Retrospective authority under repealed foreign exchange law rejected where special empowerment under the old statute was absent.

An officer appointed as an Adjudicating Authority under FEMA could not issue show cause notices for contraventions under the repealed FERA because FERA required special empowerment by the Central Government under its own scheme. The Bombay High Court held that an appointment under FEMA did not retrospectively confer authority under FERA, and the saving provisions in FEMA section 49, read with the General Clauses Act, preserved valid past and pending actions but did not create fresh post-repeal power to adjudicate under the repealed Act. The notices and consequential orders were therefore quashed, with refund directed of amounts recovered, if applicable.

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Issues: (i) Whether an officer appointed as an Adjudicating Authority under the Foreign Exchange Management Act, 1999 could validly issue show cause notices for contraventions under the repealed Foreign Exchange Regulation Act, 1973. (ii) Whether the saving and repeal provisions in section 49 of the Foreign Exchange Management Act, 1999 permitted a post-repeal or deemed empowerment to adjudicate contraventions under the repealed Foreign Exchange Regulation Act, 1973.

Issue (i): Whether an officer appointed as an Adjudicating Authority under the Foreign Exchange Management Act, 1999 could validly issue show cause notices for contraventions under the repealed Foreign Exchange Regulation Act, 1973.

Analysis: Section 50 of the Foreign Exchange Regulation Act, 1973 required adjudication by the Director of Enforcement or another officer of Enforcement not below the rank of Assistant Director of Enforcement who was specially empowered by order of the Central Government. The notices were issued after repeal of FERA by an officer appointed under FEMA, not by an officer specially empowered under FERA. The Court held that appointment under FEMA did not, by itself, confer authority to exercise powers under the repealed Act, and a deemed empowerment could not replace the specific statutory requirement of special empowerment under FERA.

Conclusion: The issue was answered against the respondents and in favour of the petitioners. The officer had no authority to issue the show cause notices under FERA.

Issue (ii): Whether the saving and repeal provisions in section 49 of the Foreign Exchange Management Act, 1999 permitted a post-repeal or deemed empowerment to adjudicate contraventions under the repealed Foreign Exchange Regulation Act, 1973.

Analysis: The Court construed section 49(3), 49(4), 49(5)(a) and 49(6) of FEMA together with section 6 of the General Clauses Act, 1897. It held that the sunset clause allowed an already validly empowered adjudicating officer to take notice of contraventions under FERA within two years of commencement of FEMA, but did not authorise the Government to create a fresh appointment under the repealed Act after repeal. The deeming and saving provisions preserved valid past actions and pending proceedings, but did not extend to conferring retrospective authority on an officer appointed only under FEMA.

Conclusion: The issue was answered against the respondents and in favour of the petitioners. The saving provisions did not validate the impugned notices or the consequential order.

Final Conclusion: The petitions succeeded, the impugned show cause notices and consequential orders were quashed, and the amounts recovered pursuant to them were directed to be refunded with interest, if applicable.

Ratio Decidendi: A person can take notice of contraventions under the repealed FERA within the section 49(3) period only if he was validly and specifically empowered under FERA itself; an appointment under FEMA cannot be retrospectively treated as authority under the repealed Act unless the statute expressly so provides.

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