2010 (2) TMI 1323 - HC - FEMA

Summary

Issues Involved:
1. Jurisdiction of the court u/s 227 of the Constitution of India read with Section 482 CrPC.
2. Validity of the complaint under the repealed Foreign Exchange Regulation Act, 1973 (FERA) and its transition to the Foreign Exchange Management Act, 1999 (FEMA).
3. Interpretation of Section 49(3) of FEMA regarding the cognizance of offences under the repealed FERA.

Summary:

1. Jurisdiction of the court u/s 227 of the Constitution of India read with Section 482 CrPC:
The Criminal Application invoked the court's jurisdiction under Article 227 of the Constitution of India read with Section 482 CrPC to challenge an order dated 27/3/2008 by the Sessions Court for Greater Bombay in Criminal Revision Application No. 921 of 2005. The Additional Sessions Judge upheld the Magistrate's order issuing process and dismissed the Revision Application of the applicant.

2. Validity of the complaint under the repealed Foreign Exchange Regulation Act, 1973 (FERA) and its transition to the Foreign Exchange Management Act, 1999 (FEMA):
The complaint was filed by the Enforcement Directorate alleging offences under Section 120B of IPC, Section 56(1)(ii) read with Section 19(1)(b) of FERA, 1973, and Sections 64(2), 68(1), and 68(2) of FERA, 1973, all read with Sections 49(3) and 49(4) of FEMA, 1999. The applicants contended that the complaint was barred by law as FERA was repealed by FEMA, which does not provide for criminal prosecution. They argued that the cognizance of offences under the repealed Act was barred after two years from the commencement of FEMA.

3. Interpretation of Section 49(3) of FEMA regarding the cognizance of offences under the repealed FERA:
The applicants argued that Section 49(3) should be interpreted to mean that no court shall take cognizance of an offence under the repealed Act after two years from the commencement of FEMA. They relied on the Rule of Last Antecedent and various judicial precedents to support their contention. However, the prosecution contended that both criminal proceedings and adjudication under the old Act are saved if initiated within the stipulated period. The court held that Section 49(3) must be read as a whole, and both offences and adjudication proceedings can continue if cognizance is taken within the statutory period. The court rejected the applicants' interpretation and upheld the orders issuing process and rejecting the discharge applications.

Conclusion:
The court dismissed the Criminal Application, discharged the rule, and vacated any ad-interim orders. The court emphasized that the legislative intent was to save both criminal and adjudication proceedings under the repealed FERA, provided they were initiated within the specified period under FEMA.