Enforcement Officer Competent To File Complaint Under Repealed Provisions Of FERA During Sunset Period Of 2 Years After Enforcement Of FEMA: Supreme Court

The Supreme Court has ruled that the Enforcement Officer appointed and authorised under the repealed provisions of the Foreign Exchange Regulation Act, 1973 (FERA), will continue to have the authority and competence to file a complaint for the offences punishable under the Act before the expiry of the sunset period of 2 years provided under Section 49(3) of the Foreign Exchange Management Act, 1999 (FEMA).

The bench of Justices Abhay S. Oka and Sanjay Karol was hearing an appeal against the order of the Bombay High Court, where the appellants’ application under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) for quashing of the criminal complaint filed against them under Sections 56 and 57 of FERA, was dismissed by the High Court.

The bench observed that keeping in view the changed economic environment, the more stringent provisions of FEMA were enacted by repealing FERA. However, a sunset provision of 2 years is provided under Section 49 (3) of FEMA, for filing complaints alleging the commission of offences punishable under FERA and for taking cognizance of these offences, provided the offences were committed prior to the repeal of the Act.

The court noted that Section 49 (3) of FEMA saves the prosecution for the offences punishable under Sections 56 and 57 of FERA, committed prior to the repeal of the Act, provided the competent Court takes its cognizance within 2 years from the date of coming into force of FEMA. Further, as per Section 49 (4) of FEMA, all offences committed under the repealed Act shall continue to be governed by the provisions of the repealed Act as if that Act had not been repealed. However, Section 49(4) is made subject to the provisions of Section 49 (3) of FEMA.

The court thus concluded that in view of Section 49 (4) of FEMA, for the purposes of prosecution of offences punishable under Sections 56 and 57 of FERA, by a legal fiction, the provisions of the repealed Act will continue to apply. However, the same will continue to apply only for the purposes of prosecution of the offences which are saved by Section 49(3) of FEMA. Accordingly, the complaint filed within the sunset period of two years by the Enforcement Officer, who is duly authorised to file the complaint under Section 61 (2)(ii) (b) of FERA, will continue to be valid, the court said.

“Therefore, during the sunset period, the authorisation of the Enforcement Officers to file the complaints continues to be valid for the limited purposes of sub­section (3) of Section 49 of FEMA,” the court held.

Dismissing the plea of the accused that the officer nominated under FERA will not be empowered to file complaints for the offences punishable under the repealed Act even within the sunset period of two years, the bench remarked:

“Such interpretation will prevent the Court from taking cognizance after the repeal of FERA on a complaint filed after the repeal of FERA by an officer authorised under sub­clause (b) of clause (ii) of subsection (2) of Section 61 of FERA. Thus, no complaint can be filed during the sunset period of two years provided in subsection (3) of Section 49 of FEMA. A Statute cannot be interpreted in such a manner that any provision thereof is rendered otiose.”

The court added that any construction which will defeat the plain intention of the legislature must be rejected and the court must adopt the interpretation which makes the provisions of a Statute workable.

Facts of the case:

FEMA was brought into force with effect from 1st June 2000, and by virtue of Section 49(1) of FEMA, FERA was repealed. On 11th February 2002, the Enforcement Officer appointed under FERA, filed a complaint in the Court of the Chief Metropolitan Magistrate against the appellants for various offences punishable under FERA and Section 120-B of the Indian Penal Code. The court took cognizance of the complaint and passed an order of issue of process.

The applications filed for discharge of the accused-appellants, were rejected by the lower court. The revision application against the order of rejection, was also dismissed. Against this, the application filed under Section 482 of CrPC was also dismissed by the High Court.

In the appeal filed before the Supreme Court, the appellant argued that the Enforcement Officer, who may have been authorised under FERA before the repeal of the Act, was not authorised to file the complaint as from 1st June 2000, he ceased to be an Enforcement Officer under the Act. Thus, it claimed that the Court should not have taken cognizance of the complaint which was filed by an officer who was not authorised.

Supreme Court’s Analysis:

The court observed that the cognizance was taken by the Magistrate within the sunset period of two years provided under Section 49 (3) of FEMA. Further, the complaint had been filed by the officer, who was, at the relevant time, an Enforcement Officer appointed under Section 3 (e) of FERA. Thus, the court said, the Enforcement Officer was authorised to file a complaint before the Magistrate for taking cognizance of offences punishable under Sections 56 and 57 of FERA, as provided in Section 61 (2)(ii) (b).

The court said the complaint filed by the Enforcement Officer- duly authorised under Section 61 (2)(ii) (b) of FERA- during the sunset period, will continue to be valid, as by virtue of the legal fiction incorporated in Section 49 (4) of FEMA, the prosecution will continue to be governed by the provisions of FERA as if the same had not been repealed. Thus, during the sunset period, the authorisation of the Enforcement Officer to file the complaint will continue to be valid for the purpose of prosecution of the offences under the repealed act.

Accordingly, the court dismissed the appeal.

“The appeal fails, and the same is, accordingly, dismissed. As the complaint remained stayed from 7^th January 2011, we direct the Trial Court to give necessary out-of­turn priority to the disposal of the complaint bearing CC.No.14/CW/2002, which is the subject matter of this appeal.”

Case Title: First Global Stockbroking Pvt. Ltd. & Ors. vs Anil Rishiraj & Anr.

Citation : 2023 LiveLaw (SC) 820

Counsel for the Appellant: Mr. Braj Kishore Mishra, AOR Mr. Abhishek Yadav, Adv. Mr. Ruchit Mohan, Adv.

Counsel for the Respondent: Mr. Aman Sharma,Adv. Mr. Jitendra Kumar Tripathi,Adv. Mr. Shashwat Anand,Adv. Mr. Rustam Singh Chauhan,Adv. Ms. Chitrangda Rastravara,Adv. Mr. Mukesh Kumar Maroria, AOR Mr. Shrirang B. Varma, Adv. Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya Aniruddha Pande, AOR Mr. Bharat Bagla, Adv. Mr. Sourav Singh, Adv. Mr. Aditya Krishna, Adv.

Foreign Exchange Regulation Act, 1973 (FERA): Sections 56, 57, 61; Foreign Exchange Management Act, 1999 (FEMA): Sections 49 (1), (3), (4)-

The Supreme Court has ruled that the Enforcement Officer appointed and authorised under the repealed provisions of the Foreign Exchange Regulation Act, 1973 (FERA), will continue to have the authority and competence to file a complaint for the offences punishable under the Act before the expiry of the sunset period of 2 years provided under Section 49(3) of the Foreign Exchange Management Act, 1999 (FEMA).

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