JUDGMENT
S. Ravindra Bhat, J.
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1. The petitioner claims to be aggrieved b y the continuation of proceedings under provisions of the Foreign Exchange Regulation Act, 1973 (FERA) for which show cause notice was issued in 1994.
2. The short ground on which this writ petition is premised is that with an advent and coming into force of the Foreign Exchange Management Act, 1999 (FEMA), the position is unclear both in regard to the substantive aspect as Page 3107 well as the forum i.e. adjudicating authority and appellate authority. Therefore, appropriate declarations and writ have been sought.
3. Although, several claims are made, Mr. Malhotra, learned Counsel submitted that the scope of the petition would be confined to an appropriate direction that the adjudication cannot be proceeded with under FEMA as the position regarding appellate authority is not clear. He stated that claim ‘A’ so far as it challenges Section 49(2) as un-Constitutional, would not be pressed.
4. Learned Counsel relied upon Section 49 and submitted that with the repeal of FERA, only appeals which were pending before the Appellate Board were deemed to have been transferred to the newly constituted Appellate Tribunal under Section 19, due to Section 49(5)(b). In all other respects, the legislative intent, it was contended was to repeal FERA. Dilating on the theme, learned Counsel contended that the operation of Section 49(2) has resulted in a haitus with regard to the identity of the adjudicating authority, the availability of an appellate authority on the one hand as well as the substantive law to be and applied by the authorities. For these reasons, the relief claimed has to be granted and the continuation of proceedings, declared without jurisdiction.
5. The respondents in their counter affidavit have relied upon the provisions of Section 49 and contended that a case can be adjudicated in terms of the repealed FERA. It is averred that this is by virtue of Section 49(3) and (4) of FEMA. As far as the identity of the adjudicating authority is concerned, the respondents aver that the Special Director who initiated the proceedings under FERA would continue to retain jurisdiction. In regard to other issues, it is contended that FEMA is applicable as far as the other grievances are concerned.
6. Section 49 of the FEMA is extracted below:
49. Repeal and saving – (1) The Foreign Exchange Regulation Act, 1973 (46 of 1973) is hereby repealed and the Appellate Board constituted under Sub-section (1) of Section 52 of the said Act (hereinafter referred to as the repealed Act) shall stand dissolved.
(2) On the dissolution of the said Appellate Board, the person appointed as Chairman of the Appellate Board and every other person appointed as Member and holding office as such immediately before such date shall vacate their respective offices and no such Chairman or other person shall be entitled to claim any compensation for the premature termination of the term of his office or of any contract of service.
(3) Notwithstanding anything contained in any other law for the time being in force, no court shall take cognizance of an offence under the repealed Act and no adjudicating officer shall take notice or any contravention under Section 51 of the repealed Act after the expiry of a period of two years from the date of the commencement of this Act.
(4) Subject to the provisions of Sub-section (3) all offences committed under the repealed Act shall continue to be governed by the provisions of the repealed Act as if that Act had not been repealed.
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(5) Notwithstanding such repeal, –
(a) anything done or any action taken or purported to have been done or taken including any rule, notification, inspection, order or notice made or issued or any appointment, confirmation or declaration made or any license, permission, authorization or exemption granted or any document or instrument executed or any direction given under the Act hereby repealed shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act:
(b) any appeal preferred to the Appellate Board under Sub-section (2) of Section 52 of the repealed Act but not disposed of before the commencement of this Act shall stand transferred to and shall be disposed of by the Appellate Tribunal constituted under this Act;
(c) Every appeal from any decision or order of the Appellate Board under Sub-section (3) or Sub-section (4) of Section 52 of the repealed Act shall, if not filed before the commencement of this Act, be filed before the High Court within a period of sixty day of such commencement:
Provided that the High Court may entertain such appeal after the expiry of the said period of sixty days it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period.
(6) Save as otherwise provided in Sub-section (3), the mention of particular matters in Sub-sections (2), (4) and (5) shall not be held to prejudice or affect the general application of Section 6 of the General Clauses Act, 1897 (10 of 1897), with regard to the effect of repeal.
7. As is evident from the above, the first provision under Section 49 repeals the FERA and also has the effect of dissolving the Appellate Board constituted under Section 52(1) of that Act. The effect of dissolution of the Board is specifically provided under Section 49(2) in so far as the office of its members are concerned. Section 49(3) enjoins that no court shall take cognizance of an offence under the repealed Act and no adjudicating officer shall take notice of any contravention under Section 51 of the FERA after expiry of period of two years of the Act. This has been considered by the Division Bench of this Court in the decision reported as Binod Agarwal v. Union of India and Ors. 138(2007) DLT 764. However, the reasoning of that case is not relevant as that was concerned with the operation of Section 49(3). Similarly, Section 49(4) is not of relevance in this case.
8. Section 49(5) protects from the effects of repeal, various acts such as notifications, inspections, orders, notices, made or issued and appointments, confirmation or declaration made, permission, authorization granted etc. Similarly, appeals preferred to the Appellate Board under Section 52(2) the erstwhile Act, but not disposed off before the commencement of FEMA, were statutorily transferred by virtue of Section 49(5)(b). A transitional provisions by way of Section 49(5)(c) enabling filing of the appeals to the High Court was also made.
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9. Significantly, Section 49(6) saves the operation of the Section 6 of the General Clauses Act, 1897. Section 6 of the General Clauses Act which deals with all situations concerning the effect of repeal of enactments reads as follows:
Effect of repeal Where this Act, or any (Central Act) of Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not:
a) revive anything not in force or existing at the time at which the repeal takes effect; or
b) affect the previous operation of any enactment so repealed or anything duly done or suffered there under; or
c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or
d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or
e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid;
and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed.
6A. Repeal of Act making textual amendment in Act or Regulation.–Where any (Central Act) or Regulation made after the commencement of this Act repeals any enactment by which the text of any (Central Act) or Regulation was amended by the express omission, insertion or substitution of any matter, then, unless a different intention appears, the repeal shall not affect the continuance of any such amendment made by the enactment so repealed and in operation at the time of such repeal.
10. The net effect of the above, in my opinion, is that all proceedings-the expression being broad and generic and not confined to legal proceedings before the Court-(as can be discerned from Section 49(3) and Section 49(5)(a) are saved. Consequently, investigations and show cause notices started or issued prior to the commencement of the Act are to be continued and concluded. The bar created under Section 49(3) applies in those cases of notices being issued; an outer limit of two years has been prescribed. However, in this case notice was issued in 1994.
11. As far as the grievance of the petitioner is concerned, I am of the opinion that Section 49(5) and (6) provide a complete answer. The legislative intent in directing statutory transfer of appeal pending before the Appellate Board (of the Repealed Act) to the newly constituted Board is clear. If this thought process is to be pursued further, the logic of the applicability of the General Clauses Act is inexorable. Consequently, if a proceeding is concluded after the commencement of the FEMA by any adjudicating authority in terms of pre-existing law, the appeal would lie to the newly constituted Board under Page 3110 FEMA. As far as the apprehension of appropriate authority under FEMA i.e. whether it should be the Special Director or the Assistant Director, I am of the opinion that there is not much merit in this again. By operation of Section 6 of the General Clauses Act, the same authority continues to be empowered, to adjudicate and render findings in the absence of any other statutory indication to the contrary. The cumulative effect of Section 49 of FEMA and Section 6 of the General Clauses Act, in my opinion, are that though FERA stands repealed, yet in respect of the investigations pending before the various authorities, the liability under the FERA, has to be enforced and adjudicated.
12. The petition is disposed off in terms of the above directions. The proceedings pursuant to the show cause notice issued against the petitioner shall be concluded as soon as possible and preferably within nine months from today.