JUDGMENT
S.M. Daud, J.
1. This judgment will rule upon an application for condonation of delay and the Maintainability of an appeal purporting to be under section 54 of the Foreign Exchange Regulation Act , 1973 (FERA).
2. Respondent-hereinafter referred to as ‘Palekar’-was served with a memorandum bearing No. T-4/19/DD/BKS/B/83 (ii) dated 23-2-1983 by the Enforcement Directorate, Bombay. This memorandum alleged that on a trip to United States of America, he had been given a Credit Card by Philips E. Carne of Johnson International, USA; that he had used the said Card for meeting certain personal expenses, and, that by so doing, he had contravened the provisions of sections 8(1) and 9(1)(a) of the FERA. Palekar was called upon to show cause why a penalty should not be imposed upon him. The reply given by Palekar did not satisfy the Adjudicating Officer. That Officer held that the charge was established and imposed a penalty of Rs. 7,500/- against Palekar. Upon this, Palekar lodged an appeal with the Foreign Exchange Regulation Appellate Board. This appeal was numbered as Appeal No. 188 of 1983. It was heard, and on 16th March, 1984, dismissed. After this dismissal, a petition labelled as a “review petition” was moved. The very first line began with a description of the request made in the petition, as being” a request for review, reconsideration and correction of accidental error or omission in the order dated 16th March, 1984 passed by the FERA Board in Appeal No. 188 of 1983″. Briefly stated, the petition contended that there was a conflict between the reasoning accepted by the Board which reasoning was set out in earlier paragraphs of the order and the later paragraphs which purported to record conclusions. Apparently, the Board had over-looked the reasoning when it came to record conclusions. The consequence was that an appeal which should have been, and, had in fact allowed, was, by an accidental slip or omission, “dismissed”. The petition was registered and notice directed to be issued to the Director of Enforcement. On behalf of the said Director of Enforcement, it was contended that the Appellate Board had no power to review an order passed in appeal, that Palekar in fact wanted reversal of the verdict given in appeal and that this could not be said to be provided by section 65 of the FERA to which recourse was being had by Palekar for showing that the petition was maintainable in law. The Board over-ruled the objection raised by the Director of Enforcement and held that the application sought exercise of powers conferred upon the Board by section 65 of the FERA; that there was substance in the contention put forth by Palekar, and, that the appeal in fact should have been allowed instead of the dismissal recorded due to an error in the first instance. For that reason, an amendment was directed to be made in the order, and, the conclusion now became one favourable to Palekar. This order was passed on February 27, 1986.
3. The Union of India, purporting to act through the Director of Enforcement, lodged an appeal under section 54 of the FERA on 16-6-1986. The office recorded an objection pointing out that prima facie the appeal seemed to be beyond time as it had been lodged after the expiry of 60 days which came to an and on 9-5-1986 as reckoned from 27-2-1986. To get over this difficulty, the Union of India again acting through the Director of Enforcement moved an application for condonation of delay on 23-7-1986. This application recited various dates and the events that took place on those dated. A brief summary thereof is given below:-
Sr. Event Date
No.
1. Receipt of the copy of the order
passed 11th March, 1986
on 27-2-1986
2. Review of the order by Deputy 21st March, 1986
Legal Advisor
3. Placing of the order along with
a report of the Deputy Legal Adviser
before the Director of
Enforcement suggesting taking
of legal opinion from Delhi. 24th March, 1986
4. Legal opinion received from
the Ministry of Law and Justice by
the Director of Environment. 24th April, 1986
5. Opinion of Law and Justice Ministry
placed before the Special Director
of Enforcement and return of
the papers to Deputy Legal Advisor. 30th April, 1986
6. Director of Enforcement's office
at Delhi sending the letter to Director
of Enforcement's office at
Bombay recommending the filing
of an appeal in the High Court. 6th May, 1986
7. Directorate's office at Bombay
receiving the aforementioned report. 13th May, 1986
8. Mr. Ganguly, Officer in the Bombay
office placing the report for sanction
and approval of the Deputy
Director in the Bombay office. 27th May, 1986
9. Report and copy of the impugned
order sent to the department
for typing. 28th May, 1986
10. Typist on return from leave
typing out the report
and copy of the impugned order. 5th June, 1986
11. Return of the typed copies
to Mr. Ganguly. 6th June, 1986
12. Papers sent to the Government
Pleader, High Court, A.S., with a
direction to lodge an appeal. 11th June, 1986
this because, 7th to 10th of June,
1986 were holidays.
13. Appeal filed by the office of the
Govt. Pleader. 16th June, 1986
14th and 15th of June, 1986 being
holidays.
The application goes on to recite that the delay was attributable to long procedural formalities, there being only one typist in the Bombay office and that typist going on leave, and lastly the belief of the Bombay office that during the summer vacation the High Court did not receive petitions or appeal memos etc. etc. It is said that the delay was neither intentional nor deliberate, and therefore, deserved to be condoned.
4. Palekar opposes the request for condonation of delay and raised two further questions, viz. (i) that the Director of Enforcement who has moved the application as also the appeal, has no locus standi to act on behalf of the Union of India and (ii) that the appeal is not maintainable in law. I do not propose to go into the question of locus standi of the Director of Enforcement to act on behalf of the Union on India. Here also I must make it clear that there is good authority in support of the stand taken by Palekar and that authority is to be found in Director of Enforcement, Madras v. Rama Arangannal and another, reported at . I do not propose to go into that question, in the matter before me, because a request was made on behalf of the appellant to obtain proper instructions on the subject. On this very ground, an adjournment was granted earlier, but to no avail. Be that as it may, if proper instructions have not been made available, it will not be fair to sustain the objection in regard to locus standi of the Director to initiate proceedings on behalf of the Union of India. Keeping that objection in abeyence, I move on to the contention regarding the maintainability of the appeal.
5. Sections 54, 52 and 65 of the FERA, to the extent relevant read thus :
“54. An appeal shall lie to the High Court only on question of law from any decision or order of the Appellate Board under sub-section (3) or sub-section (4) of section 52.
52(2) Any person aggrieved by such order may… prefer an appeal to the Appellate Board…
(3) On receipt of an appeal under sub-section (2), the Appellate Board may after making such further inquiry as it deems fit, confirm, modify or set aside the order appealed against and the decision of the Appellate Board shall, subject to the provisions of section 54, be final…
(4) The Appellate Board may, for the purpose of examing the legality, propriety or correctness of any order made by the adjudicating officer under section 50 read with section 51…. on its own motion or otherwise, call for the records of such proceeding and make such order in the case as it thinks fit.
65. Clerical or arithmetical mistakes in any decision or order passed by the Appellate Board … under this Act, or errors arising therein from any accidental slip or omission may, at any time, be corrected by the appellate Board..”
The applicability of these sections has to be considered in a somewhat curious background. Palekar, while in the United States, had used a Credit Card to meet certain expenses incurred by him while touring various parts of that country. After so doing, he wrote a letter to Philip E. Carne of Johnson and Johnson, U.S.A. In this letter, he stated that he had used the Credit Card for certain personal expenses which would be reimbursed by him during his next trip. It was upon this letter, that Palekar was charged with having contravened sections 8(1) and 9(1)(a) of the FERA. As said earlier, the Ajudicating Officer held that the alleged contravention had been proved and imposed a penalty of Rs. 7,530/- upon him. In appeal, Counsel representing Palekar contended that the use of the Credit Card by his client would not attract section 8(1) of the FERA. Counsel went on to elaborate the submission and in so doing, pointed out that the Credit Card had been issued by American Express which issued Cards of two categories to its customers. The First was a personal Credit Card (PCC) and the other a Corporation Credit Card (CCC). In the case of the former, the name of the person to whom credit was allowed, alone appeared. In the second case, the name of the user of the Credit Card as also the Corporation to whom it had been issued, were shown. The Card issued to Palekar by Johnson and Johnson International, USA belonged to the CCC category. As such, there was no question of acquisition of foreign exchange which was the condition precedent for attracting section 8(1) of the FERA. The Adjudicating Officer had erred because of the failure to keep in view the dichotomy prevalent. This contention was met by the representative of the Director of Enforcement by submitting that irrespective of the existence of two categories of Credit Cards, the fact remained that Palekar had the benefit of expenses incurred by him abroad being met by American Express in foreign exchange and therefore, he must be deemed to have contravened the provisions of the Act. The Appellate Board, speaking through the Chairman, in para 4 of the judgment expressed its concurrence with the distinction drawn by Palekar’s Counsel between the cases of a PCC holder and a CCC holder. It was further held that his being in the employ of Johnson and Johnson International, USA was proved. Therefore, the expenses incurred by him while touring the USA, and for that purpose, using a CCC, did not lead to the passing of any foreign exchange through his hands. He was not therefore, liable for the contravention of the FERA. However, the Chairman went on to consider other aspects. He referred to the difficulty in the path of Palekar arising on account of the letter addressed to Philip E. Carne. In this letter, there was a request that personal expenses made through the use of the Card furnished to him, would be reimbursed by him upon his next visit to the States. Carne was requested to honour the bills as and when these were submitted to Johnson and Johnson International, USA by American Express. The exact figures of the sums involved were made known to Carne. The conclusion drawn by the Chairman, was–
“It is amply clear from this letter that the appellant had during his foreign tour incurred travelling expenses not relatable to the official trip for which Johnson USA was not liable to pay American Express against the CCC held by him and the excess expenditure incurred was, therefore, to be borne by him and not Johnson USA.”
Next, there was a consideration of the waiver made by Carne. Apparently, Carne made it clear that there was no question of reimbursement by Palekar and that Johnson USA, would be waiving the same. The Chairman then proceeded to consider whether the waiver would take the case of Palekar within the purview of section 8(1) of the FERA. He held that the subsequent conduct on the part of Johnson USA, resulted in a gift of foreign exchange to Palekar which was covered by the words “otherwise acquired” occurring in section 8(1) of the FERA. Counsel representing Palekar referred to a judgement of this Court in Pandharinath v. Deputy Director of Enforcement, 1979 Mh.L.J. 176. This judgement was considered by the Chairman and held to be inapplicable to the case of Palekar. Paras 9 and 10 of the judgement which are important need reproduction and say thus–
“On a careful consideration of the pros and cons, I confirm the finding of the adjudicating officer that the charge against the appellant is established. In the result the appeal is dismissed.”
I have made a somewhat detailed reference to the order passed in appeal, because of the submission that it was that order which furnished the Director of Enforcement a cause of action to come to this Court if he wanted to take recourse to section 54 of the FERA. To appreciate this contention let us turn to the order passed in the section 65 FERA application. A complete go-by was given to the earlier order. This time, the Chairman persuaded himself to believe that irrespective of the use to which the Credit Card was put by Palekar i.e. whether the Card was used for personal or corporate purposes, the user did not lead to Palekar acquiring foreign exchange. Therefore, section 8 of the FERA was not attracted and the appeal should have been allowed instead of being ‘dismissed’. This reversal was said to be not in exercise of the power of review, which admittedly did not vest in the Adjudicating Officer or the Appellate Board. The conclusion was said to be the result of a rectification made under section 65 of the FERA. With great respect to the Chairman, I am not in a position to support the reasoning given by him for reversing himself. The original order made a clear distinction between the use of the Credit Card for two purposes viz. for corporate and for personal expenses. In relation to the former, it was held that section 8(1) of the FERA did not apply. In relation to the use of the Card for personal expenses, it was held that there was an infringement of the FERA which justified the imposition of penalty upon Palekar by the Adjudicating Officer. It is the total reversal of this which has brought the Director of Enforcement to this Court. Quite apart from the question whether section 65 of the FERA applies or not , the need to file an appeal, in the sense of making the Director of Enforcement aggrieved, really came about on February 27, 1986 – not prior thereto, and, certainly not, on March 16, 1984. True, in the background of section 54, it must be shown that the appeal falls within that section if it raises a question and the question of law arising from a decision, which in substance falls under sub-section (3) of section 52 of the FERA. It was referred to the appeal memo in support of the contention that the appeal was directed only against the exercise of the power under section 65 of the Act. It is true that the appeal memo does give the impression that it is mainly directed against section 65 of the FERA being utilised to exercise the non-existing power of review. But there are other clause in the appeal memo which enable the same to be treated as an appeal in the broader sense of the term viz. an order truly falling with section 54 – the section 65 application being treated as a supplementary appeal, or a memo, supplementing the original appeal memo. Clause 11 of the appeal memo recites that the Appellate Board erred in holding that there was no acquisition of foreign exchange at all. Clauses 13 to 16 can be dis-associated from the other clauses, and read as being confined to treating the appeal as directed also against Palekar being given the benefit of the use of the Credit Card for personal purposes, though the contrary was the finding in the order delivered on 16th March, 1984. Therefore, irrespective of the extent to which section 54 FERA can apply to the instant appeal, I am clear in my mind that it is applicable vis-a-vis the use of the Credit Card by Palekar to reimburse his personal expenses. This is not to say that I have already come to any conclusion on the subject, whether on the facts or otherwise. The question under consideration is about the maintainability of the appeal, and for that purpose, I would hold that the appeal is maintainable.
6. Unfortunately for the appellant, gross delay and unexplained at that, compels me to dismiss the appeal in limine. Far from there being any satisfactory grounds to explain the delay, the application for condonation is a litany of carelessness accompanied by bureaucratic callousness. At every stage, the various departments and offices of the Union of India have dragged their feet. Though the copy of the order was received on 11-3-1986, the Deputy Legal Advisor found time to review it only on 21-3-1986. There is no explanation as to what else – if anything – preoccupied him between these two dates. Even after 21-3-1986, the matter was not immediately placed before whoever was required to attend to despatch of the papers for taking of the legal opinion at Delhi. In Delhi, the matter took its own time. With all this, the papers came back on 13-5-1986. It is said that the Officer dealing with the matter, one Mr. Ganguli, found time to address himself to the papers on 27-5-1986. Then comes the sorry spectacle of the papers lying in this or that table and moving with the usual retarded speed in any department burdened with shoddy workers. As if the delay was not sufficient, we are asked to believe that the Directorate of Enforcement laboured under the impression of the High Court being closed and no matters being lodgable during the summer vacation. I presume that the Directorate of Enforcement is an office of the Union of India and it is certainly so described in the appeal memo itself. The Union of India seems to have over-staffed legal office at Bombay. If this office could not correct the mis-conceptions of the Directorate of Enforcement’s office at Bombay, then it have better be wound up. Everyone knows that the offices of the High Court – whether on the Original or on the Appellate Side – are in vacation open for the lodging of petitions, reviews and appeals. In fact, during the summer as in other vacations, there are what is known as Vacation Judges attending to important and urgent work. The Government Pleader’s office on the Appellate Side also functions, during the summer vacation, If on so obvious a matter, the Directorate of Enforcement, laboured under a wrong impression, it has to thank itself. That cannot be a ground for seeking the indulgence of this Court in the matter of condonation of delay. Mr. Desai for Palekar rightly says that the standard to be applied under section 54 is more stringent vis-a-vis that available under section 5 of the Limitation Act. Under the latter enactment, an appeal may be admitted after the prescribed period if the appellant or the applicant satisfies the Court “that he had sufficient cause for not preferring the appeal or making the application within such period.” As against this, the requirement under section 54 is the satisfaction of High Court “that the appellant was prevented by sufficient cause from filing the appeal in time.” Here, the appeal was filed beyond sixty days, and far from there being sufficient cause to prevent the filing of the appeal, it was undeniable indolence that occasioned the gross delay in the filling of the appeal. Therefore, the delay cannot be condoned. A somewhat similar position arose before the Supreme Court in (SLP (Civil) No. 2448 of 1985 decided on 24-11-1986)3. The Court refused to condone delay and it is not necessary to burden this judgment by mentioning authorities indicating that the Government is not to be dealt with greater indulgence in the matter of condoning of delay, merely by the fact of its being, the Government. Of course, this is not to say that it should be treated any different from the ordinary litigant. The result of the foregoing discussion is that though the appeal is held to be maintainable, it will have to be dismissed as time-barred-the said bar, not being condonable. Having regard to the above, I will leave parties to bear their own costs. Therefore, the order.
ORDER
The application for condonation of delay viz. C.A. No. 3411 of 1986 fails and is rejected. The appeal being First Appeal No. 833 of 1986 being still-born as time-barred, is dismissed. Costs, as incurred.