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2016 (4) TMI 782 - HC - FEMAAggrieved person - Whether the 4th respondent, Assistant Director, Directorate of Enforcement can be said to be an aggrieved person from the order dated 3.7.2013 of the Adjudicating Authority, the Assistant Director, Directorate of Enforcement so as to file an appeal under Section 17(2) of 1999 FEMA Act - Held that - Section 19 of the 1999 Act provides appeal to the Appellate Tribunal against an order; (i) passed by the Adjudicating Authority other than those referred to in Section 17(1); and (ii) an order of the Special Director of Appeals. Under Section 17, appeal is provided to Special Director only against the Adjudicating Authority (Assistant Director or Deputy Director of Enforcement). Thus appeal under Section 19 shall lie to the Appellate Tribunal when adjudication is made by an authority other than the Assistant Director and Deputy Director. In event it is held that a person aggrieved within the meaning of Sec.17(2) cannot include the Assistant Director who is the complainant or Director of Enforcement who is empowered to enforce the provisions of the Act, there will be no remedy available against an order of the Adjudicating Authority, viz., Assistant Director and Deputy Director in the event of they passing illegal adjudication order. For eg., in the event the Assistant Director passes an order finding contravention of the provisions of Section 13 but rejects the application on technical ground whether there shall be no remedy against such an order. The right of appeal given to the person aggrieved has to be given meaning and purpose which may advance the object of the Act. Denying right of appeal against any order passed by the adjudicating authority shall be defeating the purpose and object of the Act. Hence we are inclined to take the view that the Assistant Director, who is also a complainant can file appeal before the Special Director under Section 17(2). When Officer of the rank of Assistant Director and above in the Directorate of Ministry of Finance has been empowered to file appeal under Section 35 of the 1999 Act in the High Court, we are not persuaded to accept the submission that Assistant Director was incompetent to file an appeal before the Special Director. More so, both in the memorandum of appeal as well as the counter affidavit it has been categorically stated that the appellant is authorised to file appeal. Thus submission raised by the learned counsel for the appellant that the 4th respondent was not competent to file the appeal and the appeal was not maintainabale has to be rejected. Violation of the principles of natural justice - Held that - It is relevant to note that the Adjudicating Authority has recorded the findings of contravention and imposed penalty however refused to confiscate the amount seized. No appeal was filed by the appellants against the order of the Adjudicating Authority imposing penalty. Thus the appellants were not allowed to raise submissions regarding finding of contravention. Scope of the appeal filed was as to whether the Adjudicating Authority has rightly refused to confiscate the amount seized or the amount deserves to be confiscated. We do not find any violation of principles of natural justice as contended by the learned counsel for the appellant. In the result, we find no merit in the appeal. Writ Appeal is dismissed. As no such substantial question of law is involved as to the interpretation of this Constituition so as to enable us to grant the certificate under Article 134A of the Constitution of India
Issues Involved:
1. Whether the Assistant Director, Directorate of Enforcement can be considered an "aggrieved person" from the order of the Adjudicating Authority to file an appeal under Section 17(2) of the Foreign Exchange Management Act, 1999. 2. Whether the appeal was decided in violation of the principles of natural justice. Issue-wise Detailed Analysis: 1. Whether the Assistant Director, Directorate of Enforcement can be considered an "aggrieved person" from the order of the Adjudicating Authority to file an appeal under Section 17(2) of the Foreign Exchange Management Act, 1999: The court examined whether the Assistant Director, Directorate of Enforcement, who filed the appeal, can be considered an "aggrieved person" under Section 17(2) of the Foreign Exchange Management Act, 1999. The court noted that an appeal is a creature of statute and that the right to appeal must be exercised by persons permitted by the statute. The statutory scheme of the Foreign Exchange Management Act, 1999, was analyzed, particularly Sections 13, 16, 17, 19, and 35. Section 17(2) allows "any person aggrieved" by an order of the Adjudicating Authority (Assistant Director or Deputy Director of Enforcement) to appeal to the Special Director (Appeals). The court considered various precedents and definitions of "person aggrieved," including judgments from different courts and the Supreme Court. The court concluded that the Assistant Director who filed the appeal was not the same Assistant Director who adjudicated the dispute. The Assistant Director who filed the appeal was the complainant in the case and had a cause of action due to the rejection of confiscation of the seized amounts. The court distinguished the present case from the judgments in Director of Enforcement, Madras v. Rama Arangannal and Mohtesham Mohd. Ismail v. Spl. Director, Enforcement Directorate, noting that in the current case, the appeal was filed by a different Assistant Director than the one who adjudicated the matter. The court also referenced an order dated 6.3.2009 by the Government of India empowering officers of the rank of Assistant Director and above to file appeals under Section 35 of the Foreign Exchange Management Act, 1999. The court concluded that the appeal filed by the Assistant Director was maintainable, as the Assistant Director who filed the appeal was not the Adjudicating Authority and had the authority to file the appeal. 2. Whether the appeal was decided in violation of the principles of natural justice: The court addressed the appellants' contention that the appeal was decided in violation of the principles of natural justice. The appellate order noted that notices were issued to all concerned parties, and the counsel for the petitioners was heard. The court found that the appellants were given an opportunity to be heard and to make submissions or defense statements against the appeal petition. The court also addressed the appellants' argument that they were not allowed to raise submissions regarding the findings of contravention recorded by the Adjudicating Authority. The court noted that the appellants had not filed an appeal against the order of the Adjudicating Authority imposing a penalty. Therefore, the scope of the appeal was limited to whether the Adjudicating Authority had rightly refused to confiscate the seized amount. The court concluded that there was no violation of the principles of natural justice and dismissed the appeal. Conclusion: The court dismissed the writ appeal, holding that the Assistant Director, Directorate of Enforcement, was competent to file the appeal and that there was no violation of the principles of natural justice. The court also refused the appellants' prayer for a certificate under Article 134A of the Constitution of India.
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