FEMA adjudication proceedings can be transferred between authorities after jurisdiction enhancement without invalidating process

The Madras HC upheld the transfer of FEMA adjudication proceedings from Special Director to Additional Director following enhancement of pecuniary jurisdiction. The court rejected appellants' contention that the authority issuing the show cause notice must complete the entire proceedings, holding that "Adjudicating Authority" under FEMA Rules 2000 is not persona designata but refers to whoever holds the position per current notification. The saving clause in superseding notifications only protects acts done before supersession, not ongoing proceedings. The Additional Director, being the current Adjudicating Authority under the 2018 notification, was empowered to continue the adjudication despite the original notice being issued by the Special Director.

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Issues Involved:
1. Competence of Adjudicating Authority to continue proceedings.
2. Retrospective effect of notification revising pecuniary jurisdiction.
3. Interpretation of the term "Adjudicating Authority."

Summary:

Issue 1: Competence of Adjudicating Authority to continue proceedings:
The appellants contended that the show cause notice issued by the Special Director, Directorate of Enforcement, made him "the Adjudicating Authority," and only he could conduct the adjudication. They argued that the proceedings should not be transferred to the Additional Director. The court, however, held that the Adjudicating Authority is not a "persona designata" but an officer designated by pecuniary jurisdiction. The successor in office can continue the proceedings from where they were left by the predecessor. Thus, the Additional Director, empowered by the notification dated 27.9.2018, is competent to conduct the adjudication.

Issue 2: Retrospective effect of notification revising pecuniary jurisdiction:
The appellants argued that the notification dated 27.9.2018, which revised the pecuniary jurisdiction, should not have retrospective effect. They pointed out that the show cause notice was issued before the notification, and the savings clause in the notification should protect their case from being transferred. The court rejected this argument, stating that the phrase "except as respects things done or omitted to be done before such supersession..." means that actions taken before the notification are saved, but further proceedings must be conducted by the Adjudicating Authority as per the new notification.

Issue 3: Interpretation of the term "Adjudicating Authority":
The appellants emphasized the use of the word "the" in "the Adjudicating Authority" to argue that it specifies a particular person, i.e., the one who issued the show cause notice. The court referred to the Apex Court's interpretation in Canon India Private Limited v. Commissioner of Customs, which clarified that "the" indicates specificity but does not necessarily mean the same officer must continue the proceedings. The court concluded that the Adjudicating Authority referred to in Rule 4 of the Rules of 2000 is not limited to a specific individual but includes any officer designated by the Central Government with the appropriate pecuniary jurisdiction.

Conclusion:
The court affirmed the decision of the learned Single Judge, dismissing the writ petitions and holding that the Additional Director is competent to continue the adjudication proceedings. The writ appeals were dismissed, and there was no order as to costs.

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