordingly allowed. The impugned order is set aside.

January 29, 2019.