IN THE SUPREME COURT OF INDIA

CIVIL  APPELLATE  JURISDICTION

CIVIL APPEAL Nos.3191-3194 OF 2011 (Arising out of SLP (Civil) Nos. 23374-23377 of 2008)

Thirumalai Chemicals Limited ….Appellant

Versus

Union of India & Ors. ..Respondents

J U D G E M E N T

K. S. PANICKER RADHAKRISHNAN, J.

Leave granted.

2. The question that has come up for consideration in this  

case is whether the Appellate Tribunal constituted under the Foreign  

Exchange  Management  Act  1999  (in  short  FEMA)  was  right  in  

rejecting a belated appeal filed under Section 19 of FEMA, applying  

the first proviso to sub section (2) of Section 52 of Foreign Exchange  

Regulation Act 1973 (in short FERA), instead of following the proviso  

to sub section (2) to Section 19 of FEMA.

3. M/s Tirumalai Chemicals Limited (in short 'the Company')  

had imported various consignments of benezene, orthoxalene etc. for  

home consumption.  For the said purpose, the Company had opened  

Letters of Credit bearing No.MLCO 4359096 and No.529/960487 on  

28.09.96 and 07.08.96 respectively on their bankers ICICI Bank and  

Standard  Chartered  Bank  (authorized  dealers).   By  letters  dated  

07.12.96 and 18.01.97 Exchange Control Copies of bills of entry (in  

short, ECC – bills of entry) in relation to those imports were forwarded  

by  the  Company  to  the  above  mentioned  Banks.   As  per  the  

provisions  of  Exchange  Control  Manual  (in  short  ECM),  the  

authorized dealers had to submit the ECC-bills of entry submitted by  

the importers (the Company) to the Reserve Bank of India (in short  

RBI).   The Company was under  the  bonafide  impression  that  the  

documents submitted by it were forwarded by the authorized dealers  

to the RBI and that the RBI in turn had given due intimation to the  

Enforcement Directorate.  The Company on 22.04.2004 received a  

telephonic communication from the office of the 3rd respondent viz.,  

Directorate of Enforcement, stating that it had passed various orders  

on  27.01.04  imposing  a  total  penalty  of  Rs.9,33,63,453/-  on  the  

Company on the ground that it had  contravened the provisions of  

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Sections 8(3),  8(4)  of  FERA read with sub-sections (3)  and (4)  of  

Section 49 of FEMA.  Copies of the orders dated 27.01.04 were then  

received  by  the  Company  on  22.04.04  on  request.   From  those  

orders  the  Company  came  to  know  that  the  Directorate  of  

Enforcement  had  issued  four  show cause  notices  dated  14.05.02  

stating that the Company had contravened Section 8(3), Section 8(4)  

of FERA read with para 7A.20 (Chapter 7) of ECM and was required  

to show cause why adjudication proceedings be not initiated against  

the  Company under  Section  49  of  FEMA for  contravention  of  the  

above  mentioned  provisions.   Further,  it  was  also  stated  that  the  

Company  had  failed  to  furnish  the  required  

bills/information/documents  and  did  not  avail  of  the  opportunity  of  

hearing in spite of notices issued to them on 29.08.02, 27.10.03 and  

01.12.03.  Orders dated 27.01.04 also indicated that an appeal would  

lie  before  the  Appellate  Tribunal  after  depositing  the  amount  of  

penalty imposed within 45 days from the date on which the order was  

served. Reference was also made to Section 19 read with  Section  

49(5)(a) of FEMA.

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4. The Company on receipt of the above mentioned orders  

dated  27.01.04  approached  the  authorized  dealers  and  enquired  

whether they had forwarded the ECC of bills of entry to the RBI as  

required under the provisions of  ECM.  The ICICI  Bank vide their  

letters  dated  12.05.04 informed the Company that  it  had received  

ECC of bills of entry on 20.01.97 with difference of value. The ICICI  

Bank then forwarded a letter dated 15.05.04 to the RBI seeking its  

permission to accept the bills of entry stating that the Company had  

submitted the relevant documents on 20.01.97 with shortfall of value.  

The Standard Chartered Bank also  vide their  letter dated 12.05.04  

informed the RBI that they had also received the Exchange Control  

Copy of bills of entry for the import  in question from the appellant  

Company  on  09.12.96,  but  due  to  an  inadvertent  mistake  had  

reported in their BEF Return that bills of entry were not submitted.  

The RBI  vide letter  dated nil  of  May, 2004 sent  by registered AD  

informed the Enforcement Directorate as follows:-

“……..Please  refer  to  the  outstanding  entries  reported  in  their respective BEF Statement by the captioned banks in respect  of M/s Tirumalai Chemicals Ltd., which was forwarded to you by us.  In  this  connection we advise that,  based on the documents and  evidence  submitted  by  authorized  dealer,  we  have  deleted  the  entries from our records and regularized the transactions at our end  as under :-

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i) ICICI Bank confirmed that they had received EC copies of  Bill  of  Entry  in  respect  of  the  transactions  reported  at  Sr.No.40  and  Sr.No.1  of  their  BEF  Statement  referred  to  above and the entry at Sr. No.28 of their BEF Statement was  a repetition of entry at Sr.No.40 of the same statement.

ii) Standard Chartered Bank has also confirmed to us that the  relative  EC  copy  of  the  Bill  of  Entry  in  respect  of  the  transaction reported in their BEF Statement was received by  them….”.    

5. The Company had also sent a letter dated 17.05.04 to the  

Enforcement Directorate stating that it was not due to the mistake of  

the Company that the ECC of bills of entry were not forwarded to the  

Directorate  of  Enforcement  in  time,  but  due to  the  mistake of  the  

authorized  dealer  (Bank).   RBI  had  subsequently  carried  out  

necessary corrections and deleted the entries from their records and  

regularized the transactions and requested to drop the proceedings  

initiated against the Company.

6. The  Company   stated  that  it  was  under  the  bonafide  

impression that respondents would drop the proceedings since RBI  

had deleted the entries from the records and informed the same to  

the  Enforcement  Directorate  but  nothing  was  heard  from  the  

Directorate and hence the Company was constrained to file appeals  

against those orders on 02.08.04 before the Appellate Tribunal for  

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Foreign Exchange (in short the Tribunal) vide Appeal nos. 787, 788,  

789 and 790 of  2004 with  an application under  Section  5  of  the  

Limitation Act read with Section 19 and Section 49(5) (a) of FEMA for  

condonation of delay.

7. The Tribunal,  however,  without  going into the merits  of  

the case dismissed the appeals on the ground of delay by its order  

dated 25.10.2007.  The operative portion of the said order reads as  

follows:-

“…..Therefore, these appeals when filed after 90 days from  the  date  of  receipt  of  the  order  has  to  be  dismissed  and  the  exceeding period cannot be condoned by this Tribunal because of  legislative mandate couched in clear language.

For  the  reasons  stated  herein  above,  these  appeals  are  dismissed  because  these  appeals  have  been  filed  after  a  total  period  of  90  days  from  the  date  of  receipt  of  impugned  order  beyond  which  this  Tribunal  is  not  empowered  to  condone  the  delay.”

8. The Company aggrieved by the above mentioned order  

preferred writ petitions nos. 692, 1528, 1531 and 693 of 2008 before  

the Bombay High Court for quashing the order dated 25.10.2007 of  

the Tribunal as also the order dated 27.01.04 passed by the third  

respondent  contending  that  the  Tribunal  was  not  justified  in  

dismissing  the  appeals  on the  ground  of  delay.   The High Court,  

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however, dismissed all the writ petitions by the following order dated  

24.07.2008:-

“There is no dispute that  the appeal was filed beyond the  period of 90 days.  Therefore, the tribunal did not have jurisdiction  to condone the delay.  The learned counsel, then, submitted that  we  should  consider  these  petitions  as  the  petitions  against  the  original order.

In our opinion, it  will  not be appropriate to entertain these  petitions as petitions against the original order.  The Parliament has  provided remedy of an appeal against the original order and has  provided  for  period  of  limitation  for  filing  that  appeal.   The  Parliament has also provided that  delay beyond a certain period  cannot  be  condoned  by  the  Tribunal/Appellate  authority.   The  Petitioners  have  allowed  that  remedy  of  appeal  to  be  barred,  therefore, now to entertain these petitions as petitions against the  original order would amount to permitting the Petitioners to frustrate  the scheme of the Legislation.  The scheme of the statute is that a  challenge to the original order is to be raised by an appeal which is  to be filed within a particular period.  The extra ordinary jurisdiction  of this court under the Constitution cannot be permitted to be used  by the Petitioners, who have allowed their ordinary remedy to be  barred.  Petitions are, therefore, rejected.”

9. Mr. Harish Salve,  learned senior counsel appearing on  

behalf of the appellants submitted that the authorized dealer (Bank)  

had owned up their mistake and had informed the RBI accordingly  

and hence there was no reason to penalize the Company for no fault  

of  it.   Learned  counsel  also  submitted  that  the  Tribunal  had  

committed a mistake in holding that it had no power to condone the  

delay beyond 90 days.  He  also submitted that even if the Tribunal  

has  no  power  to  condone  the  delay  the  High  Court  could  have  

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entertained the writ petitions under Article 226 of the Constitution of  

India when the impugned order of the Tribunal was manifestly illegal.  

Learned counsel further submitted that in any view of the matter High  

Court under Article 226 of the Constitution of India has the power to  

condone delay in exercise of its extra ordinary jurisdiction and then  

direct the Tribunal to consider the appeal on merits. Reference was  

made to the judgments of this Court in Harbanslal Sahnia & Anr.  vs.  

IOC Ltd. & Ors. (2003) 2 SCC 107, L.K. Verma  vs.  HMT Ltd. & Anr.   

(2006) 2 SCC 269.

10. Shri Vivek Tankha, Learned Additional Solicitor General,  

appearing  for  the  respondents  referred  to  the  first  proviso  to  sub  

section (2) of Section 52 of FERA and submitted that the Tribunal  

was justified in holding that it  had no power to condone the delay  

beyond a period of 90 days.  Ld. ASG also submitted that when a  

party has availed of the statutory remedy of appeal and lost on the  

ground of  delay the  High Court  can not  exercise  its  extraordinary  

jurisdiction under Article 226 / 227 of the Constitution of India.

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11. We are in this case called upon to decide the question  

whether the Tribunal was right in dismissing the appeals preferred  

under Section 19(1)  of  FEMA, by applying the first  proviso to sub  

section (2)of  Section 52 of  FERA holding that  it  had no power to  

condone the delay beyond 90 days from the date on which the order  

was  served  on  the  person  committing  the  contravention.   The  

Tribunal and the High Court proceeded on the premises that since  

the cause of  action arose when FERA was in  force the period of  

limitation for filing an appeal before the Tribunal even after coming  

into  force of  FEMA is   as  provided under  the first  proviso to  sub  

section (2) of Section 52 of FERA.  Admittedly, in this case the cause  

of action arose when FERA was in force, but show cause notices and  

impugned  orders  were  issued  when  FEMA  was  in  force  and  the  

appeals were also preferred under sub section (1) of Section 19 of  

FEMA.   Therefore,  the  important  question  that  arises  for  

consideration  is  whether  limitation  for  filing  the  appeal  has  to  be  

considered under the proviso to sub section (2)of Section 19 of FEMA  

or under the first proviso to sub section ( 2) of Section 52 of FERA.  In  

order to answer the above question, it is necessary to examine the  

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scope and ambit of Section 52 of FERA, Section 19 , 49 of FEMA and  

Section 6 of the General Clauses Act, 1897.   

12. FERA was  enacted  to  consolidate  and  amend the  law  

relating  to  certain  payments  dealing  in  foreign  exchange  and  

securities, transactions indirectly affecting the foreign exchange and  

import and export and import of currency, for conservation of foreign  

exchange resources of the country and proper utilization thereof in  

the interest of economic development of the country.  Sections 50  

and 51 of  FERA were the penal  provisions which empowered the  

authority to impose penalty on persons who had contravened some of  

the  provisions  of  the  Act.   An  appeal  was  provided  under  FERA  

against  the  order  of  adjudication  before  the  Foreign  Exchange  

Regulation Appellate Board (in short the ‘Board’) under Section 52 of  

that Act within a period of 45 days from the date on which the order  

was served on the person committing the contravention.  The  Board  

was also empowered to entertain any appeal after the expiry of the  

said period of 45 days but not after 90 days from the date on which  

the order was served on the person if it was satisfied that the person  

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was prevented by sufficient cause in not filing the appeal in time.  It is  

useful to extract that provision for easy reference :-

52.  Appeal  to  Appellate  Board  ---(1)  The  Central  Government may, by notification in the Official Gazette, constitute  an Appellate Board to be called the Foreign Exchange Regulation  Appellate Board consisting of a Chairman [being a person who has  for at least ten years held a civil judicial post or who has been a  member of  the Central  Legal  Service (not  below Grade I)  for  at  least three years or who has been in practice as an advocate for at  least ten years] and such number of other members, not exceeding  four,  to  be  appointed  by  the  Central  Government  for  hearing  appeals against the orders of the adjudicating officer made under  Section 51.

(2) Any person aggrieved by such order may, [on payment of  such  fee  as  may  be  prescribed  and]  after  depositing  the  sum  imposed by way of penalty under Section 50 and within 45 days  from  the  date  on  which  the  order  is  served  on  the  person  committing  the  contravention,  prefer  an  appeal  to  the  Appellate  Board:   

Provided that the Appellate Board may entertain any appeal after  the expiry of the said period of 45 days, but not after 90 days, from  the date aforesaid if it is satisfied that the appellant was prevented  by sufficient cause from filing the appeal in time:

Provided further that where the Appellate Board is of opinion that  the deposit to be made will cause undue hardship to the appellant,  it  may, in its own discretion, dispense with such a deposit  either  unconditionally or subject to such conditions as it may deem fit.   

        ……. …….. ……...”

13. FERA was repealed by FEMA which came into force with  

effect from 01.06.2000.  Chapter IV of FEMA deals with contravention  

of penalties.  Section 13 of FEMA empowers the authorized officers  

to impose penalties for contravention of  certain provisions of the Act.  

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Failure  to  make  full  payment  of  penalty,  may  attract  civil  

imprisonment subject to the provisions of sub section (2) of Section  

19.  Chapter V of the Act deals with adjudication and appeal.  Section  

19 deals with the appeal to the Appellate Tribunal. Sub section (2) of  

Section 19 says that every appeal under sub-section(1) shall be filed  

within a period of 45 days from the date on which the copy of the  

order  made  by  the  adjudicating  authority  or  the  Special  Director  

(Appeals)  is  received  by  the  aggrieved  person.   The  Appellate  

Tribunal is also empowered to entertain the appeals filed after the  

expiry of the said period of 45 days if it is satisfied that there was  

sufficient cause for not filing the appeal within that period.  Law is well  

settled that the manner in which the appeal has to be filed, its form  

and the period within which the same has to be filed are matters of  

procedure, while the right conferred on a party to file an appeal is a  

substantive  right.   The  question  is,  while  dealing  with  a  belated  

appeal under Section 19(2) of FEMA, the application for condonation  

of delay has to be dealt with under the first proviso to sub- section (2)  

of  Section 52 of  FERA or under the  proviso to  sub section (2)  of  

Section 19 of FEMA.  For answering that question it is necessary to  

examine the law on the point.  

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Substantive and Procedural Law:   

14. Substantive  law  refers  to  body  of  rules  that  creates,  

defines and regulates rights and liabilities.  Right conferred on a party  

to prefer an appeal against an order is a substantive right conferred  

by a statute which remains unaffected by subsequent changes in law,  

unless  modified  expressly  or  by necessary  implication.  Procedural  

law  establishes  a  mechanism  for  determining  those  rights  and  

liabilities and a machinery for enforcing them.  Right of appeal being  

a substantive right always acts prospectively.  It is trite law that every  

statute prospective unless it is expressly or by necessary implication  

made to  have retrospective operation.   Right  of  appeal  may be a  

substantive right but the procedure for filing the appeal including the  

period  of  limitation  cannot  be  called  a  substantive  right,  and  

aggrieved  person  cannot  claim  any  vested  right  claiming  that  he  

should  be  governed  by  the  old  provision  pertaining  to  period  of  

limitation.  Procedural law is retrospective meaning thereby that it will  

apply even to acts or transactions under the repealed Act.  

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15. Law on the subject has also been elaborately dealt with  

by this Court in various decisions and reference may be made to few  

of those decisions.  This Court in Garikapati Veeraya  vs. N. Subbiah  

Choudhry & Ors.  AIR 1957 SC 540,  New India Insurance Company  

Limited Vs.  Smt. Shanti Mishra (1975) 2 SCC 840,  Hitendra Vishnu  

Thakur & Ors. vs.  State of Maharashtra & Ors.  (1994) 4 SCC 602;  

Maharaja Chintamani Saran Nath  Shahdeo  vs.  State of Bihar  &  

Ors. (1999) 8 SCC 16; Shyam Sundar & Ors. vs.  Ram Kumar & Anr.   

(2001) 8 SCC 24, has  elaborately discussed the scope and ambit of  

an amending legislation and its  retrospectivity and held that  every  

litigant has a vested right in substantive law but no such right exists in  

procedural law.  This court  has held the law relating to forum and  

limitation  is  procedural  in  nature  whereas  law  relating  to  right  of  

appeal even though remedial is substantive in nature.

16. Therefore, unless the language used plainly manifests in  

express  terms  or  by  necessary  implication  a  contrary  intention  a  

statute divesting vested rights is to be construed as prospective, a  

statute merely procedural is to be construed as retrospective and a  

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statute which while procedural in its character, affects vested rights  

adversely is to be construed as prospective.

17. Right of appeal conferred under Section 19(1) of FEMA is  

therefore  a  substantive  right.   The  procedure  for  filing  an  appeal  

under sub-section (2) of Section 19 as also the proviso to sub-section  

(2) of Section 19 conferring power on the Tribunal to condone delay  

in filing the appeal if sufficient cause is shown, are procedural rights.  

18. We  have  already  indicated  that  the  proviso  to  sub-

section(2) of Section 19 operates retrospectively, but the question is  

in that process, whether it impairs or takes away any accrued right, to  

plead a time bar and on facts whether the Company has lost its right  

of appeal to the Tribunal under FEMA.

Law of Limitation

19. Law of limitation is generally regarded as procedural and  

its object  is not  to create any right  but  to prescribe periods within  

which legal proceedings be instituted for enforcement of rights which  

exist under substantive law.  On expiry of the period of limitation, the  

right to sue comes to an end and if a particular right of action had  

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become time barred under the earlier statute of limitation the right is  

not revived by the provision of the latest statute.  Statutes of limitation  

are thus retrospective insofar as they apply to all legal proceedings  

brought  after  their  operation for  enforcing cause of  action accrued  

earlier, but they are prospective in the sense that neither have the  

effect of reviving the right of action which is already barred on the  

date  of  their  coming  into  operation,  nor  do  they  have  effect  of  

extinguishing a right of action subsisting on that date.  Bennion  on  

Statutory Interpretation 5th Edn.(2008) Page 321 while dealing with  

retrospective  operation  of  procedural  provisions  has  stated  that  

provisions laying down limitation periods fall into a special category  

and opined that although prima facie procedural, they are capable of  

effectively  depriving  persons  of  accrued  rights  and  therefore  they  

need be approached with caution.   

20. Learned author in order to establish the above proposition  

referred to  the decision of  the Court  of  Appeal  in  The Ydun case  

[THE YDUN (1899)  Probate  Division  at  page  236  (The  Court   of  

Appeal) where the Court held that the amending legislation dealt with  

procedure   only  and  therefore  applied  to  all  actions  whether  

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commenced  before  or  after  the  passing  of  the  Act  and  even  in  

respect of previously accrued rights. The principle laid down in ‘The  

Ydun’  was applied in  The King  vs.  Chandra Dharma  (1905) 2 KB  

335 and it was held that if a statute shortening the time within which  

proceedings can be taken is retrospective then it is impossible to give  

good  reason,  why  a  statute  extending  the  time  within  which  

proceedings be taken, should not be held to be retrospective.  The  

Judicial Committee of Privy Council in  Yew Bon Tew v.  Kenderaan  

Bas  Mara (1982)  3 All  E.R.  833,  opined that  whether  statute  has  

retrospective  effect,  cannot  in  all  cases  safely  be  applied  by  

classifying statute as procedural  or  substantive and pointed out  in  

certain  situation  the  Court  would  rule  against  a  retrospective  

operation.  Limitation  provisions therefore can be procedural  in  the  

context of one set of facts but substantive in the context of different  

set of facts because rights can accrue to both the parties.  In such a  

situation, test is to see whether the statute, if applied retrospectively  

to  a  particular  type  of  case,  would  impair  existing  rights  and  

obligations.  An accrued right to plead a time bar, which is acquired  

after the lapse of the statutory period, is nevertheless a right, even  

though it arises under an Act which is procedural and a right which is  

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not  to  be  taken  away  pleading  retrospective  operation  unless  a  

contrary intention is discernible from the statute Therefore, unless the  

language  clearly  manifests  in  express  terms  or  by  necessary  

implication, a contrary intention a statute divesting vested rights is to  

be construed as prospective.  A statute, merely procedural is to be  

construed as retrospective and a statute while procedural in nature  

affects vested rights adversely is to be construed as prospective. The  

manner of filing an appeal, under sub section (2) of Section 19 of  

FEMA and the time within which such an appeal has to be preferred  

and the power conferred on the Tribunal to condone delay under the  

proviso to sub-section (2) of Section 19 are matters of procedure and  

act retrospectively, so as to cover causes of action which arose under  

FERA.  Since the appeal was filed under FEMA with an application  

for condonation of delay such an appeal has to be considered by the  

Tribunal under the proviso to sub-section(2) of Section 19 FEMA and  

if the Company shows sufficient cause for not filing the appeal in time  

then the Tribunal can condone the delay and entertain the appeal,  

especially when there is no accrued right to the respondent to plead a  

time  bar.   The legal  position  is  summarized  thus  by Justice  G.P.  

Singh in Principles of Statutory Interpretation (12th Edition-Page 541)  

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thus:-

“Statutes of Limitation are thus retrospective in so far as they apply  to all legal proceedings brought after their operations for enforcing  causes of action accrued earlier….”

21.  We  may  also  examine  whether  Section  49  of  FEMA,  

which is the repealing and saving clause, has in any way taken away  

the right of appeal under FEMA for cause of action which arose under  

FERA expressly or by necessary implication and also whether it has  

any effect on the retrospectivity of the procedural provision under the  

proviso to sub-section (2) of section 19.  For easy reference we may  

extract Section 49 of FEMA and Section 6 of the General Clauses  

Act, 1897.  

“49.  Repeal  and  Saving ---(1)  The  Foreign  Exchange  Regulation  Act,  1973  (46  of  1973)  is  hereby  repealed  and  the  Appellate Board constituted under sub-section (1) of section 52 of  the said Act (hereinafter referred to as the repealed Act) shall stand  dissolved.

(2) On the dissolution of the said Appellate Board, the person  appointed  as  Chairman  of  the  Appellate  Board  and  every  other  person  appointed  as  Member  and  holding  office  as  such  immediately before such date shall vacate their respective offices  and no such Chairman or other person shall be entitled to claim any  compensation for the premature termination of the term of his office  or of any contract of service.

(3) Notwithstanding anything contained in any other laws for the  time being in force, no court shall  take cognizance of an offence  under the repealed Act and no adjudicating officer shall take notice  of any contravention under section 51 of the repealed Act after the  expiry of a period of two years from the date of the commencement  of this Act.

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(4) Subject  to  the  provisions  of  sub-section  (3)  all  offences  committed under the repealed Act shall continue to be governed by  the  provisions  of  the  repealed  Act  as  if  that  Act  had  not  been  repealed.

(5) Notwithstanding such repeal, ---

(a) anything  done  or  any  action  taken  or  purported  to  have been done or taken including any rule, notification, inspection,  order or notice made or issued or any appointment, confirmation or  declaration  made  or  any  licence,  permission,  authorization  or  exemption granted or any document or instrument executed or any  direction given under the Act hereby repealed shall, in so far as it is  not inconsistent with the provisions of this Act, be deemed to have  been done or taken under the corresponding provisions of this Act;

(b) any  appeal  preferred  to  the  Appellate  Board  under  sub-section (2) of section 52 of the repealed Act but not disposed of  before the commencement of this Act shall stand transferred to and  shall be disposed of by the Appellate Tribunal constituted under this  act;

(c) every  appeal  from  any  decision  or  order  of  the  Appellate Board under sub-section (3) or sub-section (4) of section  52 of the repealed Act shall, if not filed before the commencement  of this act, be filed before the High Court within a period of sixty  days of such commencement;

Provided that the High Court may entertain such appeal after  the expiry of the said period of sixty days if it is satisfied that the  appellant was prevented by sufficient cause from filing the appeal  within the said period.

(6) save as otherwise provided in sub-section(3), the mention of  particular matters in sub-sections (2), (4) and (5) shall not be held  to  prejudice or  affect  the general  application  of  section  6 of  the  General Clauses Act, 1897 (10 of 1897), with regard to the effect of  repeal.”

Section 6 of the General Clauses Act reads as under:-

6.   Effect of repeal --  Where this Act, or any [Central Act ] or  Regulation made after the commencement of this Act, repeals any  enactment hitherto made or hereafter to be made, then, unless a  different intention appears, the repeal shall not --

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(a) revive anything not in force or existing at the time at  which the repeal takes effect; or

(b) affect  the  previous  operation  of  any  enactment  so  repealed  or  anything  duly  done  or  suffered  thereunder; or

(c) affect  any  right,  privilege  obligation  or  liability  acquired,  accrued or  incurred under  any enactment  so repealed; or

(d) affect any penalty, forfeiture or punishment incurred in  respect  of  any  offence  committed  against  any  enactment so repealed; or

(e) affect any investigation legal proceeding or remedy in  respect of any such right, privilege, obligation, liability,  penalty, forfeiture or punishment as aforesaid; and

any  such  investigation,  legal  proceeding  or  remedy  may  be  instituted, continued or enforced, and any such penalty, forfeiture or  punishment may be imposed as if the repealing Act or Regulation  had not been passed.”

Repealing  and  saving  clause  is  a  residuary  provision  which  

envisages that notwithstanding such repeal of FERA there would be  

application of Section 6 of the General Clauses Act with regard to the  

effect of repeal which is discernible from sub section (6) of Section 49  

of the Act.  Sub-section (1) of Section 49 of FEMA states that FERA  

stands  repealed  and  the  Appellate  Board  constituted  under  sub-

section  (1)  of  Section  52 of  the  said  Act  stands  dissolved.   Sub-

section (3) of Section 49 incorporates a sunset clause.  The said sub-

section  begins  with  a  non-obstante  clause  overriding  any  other  

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enactment  and  states  that  no  court  shall  take  notice  of  any  

contravention under Section 51 of the repealed Act after the expiry of  

two years from the date of commencement of FEMA on 1.6.2000.  

Sub-section (4) of Section 49 stipulates that subject to the provisions  

of sub-section(3) all offences committed under the repealed Act shall  

continue to be governed by the provisions of the repealed Act as if  

that Act had not been repealed.  

22. Sub-section (5) of Section 49 of FEMA consists of three  

clauses (a), (b) and (c).  Clause (a) states that anything done or any  

action taken or purported to have been done or taken including any  

rule, notification, inspection, order or notice made or issued or any  

appointment,  confirmation  or  declaration  made  or  any  license,  

permission, authorization or exemption granted or any document or  

instrument executed under the repealed act i.e. FERA to the extent  

they are not  inconsistent with the provisions of this Act, are deemed  

to be done or taken under the corresponding provisions of this Act.  

The said provision has the effect of incorporating or making a general  

declaration  that  the  existing  rules,  notifications,  declarations,  

authorization and exemptions granted under FERA will  continue to  

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apply in spite of repeal of FERA and after enactment of FEMA as  

long as they are not in consistent with FEMA.  Clause (b) of sub-

section (5) of Section 49 states that any appeal preferred before the  

Appellate Board under sub-section (2) of Section 52 of FERA but not  

disposed  of  before  the  commencement  of  this  Act  shall  stand  

transferred  to  and  shall  be  disposed  of  by  the  Appellate  Tribunal  

constituted under this Act.   Sub-section (6) to Section 49 of FEMA  

deals with the application of Section 6 of the General Clauses Act.  

The first part of the said sub-section protects the sunset clause and  

the two year limitation period for commencement of proceedings. The  

expression “save as otherwise provided in sub-section (3)” protects  

the sunset clause in spite of second portion of sub-Section 6 and the  

second  portion  of  sub-section  (6)  of  Section  49  expressly  makes  

Section 6 of  the General  Clauses Act,  1897 applicable in  spite of  

repeal of FERA.   

23.  Section  6  of  the  General  Clauses   Act,  1897  which  

protects the rights,  obligations and actions and liabilities applies in  

spite  of  repeal  of  FERA  subject  to  two  years  limitation  period  

specified in sub-section (3) of Section 49 for initiation of proceedings.  

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Therefore, in view of Section 6 of the General Clauses Act read with  

sub-section (3) of Section 49 of FEMA, proceedings for violation of  

FERA can be instituted within the sunset period of  two years with  

effect from 1.6.2000 till 31.5.2002.  But for sub-section(3) there will be  

no  limitation  period  of  two years  in  view of  Section  6  of  General  

Clauses Act, 1897 read with sub-section (4) of Section 49 of FEMA.   

24. We  have  dealt  with  the  above  mentioned  repeal  and  

saving clause to highlight the application of Section 6 of the General  

Clauses Act, 1897 which provides that where an Act is repealed then  

unless a different intention appears, the repeal shall not affect any  

right or liability acquired or incurred under the repealed enactment or  

any legal proceeding initiated in respect of such right or liability and  

the legal proceedings may continue as if the repealing Act has not  

been passed.   The saving clause thus aimed to preserve the legal  

effect  and  consequence  of  things  done  though  those  effects  and  

consequences projected at the time when FERA was in force.   The  

scope  and  ambit  of  such  repeal  and  saving  clauses  have  been  

considered by this  Court  in  various decisions.   Reference may be  

made to the decisions of this Court reported in Anant Gopal Sheorey  

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v.  State of Bombay, AIR 1958 SC 915, Rao Shiv Bahadur Singh  &  

Anr.  vs.   State of  Vindhya Pradesh,   AIR 1953 SC 394,  State of  

Punjab v.  Mohar  Singh  S/o  Pratap  Singh, AIR 1955 SC 84,  T.S.  

Baliah   v.   T.S. Rangachari,  ITO, AIR 1969 SC 701;  Gajraj Singh  

& Ors. vs.  State Transport Appellate Tribunal & Ors.  (1997) 1 SCC  

650; Gammon India  Ltd. vs.  Special Chief Secretary & Ors. (2006) 3  

SCC 354.

25. The appellate Board under FERA, it may be noted stood  

dissolved  and  ceased  to  function  when  FEMA  was  enacted.  

Therefore,  any appeal  against  the order  of  the adjudicating officer  

made  under  FERA,  after  FEMA  came  into  force,  had  to  be  filed  

before the Appellate Tribunal constituted under FEMA and not to the  

Appellate  Board under  FERA.  Section 52 of  FERA stipulates  the  

limitation for an appeal against the orders of the adjudicating officer to  

the Appellate Board.  It provides the period of limitation as 45 days  

but the Board may entertain an appeal after the expiry of 45 days but  

not beyond 90 days.  Under FEMA, an appeal lies to the appellate  

tribunal  constituted under that Act  and Section 19(2)  provides that  

every appeal shall be filed within 45 days from the date on which a  

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copy   of  the  order  of  the  adjudicating  authority  is  received.   The  

appellate is however empowered to entertain appeals filed after the  

expiry of 45 days if it is satisfied that there was sufficient cause for  

the delay in filing the appeal. Though both Section 52(2) of FERA and  

Section 19(2) of FEMA provide a limitation of 45 days and also give  

the discretion to the appellate authority to entertain an appeal after  

the expiry of  45 days,  if  the appellant  was prevented by sufficient  

cause  from filing  an  appeal  in  time,  the  appellate  authority  under  

FERA could not condone the delay beyond 45 days whereas under  

FEMA, if the sufficient cause is made out, the delay can be condoned  

without  any  limit.   The  question  we  have  already  pointed  out  is  

whether Section 52(2) of FERA or Section 19(2) of FEMA will govern  

the appeal.  As noticed above, any provision relating to limitation is  

always regarded as procedural and in the absence of any provision to  

the contrary,  the law in  force  on the date  of  the  institution of  the  

appeal, irrespective of the date of accrual of the cause of action for  

the original order, will govern the period of limitation.

26. Section 52(2) can apply only to an appeal to the appellate  

Board and not to any appellate tribunal.  Therefore, irrespective of the  

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fact that the adjudicating officer had passed the orders with reference  

to the violation of the provisions of FERA, as the appeal against such  

order  was  to  the  appellate  tribunal  constituted  under  FEMA,  

necessarily  Section  19(2)  of  FEMA  alone  will  apply  and  it  is  not  

possible to import the provisions of Section 52(2) of FERA.  As we  

are not concerned with the appeals to Appellate Board, but appeals  

to the Appellate Tribunal, limitation being a matter of procedure, only  

that law that is applicable at the time of filing the appeal, would apply.  

Therefore, Section 19(2) of FEMA and not Section 52(2) of FERA will  

apply.   As noticed above, under Section 19(2), there is no ceiling in  

regard to the period of delay that could be condoned by the appellate  

tribunal.  If sufficient cause is made out, delay beyond 45 days can  

also  be  condoned.   The  tribunal  and  the  High  Court  misdirected  

themselves in assuming that the period of limitation was governed by  

Section 52(2) of FERA.

27. We have already indicated that clause (b) of  sub-section  

(5) of Section 49 refers to appeal preferred and pending before the  

Appellate Board under FERA at the time of repeal.  The said clause  

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does not specifically refer to appeals preferred against adjudication  

orders passed under FEMA with reference to causes of action which  

arose under  FERA.   We have already noticed the right  of  appeal  

under FEMA has already been saved in respect of cause of action  

which  arose  under  FERA however  subject  to  the  proviso  to  sub-

section (2) of Section 19, in the case of belated appeals.   

28. Above discussion will clearly demonstrate that Section 49  

of FEMA does not seek to withdraw or take away the vested right of  

appeal in cases where proceedings were initiated prior to repeal of  

FERA on 01.06.2000 or after. On a combined reading of Section 49  

of FEMA and Section 6 of General Clauses Act, it is clear that the  

procedure prescribed by FEMA only would be applicable in respect of  

an  appeal  filed  under  FEMA though  cause  of  action  arose  under  

FERA.   In fact, the time limit prescribed under FERA was taken away  

under the  proviso to sub-section (2) of Section 19 and the Tribunal  

has been conferred with wide powers to condone delay if the appeal  

is not filed within forty-five days prescribed, provided sufficient cause  

is shown. Therefore, the findings rendered by the Tribunal as well as  

the High Court that the Tribunal does not have jurisdiction to condone  

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the delay beyond the date prescribed under FERA is not a correct  

understanding of the law on the subject.   

29. We,  therefore,  hold  that  the  Appellate  Tribunal  can  

entertain  the appeal  after  the prescribed period of  45 days  if  it  is  

satisfied,  that  there  was  sufficient  cause  for  not  filing  the  appeal  

within  the said period.   We are therefore inclined to set  aside the  

orders passed by the Tribunal and the  High  Court  and  remit   the  

matter back to the Tribunal for fresh consideration in accordance with  

law  on  the  basis  of  the  findings  recorded  by  us.    We  order  

accordingly.  

30. The appeals stand disposed of accordingly.

………………………………….J (R.V. Raveendran)

………………………………….J   (K.S. Panicker Radhakrishnan)

New Delhi April 11, 2011

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