2004 (6) TMI 335 - HC - Companies Law

Summary

Issues Involved:
1. Applicability of Section 5 of the Limitation Act in the context of the Foreign Exchange Management Act, 1999.
2. The effect of the repeal of the Foreign Exchange Regulation Act, 1973, on pending appeals.
3. The substantive versus procedural nature of the right to appeal.
4. Interpretation of Section 29(2) of the Limitation Act.
5. The application of Section 6 of the General Clauses Act.

Detailed Analysis:

1. Applicability of Section 5 of the Limitation Act:
Objection to Applicability:
Mr. Anjan Mukherjee argued that Section 5 of the Limitation Act is not applicable due to Section 29(2) of the Limitation Act, which excludes its application by the express provision in Section 35 of the 1999 Act. He cited the decision in Union of India v. SMP Exports P. Ltd., asserting that this decision binds the Court.

Support to Applicability:
Mr. Shibdas Banerjee contended that the decision in SMP Exports P. Ltd. did not correctly interpret the law, particularly the implications of sub-sections (3), (4), (5), and (6) of Section 49 of the 1999 Act. He argued that the right to appeal is a substantive right, which includes the right to get delays condoned, and this right cannot be taken away by subsequent enactments unless expressly stated.

2. Effect of Repeal of the 1973 Act on Pending Appeals:
Arguments:
The 1973 Act was repealed by the 1999 Act, and the Board constituted under Section 52(1) of the 1973 Act was dissolved. Appeals pending before the Board were transferred to the Tribunal constituted under the 1999 Act. Mr. Mukherjee argued that the appeal should be governed by the limitation period in Section 35 of the 1999 Act, while Mr. Banerjee argued that the right to appeal, a substantive right, should remain governed by the provisions of the 1973 Act.

3. Substantive vs. Procedural Nature of the Right to Appeal:
Arguments:
Mr. Banerjee argued that the right to appeal is a substantive right that accrues when the proceeding is initiated and cannot be taken away by subsequent legislation. If the right to appeal is considered procedural, the decision in SMP Exports would be correct. However, if it is substantive, then the decision requires reconsideration.

4. Interpretation of Section 29(2) of the Limitation Act:
Analysis:
Section 29(2) allows the application of the Limitation Act to be circumscribed by special or local laws. The 1973 Act provided a 60-day limitation period for appeals under Section 54, including the application of Section 5 of the Limitation Act. The 1999 Act, under Section 35, provides a 60-day limitation period with a further 60 days extension, thereby limiting the application of Section 5 of the Limitation Act.

5. Application of Section 6 of the General Clauses Act:
Analysis:
Section 6 of the General Clauses Act preserves rights, privileges, and obligations accrued under repealed enactments unless a different intention appears. The right to appeal under the 1973 Act is a substantive right and is preserved by Section 6 of the General Clauses Act. The 1999 Act, through Section 49(6), does not express an intention to exclude the application of Section 6 of the General Clauses Act, thereby preserving the right to appeal under the 1973 Act.

Conclusion:
The Court concluded that the right to appeal under the 1973 Act is a substantive right preserved by Section 6 of the General Clauses Act and Section 49(6) of the 1999 Act. Therefore, the proviso to Section 54 of the 1973 Act, allowing for the application of Section 5 of the Limitation Act, should apply to the appeal in question.

Order:
The matter was referred to a larger bench for a definitive resolution of the issue, disagreeing with the decision in Union of India v. SMP Exports Pvt. Ltd.