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2019 (8) TMI 265 - AT - FEMAMaintainability of the appeal - Section 19 of the Foreign Exchange Management Act, 1999 - appeals were fixed for orders when there is a difference of opinion - HELD THAT - There is no dispute that the impugned orders are interlocutory orders and these orders are passed during the course of inquiry proceedings as provided under the Act and Rules thereto. The object of Section 19 (1) is to give a right to appeal to a party aggrieved by an order which affects the party s right or liability. If the present type of orders are allowed to be agitated than there will be no end to litigation and the very purpose of the relevant provisions and intention of the legislature would be defeated. The scope of the words an order of Adjudicating Authority is not as wide as any order or every decision or order in the context of Sections 19 (1), 19 (6) Section 35 respectively of FEMA, 1999 - As held by Hon ble Supreme Court, in many judgments, only those orders which affect the rights and liabilities of the parties can only be appealable. After considering the materials on record, oral and written submissions of learned counsels and the relevant judgments in the present appeals, I do not find any materials to support that the present impugned orders in any way affects the rights and liabilities of the parties, hence in view of the discussions made in the preceding paras, it is held that these impugned orders are not covered within the scope of the words an order occurring in Section 19 (1) of FEMA, 1999 for the purpose of filing an appeal as required under the said section. Therefore, these appeals are not maintainable. Appeal not maintainable.
Issues Involved:
- Maintainability of the appeals filed under Section 19 of the Foreign Exchange Management Act, 1999. Detailed Analysis: Issue: Maintainability of the Appeals Background of the Case: The appeals were filed by a company and its representatives against orders issued by the Special Director of Enforcement, rejecting their requests for cross-examination of certain witnesses. The main issue for determination was whether these appeals were maintainable under Section 19 of the Foreign Exchange Management Act, 1999 (FEMA). Common Facts: - The appellant company received a Show Cause Notice from the Directorate of Enforcement based on a complaint. - The appeals were filed under Section 19 of FEMA against orders dated 30th October 2017 and 15th November 2017, which denied cross-examination requests. Arguments by the Appellants: 1. Violation of Natural Justice: The appellants argued that the impugned orders violated the principles of natural justice. 2. Interpretation of "An Order": They contended that the term "an order" in Section 19(1) should be interpreted broadly, similar to "any order" in Section 19(6), to include any order affecting valuable rights. 3. Precedents and Analogous Laws: The appellants referred to various judgments and analogous provisions under other laws, asserting that interim orders affecting rights should be appealable. Arguments by the Respondent: 1. Procedural Context: The respondent argued that FEMA is a complete code with specific procedures, and only orders passed at certain stages are appealable. 2. Statutory Interpretation: They emphasized that tribunals should not expand the scope of legislation beyond clear statutory language. 3. Finality of Orders: The respondent maintained that only final orders imposing penalties are appealable under Section 19(1). Tribunal's Discussion and Findings: 1. Nature of Orders under FEMA: The Tribunal noted that the proceedings before the Adjudicating Authority are in the nature of inquiry, involving several procedural orders. 2. Interpretation of "An Order": It was observed that "an order" in Section 19(1) does not necessarily mean only final orders. However, the scope of "an order" is narrower than "any order" in Section 19(6). 3. Impact on Rights and Liabilities: The Tribunal emphasized that only orders substantially affecting rights or liabilities are appealable. The impugned orders, being procedural and not affecting substantial rights, do not fall within this category. Precedents Considered: - Delhi High Court in Sandeep Singh Sandhu vs. Debt Recovery Tribunal: The court held that "any order" and "an order" include every order affecting rights or liabilities. - Supreme Court in Raj Kumar Shivhare vs. Directorate of Enforcement: The court interpreted "any decision or order" in Section 35 of FEMA to mean all decisions or orders of the Appellate Tribunal. - Central Bank of India vs. Gokal Chand: The Supreme Court ruled that interlocutory orders merely procedural and not affecting rights or liabilities are not appealable. Conclusion: The Tribunal concluded that the appeals are not maintainable as the impugned orders do not affect the substantive rights or liabilities of the parties. The orders are procedural steps in the inquiry process and can be challenged after the final order is passed. Final Decision: The appeals were dismissed as not maintainable under Section 19(1) of FEMA, 1999.
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