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Recovery of penalty under repealed Foreign Exchange Regulation Act, 1973 after the enactment of Foreign Exchange Management Act, 1999. Analysis: The Writ Appeal before the High Court of Kerala dealt with the issue of whether a penalty imposed under sections 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973 (FERA) in 1996 could be recovered as an arrear of land revenue under section 70(1)(iii) of FERA after the repeal of FERA by the Foreign Exchange Management Act, 1999 (FEMA). The appellant, who was penalized under FERA, argued that proceedings under section 70 of FERA could not be initiated post the enactment of FEMA. The appellant contended that FEMA provides for enforcement of penalties through civil imprisonment and compounding, making the recovery proceedings under FERA inconsistent. The Assistant Solicitor General argued that the provisions of FERA for recovery were not inconsistent with FEMA, and proceedings under FERA were saved by section 49(3) of FEMA. The High Court analyzed the relevant provisions of FEMA, specifically section 49, which deals with the repeal and saving provisions. It was noted that the bar under sub-section (3) of section 49 did not apply in this case as the penalty order was passed before the commencement of FEMA. The Court highlighted the adjudication process under FERA, including penalties, appeals, and prosecution. The appellant had not appealed the penalty under FERA within the prescribed time limit, rendering FEMA's provisions for penalties and imprisonment inapplicable. The Court emphasized that the proceedings under FERA could continue even after the commencement of FEMA if the matter was not concluded under FERA. The Court addressed the appellant's argument that the recovery proceedings under FERA were inconsistent with FEMA, specifically sections 13 and 14. It was clarified that since the adjudication under FERA was final, the penalties and provisions under FEMA, including civil imprisonment, did not apply. The Court also invoked the General Clauses Act to save penalties and forfeitures under repealed enactments like FERA. The appellant's reliance on a Supreme Court decision was deemed irrelevant to the case at hand. In conclusion, the Writ Appeal was dismissed, and the appellant was granted three months to pay the amount sought for recovery. The Court held that the proceedings for recovery of penalties under FERA could continue post the enactment of FEMA, as the penalties incurred under FERA were saved by the provisions of FEMA, except where explicitly barred.
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