2014 (1) TMI 796 - HC - FEMA

Failure to take steps for realization of export outstanding - Maintanability of appeal - Section 52 of FERA or Section 19 of FEMA - Held that - Merely because the proviso provides for deposit of penalty while preferring appeal against the order imposing penalty, cannot be said to limit the wide amplitude of the main provision providing for appeal by any person aggrieved from any order made by the adjudicating authority . Any order would include an order exonerating some of the noticees. Reference may also be made to Section 49(4) of FEMA, being a transitory provision providing for the cases governed by FERA to be continued to be governed by the said Act notwithstanding the repeal thereof. In this regard, it may also be noted that the order dated 26th September, 2003 of the Enforcement Directorate also records the same to have been made under the provisions of the FERA and not under the provisions of FEMA. Once it is held that the grievance as raised in this petition is appealable and once it is admitted that appeal indeed was preferred, this writ petition would definitely be not maintainable - Even if the Appellate Tribunal has not returned any findings on the grievances raised by the petitioner qua the exoneration of the respondents No.3&4, the dismissal of the appeal indicates that the said grievance has also been negatived - If the petitioner is aggrieved of the order of the Appellate Tribunal, she has remedies thereagainst and cannot pursue this petition qua the order which has been subject matter of appeal - Decided against Petitioner.

Summary

Issues:
Challenge to order of exoneration under FERA, 1973 by Enforcement Directorate and mandamus sought for fresh adjudication.

Analysis:
The petition challenged the order of the Enforcement Directorate dated 26th September, 2003 under the Foreign Exchange Regulation Act, 1973 (FERA) regarding the exoneration of respondent No.3 and respondent No.4. The order found the petitioner guilty of not repatriating sale proceeds into India but using them in the USA. It also noted that the respondents were removed from the company in 1984, thus holding them not liable for the contravention under Section 68(1) of the Act.

The respondents argued that the petitioner had appealed to the Appellate Tribunal against the order, which was dismissed on 28th May, 2010. They contended that the petitioner should have challenged the exoneration in the appeal itself and had the option of a second appeal to the High Court. The counsel for the Enforcement Directorate cited a Supreme Court judgment to emphasize the availability of alternative remedies like appeals.

The Appellate Tribunal, in its order dated 28th May, 2010, acknowledged the petitioner's argument that the respondents were wrongly exonerated. The petitioner claimed that the respondent No.4 continued to act as the Managing Director of the company, implying shared liability. However, the Tribunal rejected the argument of equal liability, stating that no claim for negative equality could be made.

The petitioner's counsel contended that the maintainability of the writ petition could not be questioned once notice was issued. However, the court rejected this argument, stating that the question of maintainability could be raised at any stage. The petitioner also argued that the appeal to the Appellate Tribunal was not the appropriate forum to challenge the exoneration, but the court disagreed, highlighting the similarity in appeal provisions under FERA and FEMA.

The court addressed the petitioner's contention that the appeal under FEMA only lies against orders imposing penalties, clarifying that the main provision allows appeals against any order made by the adjudicating authority, including exoneration orders. The court emphasized that the order in question was made under FERA, not FEMA. Since the petitioner had the option to appeal the Appellate Tribunal's decision but had not done so, the writ petition was deemed not maintainable.

In conclusion, the court dismissed the petition, noting that the petitioner had alternative remedies available through appeals and had not challenged the Appellate Tribunal's order in the present petition. The court also questioned the petitioner's locus standi to maintain the petition, highlighting the lack of merit in the case.