S. R. S. Rafeek vs The Additional Director, Directorate of Enforcement, The Appellate Tribunal for Foreign Exchange and The Tahsildar

P. Jyothimani, J.—This writ petition is directed against the order of the second Respondent Appellate Tribunal, dated17.07.2007 and consequential order of the third Respondent, dated 05.01.2010 which has been invoked as per the provisions of the Revenue Recovery Act for recovery of the amount. The officials of the first Respondent Director of Enforcement have conducted search in the house of the Petitioner as per the provisions of Section 37 of the Foreign Exchange Regulation Act, 1973 on 08.10.1993 based on a statement given by one S. Hameed Rasik and there was a seizure of Rs. 3,10,000/-and thereafter, a notice was issued to the Petitioner u/s 9(1)(b) of the erstwhile Foreign Exchange Regulation Act, 1973 on the ground that the Petitioner has received Rs. 98 lakhs from a person resident of outside India and for distributing an amount of Rs. 93,05,000/-to local persons or on behalf of a person residing outside India. The charges were denied bythe Petitioner whose case was that there was no contravention of the provisions of the Foreign Exchange Regulation Act and ultimately, the first Respondent has imposed a penalty of Rs. 20,00,000/-as per Section 50 of the Act and ordered confiscation of amount of Rs. 3,10,000/-. It was against the said order, the Petitioner preferred an appeal to the second Respondent Appellate Tribunal. As per the provisions of the Foreign Exchange Regulation Act for preferring an appeal against the order of enforcement authorities, the Petitioner has to pre-deposit of the penalty amount and the Petitioner has filed an application before the second Respondent Appellate Tribunal to dispense with the pre-deposit of the penalty amount on the basis that he is a poor person and his average monthly income isRs.1,500/-per month and he has no immovable properties of his own. In spite of the same, it is stated that the second Respondent Tribunal by order dated 09.03.2007 directed the Petitioner to deposit the penalty amount which is the pre-deposit amount within a period of 30 days. The Petitioner was unable to comply with the said order and ultimately, the second Respondent has dismissed the appeal on17.07.2007. After dismissal of the appeal nearly 21/2 years, at the instance of the Department, the third Respondent Tahsildar has initiated proceedings under the provisions of Revenue Recovery Act to recover the amount and that has been challenged by the Petitioner on the ground that the same is opposed to the principles enunciated under the Foreign Exchange Regulation Act.

In the counter affidavit filed by the first Respondent ,it is stated that as per the provisions of Section 52 of the Foreign Exchange Regulation Act, for nonfulfillment of the payment of pre-deposit as penalty, the Appellate Tribunal is entitled to pass orders even though the Appellate Tribunal has got jurisdiction to dispense with the payment of pre-deposit on the ground of undue hardship .It is stated that the undue hardship is a matter to be proved by the Petitioner and not to be presumed bythe Court by relying upon the judgment of Hon''ble Supreme Court in Banara Valves Ltd., v. Commissioner of Central Excise reported in 2006 (204) E.L.T. 513 (SC). Since the amount was not deposited, the Appellate Tribunal has dismissed the appeal. It is stated that even as per the Foreign Exchange Regulation Act and as per the Foreign Exchange Management Act, 1999 which has superseded the Foreign Exchange Regulation Act as against the order of the Appellate Tribunal, the right of appeal is available and therefore, without exhausting the remedy of appeal, the Petitioner has approached this Court.

But the contention of the learned Counsel for the Petitioner is that while it is true that the first Respondent has on enquiry passed an order, the Petitioner through her counsel on 09.01.2007 addressed to the Appellate Tribunal has requested the Tribunal as per Section 52 of the Foreign Exchange Regulation Act to dispense with the obligation of pre-deposit and any order passed by the Tribunal in directing the Petitioner to pay the pre-deposit amount should have been intimated to the Petitioner so as to enable the Petitioner either to pay the amount or not. According to the learned Counsel for the Petitioner, such order stated to have been passed by the Tribunal on 09.03.2007 directing the Petitioner to make pre-deposit in the form of penalty amount of Rs. 20,00,000/-has never been intimated either to her or her counsel and therefore, the subsequent order passed by the second Respondent in dismissing the appeal is without jurisdiction and therefore, it is his submission that the matter could be remitted back to the Appellate Authority once again for the purpose of arriving at a decision on merit including to decide about the inability of a person to give pre-deposit amount. I do not agree with the submission of the learned counsel for the Petitioner.

A reference to the order passed by the Appellate Tribunal, the second Respondent, dated09.03.2007, directing the Petitioner to deposit the amount shows that the same has been addressed not only to the Petitioner but also to his counsel. Even otherwise, the Petitioner having filed a statutory appeal under the Foreign Exchange Regulation Act against the enforcement authority through counsel cannot be heard to say that the Petitioner was not aware of the hearing by the judicial authority namely, the Appellate Tribunal.

In such view of the matter, there is absolutely no error on the part of the second Respondent Appellate Tribunal to pass consequential order in dismissing the appeal on the ground of non compliance of pre-deposit of penalty amount. It is relevant to note that even under the Foreign Exchange Regulation Act, 1973 which has been subsequently repealed, against the order of the Appellate Tribunal Section 54 of the erstwhile Act provided an appeal to the High Court which relates to the question of law which is raised from the order of the Appellate Court. In the meantime, the Foreign Exchange Regulation Act has been superseded by the Foreign Exchange Management Act, 1999. While repealing the Act u/s 49 of the Foreign Exchange Management Act, 1999 any Act under the earlier Act has been saved. Therefore, by virtue of the saving clause in spite of repealing of the Foreign Exchange Regulation Act ,1973, action taken against the Petitioner, is deemed to be action taken under the Foreign Exchange Management Act .Under the provisions of the Foreign Exchange Management Act, against an order of the Appellate Tribunal, the appeal lies to the High Court as per Section 35 of the Foreign Exchange Management Act, 1999 which is follows:

Appeal to High Court:- Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law arising out of such order:

Provided that the High Court may, if it is satisfied that the Appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.

It is totally different from Section 54 of the Foreign Exchange Regulation Act.

The difference between the two Acts is that under the old Act, the High Court can interfere only question of law, while under the Foreign Exchange Management Act, it can be on questions of law and on any other legal grounds also. Moreover, under the old Act, the appeal even under the questions of law can be only in respect of the order of the Appellate Tribunal passed under Sub-Sections 3 and 4 of Section 52 of the Act which of course does not include the condition regarding the pre deposit which is covered u/s 52(2). Inasmuch as such embargo has been taken away under Foreign Exchange Management Act, 1999, the Petitioner ought to have approached the Appellate Tribunal for remedy against the Tribunal .Having not done so, I am of the considered view that it is certainly not open to the Petitioner to quash the validity of such order of the Appellate Tribunal especially when the third Respondent has proceeded to recover the amount under the Revenue Recovery Act. Moreover, the Appellate Tribunal''s order was on 17.03.2007and the Petitioner has chosen to challenge the same only in the year 2010 without resorting to the remedy of appeal to the High Court within 60 days and therefore, this writ petition is liable to be dismissed on laches also. Accordingly, the writ petition fails and the same is dismissed .No costs. Consequently, connected miscellaneous petition is closed.