2012 (6) TMI 675 - HC - FEMA

Penalty for contravention of Section 9(1) (d) read with Section 68 of Foreign Exchange Regulation Act, 1973 - Condonation of 507 days delay in filing the appeal - appellants contended that delay in filing the original appeal and in re-filing has taken place on account of the delay in normal decision making process which is bound to entail certain time at different levels and since the case of the appellants Held that - applications have been drafted in a most casual manner and absolutely no details have been given for the reasons as to why a delay of 507 days had occurred - appeals are bereft of any material which will persuade the Court to condone the delay either originally or in re-filing Application for COD dismissed

Summary

Issues Involved:
1. Delay in filing the appeals.
2. Delay in re-filing the appeals.
3. Validity of penalties imposed under the Foreign Exchange Regulation Act (FERA), 1973.

Detailed Analysis:

1. Delay in Filing the Appeals:

The appeals were filed with a delay of 507 days. The appellants contended that the delay was due to the normal decision-making process within the department, which involved multiple levels of approval and communication. The court noted that the applications for condonation of delay lacked specific details and dates, making the explanation insufficient. The law, as per Section 35 of FEMA and Section 54 of FERA, mandates that an appeal must be filed within 60 days, extendable by another 60 days if sufficient cause is shown. The court emphasized that the maximum allowable period for filing an appeal is 120 days, and the delay of 507 days far exceeded this limit. The court cited the Apex Court's judgment in Ramlal v. Rewa Coalfields Ltd. and State of Nagaland v. Lipok AO, which stress the need for a pragmatic and liberal approach towards condonation of delay, especially for government bodies. However, the court found that the appellants' explanation lacked bona fides and indicated gross negligence, thereby not meeting the 'sufficient cause' requirement.

2. Delay in Re-filing the Appeals:

The appellants also sought condonation for a delay of 151 days in re-filing the appeals. The reason provided was that the learned counsel for the appellants had been designated as a senior counsel, necessitating the appointment of a new counsel, which took considerable time. The court found the explanation too general and lacking specific dates and details. The applications did not provide the date of collection of the brief from the registry or the date of re-filing. The court concluded that the appellants were not bona fide in pursuing the matter and exhibited gross negligence. The court reiterated that after the expiry of the limitation period, a vested right is created in favor of the opposite party, which should not be disturbed lightly.

3. Validity of Penalties Imposed Under FERA, 1973:

The original penalties were imposed by the Special Director, Enforcement Directorate, for contraventions under Section 9(1)(d) read with Section 68 and Section 9(1)(b) of FERA, 1973. Smt. Renu Vij and Sh. Ravinder Singh were penalized for unauthorized transactions involving significant amounts of foreign exchange. The Appellate Tribunal for Foreign Exchange initially granted dispensation of the pre-deposit of penalty, citing a prima facie good case. The Tribunal's Division Bench later disagreed on the validity of the penalties, with the Chairperson favoring the respondents and the Member supporting the penalties with some reduction. The matter was referred to a third Member, who concurred with the Chairperson, leading to the setting aside of the penalties. The Department challenged this decision, but the court dismissed the appeals due to the aforementioned delays.

Conclusion:

The court dismissed the appeals as time-barred, citing the appellants' failure to provide sufficient cause for the delays in filing and re-filing. The court emphasized the importance of adhering to statutory timelines and the need for detailed and bona fide explanations when seeking condonation of delay. The penalties imposed under FERA were ultimately set aside by the Appellate Tribunal, and the Department's appeals were not entertained due to procedural lapses.