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Kartik K. Parekh v. Appellate Tribunal For Foreign Exchange
Factual and Procedural Background
These three Civil Applications seek condonation of delay in filing appeals against the order passed by the Appellate Tribunal for Foreign Exchange on 2-8-2007. The appellants were initially penalized on 30-1-2006 for violating provisions of the Foreign Exchange Management Act, 1999 (FEMA). Upon appeal, the Appellate Tribunal directed the appellants to make a predeposit of 50% of the penalty within 30 days of receiving the order. The appellants challenged this order via Writ Petitions in the Delhi High Court on 7-11-2007, which were admitted but ultimately dismissed on 26-7-2010 following the Supreme Court’s judgment in Raj Kumar Shivhare v. Assistant Director of Enforcement. The Delhi High Court granted the appellants liberty to file an appeal before an appropriate High Court within thirty days, with a sympathetic consideration of limitation due to bona fide pursuit of the case under Article 226. The present appeals, along with applications for condonation of delay, were filed on 27-8-2010.
Legal Issues Presented
- Whether this Court has the power under Section 35 of FEMA to condone delay in filing appeals beyond the prescribed period of 120 days.
- Whether the Delhi High Court could grant liberty to the appellants to file an appeal beyond the limitation period, relying on the Supreme Court’s power under Article 136 of the Constitution.
- The proper interpretation of the expression “within thirty days from today” as mentioned in the Delhi High Court’s order dated 26-7-2010.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Raj Kumar Shivhare v. Assistant Director of Enforcement, (2010) 4 SCC 772 | Supreme Court’s power under Article 136 to grant liberty to file appeal beyond limitation period with sympathetic consideration under Section 14 of Limitation Act. | Delhi High Court relied on this judgment to grant liberty to appellants to file appeal within thirty days; court analyzed the scope and limitation of this liberty. |
| Commissioner of Customs & Central Excise v. Hongo India Pvt. Ltd., (2009) 5 SCC 791 | High Court has no power to condone delay beyond the period specified in the Central Excise Act (Section 35H). | By analogy, the court held that under FEMA Section 35, delay beyond 120 days cannot be condoned as no similar amendment exists in FEMA. |
| Chaudharana Steels Private Limited v. Commissioner Of Central Excise, Allahabad, 2009 (238) E.L.T 705 (S.C) | Reinforces the principle that delay beyond limitation period prescribed in statute cannot be condoned by the High Court. | Supported the court’s view that delay in filing appeals beyond 120 days under FEMA Section 35 cannot be condoned. |
Court's Reasoning and Analysis
The court observed that the appeal was filed beyond the 120-day limitation period prescribed under Section 35 of FEMA, which allows 60 days for filing an appeal with a possible extension of another 60 days if sufficient cause is shown. The court noted the absence of any legislative amendment in FEMA akin to those made retrospectively in the Central Excise and Customs Acts, which empower courts to condone delay beyond the prescribed period. It relied on Supreme Court precedents interpreting analogous provisions in the Central Excise Act to conclude that no power exists to condone delay beyond 120 days under FEMA.
Regarding the Delhi High Court’s order granting liberty to file an appeal within thirty days based on the Supreme Court’s judgment in Raj Kumar Shivhare, the court questioned whether the High Court could exercise the Supreme Court’s constitutional power under Article 136. It interpreted the phrase “within thirty days from today” strictly as thirty days from the date of the Delhi High Court’s order (26-7-2010), not from the date of receipt of the order. Since the appeals were filed beyond this period, the court held it had no power to condone the delay.
Holding and Implications
The Civil Applications seeking condonation of delay in filing the appeals are dismissed.
The direct consequence of this decision is that the appeals filed beyond the permissible limitation period under Section 35 of FEMA cannot be entertained, and no condonation of delay is granted. The court did not establish any new precedent but reaffirmed the strict adherence to limitation periods prescribed in FEMA and the limited scope of condonation powers of the High Courts in this context.
1. P.C: These three Civil Applications are filed seeking condonation of delay in filing appeals against the order passed by the Appellate Tribunal for Foreign Exchange on 2-8-2007.
2. By order-in-original dated 30-1-2006 penalty was imposed upon the appellants for violation of the provisions of the Foreign Exchange Management Act, 1999 (‘FEMA’ for short). On filing appeal, the Appellate Tribunal for Foreign Exchange by its order dated 2-8-2007 directed the appellants to make a predeposit of 50% of the amount of the penalty within a period of 30 days from the date of the receipt of the said order.
3. Challenging the aforesaid order, the appellants filed Writ Petitions in the Delhi High Court on 7-11-2007. The said Writ Petitions were initially admitted and ultimately dismissed on 26-7-2010 in the light of the judgment of the Apex Court in the case of Raj Kumar Shivhare v. Assistant Director of Enforcement reported in (2010) 4 SCC 772 : 2010 (253) E.L.T 3 (S.C). However, while dismissing the Writ Petitions, the Delhi High Court granted liberty to the appellants to avail appropriate remedy in terms of para 45 of the judgment of the Supreme Court in the case of Raj Kumar Shivhare (supra), which reads as under:—
“45. In view of this Court's jurisdiction under Article 136 of the Constitution, we give liberty to the appellant, if so advised, to file an appeal before an appropriate High Court within the meaning of the Explanation to section 35 of fema and if such an appeal is filed within a period of thirty days from today, the appellate forum will consider the question of limitation sympathetically having regard to the provisions of Section 14 of the Limitation Act and also having regard to the fact that the appellant was bona fide pursuing his case under Article 226 of the Constitution before the Delhi High Court and then its appeal before this Court.”
4. Accordingly, the present appeals are filed on 27-8-2010 with the Civil Applications seeking condonation of delay in filing the appeals.
5. Section 35 of the FEMA Act which provides for a remedy of appeal against the order of the Appellate Tribunal reads thus:—
“35. 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.
Explanation-In this section “High Court” means —
(a) the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain; and
(b) where the Central Government is the aggrieved party, the High Court within the jurisdiction of which the respondent, or in a case where there are more than one respondent, any of the respondents, ordinarily resides or carries on business or personally works for gain.
6. Admittedly, the appeal is filed beyond 120 days from the date of communication of the order of the Appellate Tribunal. The question is, whether under Sections 35 of FEMA, this Court can condone the delay in filing the appeal beyond the period of 120 days?
7. Interpreting similar provision contained in Section 35H of the Central Excise Act, the Apex Court in the case of Commissioner of Customs & Central Excise v. Hongo India Pvt. Ltd. reported in (2009) 5 SCC 791 : 2009 (236) E.L.T 417 (S.C), held that the High Court has no power to condone delay beyond the period specified in the Central Excise Act. Similar view is taken by the Apex Court in the case of Chaudharana Steels Private Limited v. Commissioner Of Central Excise, Allahabad reported in 2009 (238) E.L.T 705 (S.C). Therefore, the delay in filing the appeals beyond the period of 120 days under section 35 of fema cannot be condoned by this Court. To overcome the aforesaid decisions, the legislature has amended the Central Excise Act and the Customs Act retrospectively so as to confer power on the High Court to condone the delay. No such amendment is introduced under FEMA, hence this Court cannot condone the delay in filing the appeal beyond the period prescribed under section 35 of fema.
8. It is, however contended that the Delhi High Court while dismissing the Writ Petitions on 26-7-2010 has given liberty to the appellants to file appeals in terms of para 45 of the judgment of the Apex Court in the case of Raj Kumar Shivhare (supra). As noted earlier, in the case of Raj Kumar Shivhare (supra), the Apex Court in exercise of its power under Article 136 of the Constitution gave liberty to file ‘an appeal within a period of thirty days from today’. Whether the Delhi High Court could exercise such power exercised by the Apex Court under Article 136 of the Constitution, is a debatable question. In any event, the expression ‘within thirty days from today’ means within thirty days of passing the order. Delhi High Court passed the order on 26-7-2010 and, therefore, the appeals ought to have been filed within thirty days from 26-7-2010. Since the appeals are filed beyond the period permitted by the Delhi High Court, this Court cannot condone the delay.
9. The argument that the expression ‘within thirty days from today’ in para 45 of the judgment in the case of Raj Kumar Shivhare (supra) must be construed to mean within thirty days of the appellant receiving the order cannot be accepted, because, the decision was rendered in the open Court by the Delhi High Court on 26-7-2010 when the parties were represented by the respective Advocates. In such a case, the expression ‘today’ would obviously means from the day on which the order was made i. e. on 26-7-2010. Since the appeals have been filed beyond thirty days from 26-7-2010, this Court has no power to condone the delay.
10. In these circumstances, we have no option but to dismiss the Civil Applications filed by the appellants seeking condonation of delay in filing appeals. Accordingly, the Civil Applications are dismissed with no order as to costs. Consequently, the Appeal papers be consigned to record.
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