Time spent in bona fide litigation can be excluded in appeals under Foreign Exchange Management Act.

The court held that Section 14 of the Limitation Act, 1963 applies to appeals under Section 35 of the Foreign Exchange Management Act, 1999 (FEMA), allowing for the exclusion of time spent in bona fide litigation in courts without jurisdiction. The appeal, filed within the maximum period of 120 days, including the excluded time, was deemed admissible after the court condoned the delay of sixty days as permitted under Section 35 of FEMA.

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Issues Involved:
1. Applicability of Section 14 of the Limitation Act, 1963 to an appeal filed under Section 35 of the Foreign Exchange Management Act, 1999 (FEMA).
2. Exclusion of time spent in bona fide litigation in a court without jurisdiction while computing the period of limitation.

Issue-wise Detailed Analysis:

1. Applicability of Section 14 of the Limitation Act, 1963:

The primary issue before the court was whether an appellant filing an appeal under Section 35 of FEMA can seek exclusion of time under Section 14 of the Limitation Act, 1963. Section 35 of FEMA stipulates that an appeal must be filed within sixty days from the date of communication of the decision or order of the Appellate Tribunal, with a proviso allowing the High Court to condone a delay of up to an additional sixty days if sufficient cause is shown.

The court noted that Section 29(2) of the Limitation Act prescribes that the provisions of Sections 4 to 24 of the Limitation Act apply to special or local laws unless expressly excluded. Section 14 of the Limitation Act deals with the exclusion of time spent in bona fide litigation in a court without jurisdiction. The court emphasized that Section 14 does not extend the period of limitation but excludes certain periods while computing the limitation period.

The court found no express exclusion of Section 14 in FEMA. Therefore, it concluded that Section 14 of the Limitation Act applies to appeals under Section 35 of FEMA, allowing the exclusion of time spent in bona fide litigation in a court without jurisdiction.

2. Exclusion of Time Spent in Bona Fide Litigation:

The court referred to the Supreme Court's judgment in Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department, which held that Section 14 of the Limitation Act applies to proceedings under the Arbitration and Conciliation Act, 1996, and that the time spent in bona fide litigation in a court without jurisdiction should be excluded.

The court also cited the Supreme Court's recent judgment in Coal India Ltd. v. Ujjal Transport Agency, which reiterated that Section 14 of the Limitation Act applies when an application for setting aside an award under Section 34 of the Arbitration and Conciliation Act, 1996, is filed.

Applying these principles, the court held that Section 14 of the Limitation Act applies to appeals under Section 35 of FEMA. The court noted that the appellant had bona fide pursued his case under Article 226 of the Constitution before the Delhi High Court and then in appeal before the Supreme Court. The period spent in these proceedings should be excluded while computing the limitation period for filing the appeal under Section 35 of FEMA.

Conclusion:

The court concluded that the appeal was filed within the maximum period of 120 days, considering the exclusion of time spent in bona fide litigation in courts without jurisdiction. The court condoned the delay of sixty days within the meaning of the proviso to Section 35 of FEMA and directed that the appeal be placed on the board for admission.

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