FIRST GLOBAL STOCKBROKING PVT. LTD. vs. ANIL RISHIRAJ

2023INSC845 Reportable IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION  CRIMINAL APPEAL NO. 2151 OF 2011 First Global Stockbroking  Pvt. Ltd. & Ors.                 … Appellants versus Anil Rishiraj & Anr.             … Respondents J U D G M E N T ABHAY S. OKA, J. FACTUAL ASPECTS The Foreign Exchange Management Act, 1999 (for short, 1. st ‘FEMA’) was brought into force with effect from 1  June 2000. By virtue of sub­section (1) of Section 49 of FEMA, the Foreign Exchange   Regulation   Act,   1973   (for   short,   ‘FERA’)   stood th repealed.  On 11  February 2002, the first respondent, who was   an   Enforcement   Officer   appointed   under   clause   (e)   of Section   3   of   FERA,   filed   a   complaint   in   the   Court   of   the learned Chief Metropolitan Magistrate, Esplanade, Mumbai, against the appellants for various offences punishable under Signature Not Verified FERA   and   Section   120­B   of   the   Indian   Penal   Code. Digitally signed by Anita Malhotra Date: 2023.09.21 16:57:34 IST Reason: Cognizance   was   taken   by   the   learned   Additional   Chief Criminal Appeal No.2151 of 2011 Page 1 of 17 rd Metropolitan Magistrate, 3   Court, Esplanade, Mumbai, on th the said complaint on 11  February 2002 by passing an order of issue of process.   2. The   appellants   made   separate   applications   for discharge,   but   the   learned   Additional   Chief   Metropolitan Magistrate rejected the applications.   A revision application preferred against the order of rejection, was also dismissed. Being   aggrieved   by   the   said   order,   an   application   under Section   482   of   the   Code   of   Criminal   Procedure,   1973   (for short, ‘Cr.PC’) was filed by the appellants which has been rd dismissed   by   the   impugned   judgment   dated   3   February 2010   by   the   learned   Single   Judge   of   the   High   Court   of Bombay. SUBMISSIONS 3. Mr.   Siddhartha   Dave,   the   learned   senior   counsel appearing   for   the   appellants   has   taken   us   through   the relevant provisions of the FERA and the FEMA.  As the High Court has not dealt with the merits of the complaint, even the learned   senior   counsel   has   not   made   submissions   on   the merits of the complaint.  He submitted that under clause (ii) of sub­section (2) of Section 61 of FERA, cognizance of the offence punishable under Sections 56 and 57 could be taken by a Court only on a complaint in writing made by an officer specified under sub­clauses (a) to (c) of clause (ii) of sub­ section (2) of Section 61 of FERA.  He submitted that under sub­clause (b) of clause (ii) of sub­section (2) of Section 61, Criminal Appeal No.2151 of 2011 Page 2 of 17 only an officer authorised in writing on this behalf by the Director   of   Enforcement   or   the   Central   Government   was empowered to file a complaint.   The learned senior counsel pointed   out   that   Section   3   of   FERA   provided   for   the appointment   of   different   classes/categories   of   officers   of Enforcement.  He submitted that the appointment of officers made under Section 3 of FERA has not been saved by Section 49, which is a saving and repealing provision under FEMA. He submitted that the first respondent­Enforcement Officer was appointed under clause (e) of Section 3 of FERA and st thus, with effect from 1   June 2000, the said officer is not empowered   to   exercise   powers   of   an   Enforcement   Officer under FERA as the said powers have not been saved.   The learned   senior   counsel   submitted   that   assuming   that cognizance is taken within the sunset period provided under sub­section (3) of Section 49 of FEMA, in view of clause (ii) of sub­section (2) of Section 61 of FERA, only an authorised officer could have filed the complaint and in the facts of the case, the Enforcement Officer who may have been authorised st earlier, cannot perform duties of his office as from 1   June 2000, he ceased to be an Enforcement Officer.   He would, therefore,   submit   that   the   Court   was   powerless   to   take cognizance of the complaint which was filed by an officer who was not authorised. Ms. Aishwarya Bhati,  the  learned Additional  Solicitor 4. General appearing for the respondents, submitted that sub­ section (4) of Section 49 of FEMA is a complete answer to the Criminal Appeal No.2151 of 2011 Page 3 of 17 submissions made by the learned senior counsel appearing for   the   appellants.     She   submitted   that   the   Enforcement Officer appointed under FERA continued to have the authority or competence to file a complaint for the offences punishable under FERA before the expiry of the sunset period provided in sub­section (3) of Section 49 of FEMA. CONSIDERATION OF SUBMISSIONS 5. As   can   be   seen   from   the   statement   of   objects   and reasons   of   FEMA,   the   legislature   noticed   that   after   1993, there were significant developments, such as a substantial increase in foreign exchange reserves of our country, growth in   foreign   trade,   rationalisation   of   tariffs,   liberalisation   of Indian   investment   abroad,   increased   access   to   external commercial borrowings by Indian corporates and participation of foreign investors in the stock market.  Keeping in view the entirely changed environment, by repealing FERA, FEMA was brought on the Statute book with the objective of facilitating external   trade   and   payments   and   promoting   the   orderly development and maintenance of the foreign exchange market in India.   A perusal of the provisions of FEMA shows that there is a difference between its scheme and the scheme of FERA.     There   are   elaborate   provisions   for   penalty   under Chapter IV of FEMA, and the penal provision is confined to sub­section (1C) of Section 13 of FEMA.  Whereas Section 56 Criminal Appeal No.2151 of 2011 Page 4 of 17 and Section 57 of FERA were more stringent in the sense that they covered a very large category of violations. The   procedure   for   taking   cognisance   of   the   offences 6. punishable under Sections 56 and 57 was provided in Section 61 of FERA.  Section 61 reads thus: “ 61. Cognizance of offences.–  (1) Notwithstanding anything contained in section   29   of   the   Code   of   Criminal Procedure, 1973 (2 of 1974), it shall be lawful   for   any   metropolitan   magistrate and for any magistrate of the first class to pass   a   sentence   of   imprisonment   for   a term   exceeding   three   years   or   of   fine exceeding   five   thousand   rupees   on   any person convicted of an offence punishable under section 56.]  (2) No court shall take cognizance–  (i)   of   any   offence   punishable   under sub­section   (2)   of   section   44   or subsection (1) of section 58,­  (a)   where   the   offence   is   alleged   to have been committed by an officer of Enforcement not lower in rank than an Assistant Director of Enforcement, except with the previous sanction of the Central Government;  (b)   where   the   offence   is   alleged   to have been committed by an officer of Enforcement  lower  in  rank than an Assistant   Director   of   Enforcement, except with the previous sanction of the Director of Enforcement; or  Criminal Appeal No.2151 of 2011 Page 5 of 17 (ii) of any offence punishable under section 56 or section 57, except upon complaint in writing made by­  (a) the Director of Enforcement; or  (b) any officer authorised in writing in   this   behalf   by   the   Director   of Enforcement   or   the   Central Government; or  (c) any officer of the Reserve Bank authorised by the Reserve Bank by a general or special order:  Provided that where any such offence is   the   contravention   of   any   of   the provisions   of   this   Act   or   of   any   rule, direction or order made thereunder which prohibits   the   doing   of   an   act   without permission,  no   such   complaint   shall  be made unless the person accused of the offence has been given an opportunity of showing that he had such permission.”              (emphasis added) 7. A criminal Court was empowered to take cognisance of the offences punishable under Sections 56 and 57 of FERA only   on   a   complaint   in   writing   made   by   an   officer   of   the categories covered by sub­clauses (a) to (c) of clause (ii) of sub­section (2) of Section 61.  The Enforcement Officers were appointed   under   clause   (e)   of   Section   3   of   FERA.     By   a th notification dated 24   September 1993, issued under sub­ clause (b) of clause (ii) of sub­section (2) of Section 61 of FERA, various officers, including all the enforcement officers, Criminal Appeal No.2151 of 2011 Page 6 of 17 were authorised to file a complaint in respect of the offences punishable under Sections 56 and 57 of FERA. Now, we turn to Section 49 of FEMA under the heading 8. “Repeal   and   Saving”.     As   noted   earlier,   sub­section   (1)   of Section 49 repealed the provisions of FERA.  Sub­sections (3) to (5) deal with ‘savings’, which read thus: “49. Repeal and saving.–  (1) .. .. .. .. .. .. .. .. .. .. .. .. .. (2) .. .. .. .. .. .. .. .. .. .. .. .. ..  (3)   Notwithstanding   anything contained   in   any   other   law   for   the time   being   in   force,   no   court   shall take cognizance of an offence under the repealed Act and no adjudicating officer   shall   take   notice   of   any contravention   under   section   51   of the repealed Act after the expiry of a period of two years from the date of the commencement of this Act. (4) Subject to the provisions of sub­ section   (3)   all   offences   committed under the repealed Act shall continue to be governed by the provisions of the repealed Act as if that Act had not been repealed. (5) Notwithstanding such repeal,–  (a)   anything   done   or   any   action taken   or   purported   to   have   been done or taken including any rule, notification,   inspection,   order   or notice   made   or   issued   or   any appointment,   confirmation   or Criminal Appeal No.2151 of 2011 Page 7 of 17 declaration   made   or   any   license, permission,   authorization   or exemption   granted   or   any document   or   instrument   executed or any direction given under the Act hereby repealed shall, in so far as it is   not   inconsistent   with   the provisions of this Act, be deemed to have been done or taken under the corresponding   provisions   of   this Act; (b)   any   appeal   preferred   to   the Appellate Board under sub­section (2) of section 52 of the repealed Act but   not   disposed   of   before   the commencement   of   this   Act   shall stand   transferred   to   and   shall disposed   of   by   the   Appellate Tribunal   constituted   under   this Act; (c) every appeal from any decision or   order   of   the   Appellate   Board under   sub­section   (3)   or   sub­ section   (4)   of   section   52   of   the repealed Act shall, if not filed before the commencement of this Act, be filled before the High Court within a period   of   sixty   days   of   such commencement: Provided  that   the  High  Court   may entertain such appeal after the expiry of the   said   period   of   sixty   days   if   it   is satisfied   that   the   appellant   was prevented by sufficient cause from filing the appeal with the said period. ”             (emphasis added) Criminal Appeal No.2151 of 2011 Page 8 of 17 9. From   the   impugned   judgment,   it   appears   that   the submissions were made on behalf of the appellants that the word   “and”   in   sub­section   (3)   must   be   read   as   “or”,   and therefore, there is a bar on taking cognizance of the offence under FERA after the repeal of FERA.   The High Court has elaborately and eruditely dealt with this argument.  However, that need not detain us as the submissions made before this Court proceed on the footing that there is a sunset period available of two years as provided in sub­section (3) of Section 49 of FEMA for filing complaints alleging the commission of offences punishable under Sections 56 and 57 of FERA and for taking cognizance thereof. In the facts of the case, the cognizance was taken by the 10. learned   Magistrate   within   the   sunset   period   of   two   years provided under sub­section (3) of Section 49 of FEMA.   11. We   have   perused   the   complaint   filed   by   the   first respondent.     The   complaint   has   been   filed   by   the   first respondent, who was, at the relevant time, an Enforcement Officer appointed under clause (e) of Section 3 of FERA.  As noted earlier, the power under sub­clause (b) of clause (ii) of sub­section (2) of Section 61 was exercised by the Central Government and all the Enforcement Officers were authorised to file complaints regarding the offences punishable under Sections 56 and 57 of FERA.  Thus, there is no difficulty in holding that the first respondent–Enforcement Officer, was authorised to file a complaint as provided in clause (ii) of sub­ Criminal Appeal No.2151 of 2011 Page 9 of 17 section (2) of Section 61 of FERA.   What is material here is sub­section (4) of Section 49 of FEMA, which provides that subject   to   the   provisions   of   sub­section   (3),   all   offences committed   under   the   repealed   Act   shall   continue   to   be governed by the provisions of the repealed Act as if that Act had not been repealed.   Sub­section (3) of Section 49 saves the prosecution for the offences punishable under Sections 56 and 57, which have been committed prior to the repeal of FERA,   provided   the   competent   Court   takes   its   cognizance within two years from the date of coming into force of FEMA. In view of sub­section (4) of Section 49, for the purposes of the prosecution of offences punishable under Sections 56 and 57 of FERA, by a legal fiction, the provisions of the repealed Act will continue to apply.  However, the same will continue to apply only for the purposes of prosecution of the offences which are saved by sub­section (3) of Section 49 of FEMA. That is how the complaint filed by the Enforcement Officer, duly authorised under clause (ii) of sub­section (2) of Section 61 of FEMA, will continue to be valid, inasmuch as by virtue of the legal fiction incorporated in sub­section (4) of Section 49,   the   prosecution   will   continue   to   be   governed   by   the provisions of FERA as if the same had not been repealed. Therefore, during the sunset period, the authorisation of the Enforcement Officers to file the complaints continues to be valid for the limited purposes of sub­section (3) of Section 49 of FEMA. Criminal Appeal No.2151 of 2011 Page 10 of 17 12. If   the   arguments   of   the   appellants   are   accepted,   the officer nominated under sub­clause (b) of clause (ii) of sub­ section (2) of Section 61 of FERA will not be empowered to file complaints   for   the   offences   punishable   under   FERA   even within the sunset period of two years.   Such interpretation will prevent the Court from taking cognizance after the repeal of FERA on a complaint filed after the repeal of FERA by an officer authorised under sub­clause (b) of clause (ii) of sub­ section (2) of Section 61 of FERA.  Thus, no complaint can be filed during the sunset period of two years provided in sub­ section   (3)   of   Section   49   of   FEMA.     A   Statute   cannot   be interpreted in such a manner that any provision thereof is rendered   otiose.     Therefore,   we   are   unable   to   accept   the submissions made by the learned senior counsel appearing for the appellants.   Any construction which will defeat the plain intention of the legislature must be rejected.  The Court must adopt the interpretation which makes the provisions of a Statute workable. 13. By FERA, the Foreign Exchange Regulation Act, 1947 (for   short,   ‘FERA,   1947’)   was   repealed.     The   repealing provision is provided under sub­section (1) of Section 81 of FERA.     This   Court,   in   the   case   of   M/s.   P.V.   Mohammad 1 Barmay   Sons   v.   Director   of   Enforcement ,   interpreted clause (a) of sub­section (2) of Section 81 of FERA.  Clause (a) of sub­section (2) of Section 81 of FERA reads thus: “81.Repeal and saving– 1 1993 Supp (2) SCC 724 Criminal Appeal No.2151 of 2011 Page 11 of 17 (1) .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..  (2) Notwithstanding such repeal­ (a)   anything   done   or   any   action taken   or   purported   to   have   been done  or  taken  (including  any   rule, notification,   inspection,   order   or notice   made   or   issued,   or   any appointment,   confirmation   or declaration   made   or   any   licence, permission,   authorisation   or exemption granted or any document or   instrument   executed   or   any direction   given   or   any   proceedings taken or any confiscation adjudged or   any   penalty   or   fine   imposed) under the Act hereby repealed shall, in   so   far   as   it   is   not   inconsistent with  the provisions  of this Act, be deemed to have been done or taken under the corresponding provisions of this Act; (b) .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..; (c) .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..; (d) .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..: (3) .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ” The   issue   before   this   Court   was   about   the   power   of   the authorities  under  FERA  to investigate  and  enforce  liability and penalty incurred under FERA, 1947, after its repeal.  In paragraphs 7 to 9 of the aforesaid decision, this Court held thus: “7.  Shri   Tulsi,   the   learned   Additional Solicitor General placing reliance on  O. Abdul   Aziz  v.  Addl.   Director   of Enforcement  [AIR 1983 Mad 59:(1982) 2 Criminal Appeal No.2151 of 2011 Page 12 of 17 MLJ   359]   and  A.K.L.   Labbai   Thambi Maraicar  v.  Govt.   of   India,   Enforcement Directorate  [AIR 1983 Mad 102:(1982) 2 MLJ   59]   contended   that   in   view   of Section 81(2) of the Act read with Section 6 of the General Clauses Act, the power of   the   respondents   to   investigate   and enforce the liability or penalty incurred under the Repealed Act is saved, though the   Act   7   of   1947   has   been   repealed under sub­section (2) of Section 81 of the Act.  The contention of the respondent is that the Repealed Act, after the Act had come into force in 1973, is a dead corpse   and   no   life   into   it   could   be blown with the aid of Section 81(2) of the  Act  or  Section  6 of  the  General Clauses Act. We find no force in the contention. The effect of the repealed Act   by   operation   of   clause   ( e )   of Section 6 of the General Clauses Act read with sub­section (2) of Section 81 is that, though the Act obliterates the operation of Act 7 of 1947, despite its repeal, the penalty, liability, forfeiture or prosecution for acts done while the repealed   Act   was  in  force   were   kept alive,   though   no   action   thereunder was taken when the Repealed Act was in   force.   The   rights   acquired   or accrued or the liabilities incurred or any penalty, forfeiture or punishment incurred during its operation are kept alive. Investigations to be made or any remedy which may have been available before the repeal be enforced are also preserved.   Such   rights,   liabilities, penalty, forfeiture or punishment, due Criminal Appeal No.2151 of 2011 Page 13 of 17 to repeal “shall not lapse”. The saving clause,   thus,   aimed   to   preserve   the legal   effect   and   consequences   of things done though those effects and consequences projected to post­repeal period.   The   things   done   adumbrated in Section 81(2) or Section 6 of the General   Clauses   Act   or   penalty   or punishment   incurred   would   envisage that   the   things   already   done   or liabilities,   penalty   punishment   or forfeiture   incurred,   though   happened before   the   Act   came   into   force, Section 81(2) of the Act empowers to effectuate   the   liabilities,   penalties, etc. as if they have been in existence and amenable to be pursued under the Act   or   under   the   Repealed   Act   by operation   of   Section   6   of   General   What is unaffected by the Clauses Act. repeal  of  the  Act  7  of  1947  is  a   right accrued,   etc.   There   is   a   distinction between a legal proceeding for enforcing a right acquired or accrued or liability, penalty, forfeiture, punishment incurred and the legal proceedings for acquisition of a right, the former is saved whereas the latter is not.   In spite of repeal the right to investigation or to take legal proceedings   remain   unaffected   and preserved as if the old Act continues to be operative. What remains to be done, after the Act came into force, is the quantification, if necessary, after due   investigation   and   legal proceedings and if proved to impose the penalty, forfeiture or punishment. The   Court   takes   cognizance   of   the Criminal Appeal No.2151 of 2011 Page 14 of 17 offence   and   not   the   offender   or   the acts   done.   What   the   Court   is   to enquire   into   is   whether   the   Act   is incompatible   with   the   repealed   Act and   whether   it   manifested   any contrary   intentions   to   the   Repealed Act. Unless a different intention has been   manifested   in   the   Act,   the Repealed   Act   would   continue   to   be  Even in a case of bare repeal operative. accompanied by a fresh legislation on the same subject, the provisions of the new Act will have to be looked into to find where and how far the new Act envisages a   contrary   intention   affecting   the operation   of   Section   6   of   the   General Clauses   Act.   Unless   such   contrary intention   is   manifested,   liabilities, penalties,   forfeiture   or   punishment under the Repealed Act will continue to exist and remain in force by operation of Section 6 of the General Clauses Act. 8.  We have already seen that the Act did not   evince   any   contrary   intention.   It merely   reiterated   the   earlier   law operating in the field.  Therefore, clause ( d ) of Section 6 of the General Clauses Act gets attracted to the acts done or the   penalties   of   forfeiture   or punishment for any offence which had already   been   committed   before   the repeal   of   the   enactment,   though   no criminal   proceedings   have   been actually   initiated   under   repealed enactment before its repeal. Criminal Appeal No.2151 of 2011 Page 15 of 17

14. Hence, the view taken by us in earlier paragraphs is fortified by the above decision.    15. The   appeal   fails,   and   the   same   is,   accordingly, th dismissed.     As   the   complaint   remained   stayed   from   7 January 2011, we direct the Trial Court to give necessary out­ Criminal Appeal No.2151 of 2011 Page 16 of 17 of­turn   priority   to   the   disposal   of   the   complaint   bearing CC.No.14/CW/2002,   which   is   the   subject   matter   of   this appeal. ….…………………….J. (Abhay S. Oka) …..…………………...J.   (Sanjay Karol) New Delhi; September 21, 2023. Criminal Appeal No.2151 of 2011 Page 17 of 17