MADHAV MAGANLAL AND CO. Vs. UNION OF INDIA

JUDGEMENT

(1.) This criminal appeal invoking section 54 of the Foreign Exchange Regulation Act, 1973 (FERA) read with section 35 of Foreign Exchange Management Act, 1999 (FEMA) was preferred to assail order dated 13.05.2009 passed by Foreign Exchange Regulation Appellate Board (Appellate Tribunal) under Section 52 of FERA read with Section 28 of FEMA dismissing the appeals (Appeals numbers 177-178/2007) of the first and second appellant herein which had been taken out against adjudication order no. ADJ/62-B/SDE/KNR/2007 dated 30.10.2007 of Special Director, Enforcement Directorate, Mumbai imposing penalties on account of violation of Sections 9(1)(b) and (d), Section 68(1), Section 64(2) and 63 of FERA.

(2.) The Foreign Exchange Regulation Act, 1973 (FERA) was repealed and the appellate board constituted under Section 52 of the said Act was dissolved by section 49 of the Foreign Exchange Management Act, 1999 (FEMA), it having come into force with effect from 01.06.2000. However, notwithstanding such repeal, by virtue of Section 49(5), all action taken or purported to have been taken under the repealed enactment (FERA) is envisaged to be deemed to have been taken under the corresponding provisions of the new law (FEMA) in so far as it is not inconsistent with the provisions of the latter. Further, the appeal preferred to the appellate board under Section 52(2) of erstwhile law (FERA) but not disposed of before the commencement of the new law (FEMA) was to stand transferred to the appellate tribunal constituted under FEMA for adjudication by it and every appeal from any decision or order of the appellate board under Section 52 of the repealed Act, if not filed before the commencement of new law (FEMA), could still be filed before this court within the period specified. For such purposes, and by a saving clause, Section 49(3) of FEMA, however, puts a restriction against notice of any contravention if taken under Section 51 of FERA by any adjudicating officer under that law "after the expiry of a period of two years from the date of the commencement of the new law (FEMA)". Pertinent to add here, that appeal to this court against the order of the appellate tribunal under Section 54 of FERA or Section 35 of FEMA would lie only on "questions of law".

(3.) The background facts, as may be culled out from the material on record, would show that the premises of the first appellant were searched by the officers of Customs Department on 26.04.1991 resulting in seizure of diamonds worth Rs. 8 Lakhs with unaccounted Indian currency of Rs. 5,42,660/- besides certain incriminating documents. The investigation revealed that the second appellant and one Amrit Bhai Nathu Bhai Patel (who were partners in the first appellant firm) with one employee (Jayantibhai Tribhuvandas Patel) had indulged in hawala payments. During the pendency of the adjudication proceedings that were initiated, the other partner (Amrit Bhai Nathu Bhai Patel) and the employee (Jayantibhai Tribhuvandas Patel) died and the action against them thus abated.