Section 6(3)(i) of the Foreign Exchange Management Act, 1999 (FEMA) read with Regulation 3(a) of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000.

Rule 11 132-A

Section 6(3)(i) r/w Regulation 3(a) of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000

provision of Section 2(v)(i) clause B sub-clause (a), (b) & (c)

provisions of clause B of Section 2(v)(i) of FEMA,

provisions of sub-section (2)

Section 36(1)(vii) of the 1961 Act. These two provisions

provisions of the General Clauses Act including Sections 6 and 24

clause (i) of sub-section (3) of Section 6 r/w sub-section 2 of Section 47 of FEMA.

Section 6 and Section 24

provision of Section 2(v)(i) of FEMA

provision of Section 2(v)(i) clause B

Section 36(1)(vii) of the 1961 Act

section 5 or 5-A of the Scheduled District Act, 1874 (XIV of 1974),

provisions of Section 6, 6A and 24 of the General Clauses Act

Section 139 (C) of the Finance Act of 2015.

clause B of the Section 2(v)(i)

Section 6, 6A and 24 of the General Clauses Act and the provisions

sub-section (2) of Section 30 of the 1988 Act

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Smart Summary (Beta)

Factual and Procedural Background

This appeal (FPA-FE-15/LKW/2017) was filed by Shri Pradeep Mishra challenging the Order dated 06.01.2017 of the Special Director of Appeals (FEMA), which had dismissed his appeal and confirmed a penalty of Rs.8,00,000/- imposed by Adjudication Order No. ADJ/12/LKZO/2016/AD(NBS) dated 31.03.2016 of the Assistant Director, Enforcement Directorate, Lucknow. The penalty was imposed for contravention of Section 6(3)(i) of the Foreign Exchange Management Act, 1999 (FEMA) read with Regulation 3(a) of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000.

Procedurally, this Tribunal on 20.03.2018 directed a waiver of full pre-deposit but required the Appellant to deposit 25% of the penalty within six weeks; the Appellant's counsel complied and showed proof to the Respondent. The show-cause notice in the matter dated 30.11.2015 (with Complaint dated 23.11.2015) preceded subsequent legislative omission of Section 6(3)(i).

Material facts relevant to the dispute: the Appellant had NRI status while employed abroad and opened an NRE savings account (18.02.2010). He returned permanently to India in May 2012. Between 04.08.2012 and 20.01.2014 he purchased various immovable properties — including an agricultural land purchased in the name of his wife on 04.08.2012 for a consideration shown as Rs.32,04,600/- (including stamp duty) — with payments made from the above account. A Show Cause Notice issued in November 2015 alleged contravention of FEMA provisions for acquisition/transfer of immovable property by a person resident outside India.

Legal Issues Presented

Whether invocation of Section 6(3)(i) of FEMA (and Regulation 3(a) of the 2000 Regulations) in proceedings arising from a complaint/SCN dated November 2015 was legally valid in view of a later omission of that provision by the Finance Act, 2015.
Whether Shri Pradeep Mishra was a person resident in India (within Section 2(v) of FEMA) at the relevant time (determination of residential status for the purpose of the alleged contravention).
Whether mens rea (intent to contravene) is a necessary element for imposition of penalty under FEMA (Section 13 and related authorities).
Whether the quantum of penalty (Rs.8,00,000/-) was excessive and liable to be reduced in the circumstances of the case.

Arguments of the Parties

Appellant's Arguments

The Impugned Order merely reiterated the Order in Original and failed to address the grounds raised in the appeal.
The Appellant was permanently resident in India since May 2012 and, by his return and intention to settle and set up business, should be treated as resident under Section 2(v)(i) of FEMA (clause B), thus making the property purchase permissible.
The Appellant purchased agricultural land in his wife's name from lawful earnings and had no intention to contravene FEMA; mens rea was absent and thus penalty could not be imposed (reliance placed on Hindustan Steels Ltd. v. State of Odisha).
As the relevant provision (Section 6(3)(i)) had been omitted by subsequent legislation (Finance Act, 2015), proceedings could not be maintained; reliance was placed on authorities distinguishing omission from repeal and on General Clauses Act principles (citing Rayala Corporation, Kolhapur Cane Sugar Works, General Finance Co., and others).
The penalty amount was excessive and should be reduced in view of the facts (lawful earnings used, lack of knowledge, family circumstances); the Appellant had already deposited 25% as pre-deposit per Tribunal order.

Respondent's Arguments

The Appellant was not a person resident in India at the relevant time; hence purchase of agricultural land using funds earned abroad was impermissible under Section 6(3)(i) FEMA read with Regulation 3(a).
Proceedings were valid despite later omission of the provision because the contravention occurred when the law (Section 6(3)(i)) was in force; the Respondent relied on authorities supporting that omission and repeal may be treated similarly in relevant contexts (citing Mithilesh Kumari, Shree Bhagwati Steel Rolling Mills and tribunal's prior order dated 08.04.2024).
On penalty, the contention that mens rea is required was disputed; the Respondent relied on authorities holding that civil penalties under statutes like FEMA are attracted upon proof of contravention irrespective of intention.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Fibre Boards Pvt. Ltd. vs. CIT [(2015) 10 SCC 333]	Held that the word "repeal" includes repeals by express omission; General Clauses Act Sections 6, 6A and 24 apply to such omissions.	The Tribunal relied on this Apex Court decision to conclude that omission of Section 6(3)(i) (by Finance Act, 2015) did not invalidate proceedings initiated earlier; omission treated equivalent to repeal for saving prior operation.
Shree Bhagwati Steel Rolling Mills vs. Commissioner of Central Excise [(2016) 3 SCC 643]	Interpreted "delete", "omit" and "repeal" as interchangeable; omission can amount to repeal.	Used to support the conclusion that omission of a provision does not extinguish prior rights/liabilities and that prior proceedings can continue.
Rayala Corporation (P) Ltd. & M.R. Pratap v. Director of Enforcement [(1969) 2 SCC 412 / 1970 AIR 494]	Constitution Bench decisions holding Section 6 of the General Clauses Act applies to repeal (and distinguishing omission from repeal in certain contexts).	The Tribunal discussed these decisions at length, treated certain elements as not binding in light of later authority (Fibre Boards), and explained why the Fibre Boards analysis governs the present situation.
Kolhapur Cane Sugar Works Ltd. [(2000) 2 SCC 536]	Followed Rayala; addressed limits on applying Section 6 of General Clauses Act to omissions/deletions.	Considered and distinguished in the Tribunal's reasoning in light of Fibre Boards and related analysis; not treated as overriding the later Apex authority.
General Finance Co. & Anr. v. Assistant Commissioner of Income Tax [(2002) 7 SCC 1]	Addressed whether omission amounts to repeal and whether reference to a larger bench was required on that point.	Noted by the Tribunal for background; the Court recorded the earlier discussion and the fact that the larger-bench reference was not made in that case.
Mithilesh Kumari vs. Prem Behari Khare [(1989) 2 SCC 95]	Authority cited in submissions regarding the effect of omission/repeal (as argued by Respondent).	Referred to as one of the authorities relied on by the Respondent to support continuation of proceedings despite later omission.
Poonjabhai Vanmalidas v. Commissioner of Income Tax, Ahmedabad [1992 Supp (1) SCC 182]	Interpretation of Section 24 of the General Clauses Act; continuity of orders on repeal and re-enactment.	Quoted in the Tribunal's discussion on how subordinate legislation and orders continue under re-enactment/repeal rules; used to explain the functioning of Section 24.
State of Punjab v. Harnek Singh [(2002) 3 SCC 481]	Explained the object of Section 24 and continuity of notifications/orders under re-enactment.	Relied on to underline that subordinate legislation continues unless inconsistent with re-enacted provisions.
State of Orissa v. M.A. Tulloch & Co. [(1964) 4 SCR 461]	Discussed the doctrine of implied repeal and the equivalence of express and implied repeal for purposes of saving provisions.	Quoted to support the proposition that implied repeal is within the ambit of "repeal" and thus saved by the General Clauses Act.
SEBI v. Shriram Mutual Fund & Ors. [(2006) 5 SCC 361]	Confirmed that civil penalties are attracted upon establishment of contravention; mens rea is not required unless statute so indicates.	The Tribunal relied on this authority to reject the Appellant's contention that absence of guilty intention (mens rea) precluded imposing penalty under FEMA.
Director of Enforcement v. MCTM Corporation Pvt. Ltd. & Ors. [Manu/SC/0300/1996]	Earlier authority on FERA stating contravention attracts penalty irrespective of guilty intention.	Referred to in support of the civil-penalty principle applied to FEMA matters; used as background for mens rea discussion.
Final Order of this Tribunal dated 08.04.2024 in Appeal No. FPA-FE-43-44/BNG/2023 (M/s Shell India Markets Pvt. Ltd. & Shri Nitin Prasad)	Tribunal's prior analysis on omission/repeal and applicability of General Clauses Act provisions to omitted FEMA provisions.	The present Bench adopted and relied on the reasoning of that Final Order in analysing omission, Section 6/6A/24 and the effect on proceedings initiated earlier.
Hindustan Steels Limited v. State of Odisha [1978]	Authority involving criminal/quasi-criminal provisions where mens rea considerations were pertinent.	The Court noted that Hindustan Steels pertained to criminal/quasi-criminal provisions and therefore was not applicable to FEMA civil penalty regime; distinguished on that basis.
Chief Inspector of Mines v. Karam Chand Thapar [AIR 1961 SC 838]	Referenced in the Tribunal's extended survey of authorities dealing with continuity and application of saving provisions.	Referred to in the course of discussing prior jurisprudence on continuity of subordinate legislation and effect of repeal/omission; used as part of the doctrinal background.

Court's Reasoning and Analysis

The Tribunal proceeded in a structured manner to address (a) the effect of omission of Section 6(3)(i) of FEMA, (b) the Appellant's residential status at the time of purchase, and (c) the relevance of mens rea to penalty liability under FEMA.

Effect of omission of Section 6(3)(i): The Tribunal noted that the Finance Act, 2015 contained a provision to omit Section 6(3) (including clause (i)) but the omission took effect only from 15.10.2019 (S.O. 3715(E)). The complaint and Show Cause Notice in this case are dated November 2015. The Tribunal examined the interplay between the omission and the saving provisions in the General Clauses Act (Sections 6, 6A and 24). Relying principally on the Supreme Court's decision in Fibre Boards Pvt. Ltd., and on Shree Bhagwati Steel Rolling Mills, the Tribunal accepted that a repeal can be by express omission and that the General Clauses Act's protections apply to preserve prior operation, investigations and proceedings. The Tribunal therefore held that invocation of Section 6(3)(i) read with Regulation 3(a) in the 2015 SCN/Complaint was correct and lawful as the relevant law was in force at the time of the alleged contravention and institution of proceedings.

Residential status under Section 2(v) of FEMA: The Tribunal analyzed Section 2(v)(i) (and clause B) and explained that residential status is to be determined by reference to the preceding financial year. The Appellant returned to India permanently in May 2012, so the relevant preceding financial year for determining residence was 2011-12 (01.04.2011–31.03.2012). The Tribunal found undisputedly that the Appellant had not stayed in India for more than 182 days in 2011-12, and that the qualifying circumstances in clause B (employment/business/intention to stay for uncertain period within that preceding year) did not apply because his return and intention to remain occurred in May 2012 (financial year 2012-13). Accordingly, the Appellant could not be considered a resident in India for the relevant time and was covered by Section 2(w) as a person resident outside India.

Mens rea and penalty under FEMA: The Appellant argued absence of guilty intention should preclude penalty. The Tribunal referred to the Supreme Court decision in SEBI v. Shriram Mutual Fund which holds that civil penalties are attracted upon proof of contravention and that mens rea is irrelevant unless the statute expressly requires intention. The Tribunal examined Section 13(1) of FEMA (penalty provisions) and observed that the language does not require intention (no words such as "willful", "deliberately", etc.). Accordingly, the Appellant's lack of intention did not preclude imposition of penalty for the established contravention.

Quantum of penalty: While sustaining liability, the Tribunal considered mitigating facts (payment from lawful earnings abroad, possible unawareness of FEMA, family circumstances and the fact of pre-deposit). In the exercise of its discretion, the Tribunal reduced the penalty from Rs.8,00,000/- to Rs.2,00,000/- and directed that this amount may be adjusted from any pre-deposit already made by the Appellant.

Holding and Implications

Holding: The Appeal is partly allowed. The Tribunal confirmed that proceedings under Section 6(3)(i) FEMA read with Regulation 3(a) were maintainable in respect of the Complaint/Show Cause Notice dated November 2015 (law in force at the relevant time). The Appellant was held to be a person resident outside India at the relevant time. Penalty liability under Section 13 of FEMA does not require mens rea. The Tribunal reduced the penalty to Rs.2,00,000/- (to be adjusted against any 25% pre-deposit already made by the Appellant).

Implications: The direct effect on the parties is (i) confirmation of liability for contravention and (ii) reduction of monetary penalty to Rs.2,00,000/-, subject to adjustment of any pre-deposit. The decision applies established Supreme Court authority (notably Fibre Boards and SEBI v. Shriram Mutual Fund) to hold that omission can be treated as repeal for saving prior proceedings and that civil penalties under FEMA do not require proof of mens rea. The opinion does not purport to lay down a novel legal principle beyond the application of existing precedents; it applies those precedents to the facts before the Tribunal.

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FPA-FE-15/LKW/2017 Page 1 of 20

APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

FPA-FE-15/LKW/2017

Shri Pradeep Mishra … Appellant Versus

The Special Director,

Directorate of Enforcement, Lucknow … Respondent

Advocates/Authorized Representatives who appeared

For the Appellant : Mr. Ramni Yadav, Adv. Mr. Pawan Kumar, Adv.

For the Respondent : Mr. Shoumendu Mukherji, ED Panel Mr. Aniruddha Ghosh, Adv.

Ms. Megha Sharma, Adv.

CORAM

SHRI G. C. MISHRA : MEMBER

SHRI BALESH KUMAR : MEMBER

FINAL ORDER

01.07.2025

This Order disposes of the Appeal No. FPA-FE-15/LKW/2017 filed by Shri Pradeep Mishra, against the Order dated 06.01.2017 (Impugned Order) passed by the Special Director of Appeals (FEMA) in Appeal No. 503/SD(A)- 23/FEMA/2016-17. The Special Director of Appeals had dismissed the Appeal filed by the Appellant herein and confirmed the penalty of Rs.8,00,000/- imposed by the Ld. Adjudicating Authority. The said penalty was imposed in Adjudication Order No. ADJ/12/LKZO/2016/AD(NBS) dated 31.03.2016 (Order in Original) passed by the Assistant Director, Enforcement Directorate, Lucknow. The penalty of Rs.8,00,000/- was imposed for the contravention of Section 6(3)(i) of the Foreign Exchange Management Act, 1999 (FEMA) read with Regulation 3(a) of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000. This Tribunal vide Order dated 20.03.2018 had disposed of the application for

the waiver of the pre-deposit of the penalty amount by directing the Appellant to deposit a sum of 25% of the penalty amount within six weeks from the date of the Order. The ordersheet dated 15.07.2019 of this Tribunal shows that the Counsel for the Appellant complied with the Order and deposited 25% of the total penalty amount for which the proof was shown to the Respondent who sought time to verify the same.

2. Ld. Counsel for the Appellant challenged the Impugned Order on the ground that the same is reiteration of the Order in Original and the Impugned Order failed to dispose of the grounds taken by the Appellant for filing the Appeal before the Special Director Appeals. Ld. Counsel for the Appellant submitted that the Appellant is a permanent resident of India since May 2012 and has physically handicapped minor daughter, minor son and his wife in his family. The Appellant is the sole earning member in his family. In the year 2000, the Appellant left India on being employed by "AL Salem York Services Ltd" in Saudi Arabia. He returned to India in 2006 for making arrangements for his minor daughter who is physically handicapped. Following a three-year stay in India, the Appellant left again in 2009 to take a position with a new employer, "MUBARK SAAD AL DAKAL," as a General Manager, earning an annual salary of SR 245000/-, which included housing and transportation allowances. The Appellant also started his own business in partnership with

"MESSRS KHETYAR AL JAZEERA FRO TRADE" Riyadh, Saudi Arabia in Recycled Oil and Base Oil, on the basis of 50-50% sharing of profits. Finally in May 2012, the Appellant left Riyadh (Saudi Arabia) for permanent settlement in India terminating his partnership business and realizing all his dues.

3. Ld. Counsel for the Appellant submitted that the Appellant opened a Non-Resident External (NRE) Savings account on 18.02.2010 with HSBC Bank Ltd., Lucknow Branch while he was an NRI living in Saudi Arabia. The Appellant after five months of his permanent settlement in India i.e., between

the period 04.08.2012 to 20.01.2014, purchased a residential Flat and Land in the name of his mother, one Residential land and one Agricultural land in the name of his wife and one Residential land for himself and payments were made from the said Savings Bank Account. The Appellant had purchased the agricultural land for Rs.30 Lakhs without knowing that it may lead to contravention of the provisions of FEMA. Ld. Counsel stated that the Appellant had returned permanently in May 2012 and purchased the said land for a total consideration of Rs. 32,04,600/- (including stamp duty) in the name of his wife on 04.08.2012.

4. Ld. Counsel for the Appellant further informed that on 30th November 2015, a Show Cause Notice bearing F. No: T-4/32/LZO/2015/AD/(NBS)/7599 accompanied with Complaint No: 15/2015 dated 23.11.2015 under Section 16(3) of FEMA was issued to the Appellant. The Appellant submitted his reply dated 13.01.2016 to the said Show Cause Notice stating that, in May 2012 he had decided to forego his NRI Status forever and came to India leaving Kingdom of Saudi Arabia for never to return. After coming back to India, Appellant's wife purchased agricultural property in her name. Since she is totally dependent on the Appellant, he arranged funds for that purchase. He also mentioned that his wife had never been NRI in Saudi Arabia or any other country and has always been a bonafide citizen of India. Ld. Counsel stated that the purchase was made out of the lawful earnings of the Appellant.

5. Ld. Counsel for the Appellant contended that the definition of a person resident in India as given u/s 2(v) of FEMA has been cast in terms of the intention of the person. While the Appellant may not have stayed in India for 182 days in the preceding financial year of his final return to India in May, 2012, he is to be regarded as person resident in India in terms of clause B of the Section 2(v)(i) since the Appellant returned to India permanently and set up his business here. Ld. Counsel for the Appellant further argued that it is

clear from the facts of the case that the Appellant had no intention to contravene the provisions of FEMA. In fact, except for the agricultural property which was purchased in the name of his wife, there is no other property against which contravention of the provisions of FEMA has been invoked. He, therefore, pleaded that no penalty could have been imposed in the absence of mens rea in the light of the judgment of the Hon'ble Supreme Court in the matter of Hindustan Steels Limited v. State of Odisha [1978(2) ELT (J159) SC]. Ld. Counsel also argued that the proceedings could not have been invoked in view of the fact that as on the date of the filing of the complaint on 23.11.2015, the provisions of Section 6(3)(i) of FEMA stood omitted by the Finance Act, 2015. In this regard, he cited the judgments of the Hon'ble Supreme Court in the matters of Shyamrao vs. District Magistrate [AIR 1952 SC 324], Rayala Corporation (P) Ltd. [1970 AIR 494], Kolhapur Cane Sugar Works Ltd. [(2000) 2 SCC 536] and General Finance Co. & Anr. v. Assistant Commissioner of Income Tax [(2002) 7 SCC 1]. Ld. Counsel asserted on the basis of the judgments in Rayala Corporation (P) Ltd. (supra) and General Finance Co. & Anr. (supra) that an omission of a provision is different from a repeal and Section 6 of the General Clauses Act applies to a repeal law but not to omission. He, therefore, pleaded that the Appeal may be allowed.

6. Ld. Counsel for the Respondent contended that the Appellant was not a person resident in India and therefore the purchase of agricultural land, even in the name of his wife, from his earnings abroad was not permissible under Section 6(3)(i) of FEMA r/w the afore-cited Regulation. Ld. Counsel for the Respondent cited judgments to contend that the contravention had happened in-spite of the omission of the relevant provision of FEMA. He asserted that there are judgments which have held that omission and repeal are the same. In this regard, he cited the judgments of the Hon'ble Supreme Court in the

matter of Mithilesh Kumari vs. Prem Behari Khare, [(1989) 2 SCC 95 - Para 21] & Shree Bhagwati Steel Rollling Mills vs. Commissioner of Central Excise and Anr. [(2016) 3 SCC 643]. Ld. Counsel also cited the

Final Order dated 08.04.2024 of this Tribunal in the Appeal No. FPA-FE- 43-44/BNG/2023 in the matters of M/s Shell India Markets Pvt. Ltd. & Shri Nitin Prasad.

7. We have considered the rival submissions and the material on record. On consideration of the arguments made from both the sides with respect to the omission of Section 6(3) including its clause (i), we find that the omission was made vide Section 139 (C) of the Finance Act of 2015. However, the omission was made with effect from 15.10.2019 vide S.O. 3715 (E). We further note that the Reserve Bank of India, Foreign Exchange Department, Central Office Mumbai issued Notification No. FEMA 21 (R)/2018 - RB on 26.03.2018 in exercise of the powers conferred by clause (i) of sub-section (3) of Section 6 r/w sub-section 2 of Section 47 of FEMA. The said Notification was issued in supersession of Notification No. FEMA 21/2000-RB dated 03.05.2000, as amended from time to time. The Notification dated 26.03.2018 states the following as Regulation 3:

"3. Acquisition and Transfer of Property in India by a Non-Resident Indian or an Overseas Citizen of India:-

An NRI or an OCI may

(a) acquire immovable property in India other than agricultural land/ farm house/ plantation property:

Provided that the consideration, if any, for transfer, shall be made out of (i) funds received in India through banking channels by way of inward remittance from any place outside India or (ii) funds held in any non- resident account maintained in accordance with the provisions of the Act, rules or regulations framed thereunder.

Provided further that no payment for any transfer of immovable property shall be made either by traveler's cheque or by foreign currency notes or by any other mode other than those specifically permitted under this clause.

(b) acquire any immovable property in India other than agricultural land/ farm house/ plantation property by way of gift from a person resident in India or from an NRI or from an OCI, who in any case is a relative as defined in section 2(77) of the Companies Act, 2013;

(c) acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property (a) in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations or (b) from a person resident in India;

(d) transfer any immovable property in India to a person resident in India;

(e) transfer any immovable property other than agricultural land/ farm house/ plantation property to an NRI or an OCI." In view of the aforementioned factual position, the invocation of Section 6(3)(i) r/w Regulation 3(a) of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000 in the aforementioned Show Cause Notice r/w the Complaint was correct and in accordance with law in force then. It is on record that the Complaint filed u/s 16(3) of FEMA is dated 23.11.2015 and the Show Cause Notice issued in the matter is dated 30.11.2015.

8. We observe that same position has been taken and elaborately explained by this Tribunal in the Final Order dated 08.04.2024 of this Tribunal in the Appeal No. FPA-FE-43-44/BNG/2023 in the matters of M/s Shell India Markets Pvt. Ltd. & Shri Nitin Prasad. The relevant paragraphs of the Final Order are cited as follows:

"24………. To analyse the legal issues, we may refer to Section 6(3)(b) as was existing before its repeal/omission and is quoted hereunder: "

6. Capital Account transactions.

(1) and (2) …….

(3) Without prejudice to the generality of the provisions of sub-section (2), the Reserve Bank may, by regulations, prohibit, restrict or regulate the following-

(a) transfer or issue of any foreign security by a person resident in India; (b)transfer or issue of any foreign security by a person resident outside India;

(c) transfer or issue of any security or foreign security by any branch, office or agency in India of a person resident outside India;

(d) any borrowing or lending in foreign exchange in whatever form or by whatever name called;

(e) any borrowing or lending in rupees in whatever form or by whatever name called between a person resident in India and a person resident outside India; (f) deposits between persons resident in India and persons resident outside India;

(g) export, import or holding of currency or currency notes;

(h) transfer of immovable property outside India, other than a lease not exceeding five years, by a person resident in India;

(i) acquisition or transfer of immovable property in India, other than a lease not exceeding five years, by a person resident outside India;

(j) giving of a guarantee or surety in respect of any debt, obligation or other liability incurred-

(i) by a person resident in India and owed to a person resident outside India; or (ii) by a person resident outside India". The provision quoted above was omitted by the Act of 20 of 2015 w.e.f.

15.10.2019.

……………….

30. The next question is in reference to the provisions of Section 6(3)(b) and Regulation of 2000 superseded by the Regulation of 2017 followed by the Regulation of 2019. The provision of FEMA so repealed and the relevant provision of Regulation have been quoted earlier by us. It is not in dispute that Section 6(3)(b) was omitted or repealed w.e.f. 15.10.2019 but what would be the effect of omission needs to be considered in the light of Section 6, 6A and 24 of the General Clauses Act and the provisions aforesaid are quoted hereunder for ready reference:

"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-

(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, 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.

6A. Repeal of Act making textual amendment in Act or Regulation. - Where any (Central Act) or Regulation made after the commencement of this Act repeals any enactment by which the text of any (Central Act) or Regulation was amended by the express omission.

24. Continuation of orders, etc. issued under enactments repealed and re-enacted.- Where any (Central Act) or Regulation is, after the commencement of this Act, repealed and re-enacted with or without modification, then, unless it is otherwise expressly provided, any (appointment, notification), order, scheme, rule, form or bye-law (made or) issued under the repealed Act or Regulation, shall so far as it is not inconsistent with the provisions re-enacted, continue in force, and be deemed to have been (made or) issued under the provisions re-enacted, continue in force, and be deemed to have been (made or) issued under the provisions so re-enacted, unless and until it is superseded by any (appointment, notification), order scheme, rule form or bye-law (made or) issued under the provisions so re-enacted (and when any (Central Act) or Regulation, which, by a notification under section 5 or 5-A of the Scheduled District Act, 1874 (XIV of 1974), or any like law, has been extended to any local area, has by a subsequent notification, been withdrawn from any re-extended to such area or any part thereof, the provisions of such Act or Regulation shall be deemed to have been repealed and re-enacted in such area or part within the meaning of this section)".

31. The issue in reference to the provisions quoted above were analysed by the Apex Court in the case of Fibre Boards Pvt. Ltd. (supra) where earlier judgment of the Apex Court in the case of Rayala Corporation (P) Ltd. & Anr. Vs. Directorate of Enforcement (1969)2SCC 412 and also the judgment in the case of Kolhapur Cane Sugar Works Ltd. (supra) were considered. The relevant paras 19 to 35 of the judgment (supra) are quoted hereunder for ready reference to show as to what would be the effect of repeal, implied repeal or the omission of the provisions under the Statute or Regulation:

"19. From a reading of the notes on clauses and the Memorandum of the Finance Bill, 1990, it is clear that Section 280Y(d) which was omitted with effect from 1.4.1990 was so omitted because it had become "redundant". It was redundant because it had no independent existence, apart from providing a definition of "urban area" for the purpose of Section 280ZA which had been omitted with effect from the very date that Section 54G was inserted, namely, 1.4.1988. We are, therefore, of the view that the High Court in not referring to Section 24 of the General Clauses Act has fallen into error. Section 24 states:

"24. Continuation of orders, etc., issued under enactments repealed and re- enacted. —Where any 44[Central Act] or Regulation, is, after the commencement of this Act, repealed and re-enacted with or without modification, then, unless it is otherwise expressly provided any 45 [appointment notification,] order, scheme, rule, form or bye- law, 45 [made or] issued under the repealed Act or Regulation, shall, so far as it is not inconsistent with the provisions re-enacted, continue in force, and be deemed to have been 45 [made or] issued under the provisions so re- enacted, unless and until it is superseded by any 45 [appointment notification,] order, scheme, rule, form or bye-law, 45[made or] issued under the provisions so re-enacted 46 [and when any 44 [Central Act] or Regulation, which, by a notification under section 5 or 5A of the Scheduled Districts Act, 1874, (14 of 1874) or any like law, has been extended to any local area, has, by a subsequent notification, been withdrawn from the re- extended to such area or any part thereof, the provisions of such Act or Regulation shall be deemed to have been repealed and re-enacted in such area or part within the meaning of this section]"

20. In Poonjabhai Vanmalidas v. Commissioner Of Income Tax, Ahmedabad ., Ahmedabad, 1992 Supp. (1) SCC 182, this Court in construing Section 24 of the General Clauses Act held:-

"7. The effect of Section 24 of the General Clauses Act, 1897, insofar as it is material, is that where the repealed and re-enacted provisions are not inconsistent with each other, any order made under the repealed provisions is deemed to be an order made under the re-enacted provisions. The question, therefore, is whether the provisions of the repealed Section 10(2)(xi), under which the bad debts were written off as irrecoverable in the books of the assessee, are in terms re-enacted by the repealing Act. A comparative table furnished in The Law and Practice of Income Tax, Kanga and Palkhivala (7th edn., volume II) shows that Section 10(2)(xi) of the 1922 Act is equivalent to Sections 36(1)(vii), 36(2) and 41(4) of the 1961 Act. The repealed Section 10(2)(xi) is thus a composite section containing the ingredients of the re-enacted Sections 36(1)(vii), 36(2) and 41(4). Consequently when a debt is written off by an order in terms of Section 10(2)(xi) of the 1922 Act, the Income Tax Officer exercises the same power as he would have exercised on the enactment of Section 36(1)(vii) of the 1961 Act. These two provisions are, therefore, consistent with each

other. Section 36(1)(vii) is subject to the provisions of sub-section (2) of that section. Therefore, both Sections 36(1)(vii) and 36(2) of the 1961 Act, being two of the ingredients of Section 10(2)(xi) of the 1922 Act, must be read together with reference to an order under which debts had been written off. Accordingly, in the light of Section 24 of the General Clauses Act, 1897, the relevant order made under Section 10(2)(xi) of the 1922 Act with reference to which the debt in question had been written off, is deemed to be an order made under Section 36(1)(vii) of the 1961 Act and such order is what is contemplated under Section 41(4) of that Act. Any amount which is recovered on any such debt is attracted by the provisions of Section 41(4) of the 1961 Act and is, therefore, chargeable to tax in terms of that sub- section to the extent of the 'excess' specified therein." (at para 7).

21. In State Of Punjab v. Harnek Singh ., (2002) 3 SCC 481, this Court held:-

"17. Section 24 of the General Clauses Act deals with the effect of repeal and re-enactment of an Act and the object of the section is to preserve the continuity of the notifications, orders, schemes, rules or bye-laws made or issued under the repealed Act unless they are shown to be inconsistent with the provisions of the re-enacted statute.

23. We do not find any force in the submission of the learned counsel appearing for the respondents that as reference made in sub-section (2) of Section 30 of the 1988 Act is only to Section 6 of the General Clauses Act, the other provisions of the said Act are not applicable for the purposes of deciding the controversy with respect to the notifications issued under the 1947 Act. We are further of the opinion that the High Court committed a mistake of law by holding that as notifications have not expressly been saved by Section 30 of the Act, those would not enure or survive to govern any investigation done or legal proceedings instituted in respect of the cases registered under the 1988 Act. There is no dispute that the 1988 Act is both repealing and re-enacting the law relating to prevention of corruption to which the provisions of Section 24 of the General Clauses Act are specifically applicable. It appears that as Section 6 of the General Clauses Act applies to repealed enactments, the legislature in its wisdom thought it proper to make the same specifically applicable in the 1988 Act also which is a repealing and re-enacted statute. Reference to Section 6 of the General Clauses Act in sub-section (1) of Section 30 has been made to avoid any confusion or misunderstanding regarding the effect of repeal with regard to actions taken under the repealed Act. If the legislature had intended not to apply the provisions of Section 24 of the General Clauses Act to the 1988 Act, it would have specifically so provided under the enacted law. In the light of the fact that Section 24 of the General Clauses Act is specifically applicable to the repealing and re-enacting statute, its exclusion has to be specific and cannot be inferred by twisting the language of the enactments. Accepting the contention of the learned counsel for the respondents would render the provisions of the 1988 Act redundant inasmuch as appointments, notifications, orders, schemes, rules, bye-laws made or issued under the

repealed Act would be deemed to be non-existent making impossible the working of the re-enacted law impossible. The provisions of the 1988 Act are required to be understood and interpreted in the light of the provisions of the General Clauses Act including Sections 6 and 24 thereof." (at paras 7 and 23).

22. On a reading of Section 24 together with what has been stated by this Court above, it becomes difficult to accept Shri Arijit Prasad's contention that Section 24 would only apply to notifications which themselves gave rights to persons like the appellant. Unlike Section 6 of the General Clauses Act, which saves certain rights, Section 24 merely continues notifications, orders, schemes, rules etc. that are made under a Central Act which is repealed and re-enacted with or without modification. The idea of Section 24 of the General Clauses Act is, as its marginal note shows, to continue uninterrupted subordinate legislation that may be made under a Central Act that is repealed and re- enacted with or without modification. It being clear in the present case that Section 280ZA which was repealed by omission and re-enacted with modification in section 54G, the notification declaring Thane to be an urban area dated 22.9.1967 would continue under and for the purposes of Section 54G. It is clear, therefore, that the impugned judgment in not referring to section 24 of the General Clauses Act at all has thus fallen into error.

23. But then Shri Arijit Prasad put before us two roadblocks in the form of two Constitution Bench decisions. He cited Rayala Corporation (P) Ltd. and M.R. Pratap v. Director of Enforcement, New Delhi, (1969) 2 SCC 412 which was followed in Kolhapur Cane Sugar Works Ltd. & Anr. v. Union of India & Ors., (2000) 2 SCC 536. He argued based upon these two judgments that an

"omission" would not amount to "repeal" and that since the present case was concerned with the omission of Section 280ZA, Section 24 would have no application.

24. Shri Prasad is correct in relying upon these two Constitution Bench judgments for they do indeed say that in Section 6 of the General Clauses Act, the word "repeal" would not take within its ken an "omission".

25. In Rayala Corporation (P) Ltd., what fell for decision was whether proceedings could be validly continued on a complaint in respect of a charge made under Rule 132A of the Defence of India Rules, which ceased to be in existence before the accused were convicted in respect of the charge made under the said rule. The said Rule 132A was omitted by a notification dated 30th March, 1966. What was decided in that case is set out by paragraph 17 of the said judgment, which is as follows:

"17. Reference was next made to a decision of the Madhya Pradesh High Court in State Of Madhya Pradesh v. Hiralal Sutwala [AIR 1959 MP 93] but, there again, the accused was sought to be prosecuted for an offence punishable under an Act on the repeal of which Section 6 of the General Clauses Act had been made applicable. In the case before us, Section 6 of the General Clauses Act cannot obviously apply on the omission of Rule

132-A of the DIRs for the two obvious reasons that Section 6 only applies to repeals and not to omissions, and applies when the repeal is of a Central Act or Regulation and not of a rule. If Section 6 of the General Clauses Act had been applied, no doubt this complaint against the two accused for the offence punishable under Rule 132-A of the DIRs could have been instituted even after the repeal of that rule."

26. It will be clear from a reading of this paragraph that a Madhya Pradesh High Court judgment was distinguished by the Constitution Bench on two grounds. One being that Section 6 of the General Clauses Act does not apply to a rule but only applies to a Central Act or Regulation, and secondly, that Section 6 itself would apply only to a "repeal" not to "an omission". This statement of law was followed by another Constitution Bench in the Kolhapur Canesugar Works Ltd. case. After setting out paragraph 17 of the earlier judgment, the second constitution bench judgment states as follows:

"33. In para 21 of the judgment the Full Bench has noted the decision of a Constitution Bench of this Court in Chief Inspector of Mines v. Karam Chand Thapar [AIR 1961 SC 838] and has relied upon the principles laid down therein. The Full Bench overlooked the position that that was a case under Section 24 of the General Clauses Act which makes provision for continuation of orders, notification, scheme, rule, form or bye-law, issued under the repealed Act or regulation under an Act after its repeal and re- enactment. In that case Section 6 did not come up for consideration. Therefore the ratio of that case is not applicable to the present case. With respect we agree with the principles laid down by the Constitution Bench in Rayala Corpn. Case [(1969) 2 SCC 412 : (1970) 1 SCR 639] . In our considered view the ratio of the said decision squarely applies to the case on hand."

27. The Kolhapur Canesugar Works Ltd. judgment also concerned itself with the applicability of Section 6 of the General Clauses Act to the deletion of Rule 10 and 10A of the Central Excise Rules on 6th August, 1977.

28. An attempt was made in General Finance Company & Anr. v. Assistant Commissioner of Income Tax, Punjab, (2002) 7 SCC 1 to refer these two judgments to a larger bench on the point that an omission would not amount to a repeal for the purpose of Section 6 of the General Clauses Act. Though the Court found substance in the argument favouring the reference to a larger bench, ultimately it decided that the prosecution in cases of non- compliance of the provision therein contained was only transitional and cases covered by it were few and far between, and hence found on facts that it was not an appropriate case for reference to a larger bench.

29. We may also point out that in G.P. Singh's Principles of Statutory Interpretation, 12th Edition, the learned author has criticized the aforesaid judgments in the following terms:

"Section 6 of the General Clauses Act applies to all types of repeals. The section applies whether the repeal be express or implied, entire or partial or

whether it be repeal simpliciter or repeal accompanied by fresh legislation. The section also applies when a temporary statute is repealed before its expiry, but it has no application when such a statute is not repealed but comes to an end by expiry. The section on its own terms is limited to a repeal brought about by a Central Act or Regulation. A rule made under an Act is not a Central Act or regulation and if a rule be repealed by another rule, section 6 of the General Clauses Act will not be attracted. It has been so held in two Constitution Bench decisions. The passing observation in these cases that "section 6 only applies to repeals and not to omissions" needs reconsideration for omission of a provision results in abrogation or obliteration of that provision in the same way as it happens in repeal. The stress in these cases was on the question that a 'rule' not being a Central Act or Regulation, as defined in the General Clauses Act, omission or repeal of a 'rule' by another 'rule' does not attract section 6 of the Act and proceedings initiated under the omitted rule cannot continue unless the new rule contains a saving clause to that effect…."(At pages 697 and 698)

30. In view of what has been stated hereinabove, perhaps the appropriate course in the present case would have been to refer the aforesaid judgment to a larger bench. But we do not find the need to do so in view of what is stated by us hereinbelow.

31. First and foremost, it will be noticed that two reasons were given in Rayala Corporation (P) Ltd. for distinguishing the Madhya Pradesh High Court judgment. Ordinarily, both reasons would form the ratio decidendi for the said decision and both reasons would be binding upon us. But we find that once it is held that Section 6 of the General Clauses Act would itself not apply to a rule which is subordinate legislation as it applies only to a Central Act or Regulation, it would be wholly unnecessary to state that on a construction of the word "repeal" in Section 6 of the General Clauses Act,

"omissions" made by the legislature would not be included. Assume, on the other hand, that the Constitution Bench had given two reasons for the non- applicability of Section 6 of the General Clauses Act. In such a situation, obviously both reasons would be ratio decidendi and would be binding upon a subsequent bench. However, once it is found that Section 6 itself would not apply, it would be wholly superfluous to further state that on an interpretation of the word "repeal", an "omission" would not be included. We are, therefore, of the view that the second so- called ratio of the Constitution Bench in Rayala Corporation (P) Ltd. cannot be said to be a ratio decidendi at all and is really in the nature of obiter dicta.

32. Secondly, we find no reference to Section 6A of the General Clauses Act in either of these Constitution Bench judgments. Section 6A reads as follows:

"6A. Repeal of Act making textual amendment in Act or Regulation - Where any Central Act or Regulation made after the commencement of this Act repeals any enactment by which the text of any Central Act or Regulation was amended by the express omission, insertion or substitution of any

matter, then, unless a different intention appears, the repeal shall not affect the continuance of any such amendment made by the enactment so repealed and in operation at the time of such repeal."

33. A reading of this Section would show that a repeal can be by way of an express omission. This being the case, obviously the word "repeal" in both Section 6 and Section 24 would, therefore, include repeals by express omission. The absence of any reference to Section 6A, therefore, again undoes the binding effect of these two judgments on an application of the 'per incuriam' principle.[1]

34. Thirdly, an earlier Constitution Bench judgment referred to earlier in this judgment, namely, State of Orissa v. M.A. Tulloch & Co., (1964) 4 SCR 461 has also been missed. The Court there stated:

"….Now, if the legislative intent to supersede the earlier law is the basis upon which the doctrine of implied repeal is founded could there be any incongruity in attributing to the later legislation the same intent which Section 6 presumes where the word 'repeal' is expressly used. So far as statutory construction is concerned, it is one of the cardinal principles of the law that there is no distinction or difference between an express provision and a provision which is necessarily implied, for it is only the form that differs in the two cases and there is no difference in intention or in substance. A repeal may be brought about by repugnant legislation, without even any reference to the Act intended to be repealed, for once legislative competence to effect a repeal is posited, it matters little whether this is done expressly or inferentially or by the enactment of repugnant legislation. If such is the basis upon which repeals and implied repeals are brought about it appears to us to be both logical as well as in accordance with the principles upon which the rule as to implied repeal rests to attribute to that legislature which effects a repeal by necessary implication the same intention as that which would attend the case of an express repeal. Where an intention to effect a repeal is attributed to a legislature then the same would, in our opinion, attract the incident of the saving found in Section 6 for the rules of construction embodied in the General Clauses Act are, so to speak, the basic assumptions on which statutes are drafted……." (At page

484)

35. The two later Constitution Bench judgments also did not have the benefit of the aforesaid exposition of the law. It is clear that even an implied repeal of a statute would fall within the expression "repeal" in Section 6 of the General Clauses Act. This is for the reason given by the Constitution Bench in M.A. Tulloch & Co. that only the form of repeal differs but there is no difference in intent or substance. If even an implied repeal is covered by the expression "repeal", it is clear that repeals may take any form and so long as a statute or part of it is obliterated, such obliteration would be covered by the expression "repeal" in Section 6 of the General Cl s Act".

32. The judgment in the case of Fibre Boards Pvt. Ltd. (supra) applies to the facts of this case. The detailed judgment of the Apex Court not only

makes a reference of Section 6, 6A and 24 of the General Clauses Act but the previous judgment on the issue to hold as to whether it would be binding or be per incuriam. After detailed analysis. It has been held that repeal or express omission and substitution of any provision unless a different intention appears, the repeal/omission shall not affect the continuance of such enactment by the enactment so repealed and in operation at the time of such repeal. The detailed discussion on the issue has been made to show that words "repeal" and "omission" are interchangeable and even there is express omission of the provision it would remain in operation in a given case detailed out by the Apex Court. The judgments of the Apex Court in the case of Rayala Corporation (P) Ltd. and also of Kolhapur Cane Sugar Works Ltd. (supra) were considered at length. In the case of

Rayala Corporation (P) Ltd. (supra), the Apex Court failed to consider earlier judgment of the Constitution Bench and thereby after detailed discussion, the judgment in the case of Fibre Boards Pvt. Ltd. (supra) was given."

9. The afore-cited Final Order dated 08.04.2024 clearly brings out that the provisions of Section 6, 6A and 24 of the General Clauses Act will also be applicable where the provisions of the statute are omitted and not repealed. In fact, the Apex Court has in the case of Fibre Boards Pvt. Ltd. vs. CIT [(2015)

10 SCC 333] has held that the word repeal used in the Sections would include repeals by express omission. The words repeal and omission have thus been interchangeably used. The same position has been taken by the Hon'ble Supreme Court in Shree Bhagwati Steel Rollling Mills vs. Commissioner of Central Excise and Anr. (supra). The relevant paragraphs of the judgment are cited as follows:

"13. On a conjoint reading of the three expressions "delete", "omit", and

"repeal", it becomes clear that "delete" and "omit" are used interchangeably, so that when the expression "repeal" refers to "delete" it would necessarily take within its ken an omission as well. This being the case, we do not find any substance in the argument that a "repeal" amounts to an obliteration from the very beginning, whereas an "omission" is only in futuro. If the expression "delete" would amount to a "repeal", which the appellant's counsel does not deny, it is clear that a conjoint reading of Halsbury's Laws of England and the Legal Thesaurus cited hereinabove both lead to the

same result, namely that an "omission" being tantamount to a "deletion" is a form of repeal.

……………

15. It is clear, therefore, that when this Court referred to Section 6A in Fibre Board's case and held that Section 6A shows that a repeal can be by way of an express omission, obviously what was meant was that an amendment which repealed a provision could do so by way of an express omission. This being the case, it is clear that Section 6A undisputedly leads to the conclusion that a repeal would include a repeal by way of an express omission.

…………….

23. Fibre Board's case is a recent judgment which, as has correctly been argued by Shri Radhakrishnan, learned senior counsel on behalf of the revenue, clarifies the law in holding that an omission would amount to a repeal. The converse view of the law has led to an omitted provision being treated as if it never existed, as Section 6 of the General Clauses Act would not then apply to allow the previous operation of the provision so omitted or anything duly done or suffered thereunder. Nor may a legal proceeding in respect of any right or liability be instituted, continued or enforced in respect of rights and liabilities acquired or incurred under the enactment so omitted. In the vast majority of cases, this would cause great public mischief, and the decision of Fibre Board's case is therefore clearly delivered by this Court for the public good, being, at the very least a reasonably possible view. Also, no aspect of the question at hand has remained unnoticed. For this reason also we decline to accept Shri Aggarwal's persuasive plea to reconsider the judgment in Fibre Board's case. This being the case, it is clear that on point one the present appeal would have to be dismissed as being concluded by the decision in the Fibre Board's case."

10. On examination of the argument relating to the residential status of the Appellant, we find that even though the Appellant had the intention of remaining in India after his return in May, 2012, the language used in the provision of Section 2(v)(i) of FEMA does not allow for him to be regarded as person resident in India. There is no dispute as to the date of purchase of the agricultural land in the name of the wife of the Appellant in August, 2012, from the funds earned abroad by the Appellant. Since the purchase of the agricultural land had occurred in August, 2012, we find that in accordance with the provisions of Section 2(v)(i) of FEMA, the financial year which needs

to be considered is 2011-12 i.e. from 01.04.2011 to 31.03.2012, to determine the residential status of the Appellant. There is no dispute about the Appellant having not stayed in India for more than 182 days in the preceding financial year 2011-12. The question is whether by virtue of the provisions of clause B of Section 2(v)(i) of FEMA, can the Appellant be included as a person resident in India. The provision allows for a person to be not included as person resident in India, if he has come to or stays in India even though having spent 182 days in India in the preceding financial year. His coming to or staying in India should have happened in the same preceding financial year as to when the number of days he stayed in India are being counted. The provision of Section 2(v)(i) clause B sub-clause (a), (b) & (c) provide for including such person as resident in India, if he takes up employment or business or has intention to stay for an uncertain period. The provision has been so worded so as to take care of foreigners and NRIs who for reasons like tourism, studies, medical and other exigencies chose to stay in India for more than 182 days in the preceding financial year without changing the residential status. While it is true that the Appellant returned from abroad with intention to take up employment or vocation in India, it cannot be denied that he did so in May, 2012, which falls in the financial year 2012-13 i.e. from 01.04.2012 to 31.03.2013. The Appellant came to India for good and purchased the agricultural land in the financial year 2012-13. In the preceding financial year which shall determine his residential status, he neither stayed in India for more than 182 days nor he came to India and stayed thereafter during the said year. Therefore, the Appellant cannot take advantage of the provision of Section 2(v)(i) clause B and cannot be held as a person resident in India. It follows that the Appellant is covered by Section 2(w) of FEMA as a person resident outside India, which means a person who is not resident in India.

11. Ld. Counsel for the Appellant has contended that since the Appellant had no intention to contravene the provisions of FEMA, he is not liable for imposition of penalty. In this regard, he cited the judgment of Hindustan Steels Limited v. State of Odisha (supra). We cannot agree with the contention of the Appellant. In this regard, the Judgment dated 23.05.2006 of Hon'ble Supreme Court in the matter of The Chairman, SEBI vs. Shriram Mutual Fund & Ors. [(2006) 5 SCC 361] states in paragraph 35:

"In our considered opinion, penalty is attracted as soon as the contravention of the statutory obligation as contemplated by the Act and the Regulation is established and hence the intention of the parties committing such violation becomes wholly irrelevant. A breach of civil obligation which attracts penalty in the nature of fine under the provisions of the Act and the Regulations would immediately attract the levy of penalty irrespective of the fact whether contravention must be made by the defaulter with guilty intention or not. We also further held that unless the language of the statute indicates the need to establish the presence of mens rea, it is wholly unnecessary to ascertain whether such a violation was intentional or not."

12. On perusal of Section 13 of FEMA which is the Section under which penalty is imposed for contravention of any of the provisions of the Act or any rule, regulation, notification, direction, order or any condition subject to which an authorization is issued by the Reserve Bank of India makes it obvious that the language of the Section does not require intention for penalizing of contravention.

13. The provisions of Section 13(1) of FEMA is as follows:

"If any person contravenes any provision of this Act, or contravenes any rule, regulation, notification, direction or order issued in exercise of the powers under this Act, or contravenes any condition subject to which an authorisation is issued by the Reserve Bank, he shall, upon adjudication, be liable to a penalty up to thrice the sum involved in such contravention where such amount is quantifiable, or up to two lakh rupees where the amount is not quantifiable, and where such contravention is a continuing one, further

penalty which may extend to five thousand rupees for every day after the first day during which the contravention continues." We thus find that there is nothing in the Section which can indicate directly or indirectly requirement of mens rea. Words like "willful",

"deliberately", "intentionally" etc. are missing. The Hon'ble Supreme Court in the Judgment supra have cited the judgment in Director of Enforcement vs. MCTM Corporation Pvt. Ltd. and Ors. Manu/SC/ 0300/1996 wherein even for FERA 1947 it was held that the contravention shall be breach of a civil obligation which would attract penalty irrespective of the fact whether the contravention was made with any guilty intention or not. The Judgment supra cited a number of previous judgments wherein it was held that mens rea is not an essential element for imposing penalty for breach of civil obligations. His Lordships have clarified that the case of Hindustan Steel Ltd. Vs. State of Orissa

(supra) pertained to criminal / quasi criminal proceeding as the provisions of the Act under consideration in that case imposed a punishment of imprisonment and fine as well. The present appeal deals with provisions which are strictly civil obligations and penalty for the contraventions of these provisions are imposable under Section 13(1) of FEMA which provides for penalty only, up to thrice the sum involved in such contravention.

14. Ld. Counsel for the Appellant has also pleaded that the penalty of Rs. 8,00,000/- for the afore-mentioned contravention of FEMA is on the higher side and may be reduced particularly in view of the facts of the case. We do note that the Appellant has paid for the purchase of the agricultural land from his lawful earnings abroad and may not have been aware about the provisions of FEMA. We also find that as mentioned in paragraph 1 of this Order, the Appellant appears to have deposited 25% of

the penalty amount as pre-deposit of penalty amount. Given the circumstances of the case, we make the penalty proportional to the contravention indulged in by the Appellant by reducing it to Rs. 2,00,000/- which may be adjusted from the pre-deposit, if it has been so made by the Appellant.

15. We, therefore, partly allow the Appeal to the extent mentioned above.

(Balesh Kumar) (G. C. Mishra) Member Member

New Delhi

01^st July, 2025

'AB'