Independent departmental adjudication may proceed alongside criminal prosecution in foreign exchange matters despite statutory repeal

Departmental adjudication under the Foreign Exchange Regulation Act, 1973 was treated as distinct from criminal prosecution for the same transaction, so parallel proceedings could continue and the departmental matter did not have to await the criminal trial. The Court rejected the Article 20(2) double jeopardy and defence-prejudice objections because the adjudication was penal-administrative, not a substitute for prosecution. It also held that repeal of the Foreign Exchange Regulation Act by the Foreign Exchange Management Act, 1999 did not divest jurisdiction where section 49 of the repealing Act preserved proceedings and the notice was issued within the saved statutory period. The writ petition was dismissed.

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Issues: Whether departmental adjudication proceedings under the Foreign Exchange Regulation Act, 1973 could continue notwithstanding pendency of criminal prosecution for the same transaction, and whether the repeal of that Act by the Foreign Exchange Management Act, 1999 divested the authorities of jurisdiction to proceed.

Analysis: The challenge to simultaneous adjudication and prosecution was rejected. The adjudicatory process under sections 50 and 51 of the Foreign Exchange Regulation Act, 1973 was held to be distinct from criminal prosecution under section 56 of that Act, and not in substitution of it. The Court applied the principle that, in fiscal and economic offence matters, adjudication and prosecution serve different purposes and may proceed independently. The plea based on prejudice to the defence in the criminal case and the plea of double jeopardy under Article 20(2) of the Constitution of India were rejected because the departmental proceeding was only penal-administrative in nature and did not preclude criminal trial. The Court also held that the repeal of the Foreign Exchange Regulation Act, 1973 did not invalidate the impugned notice or proceedings, because section 49 of the Foreign Exchange Management Act, 1999 contained saving provisions and the notice had been issued within the statutory period preserved by that enactment.

Conclusion: The adjudication proceedings were held maintainable and were not required to be stayed pending the criminal trial; the jurisdictional challenge based on the Foreign Exchange Management Act, 1999 also failed.

Final Conclusion: The writ petition was rejected, and the departmental proceedings were permitted to continue.

Ratio Decidendi: In fiscal/economic offence matters, departmental adjudication and criminal prosecution are independent proceedings that may proceed simultaneously, and repeal of the parent statute does not abate preserved proceedings where the repealing statute contains an express saving provision.

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