Writ jurisdiction under FEMA was confined by statutory remedies; omission of a provision did not erase liability for past conduct.

A writ challenge to FEMA show cause proceedings was held generally inappropriate where the statute provides adjudication before the authority, an appeal to the Appellate Tribunal, and a further appeal to the High Court; alleged bias and natural justice concerns were not established. Omission of Section 6(3) of FEMA by the Finance Act, 2015 did not invalidate notices for alleged past transactions, because omission was treated as not extinguishing liability for conduct when the provision was in force. The complaint and notice were also not quashed on delay, as the issue was fact-specific and should ordinarily be raised before the adjudicating authority first.

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Issues: (i) Whether the writ petitions were maintainable in view of the statutory appellate remedy under FEMA and the plea of violation of natural justice and bias; (ii) whether omission of Section 6(3) of FEMA by the Finance Act, 2015 rendered the show cause notice for past transactions without authority of law; (iii) whether the challenge to the complaint and show cause notice could succeed on the ground of unreasonable delay in initiating proceedings.

Issue (i): Whether the writ petitions were maintainable in view of the statutory appellate remedy under FEMA and the plea of violation of natural justice and bias.

Analysis: The statutory scheme provided for adjudication under Section 16 of FEMA, an appeal to the Appellate Tribunal under Section 19, and a further appeal to the High Court under Section 35. The existence of this layered appellate remedy weighed against immediate recourse to Article 226. The plea of bias was rejected because the counter affidavit relied on by the petitioners was not shown to be a counter filed by the adjudicating authority himself, and the material did not establish that the authority had pre-judged the matter. The recognised exceptions to the alternative remedy rule, including breach of natural justice and lack of jurisdiction, were held not to be made out.

Conclusion: The writ petitions were not maintainable on this ground, and the preliminary objection was accepted against the petitioners.

Issue (ii): Whether omission of Section 6(3) of FEMA by the Finance Act, 2015 rendered the show cause notice for past transactions without authority of law.

Analysis: The Court examined the distinction between repeal and omission in the light of the General Clauses Act and the decisions on the subject. It held that the later view treating omission as falling within repeal prevailed, especially after considering Section 6-A of the General Clauses Act, 1897. On that basis, omission of Section 6(3) of FEMA did not extinguish liability for acts alleged to have occurred when the provision was in force. The notice was therefore traceable to the then-existing legal framework and was not invalid merely because the provision had later been omitted.

Conclusion: The challenge based on omission of Section 6(3) of FEMA failed, and the notice was held to have legal sanctity.

Issue (iii): Whether the challenge to the complaint and show cause notice could succeed on the ground of unreasonable delay in initiating proceedings.

Analysis: Although no express limitation period was prescribed, the Court held that reasonableness of delay is fact-dependent and ordinarily can be urged before the adjudicating authority in the first instance. The authorities relied on by the petitioners were distinguished on facts. Since the petitioners had bypassed the statutory process and had not even submitted replies to the show cause notice, the Court declined to adjudicate the delay question in writ jurisdiction at this stage.

Conclusion: The plea of unreasonable delay was rejected at the threshold.

Final Conclusion: The Court declined to interfere at the show cause stage, upheld the statutory route of adjudication and appeal under FEMA, and left it open to the petitioners to submit their objections before the adjudicating authority within the time granted.

Ratio Decidendi: When a statute provides an effective adjudicatory and appellate framework, writ jurisdiction should ordinarily not be invoked against a show cause notice unless a clear case of lack of jurisdiction or violation of natural justice is established; and omission of a statutory provision does not necessarily defeat liability for past conduct when the legal consequences are saved by the General Clauses Act.

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