[2023] 12 S.C.R. 421 : 2023 INSC 845
FIRST GLOBAL STOCKBROKING PVT. LTD. & ORS.
v.
ANIL RISHIRAJ & ANR.
(Criminal Appeal No. 2151 of 2011)
SEPTEMBER 21, 2023
[ABHAY S. OKA* AND SANJAY KAROL, JJ.]
Issue for consideration: Whether the Enforcement Officer
appointed under FERA, 1973 continued to have the authority or
competence to file a complaint for the offences punishable under
FERA before the expiry of the sunset period provided in sub-section
(3) of s.49 of FEMA, 1999.
Foreign Exchange Management Act, 1999 – Foreign Exchange
Regulation Act, 1973 – On 11.02.2002, the first respondent,
who was an Enforcement Officer appointed under clause (e)
of s.3 of FERA, filed a complaint against the appellants for
various offences punishable under FERA and s.120-B of IPC
– Cognizance taken by the Magistrate – Same was upheld by
the High Court – Propriety:
Held: The Foreign Exchange Management Act, 1999 (FEMA) was
brought into force with effect from 01.06.2000 – By virtue of subsection (1) of s.49 of FEMA, the Foreign Exchange Regulation
Act,1973 (FERA) stood repealed – In the facts of the case, the
cognizance was taken by the Magistrate within the sunset period
of two years provided under sub-section (3) of s.49 of FEMA –
The complaint was filed by the first respondent, an Enforcement
Officer appointed under clause (e) of s.3 of FERA – The power
under sub-clause (b) of clause (ii) of sub-section (2) of s.61 was
exercised by the Central Government and all the Enforcement
Officers were authorised to file complaints regarding the offences
punishable u/ss. 56 and 57 of FERA – What is material here is
sub-section (4) of s.49 of FEMA, which provides that 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repealed Act shall continue to be governed by the provisions of the
repealed Act as if that Act had not been repealed – Sub-section
(3) of s.49 saves the prosecution for the offences punishable u/
ss. 56 and 57, which have been committed prior to the repeal of
FERA, provided the competent Court takes its cognizance within
* Author
422 [2023] 12 S.C.R.
SUPREME COURT REPORT: DIGITAL
two years from the date of coming into force of FEMA – In view
of sub-section (4) of s.49, for the purposes of the prosecution of
offences punishable u/ss. 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provisions of the repealed Act will continue to apply – However, the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 sub-section (3) of s.49 of FEMA
– That is how the complaint filed by the Enforcement Officer, duly
authorised under clause (ii) of sub-section (2) of s.61 of FEMA,
will continue to be valid, inasmuch as by virtue of the legal fiction
incorporated in sub-section (4) of s.49, the prosecution will continue
to be governed by the provisions of FERA as if the same had not
been repealed. [Paras 10 and 11]
M/s. P.V. Mohammad Barmay Sons v. Director of
Enforcement 1993 Supp (2) SCC 724:[1992] 3 SCR
960 – relied on.
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.2151
of 2011.
From the Judgment and Order dated 03.02.2010 of the High Court
of Judicature at Bombay in CRLA No.1982 of 2008.
Siddhartha Dave, Sr. Adv., Braj Kishore Mishra, Abhishek Yadav,
Prastut Dalvi, Ruchit Mohan, Advs. for the Appellants.
Ms. Aishwarya Bhati, A.S.G., Mukesh Kumar Maroria, Aman Sharma,
Ms. Chitragda Rastvara, Shashwat Anand, Jitendra Kumar Tripathi,
Shrirang B. Varma, Siddharth Dharmadhikari, Aaditya Aniruddha
Pande, Bharat Bagla, Sourav Singh, Aditya Krishna, Advs. for the
Respondents.
The Judgment of the Court was delivered by
ABHAY S. OKA, J.
FACTUAL ASPECTS
1. The Foreign Exchange Management Act, 1999 (for short, ‘FEMA’)
was brought into force with effect from 1st June 2000. By virtue
of sub-section (1) of Section 49 of FEMA, the Foreign Exchange
Regulation Act, 1973 (for short, ‘FERA’) stood repealed. On 11th
February 2002, the first respondent, who was an Enforcement Officer
appointed under clause (e) of Section 3 of FERA, filed a complaint in
the Court of the learned Chief Metropolitan Magistrate, Esplanade,
[2023] 12 S.C.R. 423
FIRST GLOBAL STOCKBROKING PVT. LTD. & ORS. v.
ANIL RISHIRAJ & ANR.
Mumbai, against the appellants for various offences punishable under
FERA and Section 120-B of the Indian Penal Code. Cognizance was
taken by the learned Additional Chief Metropolitan Magistrate, 3rd
Court, Esplanade, Mumbai, on the said complaint on 11th February
2002 by passing an order of issue of process.
2. The appellants made separate applications for discharge, but
the learned Additional Chief Metropolitan Magistrate rejected the
applications. A revision application preferred against the order of
rejection, was also dismissed. Being aggrieved by the said order,
an application under Section 482 of the Code of Criminal Procedure,
1973 (for short, ‘Cr.PC’) was filed by the appellants which has been
dismissed by the impugned judgment dated 3rd February 2010 by
the learned Single Judge of the High Court of Bombay.
SUBMISSIONS
3. Mr. Siddhartha Dave, the learned senior counsel appearing for the
appellants has taken us through the relevant provisions of the FERA
and the FEMA. As the High Court has not dealt with the merits of the
complaint, even the learned senior counsel has not made submissions
on the merits of the complaint. He submitted that under clause (ii)
of sub-section (2) of Section 61 of FERA, cognizance of the offence
punishable under Sections 56 and 57 could be taken by a Court
only on a complaint in writing made by an officer specified under
sub-clauses (a) to (c) of clause (ii) of sub-section (2) of Section 61
of FERA. He submitted that under sub-clause (b) of clause (ii) of
sub-section (2) of Section 61, only an officer authorised in writing on
this behalf by the Director of Enforcement or the Central Government
was empowered to file a complaint. The learned senior counsel
pointed out that Section 3 of FERA provided for the appointment of
different classes/categories of officers of Enforcement. He submitted
that the appointment of officers made under Section 3 of FERA has
not been saved by Section 49, which is a saving and repealing
provision under FEMA. He submitted that the first respondentEnforcement Officer was appointed under clause (e) of Section 3
of FERA and thus, with effect from 1st June 2000, the said officer is
not empowered to exercise powers of an Enforcement Officer under
FERA as the said powers have not been saved. The learned senior
counsel submitted that assuming that cognizance is taken within the
424 [2023] 12 S.C.R.
SUPREME COURT REPORT: DIGITAL
sunset period provided under sub-section (3) of Section 49 of FEMA,
in view of clause (ii) of sub-section (2) of Section 61 of FERA, only
an authorised officer could have filed the complaint and in the facts
of the case, the Enforcement Officer who may have been authorised
earlier, cannot perform duties of his office as from 1st June 2000, he
ceased to be an Enforcement Officer. He would, therefore, submit
that the Court was powerless to take cognizance of the complaint
which was filed by an officer who was not authorised.
4. Ms. Aishwarya Bhati, the learned Additional Solicitor General
appearing for the respondents, submitted that sub-section (4) of
Section 49 of FEMA is a complete answer to the submissions
made by the learned senior counsel appearing for the appellants.
She submitted that the Enforcement Officer appointed under FERA
continued to have the authority or competence to file a complaint for
the offences punishable under FERA before the expiry of the sunset
period provided in sub-section (3) of Section 49 of FEMA.
CONSIDERATION OF SUBMISSIONS
5. As can be seen from the statement of objects and reasons of
FEMA, the legislature noticed that after 1993, there were significant
developments, such as a substantial increase in foreign exchange
reserves of our country, growth in foreign trade, rationalisation of
tariffs, liberalisation of Indian investment abroad, increased access to
external commercial borrowings by Indian corporates and participation
of foreign investors in the stock market. Keeping in view the entirely
changed environment, by repealing FERA, FEMA was brought on
the Statute book with the objective of facilitating external trade and
payments and promoting the orderly development and maintenance
of the foreign exchange market in India. A perusal of the provisions
of FEMA shows that there is a difference between its scheme and
the scheme of FERA. There are elaborate provisions for penalty
under Chapter IV of FEMA, and the penal provision is confined to
sub-section (1C) of Section 13 of FEMA. Whereas Section 56 and
Section 57 of FERA were more stringent in the sense that they
covered a very large category of violations.
6. The procedure for taking cognisance of the offences punishable
under Sections 56 and 57 was provided in Section 61 of FERA.
Section 61 reads thus:
[2023] 12 S.C.R. 425
FIRST GLOBAL STOCKBROKING PVT. LTD. & ORS. v.
ANIL RISHIRAJ & ANR.
“61. Cognizance of offences.–
(1) Notwithstanding anything contained in section 29 of the Code
of Criminal Procedure, 1973 (2 of 1974), it shall be lawful for
any metropolitan magistrate and for any magistrate of the first
class to pass a sentence of imprisonment for a term exceeding
three years or of fine exceeding five thousand rupees on any
person convicted of an offence punishable under section 56.]
(2) No court shall take cognizance–
(i) of any offence punishable under sub-section (2) of section
44 or subsection (1) of section 58,-
(a) where the offence is alleged to have been committed
by an officer of Enforcement not lower in rank than
an Assistant Director of Enforcement, except with
the previous sanction of the Central Government;
(b) where the offence is alleged to have been committed
by an officer of Enforcement lower in rank than an
Assistant Director of Enforcement, except with the
previous sanction of the Director of Enforcement; or
(ii) of any offence punishable under section 56 or section
57, except upon complaint in writing made by-
(a) the Director of Enforcement; or
(b) any officer authorised in writing in this behalf
by the Director of Enforcement or the Central
Government; or
(c) any officer of the Reserve Bank authorised by
the Reserve Bank by a general or special order:
Provided that where any such offence is the contravention of any
of the provisions of this Act or of any rule, direction or order made
thereunder which prohibits the doing of an act without permission,
no such complaint shall be made unless the person accused of the
offence has been given an opportunity of showing that he had such
permission.”
(emphasis added)
426 [2023] 12 S.C.R.
SUPREME COURT REPORT: DIGITAL
7. A criminal Court was empowered to take cognisance of the offences
punishable under Sections 56 and 57 of FERA only on a complaint
in writing made by an officer of the categories covered by subclauses (a) to (c) of clause (ii) of sub-section (2) of Section 61. The
Enforcement Officers were appointed under clause (e) of Section
3 of FERA. By a notification dated 24th September 1993, issued
under sub-clause (b) of clause (ii) of sub-section (2) of Section 61 of
FERA, various officers, including all the enforcement officers, were
authorised to file a complaint in respect of the offences punishable
under Sections 56 and 57 of FERA.
8. Now, we turn to Section 49 of FEMA under the heading “Repeal and
Saving”. As noted earlier, sub-section (1) of Section 49 repealed
the provisions of FERA. Sub-sections (3) to (5) deal with ‘savings’,
which read thus:
“49. Repeal and saving.–
(1) .. .. .. .. .. .. .. .. .. .. .. .. ..
(2) .. .. .. .. .. .. .. .. .. .. .. .. ..
(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 license, 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;
[2023] 12 S.C.R. 427
FIRST GLOBAL STOCKBROKING PVT. LTD. & ORS. v.
ANIL RISHIRAJ & ANR.
(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 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 filled 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
with the said period.”
(emphasis added)
9. From the impugned judgment, it appears that the submissions were
made on behalf of the appellants that the word “and” in sub-section
(3) must be read as “or”, and therefore, there is a bar on taking
cognizance of the offence under FERA after the repeal of FERA. The
High Court has elaborately and eruditely dealt with this argument.
However, that need not detain us as the submissions made before this
Court proceed on the footing that there is a sunset period available
of two years as provided in sub-section (3) of Section 49 of FEMA
for filing complaints alleging the commission of offences punishable
under Sections 56 and 57 of FERA and for taking cognizance thereof.
10. In the facts of the case, the cognizance was taken by the learned
Magistrate within the sunset period of two years provided under
sub-section (3) of Section 49 of FEMA.
11. We have perused the complaint filed by the first respondent. The
complaint has been filed by the first respondent, who was, at the
relevant time, an Enforcement Officer appointed under clause (e) of
Section 3 of FERA. As noted earlier, the power under sub-clause
(b) of clause (ii) of sub-section (2) of Section 61 was exercised
by the Central Government and all the Enforcement Officers were
authorised to file complaints regarding the offences punishable under
Sections 56 and 57 of FERA. Thus, there is no difficulty in holding
that the first respondent–Enforcement Officer, was authorised to file
428 [2023] 12 S.C.R.
SUPREME COURT REPORT: DIGITAL
a complaint as provided in clause (ii) of sub-section (2) of Section 61
of FERA. What is material here is sub-section (4) of Section 49 of
FEMA, which provides that 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. Sub-section (3) of Section 49 saves the
prosecution for the offences punishable under Sections 56 and 57,
which have been committed prior to the repeal of FERA, provided the
competent Court takes its cognizance within two years from the date
of coming into force of FEMA. In view of sub-section (4) of Section
49, for the purposes of the 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 sub-section (3) of Section 49 of FEMA. That is how
the complaint filed by the Enforcement Officer, duly authorised under
clause (ii) of sub-section (2) of Section 61 of FEMA, will continue
to be valid, inasmuch as by virtue of the legal fiction incorporated
in sub-section (4) of Section 49, the prosecution will continue to be
governed by the provisions of FERA as if the same had not been
repealed. Therefore, during the sunset period, the authorisation of
the Enforcement Officers to file the complaints continues to be valid
for the limited purposes of sub-section (3) of Section 49 of FEMA.
12. If the arguments of the appellants are accepted, the officer nominated
under sub-clause (b) of clause (ii) of sub-section (2) of Section 61
of FERA will not be empowered to file complaints for the offences
punishable under FERA even within the sunset period of two years.
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 sub-clause (b) of clause (ii) of
sub-section (2) of Section 61 of FERA. Thus, no complaint can be
filed during the sunset period of two years provided in sub-section
(3) of Section 49 of FEMA. A Statute cannot be interpreted in such
a manner that any provision thereof is rendered otiose. Therefore,
we are unable to accept the submissions made by the learned senior
counsel appearing for the appellants. Any construction which will
defeat the plain intention of the legislature must be rejected. The
Court must adopt the interpretation which makes the provisions of
a Statute workable.
[2023] 12 S.C.R. 429
FIRST GLOBAL STOCKBROKING PVT. LTD. & ORS. v.
ANIL RISHIRAJ & ANR.
13. By FERA, the Foreign Exchange Regulation Act, 1947 (for short,
‘FERA, 1947’) was repealed. The repealing provision is provided
under sub-section (1) of Section 81 of FERA. This Court, in the case
of M/s. P.V. Mohammad Barmay Sons v. Director of Enforcement1
,
interpreted clause (a) of sub-section (2) of Section 81 of FERA.
Clause (a) of sub-section (2) of Section 81 of FERA reads thus:
“81.Repeal and saving–
(1) .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..
(2) 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, authorisation or
exemption granted or any document or instrument executed or
any direction given or any proceedings taken or any confiscation
adjudged or any penalty or fine imposed) 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) .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..;
(c) .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..;
(d) .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..:
(3) .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..”
The issue before this Court was about the power of the authorities
under FERA to investigate and enforce liability and penalty incurred
under FERA, 1947, after its repeal. In paragraphs 7 to 9 of the
aforesaid decision, this Court held thus:
“7. Shri Tulsi, the learned Additional Solicitor General placing reliance
on O. Abdul Aziz v. Addl. Director of Enforcement [AIR 1983 Mad
59:(1982) 2 MLJ 359] and A.K.L. Labbai Thambi Maraicar v. Govt.
of India, Enforcement Directorate [AIR 1983 Mad 102:(1982) 2 MLJ
59] contended that in view of Section 81(2) of the Act read with
Section 6 of the General Clauses Act, the power of the respondents
1 1993 Supp (2) SCC 724
430 [2023] 12 S.C.R.
SUPREME COURT REPORT: DIGITAL
to investigate and enforce the liability or penalty incurred under the
Repealed Act is saved, though the Act 7 of 1947 has been repealed
under sub-section (2) of Section 81 of the Act. The contention of
the respondent is that the Repealed Act, after the Act had come
into force in 1973, is a dead corpse and no life into it could be
blown with the aid of Section 81(2) of the Act or Section 6 of
the General Clauses Act. We find no force in the contention.
The effect of the repealed Act by operation of clause (e) of
Section 6 of the General Clauses Act read with sub-section (2)
of Section 81 is that, though the Act obliterates the operation of
Act 7 of 1947, despite its repeal, the penalty, liability, forfeiture
or prosecution for acts done while the repealed Act was in force
were kept alive, though no action thereunder was taken when
the Repealed Act was in force. The rights acquired or accrued
or the liabilities incurred or any penalty, forfeiture or punishment
incurred during its operation are kept alive. Investigations to be
made or any remedy which may have been available before the
repeal be enforced are also preserved. Such rights, liabilities,
penalty, forfeiture or punishment, due to repeal “shall not
lapse”. The saving clause, thus, aimed to preserve the legal
effect and consequences of things done though those effects
and consequences projected to post-repeal period. The things
done adumbrated in Section 81(2) or Section 6 of the General
Clauses Act or penalty or punishment incurred would envisage
that the things already done or liabilities, penalty punishment
or forfeiture incurred, though happened before the Act came
into force, Section 81(2) of the Act empowers to effectuate the
liabilities, penalties, etc. as if they have been in existence and
amenable to be pursued under the Act or under the Repealed
Act by operation of Section 6 of General Clauses Act. What is
unaffected by the repeal of the Act 7 of 1947 is a right accrued, etc.
There is a distinction between a legal proceeding for enforcing a
right acquired or accrued or liability, penalty, forfeiture, punishment
incurred and the legal proceedings for acquisition of a right, the
former is saved whereas the latter is not. In spite of repeal the right
to investigation or to take legal proceedings remain unaffected
and preserved as if the old Act continues to be operative.
What remains to be done, after the Act came into force, is the
quantification, if necessary, after due investigation and legal
proceedings and if proved to impose the penalty, forfeiture or
[2023] 12 S.C.R. 431
FIRST GLOBAL STOCKBROKING PVT. LTD. & ORS. v.
ANIL RISHIRAJ & ANR.
punishment. The Court takes cognizance of the offence and not
the offender or the acts done. What the Court is to enquire into
is whether the Act is incompatible with the repealed Act and
whether it manifested any contrary intentions to the Repealed
Act. Unless a different intention has been manifested in the
Act, the Repealed Act would continue to be operative. Even in a
case of bare repeal accompanied by a fresh legislation on the same
subject, the provisions of the new Act will have to be looked into to
find where and how far the new Act envisages a contrary intention
affecting the operation of Section 6 of the General Clauses Act.
Unless such contrary intention is manifested, liabilities, penalties,
forfeiture or punishment under the Repealed Act will continue to
exist and remain in force by operation of Section 6 of the General
Clauses Act.
8. We have already seen that the Act did not evince any contrary
intention. It merely reiterated the earlier law operating in the field.
Therefore, clause (d) of Section 6 of the General Clauses Act
gets attracted to the acts done or the penalties of forfeiture
or punishment for any offence which had already been
committed before the repeal of the enactment, though no
criminal proceedings have been actually initiated under repealed
enactment before its repeal.
9. In Tiwari Kanhaiyalal v. CIT [(1975) 4 SCC 101 : 1975 SCC
(Tax) 214:1975 SCC (Cri) 312] where prosecution was laid after
the repeal of the Income Tax Act, 1922, the contention raised was
that saving clauses in Section 297 of 1961 Income Tax Act did not
save the punishment incurred under the Repealed Act, therefore,
recourse to Section 6 of General Clauses Act cannot be had, was
negatived by this Court and it held that the repeal had not affected
the liability incurred under Section 52 of the Income Tax Act, 1922
and it continued even after its repeal. The same view was reiterated
in CIT v. M/s Shah Sadiq & Sons [(1987) 3 SCC 516, 524:1987
SCC (Tax) 270]. Accordingly, we hold that despite repeal of Act 7
of 1947 by operation of Section 6 of the General Clauses Act read
with Section 81(2), the penalty incurred by the appellant continued to
subsist and the respondents are entitled to institute the proceedings,
conduct investigation or enquiry and impose such penalty.”
(emphasis added)
432 [2023] 12 S.C.R.
SUPREME COURT REPORT: DIGITAL
14. Hence, the view taken by us in earlier paragraphs is fortified by the
above decision.
15. The appeal fails, and the same is, accordingly, dismissed. As the
complaint remained stayed from 7th January 2011, we direct the
Trial Court to give necessary out-of-turn priority to the disposal of
the complaint bearing CC.No.14/CW/2002, which is the subject
matter of this appeal.
Headnotes prepared by: Ankit Gyan Result of the case : Appeal dismissed.
