2015 (3) TMI 1165 - AT - FEMA

Application for amendment in the memo of appeal - Held that - The amendment application appears to have been made bonafidely and through it the appellant wants to bring on record the subsequent developments. Through the proposed amendment, no new cause has been set up by the appellant and is in continuation of the facts which were placed earlier. The subsequent developments are being placed before the Tribunal, so that they may be duly considered at the time of the final disposal of the appeal. The application, therefore, deserves to be allowed. The application for amendment in the memo of appeal is allowed. The amendment be incorporated within 10 days of the receipt of the copy of the order. Reply/written statement, if any may be filed by the respondent within 15 days thereafter. List on 26-5-2015 for hearing.

Issues Involved:
1. Application for amendment in the Memo of appeal.
2. Alleged contravention of Sections 7 & 8 of FEMA, 1999.
3. Relevance of subsequent developments post-adjudication.
4. Applicability of Order VI Rule 17 of the Civil Procedure Code.
5. Jurisdiction and procedural powers of the Appellate Tribunal under FEMA.

Issue-wise Detailed Analysis:

1. Application for Amendment in the Memo of Appeal:
The appellant sought to amend the Memo of appeal, arguing that significant developments had occurred since the filing of the appeal, which were pertinent to the case. The appellant contended that the impugned order was based on irrelevant material and ignored relevant considerations, thus being illegal, arbitrary, and unsustainable. The amendment aimed to include details of the company's incorporation, agreements, efforts to realize export proceeds, and financial status. The appellant also sought to introduce new grounds for challenge and requested that these facts be considered in the application for dispensation of penalty.

2. Alleged Contravention of Sections 7 & 8 of FEMA, 1999:
The respondent argued that the appellant had contravened Sections 7 & 8 of FEMA, 1999 by failing to realize export proceeds in a timely manner and not taking reasonable steps for their realization. The respondent maintained that the appellant's subsequent realization of export proceeds did not absolve them of the initial contravention. The impugned order was deemed correct, and the appellant's financial hardship claim was disputed based on the realization of Rs. 16.01 crores during 2011-2013.

3. Relevance of Subsequent Developments Post-Adjudication:
The appellant argued that the subsequent realization of export proceeds and the post facto approval from RBI were crucial for determining their liability. They contended that these developments should be considered to demonstrate that all possible efforts were made to realize the export proceeds. The respondent countered that these subsequent developments did not alter the real question in controversy and that the appellant's failure to act in time remained a critical issue.

4. Applicability of Order VI Rule 17 of the Civil Procedure Code:
The appellant invoked Order VI Rule 17 of the CPC, arguing that amendments could be made at any stage of the proceedings, including the appellate stage, to ensure justice. They cited several judgments to support their claim that amendments should be allowed to bring subsequent developments on record. The respondent contended that FEMA, 1999 is a complete code, and the Tribunal has the power to regulate its own procedure based on principles of natural justice, without being bound by the CPC.

5. Jurisdiction and Procedural Powers of the Appellate Tribunal under FEMA:
The Tribunal examined whether it had the jurisdiction to allow amendments under FEMA. It was noted that Section 28 of FEMA grants the Tribunal the power to regulate its own procedure, guided by principles of natural justice. The Tribunal referred to various judgments, emphasizing that amendments should be allowed to ensure justice, equity, and good conscience. It concluded that adopting principles governing amendments under the CPC would not conflict with natural justice and that the subsequent developments should be considered at the time of final disposal of the appeal.

Conclusion:
The Tribunal allowed the appellant's application for amendment in the Memo of appeal, recognizing the necessity of bringing subsequent developments on record to ensure a fair trial. The amendment was to be incorporated within 10 days, with the respondent given 15 days to file a reply. The case was listed for hearing on 26-5-2015. The Registrar was directed to send a copy of the order to all parties involved.

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