FERA liability survives under FEMA saving clause, with conviction upheld but imprisonment replaced by fine.

Offences committed under the repealed Foreign Exchange Regulation Act, 1973 remained punishable because the acts and proceedings began before the Foreign Exchange Management Act, 1999, and the saving clauses in Section 49(3) and 49(4) preserved liability under FERA. The prosecution was therefore maintainable, and the conviction was upheld as free from legal infirmity. However, because Section 57 of FERA allowed imprisonment, fine, or both, and in view of the long lapse of time, the petitioner's age, and the case facts, the custodial sentence was set aside and replaced with a fine.

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Issues: Whether the conviction under Section 57 of the Foreign Exchange Regulation Act, 1973 deserved interference and whether the sentence should be altered to fine alone in view of the repeal of FERA and the saving provisions in FEMA, 1999.

Analysis: The contravention and adjudication arose from acts and proceedings initiated before the commencement of the Foreign Exchange Management Act, 1999. By virtue of Section 49(3) and Section 49(4) of FEMA, offences committed under the repealed FERA continued to be governed by FERA within the saving period, and the prosecution was therefore maintainable. The conviction recorded by the trial court and affirmed in revision was not shown to suffer from any legal infirmity warranting interference. At the same time, Section 57 of FERA permits punishment by imprisonment or fine or both. Considering the long lapse of time, the age of the petitioner, and the facts of the case, the sentence required reconsideration.

Conclusion: The conviction was upheld, but the substantive sentence of imprisonment was set aside and the punishment was modified to fine of Rs. 3,00,000/- payable within the time granted.

Final Conclusion: The revisional challenge failed on merits as to conviction, but the penal consequence was made less onerous by substituting a fine for imprisonment.

Ratio Decidendi: Offences under the repealed FERA remain punishable under FERA by force of the saving clause in FEMA, while Section 57 authorises the court to impose either imprisonment, fine, or both, permitting sentence modification on appropriate facts.

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