M/S India Export House (P) Ltd vs Appellate Tribunal For Foreign ...
2015 Latest Caselaw 6802 Del

           *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                  Date of decision: 10th September, 2015

+                         W.P.(C) No.20524/2005
       M/S INDIA EXPORT HOUSE (P) LTD.             ..... Petitioner
                     Through: Mr. Vivek Chib, Mr. Asif Ahmed and
                              Mr. Rishabh Kapur, Advs.
                                Versus
    APPELLATE TRIBUNAL FOR
    FOREIGN EXCHANGE & ANR                   ..... Respondents
                  Through: Mr. Subhash Bansal and Mr.
                           Shashwat Bansal, Advs. for R-2.
CORAM:-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
RAJIV SAHAI ENDLAW, J.

1. This writ petition was filed impugning the order dated 2nd September,

2005 of the Appellate Tribunal for Foreign Exchange [in Appeal

No.1292/2004 preferred by the appellant against the order dated 31 st August,

2004 of the Deputy Director, Directorate of Enforcement imposing penalty

of Rs.5 lakhs on the petitioner under Sections 8(3), 8(4), 68(1) & (2) and

64(2) of Foreign Exchange Regulation Act, 1973 (FERA)] directing the

petitioner to make pre-deposit of penalty amount within a period of eight

weeks from that date, as a condition for consideration of the said appeal.

2. The petition came up first before this Court on 26 th October, 2005,

when while issuing notice thereof, the operation of the impugned order as

well as further proceedings before the Appellate Tribunal were stayed. As a

result thereof, neither has the petitioner deposited the penalty amount with

the respondent in the last ten years nor has the appeal preferred by the

petitioner been considered.

3. The counsels have been heard.

4. The counsel for the petitioner has contended:

(i) that though the penalty aforesaid was imposed upon the

petitioner under the provisions of FERA but FERA was repealed and

with effect from 1st May, 2000 substituted by the Foreign Exchange

Management Act, 1999 (FEMA);

(ii) that though under FERA, the remedy of the petitioner against

the order of imposition of penalty was before the Appellate Tribunal

and before availing which remedy, a pre-deposit would have been

required to be made but FEMA provides for a two tier appeal against

such orders, if were to be made under FEMA, first before the Special

Director and then to the Appellate Tribunal;

(iii) that though according to the petitioner, the order of imposition

of penalty was appealable before the Special Director (Appeals) but

the adjudicating order having provided that an appeal thereagainst had

to be preferred before the Appellate Tribunal, the petitioner could not

go before the Special Director (Appeals) and preferred the appeal to

the Appellate Tribunal but with a contention that the remedy of appeal

was before the Special Director (Appeals) and before whom no

condition of pre-deposit was required to be complied with;

(iv) that though the Appellate Tribunal ought to have decided the

said issue first and the question of making pre-deposit would have

arisen, only if the Appellate Tribunal would have held that no appeal

was maintainable before the Special Director (Appeals) and the appeal

had to be considered by the Appellate Tribunal only but the Appellate

Tribunal without going into the said aspect, required the petitioner to

make a pre-deposit of the penalty amount;

(v) that a Division Bench of the High Court of Bombay in Premier

Limited, (formerly) Premier Automobiles Ltd. Vs. Union of India

MANU/MH/0408/2006 has held that against the orders of imposition

of penalty, even if under FERA, the appeal to the Special Director

(Appeals) under FEMA lies.

5. Per contra, the counsel for the respondent No.2 Directorate of

Enforcement has referred to Thirumalai Chemicals Limited Vs. Union of

India (2011) 6 SCC 739 to contend that the view taken by the Bombay High

Court is not good law, in view of the subsequent judgment of the Supreme

Court.

6. The counsel for the petitioner rejoins by contending that the Supreme

Court was concerned with the aspect of limitation and not with the aspect of

the appellate fora and thus the judgment of the Bombay High Court cannot

be said to be no longer good law.

7. I have considered the rival contentions. At the outset, I may state that

it is sad that the matter on such an issue has remained pending for the last

ten years, resulting in, not only the penalty imposed on the petitioner

remaining unrealised but also resulting in the appeal preferred by the

petitioner having remained unheard, owing to the interim order in this

petition.

8. In my view, the question whether the view of the Bombay High Court

has been superseded by the judgment aforesaid of the Supreme Court does

not fall for adjudication in the present petition.

9. The present petition is concerned only with the challenge to the order

of the Appellate Tribunal directing the petitioner to make a pre-deposit of

the penalty amount appealed against in accordance with the statutory

provisions. It is the petitioner, who against the order of imposition of

penalty, instead of preferring an appeal thereagainst before the Special

Director (Appeals), which he claims to be maintainable, approached the

Appellate Tribunal. Once the petitioner chose to approach the Appellate

Tribunal, it has to be necessarily governed by the statutory conditions of

appeal to the Appellate Tribunal and which requires a pre-deposit to be

made. The counsel for the petitioner, on enquiry, has fairly admitted that the

appeal provisions make no distinction between the challenge made in the

appeal on a question of law or of maintainability of appeal or on the

quantum of the penalty.

10. The contention of the counsel for the petitioner, that the petitioner was

prevented from appealing to the Special Director (Appeals) owing to the

order imposing penalty, prescribing that the appeal thereagainst could be

preferred to the Appellate Tribunal, cannot be accepted. If the petitioner felt

that an appeal was maintainable before the Special Director (Appeals), the

petitioner, as aforesaid, should have preferred that appeal and if that appeal

had not been entertained, could have approached this Court for having the

said question adjudicated, as was done in the matter aforesaid before the

Bombay High Court. The petitioner, as aforesaid, having chosen to

approach the Appellate Tribunal, would necessarily have to be governed by

the rules thereof.

11. I am therefore of the view that the legal question aforesaid raised by

the petitioner does not arise for adjudication in this petition.

12. The counsel for the petitioner has then contended that in view of the

aforesaid position, the petitioner ought not to be burdened with the condition

of pre-deposit.

13. Though undoubtedly, the Courts in exercise of jurisdiction under

Article 226 of the Constitution of India, have in appropriate cases waived

partially or wholly the condition of pre-deposit but considering the amount

of penalty imposed and the long period of time which has elapsed, I am of

the view that the said considerations are not to be weighed in the present

case.

14. The counsel for the respondent No.2 in this regard points out that

others against whom penalty was imposed vide the same order, preferred

appeals to the Appellate Tribunal and those who were found deserving of

waiver of condition of pre-deposit, were given such favour but the petitioner

did not make out any such case and rather kept on taking adjournments and

sought waiver of pre-deposit only on the aforesaid grounds and which was

rejected by the Appellate Tribunal.

15. Accordingly, while dismissing the petition, it is directed that subject

to the petitioner making the pre-deposit, as directed by the impugned order,

within one month of today, the Appellate Tribunal shall proceed to hear the

matter. Needless to state, that if the petitioner fails to make such a pre-

deposit, the appeal preferred by the petitioner shall stand dismissed.

RAJIV SAHAI ENDLAW, J

SEPTEMBER 10, 2015 'bs'..

(Corrected and released on 25th September, 2015).