Section 37-A FEMA seizure orders upheld as specific provisions override general appellate powers during pending adjudication

The Appellate Tribunal under SAFEMA dismissed an appeal challenging seizure orders under Section 37-A of FEMA. The Tribunal held that specific provisions prevail over general provisions, and Section 37-A(4) being specific would override general appellate powers. Regarding retrospective application, the Tribunal found Section 37-A actually enlarged parties' rights by providing adjudication procedures before confiscation, unlike the previous more draconian system of direct confiscation. Since adjudication proceedings under Section 37-A(4) were pending and seizure must continue until disposal, the Tribunal found no legal grounds to interfere. Appellants retained liberty to appeal the final adjudication order under Section 19 of FEMA.

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Issues Involved:
1. Validity of the seizure order under Section 37-A of FEMA.
2. Retrospective application of Section 37-A.
3. Mutual exclusivity of Sections 37 and 37-A of FEMA.
4. Competent Authority's power and the scope of adjudication under Section 37-A.

Issue-wise Detailed Analysis:

1. Validity of the Seizure Order under Section 37-A of FEMA:
The appellant argued that the seizure order dated 15.12.2017 is fallacious as it relies on investigations, which Section 37-A does not authorize. They contended that Section 37-A (1) should only involve "information," "reason to believe," "suspicion of the authorized officer," and "recording reasons in writing for the seizure." The respondent countered that Sections 37 and 37-A are part of the same chapter and are not mutually exclusive. The Competent Authority's order is based on valid reasons recorded in writing, as required under Section 37-A (1).

2. Retrospective Application of Section 37-A:
The appellant argued that Section 37-A, introduced in 2015, cannot have retrospective effect on actions taken between 2007-2009. They cited the Supreme Court's principle that a law should not apply retrospectively unless explicitly stated. The respondent referred to the Supreme Court's judgment in Gokak Patel Volkart Limited vs. Dundayya Gurushiddaiah Hiremath, arguing that the nature of the offense under Section 4 is continuous and ongoing, thus justifying the application of Section 37-A.

3. Mutual Exclusivity of Sections 37 and 37-A of FEMA:
The appellant claimed that Sections 37 and 37-A are mutually exclusive, with Section 37 dealing with investigation powers and Section 37-A not providing such powers. The respondent argued that both sections are part of Chapter VI of FEMA and should be read harmoniously. Section 37-A does not exclude the application of Section 37.

4. Competent Authority's Power and the Scope of Adjudication under Section 37-A:
The appellant contended that the Competent Authority's order dated 25.05.2018 exceeded its powers by relying on investigations, which Section 37-A does not permit. They argued that the seizure order should be quashed, and the seizure vacated. The respondent maintained that the Competent Authority acted within its powers, as the seizure order was based on valid reasons recorded in writing. The adjudication proceedings under Section 37-A (4) are yet to be finalized, and the seizure should continue until then.

Judgment:
The Tribunal dismissed the appeal, stating that the Competent Authority's order confirming the seizure attains finality only when the adjudicating authority disposes of the adjudication proceedings. The Tribunal emphasized that the seizure order is valid until the adjudication proceedings are completed. The Tribunal also noted that the retrospective application of Section 37-A is justified as it provides additional rights and channels for parties to agitate their case, thus not impairing any existing rights. The appellant's plea to set aside the seizure was rejected, and they were advised to file an appeal under Section 19 of FEMA if aggrieved by the final adjudication order.

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