Limitation and culpable mental state under FERA: appeal treated as timely, but no legal issue arose on factual knowledge.

Limitation under section 54 of the Foreign Exchange Regulation Act ran from communication of the Appellate Board's order, and an appeal filed after the nominal due date was treated as in time because the High Court was closed during the intervening period. On the merits, the dispute over contraventions under sections 9(1)(a) and 9(1)(d) turned on whether the respondent had knowledge or reason to believe that the seller was resident outside India. Section 59 was read as requiring proof of the relevant culpable mental state, but the evidence did not establish that element. The factual finding in the respondent's favour was upheld and no substantial question of law arose.

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Issues: (i) Whether the appeal before the High Court was barred by limitation under section 54 of the Foreign Exchange Regulation Act, 1973. (ii) Whether any substantial question of law arose from the Appellate Board's finding that the respondent had no knowledge or reason to believe that the seller was resident outside India, so as to sustain contraventions under sections 9(1)(a) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973 in light of section 59 of the Act.

Issue (i): Whether the appeal before the High Court was barred by limitation under section 54 of the Foreign Exchange Regulation Act, 1973.

Analysis: The period of sixty days under the proviso to section 54 runs from communication of the Appellate Board's order. On the facts found, the order was communicated in time to make the appeal due on or before 11 November 1985, and the filing on 14 November 1985 occurred when the High Court was closed for the intervening period. The appeal was therefore treated as filed within time.

Conclusion: The objection on limitation failed.

Issue (ii): Whether any substantial question of law arose from the Appellate Board's finding that the respondent had no knowledge or reason to believe that the seller was resident outside India, so as to sustain contraventions under sections 9(1)(a) and 9(1)(d) of the Foreign Exchange Regulation Act, 1973 in light of section 59 of the Act.

Analysis: The Court treated the dispute as one turning on appraisal of evidence and concurrent but divergent factual findings. It held that the central question was whether the respondent had actual knowledge or the requisite culpable mental state at the time of payment. Section 59 was understood to extend culpable mental state to intention, motive, knowledge of fact, and belief or reason to believe, but the evidence did not establish such mental element beyond the standard required. The Court accepted the Appellate Board's view that the respondent's explanation was credible and that the surrounding circumstances did not show knowledge of the seller's non-resident status.

Conclusion: No substantial question of law arose, and the factual finding in favour of the respondent was upheld.

Final Conclusion: The appeal was not maintainable on the facts and law as presented, and the penalty order could not be revived; the respondent succeeded.

Ratio Decidendi: In an appeal confined by section 54 of the Foreign Exchange Regulation Act, 1973, where the determinative issue is whether the appellant had the requisite knowledge or reason to believe a fact, the matter remains one of fact unless a substantial question of law arises; culpable mental state must be established on the evidence, and absence of such proof defeats the alleged contravention.

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