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2010 (10) TMI 79 - HC - Companies LawWhether the command of section 49(3) of FEMA is that no adjudicating officer shall proceed under section 51 of FERA and that deals with enquiry and eventually imposition of penalty if he finds that there has been any contravention? Held that - As in the case at hand, the language employed in section 49(3) is absolutely clear, precise and certain and does not admit of any other interpretation and the legislative intention is absolutely clear. The legislative purpose is that the adjudicating officer shall not take notice of any contravention after the expiry of period of two years from the date of commencement of FEMA It is so as the first show-cause notice, which was issued on 28-2-2010, clearly shows application of mind to the proceeding which is sought to be adjudicated. The entire allegations have been brought on record. Similarly, from the second show-cause notice, it is clear as day that the entire allegations were put to the appellant. There cannot be any dispute over the same. The word enquiry used in section 51 has its own significance and the enquiry commences from the stage of issue of a notice to show cause under rule 3(1) and such an interpretation is in accord with the terms of section 49(3) of FEMA. Ex-consequenti, the appeal, being sans substance, deserves to be dismissed and, accordingly, it is so directed.
Issues Involved
1. Validity of proceedings initiated under FERA after the "sunset" period specified by FEMA. 2. Interpretation of the term "commencement of proceedings" under Section 49(3) of FEMA. 3. Applicability of legislative intent and parliamentary debates in statutory interpretation. Detailed Analysis 1. Validity of Proceedings Initiated under FERA after the "Sunset" Period Specified by FEMA The appellant contested the initiation of proceedings by the Enforcement Directorate (ED) under FERA after the "sunset" period of 31-5-2002, arguing that such initiation was impermissible under Section 49(3) of FEMA. The appellant maintained that the proceedings initiated on 22-8-2002 were void as they occurred after the expiration of the sunset period. The learned Single Judge ruled that the adjudicating officer had taken notice of the contravention within the sunset period by issuing notices on 28-2-2000 and 27-3-2001. Therefore, the proceedings were not invalid. The judgment emphasized that the issuance of these notices constituted the initiation of proceedings, which was permissible under the law. 2. Interpretation of the Term "Commencement of Proceedings" under Section 49(3) of FEMA The appellant argued that the term "commencement of proceedings" should be interpreted as the actual hearing for adjudication, not merely the issuance of a show-cause notice. The appellant contended that the adjudication process began only on 22-8-2002, which was beyond the sunset period. The court disagreed, stating that the term "shall take notice of" in Section 49(3) of FEMA includes the issuance of a show-cause notice as part of the adjudication process. The court referred to Rule 3 of the 1974 Rules, which outlines the stages of adjudication, including the issuance of a show-cause notice. The court held that the adjudication process begins with the issuance of the first show-cause notice, thus falling within the sunset period. The court cited the case of Videocon International Ltd., where the Supreme Court clarified that "taking cognizance" involves the application of judicial mind to the suspected commission of an offence, which precedes the commencement of formal proceedings. The court applied this principle to the adjudication process under FERA, affirming that the issuance of a show-cause notice marked the initiation of proceedings. 3. Applicability of Legislative Intent and Parliamentary Debates in Statutory Interpretation The appellant urged the court to consider legislative debates and the intent of the Legislature to interpret Section 49(3) of FEMA. The appellant argued that the legislative intent was to prevent the continuation of FERA proceedings beyond the sunset period. The court held that when the language of a statute is clear and unambiguous, there is no need to refer to legislative debates or intent. The court cited several precedents, including Chief Justice of Andhra Pradesh v. L.V.A. Dixitulu and Kehar Singh v. State (Delhi Administration), emphasizing that the primary principle of interpretation is to give effect to the plain language of the statute. The court concluded that the language of Section 49(3) of FEMA was clear and did not warrant any further interpretation based on legislative intent or debates. Conclusion The court dismissed the appeal, affirming that the proceedings initiated under FERA were valid as the adjudicating officer had taken notice of the contravention within the sunset period by issuing show-cause notices. The court extended the period for the appellant to deposit the required sum till 30-11-2010, allowing the Tribunal to proceed with the hearing of the appeal.
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