First Global Stockbroking P Ltd. Vs R. M. Ramchandani (Bombay High Court)
Bombay High Court held that the Adjudicating Authority is not authorized to issue show cause notice under the Foreign Exchange Management Act (FEMA), 1999 for violations of provisions in Foreign Exchange Regulation Act (FERA), 1973.
Facts-
In these petitions the grounds taken are almost identical. According to petitioners, the show cause notices were issued by a person who was not so empowered as per law. Hence, the show cause notices issued are ex-facie without jurisdiction and illegal. Consequently, the order passed against petitioner/s could not have been passed as the adjudicating authority was not legally empowered to perform such acts under the repealed Foreign Exchange Regulations Act, 1973 (FERA). Moreover, as provided in Section 49(3) of the repealing act, Foreign Exchange Management Act, 1999 (FEMA) no adjudication under the repealed act can now start after the expiry of the limitation of two years since the repeal of FERA. FERA was repealed on 31st May 2000. Some petitioners have approached this court on receipt of the show cause notice itself.
Conclusion-
It is well settled that where a statute provides for a thing to be done in a particular manner, then it has to be done in that manner, and in no other manner. For the purpose of Section 49(3) FEMA, there has to be a proper authorization of the ‘Adjudicating Officer’ who issues the notice of contravention under the provisions of FERA. Only because an officer has been appointed for the purpose of acting in terms of the provisions of an act, the same would not by itself entitle an officer to discharge all or any of the functions of the Central Government, unless specifically authorized.
In the circumstances, we will have to hold that Mr. A. K. Bal had no authority to issue the show cause notices and consequently no order based on the show cause notices could have been passed.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1 In these petitions the grounds taken are almost identical. According to petitioners, the show cause notices were issued by a person who was not so empowered as per law. Hence, the show cause notices issued are ex-facie without jurisdiction and illegal. Consequently, the order passed against petitioner/s could not have been passed as the adjudicating authority was not legally empowered to perform such acts under the repealed Foreign Exchange Regulations Act, 1973 (FERA). Moreover, as provided in Section 49(3) of the repealing act, Foreign Exchange Management Act, 1999 (FEMA) no adjudication under the repealed act can now start after the expiry of the limitation of two years since the repeal of FERA. FERA was repealed on 31st May 2000. Some petitioners have approached this court on receipt of the show cause notice itself.
2 For convenience, we are taking up Writ Petition No. 744 of 2005 as the lead petition and the facts narrated herein are from the said petition.
