P AZEEZ Vs. STATE OF KERALA

JUDGEMENT

(1.) The question involved in this Writ Appeal is whether a penalty imposed on the appellant under Section 9(1)(b) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973 in the year 1996 can be recovered as an arrear of land revenue under Section 70(1)(iii) of the Foreign Exchange Regulation Act, 1973, in view of the repeal of the Foreign Exchange Regulation Act by Section 49 of the Foreign Exchange Management Act, 1999

(2.) Proceedings were initiated against the appellant writ petitioner by the Assistant Director of Enforcement, Foreign Exchange Regulation Act, Government of India, Calicut under Section 50 of the Foreign Exchange Regulation Act, 1973 (hereinafter referred to as 'FERA') for contravention of Section 9(1)(b) and 9(1)(d) of the Act. Ext.P-1 order was passed by him on 29-1-1996 holding the appellant guilty of the charges levelled against him and a penalty of Rs. 35,000 was imposed on the appellant. In addition to the penalty imposed on the appellant, Rs. 75,000 seized from him was confiscated to the Central Government under Section 63 of FERA. Ext. P-1 order has become final. Since the penalty was not paid by the appellant and since it could not be recovered by resorting to Section 70(1) Clauses (i) and (iii) of the Act, proceedings were initiated for recovery of the amount as arrear of land revenue under Section 70(1)(iii) of FERA. Ext.P-2 sale notice was issued in the proceedings for recovery. Ext. P-2 was challenged by the appellant in the Writ Petition. Learned Single Judge disposed of the Writ Petition granting instalment facility to the writ petitioner-appellant enabling him to pay the amount demanded in three instalments. Dissatisfied with the judgment of the learned Single Judge, the writ petitioner has come up in appeal.

(3.) Sri Kodoth Sreedharan, learned Counsel for the appellant, contended that no proceedings for recovery could be initiated invoking Section 70 of FERA after the repeal of the said Act by the Foreign Exchange Management Act, 1999 (hereinafter referred to as 'FEMA'). He contended that Section 14 of FEMA provides for enforcement of the orders of the adjudicating authority and if the penalty imposed is not paid within ninety days from the date of notice for payment of the penalty, the person liable to pay the penalty would be exposed only to civil imprisonment under Section 14 of FEMA. It is also pointed out that facility for compounding any contravention under Section 13 of FEMA is possible under Section 15 of FEMA and in the event of compounding no further proceedings shall be initiated or continued against the person who contravenes Section 13 of FEMA. It is further submitted that the provisions for recovery of the penalty under Section 70 of FERA are inconsistent with the provisions of FEMA and, therefore, Ext. P-2 proceedings are illegal. He also relied on Section 49 of FEMA.