Limitation and natural justice challenge to a FERA opportunity notice failed where proceedings began within the preserved period.

An opportunity notice issued under Section 61(2)(ii) of FERA was held not barred by limitation because the proceedings were initiated before the two-year period preserved by Section 49(3) of FEMA expired. The court also held that Section 51 of FERA requires only a reasonable opportunity, not a fixed reply period, and the appellant had in fact filed a reply within the time granted. As the notice was only an enquiry notice seeking proof of permission and did not finally determine liability, and there was prima facie material indicating contravention with no material showing permission for the transaction, the challenge to the notice failed and the writ appeal dismissal was sustained.

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Issues: Whether the opportunity notice issued under Section 61(2)(ii) of the Foreign Exchange Regulation Act, 1973 was barred by limitation under Section 49(3) of the Foreign Exchange Management Act, 1999 or vitiated for want of reasonable opportunity and denial of natural justice.

Analysis: The proceedings were initiated before the expiry of the two-year period preserved by Section 49(3) of FEMA, and therefore the notice was not time-barred. Section 51 of FERA requires only a reasonable opportunity and does not prescribe any fixed period for reply. The appellant in fact submitted a reply within the time granted. The notice under Section 61 was only an enquiry notice calling upon the appellant to show the requisite permission and did not finally determine liability. In the absence of any material showing permission for the transaction, and in view of the prima facie material indicating contravention, the challenge to the notice failed.

Conclusion: The opportunity notice was valid and the challenge based on limitation and denial of natural justice was rejected; the dismissal of the writ appeal was justified and is sustained.

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