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2011 (4) TMI 489 - SC - FEMAWhether the Appellate Tribunal constituted under the FEMA, 1999 was right in rejecting a belated appeal filed under Section 19 of FEMA, applying the first proviso to sub-section (2) of Section 52 of Foreign Exchange Regulation Act, 1973 - Held that the right of appeal under FEMA has already been saved in respect of cause of action which arose under FERA however subject to the proviso to sub-section (2) of Section 19, in the case of belated appeals - Section 49 of FEMA does not seek to withdraw or take away the vested right of appeal in cases where proceedings were initiated prior to repeal of FERA on 1-6-2000 or after - the time limit prescribed under FERA was taken away under the proviso to sub-section (2) of Section 19 and the Tribunal has been conferred with wide powers to condone delay if the appeal is not filed within forty-five days prescribed, provided sufficient cause is shown - Appeal is allowed by way of remand to Tribunal
Issues Involved:
1. Whether the Appellate Tribunal under FEMA was correct in rejecting a belated appeal by applying the limitation period from FERA. 2. Whether the Tribunal had the power to condone the delay beyond the 90-day period prescribed by FERA. 3. Whether the High Court could entertain writ petitions under Article 226 of the Constitution of India when the Tribunal dismissed the appeal for delay. 4. The applicability of procedural and substantive law concerning the appeal process under FEMA and FERA. 5. The impact of the repealing and saving clause of FEMA on the right of appeal. Detailed Analysis: 1. Applicability of FERA or FEMA for Limitation Period: The primary issue was whether the limitation period for filing an appeal should be governed by the first proviso to sub-section (2) of Section 52 of FERA or the proviso to sub-section (2) of Section 19 of FEMA. The Court noted that the cause of action arose under FERA, but the show cause notices and orders were issued after FEMA came into force. The appeals were filed under sub-section (1) of Section 19 of FEMA. The Court clarified that procedural law, including limitation periods, operates retrospectively unless it adversely affects vested rights. Thus, the limitation for filing the appeal should be considered under the proviso to sub-section (2) of Section 19 of FEMA. 2. Tribunal's Power to Condon Delay: The Tribunal dismissed the appeals on the ground of delay, stating it had no power to condone delays beyond 90 days as per FERA. However, the Court held that the proviso to sub-section (2) of Section 19 of FEMA, which allows the Tribunal to entertain appeals filed after 45 days if sufficient cause is shown, should apply. Unlike FERA, FEMA does not impose a ceiling on the period of delay that can be condoned. Therefore, the Tribunal was empowered to condone the delay if sufficient cause was demonstrated. 3. High Court's Jurisdiction under Article 226: The High Court dismissed the writ petitions, stating it would not be appropriate to entertain them as petitions against the original order. The Court emphasized that the High Court has the power to exercise its extraordinary jurisdiction under Article 226 of the Constitution of India, especially when the impugned order of the Tribunal was manifestly illegal. The High Court could have condoned the delay and directed the Tribunal to consider the appeal on merits. 4. Substantive and Procedural Law: The Court elaborated on the distinction between substantive and procedural law. The right to appeal is a substantive right, while the procedure for filing an appeal, including the period of limitation, is procedural. Procedural law is retrospective, meaning it applies to all actions after its enactment, even if the cause of action arose under a repealed statute. The Court cited several precedents to support this interpretation, emphasizing that procedural provisions, including those related to limitation, should be applied retrospectively unless they adversely affect vested rights. 5. Repealing and Saving Clause of FEMA: The Court examined Section 49 of FEMA, which is the repealing and saving clause, and Section 6 of the General Clauses Act, 1897. Section 49 of FEMA does not withdraw or take away the vested right of appeal for causes of action arising under FERA. The procedural provisions of FEMA, including the proviso to sub-section (2) of Section 19, apply to appeals filed under FEMA, even if the cause of action arose under FERA. The Court concluded that the Tribunal and the High Court erred in assuming that the limitation period was governed by Section 52(2) of FERA. Conclusion: The Supreme Court held that the Appellate Tribunal under FEMA could entertain the appeal after the prescribed period of 45 days if it is satisfied that there was sufficient cause for not filing the appeal within the said period. The orders passed by the Tribunal and the High Court were set aside, and the matter was remitted back to the Tribunal for fresh consideration in accordance with the findings recorded by the Court. The appeals were disposed of accordingly.
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