ON AN EXAMPLE OF FLAGRANT VIOLATION OF THE PROCESS OF LAW COMMITTED BY THE GOVERNMENT OF INDIA By Dr. S. C. Roy
It has been learnt from the documents obtained through an application under RTI that as on 31.5.2003, altogether 12652 (twelve thousand six hundred and fifty two) cases of alleged contravention of the provisions of the Foreign Exchange Regulation Act, 1973, in short FERA, were still pending for adjudication, after the repeal of FERA by the Foreign Exchange Management Act, 1999, in short FEMA, which came into force on 1.6.2000. The said documents also reveal that to adjudicate the aforesaid pending cases, subsequently 29 adjudicating officers were purportedly appointed on 28.8.2003 by the Central Government, by issuing and publishing notification in the official Gazette. The aforesaid Adjudicating Officers have purportedly adjudicated the said pending cases imposing thousands of crore of rupees penalties upon the alleged contraveners. But what had escaped the scrutiny of the Central Government is the unbelievable fact that the entire exercise of purported adjudication of the aforesaid pending cases was void ab initio. The reason being, the very appointment of the officers, to adjudicate the said pending cases of alleged contravention of the provisions of FERA, was without jurisdiction and in this respect flagrant violation of law has been committed by the Central Government.
The said adjudicating officers were purportedly appointed on 28.8.2003 invoking the provisions of FERA. As FERA was already repealed with effect from 1.6.2000, therefore, the Central Government had no authority to speak of to invoke any provision of FERA after its repeal under any circumstances. The Central Government has acted without jurisdiction in the acts of:
An elaboration of the aforesaid contentions is given below:
“It is a fundamental principle well established that a decree passed by a Court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the Court to pass any decree, and such a defect cannot be cured even by consent of parties.”
The repeal and saving clause under Section 49 of FEMA has provided:
Repeal and saving
(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 law 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.
(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.
Any repeal of an enactment is governed principally by the following two Sections of the General Clauses Act, 1857:
Section 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, 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.
Section 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 or 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 not inconsistent with 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-laws made or issued under the provisions so re-enacted ………”
In view of the provisions under the above mentioned Section 24, with effect from 1.6.2000:
MINISTRY OF FINANCE
(Department of Revenue)
New Delhi, the 25th August, 2003
S.O. 964(E).— Whereas the provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) were brought into force vide G.S.R. 371(E) published in the Gazette of India on 1st May, 2000 giving effect to the provisions of the said Act from 1st June, 2000;
And, whereas, the Central Government by an Order published in the Gazette in exercise of the powers conferred under Section 50 of Foreign Exchange Regulation Act, 1973 (repealed Act) read with sub-section (1) of Section 4 and clause (e) of Section 3 of the repealed Act appointed certain officers of the Central Government to adjudicate cases for contravention made on or before 31st May, 2002 of the provisions of the repealed Act;
Now, therefore, in exercise of the powers conferred under Section 50 read with sub-section (1) of Section 4 of the Foreign Exchange Regulation Act, 1973 (repealed Act) and sub-sections (3) and (4) of Section 49 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Central Government hereby appoints the following persons given in the Table below as officers of Enforcement, namely:—”
In the table the names and respective designations (Commissioners and ADGs) of twenty-nine Central Government Officers were given. Under the provision of Section 50 of FERA as given below, only the Adjudicating Officers, but not the officers of Enforcement, could be appointed:
The third paragraph of the said notification mentions about appointment of “certain officers of the Central Government to adjudicate cases for contravention made on or before 31st May, 2002 of the provisions of the repealed Act”, whereas no contravention of any provision of the repealed Act FERA could be committed by anyone in the year 2002 as the said Act itself was already repealed in the year 2000.
MINISTRY OF FINANCE
(Department of Revenue)
New Delhi, the 28th August, 2003
S.O. 986(E) — Whereas the provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) were brought into force vide G.S.R.371(E) published in the Gazette of India 1st May, 2000 giving effect to the provisions of the said Act from 1st June, 2000;
And, whereas, the Central Government by an Order published in the Gazette in exercise of the powers conferred under Section 50 of Foreign Exchange Regulation Act, 1973 (repealed Act) appointed certain officers of the Central Government to take action for contravention under Section 51 of the repealed Act and also initiated certain actions under the provisions of the repealed Act;
And, whereas, the Central Government by an order published in the Official Gazette vide S.O.964(E) dated 25th August, 2003 appointed certain officers as Officers of Enforcement to give continued effect for the action taken under paragraph 2 above;
Now, therefore, in exercise of the powers conferred under Section 50 of the Foreign Exchange Regulation Act, 1973 (repealed Act) read with Section 5 of the repealed Act and sub-sections (3) and (4) of Section 49 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Central Government authorises the persons mentioned in the Table below to function as adjudicating officers to adjudicate the cases of contravention of any of the provisions of the repealed Act (other than Section 13, clause (a) of Section 18, sub-clause (a) of sub-section (1) of Section 19) or any rule or direction or order made thereunder, such cases as may be assigned by the Directorate of Enforcement, namely:—”
The table that followed contained the names of twenty-nine Central Government officers with their respective designations (Commissioners and ADGs).
Furthermore, under Section 50 of FERA only an ‘officer of Enforcement not below the rank of an Assistant Director of Enforcement’ was eligible to be specially empowered by the Central Government to adjudge cases of contravention as an Adjudicating Officer. But as evident from the designations of the officers given in the said notification who were purportedly authorized to function as Adjudicating Officers, they were Commissioner or Additional Director General in the Central Government but not officers of Enforcement. This made them ineligible to be authorized to function as Adjudicating Officers under FERA.
Even if it is presumed for the moment that the said officers named in the notification dated 28.8.2003 were the same who were purportedly appointed as officers of Enforcement three days earlier, i.e., on 25.8.2003, under the notification being No. S.O. 964(E), then the obvious question arises: how come their designation in the said notification dated 28.8.2003 was not shown as officer of Enforcement? Once they were appointed as officers of Enforcement, they could not remain in their original posts as Commissioners or Additional Director Generals after the said appointment as officers of Enforcement was made. Moreover, only as officers of Enforcement, they were not eligible to be authorized to function as Adjudicating Officers, for that they had to be at least Assistant Directors of Enforcement, which they were not as evident from the said notification dated 28.8.2003. Thus their appointment as Adjudicating Officers under FERA was ultra vires the Act itself, which is evident on the face of the record, and this makes any purported adjudication proceedings held and any order made by them, entirely without jurisdiction and void ab initio.
It may even be argued that the said appointments were purportedly made under Section 5 of FERA, which had provided:
Entrustment of functions of Director
It is clear from the above Section 5 that the appointment of Adjudicating Officer was not covered under Section 5. To be authorized as an Adjudicating Officer, the person had to be an officer of Enforcement not below the rank of an Assistant Director of Enforcement. Thus even a Director of any other Central Government Directorate was not eligible to be authorized by the Central Government to function as an Adjudicating Officer under FERA, unless he was appointed first at least as an Assistant Director of Enforcement, meaning Assistant Director of the then existing Enforcement Directorate as was statutorily required under Section 50 of FERA.
In the light of the above discussion, as a concluding remark, it is once again emphasized that in the adjudication of the aforesaid twelve thousand six hundred and fifty two cases of alleged contravention of the provisions of FERA, there has been complete abuse of the process of law of the land. It has ruined the lives of thousands of individuals along with the eventual closure of hundreds of companies, although there was not even an iota of cause of action against any of them because their alleged cases of contravention were purportedly adjudicated by persons who had absolutely no legal authority to do so. Since it is a serious concern for the whole country as such, through this humble article the author invites the attention of the legal fraternities to look into the matter and review the same as per the provisions of law. It is earnestly hoped that the reader will appreciate that it is a clear case of public interest at large.