Introduction:

The Calcutta High Court has clarified an important procedural and jurisdictional question concerning appeals arising from penalties imposed under the repealed Foreign Exchange Regulation Act, 1973 (FERA). The Court held that appeals challenging penal adjudications originating under FERA can be entertained under its Criminal Appellate Jurisdiction, even where the appellants have invoked Section 35 of the Foreign Exchange Management Act, 1999 (FEMA), as the procedural route for challenging the appellate decision. The ruling underscores that the character of the original proceedings and the effect of statutory savings provisions cannot be disregarded merely because the appeal is pursued under a provision of the legislation that replaced the earlier statute.

Justice Ananya Bandyopadhyay delivered the decision while considering four appeals filed by Barun Kumar Chattopadhyay, Chandranath Chatterjee, Pradyot Kumar Dutta and Gurupada Chowdhary against the Enforcement Directorate (ED). The appeals challenged the consequences of an adjudication order passed by the Special Director, Enforcement Directorate, on May 28, 2007. By that order, penalties of Rs. 2 lakh each were imposed on the appellants for alleged contraventions under FERA.

The appellants had challenged the adjudication order before the Foreign Exchange Appellate Tribunal. However, on March 5, 2008, the Tribunal dismissed their appeals and affirmed the original order. The appellants subsequently approached the Calcutta High Court under Section 35 of FEMA, seeking appellate scrutiny of the Tribunal’s decision. The immediate question before the High Court was not whether the alleged contraventions had been established or whether the penalties were justified. Instead, the Court had to determine whether the appeals could be entertained through its Criminal Appellate Jurisdiction or whether they were required to be instituted before the Original Side Registry under the rules governing civil revenue appeals.

The Enforcement Directorate raised a preliminary objection to the maintainability of the appeals on the criminal appellate side. According to the ED, since the appeals had been filed under Section 35 of FEMA, they were required to follow the procedure prescribed for statutory appeals arising from civil revenue matters under Chapter XXXVIII, Part 20 of the Calcutta High Court Original Side Rules. The objection relied substantially on the Special Bench decision in Union of India v. Jagadish Prasad Nandalal, which addressed the procedural treatment of statutory appeals arising from civil revenue matters.

The appellants, however, maintained that the proceedings could not be considered in isolation from their origin under FERA. They argued that the alleged contraventions had been adjudicated under the earlier legislation and that the legal consequences arising from those proceedings continued to be preserved by the statutory savings provisions applicable following FERA’s repeal. In their submission, the fact that Section 35 of FEMA supplied the route for approaching the High Court did not transform the underlying adjudication into an ordinary civil revenue matter.

Accepting the appellants’ position on this preliminary question, Justice Bandyopadhyay overruled the Enforcement Directorate’s objection. The Court examined Section 49 of FEMA alongside Section 6 of the General Clauses Act, 1897, and held that the statutory framework preserved liabilities arising from contraventions under the repealed FERA regime. It also distinguished the precedent relied upon by the ED, observing that the decision in Jagadish Prasad Nandalal did not address penal adjudications originating under FERA whose legal consequences survived through statutory savings.

The Court further relied on the Supreme Court’s decision in M/s. P.V. Mohammad Barmay Sons v. Director of Enforcement, concerning the effect of statutory savings on liabilities and legal consequences arising under the former foreign exchange legislation. It also considered the Delhi High Court’s decision in Rakesh Jain v. Union of India, noting that appeals preferred by co-accused MMTC Ltd. and B.C. Mallick arising from the same adjudication order had been entertained under the Criminal Appellate Jurisdiction and allowed on merits.

Emphasising consistency in the procedural treatment of challenges arising from the same penal adjudication, the Calcutta High Court held that the four appeals before it were maintainable on the criminal appellate side. It directed that the matters be listed on December 11, 2026, for a hearing on merits. The ruling therefore resolves the preliminary objection concerning the appropriate appellate jurisdiction without, by itself, deciding the appellants’ substantive challenges to the penalties.

Arguments of the Parties:

The principal dispute before the Calcutta High Court concerned the appropriate procedural classification of the four appeals. The Enforcement Directorate sought to have the appeals removed from the Criminal Appellate Jurisdiction on the ground that the appellants had invoked Section 35 of FEMA. The appellants, conversely, contended that the proceedings’ origin in alleged FERA contraventions and the continued operation of statutory savings provisions were central to determining how their appeals should be treated.

The Enforcement Directorate’s preliminary objection was based on the procedural requirements applicable to statutory appeals under the Calcutta High Court’s Original Side Rules. It argued that appeals filed under Section 35 of FEMA should be instituted before the Original Side Registry in accordance with Chapter XXXVIII, Part 20, which governs appeals arising from civil revenue matters.

The ED relied on the Special Bench decision in Union of India v. Jagadish Prasad Nandalal to support its contention. Its position was that the procedural rules applicable to appeals of this nature required the matters to be presented before the Original Side Registry rather than being entertained as criminal appeals. The objection thus focused on the manner in which the appeals had been instituted and the jurisdictional side of the High Court under which they should proceed.

At the heart of the ED’s submission was the significance of Section 35 of FEMA as the provision under which the appellants had approached the High Court. The ED sought to connect that statutory route with the rules governing civil revenue appeals. On that approach, the appellants’ reliance on the criminal appellate procedure was considered inappropriate, and the appeals were liable to be treated in accordance with the Original Side Rules.

The objection raised a question that extended beyond registry formalities. The classification of a matter as a civil or criminal appeal can determine the procedural framework through which a court examines it. Where an appeal arises from an adjudication imposing a monetary penalty, the nature of the underlying proceedings and the legal source of the liability may be relevant to deciding which appellate procedure is appropriate. The ED’s position, as recorded in the supplied case summary, rested on the application of the Original Side Rules and the authority of Jagadish Prasad Nandalal.

The appellants opposed this approach by emphasising that the adjudication order dated May 28, 2007, originated from alleged contraventions under FERA, rather than from proceedings instituted as ordinary civil revenue disputes under FEMA. They argued that the repeal of FERA did not automatically extinguish liabilities or legal consequences that had already arisen under that statute. Those consequences, they submitted, remained protected by the savings provisions contained in Section 49 of FEMA, read with Section 6 of the General Clauses Act.

The appellants’ argument depended on the distinction between the law under which the original liability arose and the procedural provision used to challenge the subsequent appellate decision. FERA had been repealed and replaced by FEMA, but the appellants contended that the legal consequences of the earlier proceedings continued to be governed by the applicable savings framework. Consequently, the nature of the adjudication could not be determined solely by looking at the provision under which the appeals were presented.

In their submission, invoking Section 35 of FEMA did not change the character of the original adjudication. The appeals continued to challenge penalties imposed in proceedings arising from alleged FERA contraventions. The procedural route available under FEMA, therefore, had to be understood alongside the statutory provisions preserving liabilities under the repealed enactment.

The appellants also relied on the principle that legal consequences arising under a repealed statute may survive where the legislature has expressly or otherwise preserved them through applicable savings provisions. Section 49 of FEMA was relevant because it addressed the transition from the earlier foreign exchange regime to the new legislation. Section 6 of the General Clauses Act supplied the broader statutory framework concerning the consequences of repeal, subject to the applicable legislative context and any contrary intention.

Their position was reinforced by the Supreme Court’s decision in M/s. P.V. Mohammad Barmay Sons v. Director of Enforcement. The appellants relied on the recognition in that decision of the effect of statutory savings in preserving legal consequences and liabilities arising under FERA. The relevance of the precedent was that repeal alone could not be treated as sufficient to erase every liability or legal consequence associated with proceedings under the former statute.

The appellants also drew support from the treatment of connected appeals by the Delhi High Court. According to the case summary, co-accused MMTC Ltd. and B.C. Mallick had challenged the same adjudication order, and their appeals had been entertained under the Delhi High Court’s Criminal Appellate Jurisdiction. Those appeals were allowed on merits, and the impugned orders were set aside. The appellants relied on this procedural history to support a consistent approach to challenges arising from the same adjudication.

This aspect of their case was particularly relevant because the four appeals before the Calcutta High Court were not disconnected from the earlier adjudication. They arose from the same order that had also been challenged by the co-accused before the Delhi High Court. The appellants’ position was that their appeals should not be assigned a fundamentally different procedural character merely because they were being considered by another High Court.

The supplied case summary does not set out every submission made by either side or reproduce the complete oral arguments. The central positions, however, are clear: the ED sought to apply the Original Side procedure governing civil revenue appeals, while the appellants relied on the penal origin of the adjudication, the statutory savings framework and the treatment of connected appeals. The Court was required to determine which approach best reflected the relevant legislation and precedents.

Court’s Judgment:

Justice Ananya Bandyopadhyay rejected the Enforcement Directorate’s preliminary objection and held that the four appeals were maintainable under the Calcutta High Court’s Criminal Appellate Jurisdiction. The Court’s reasoning centred on the effect of the statutory savings provisions, the distinction between the original adjudication and the procedural route used for appeal, the scope of the precedent cited by the ED, and the need for consistent treatment of challenges arising from the same penal adjudication.

The first significant aspect of the judgment was its consideration of the relationship between FERA and FEMA. FERA had been repealed when FEMA came into force, but the repeal did not necessarily extinguish liabilities or legal consequences that had already arisen under the earlier statute. The transition from one legislative regime to another had to be assessed in light of the applicable savings provisions rather than on the assumption that the new enactment had erased every consequence of the former law.

Section 49 of FEMA was central to this analysis. The Court read that provision together with Section 6 of the General Clauses Act, 1897, which deals with the effect of repeal. The general principle underlying statutory savings is that repeal does not, by itself, ordinarily destroy rights, obligations or liabilities already acquired, accrued or incurred under the repealed enactment, nor does it automatically eliminate legal proceedings or remedies concerning those matters. The precise effect in any case depends on the language of the relevant legislation and the applicable statutory framework.

In the present case, the Court concluded that the savings provisions preserved liabilities arising from alleged contraventions under FERA. That conclusion was important because the penalties challenged by the appellants had been imposed in an adjudication originating under the former statute. The repeal of FERA and the subsequent availability of an appellate route under FEMA did not, in the Court’s view, require the underlying adjudication to be treated as though it had originated under the new legislation.

The Court’s approach distinguished the substantive legal origin of a proceeding from the procedural provision through which a party seeks judicial review or appellate scrutiny. Section 35 of FEMA was the provision invoked for the appeals before the High Court. However, the use of that provision did not, in itself, change the legal character of the adjudication under challenge.

This distinction was central to resolving the jurisdictional objection. The ED’s argument placed considerable emphasis on the fact that the appeals had been instituted under FEMA and sought to connect that provision with the rules governing civil revenue appeals. The Court, by contrast, examined the statutory history of the adjudication and the continuing effect of the liabilities arising under FERA. It held that the procedural route could not be considered in isolation from the character of the original proceedings.

The Court’s reasoning did not mean that every appeal filed under Section 35 of FEMA must be treated as a criminal appeal. Rather, the decision addressed appeals arising from a specific category of proceedings: penal adjudications originating under FERA whose liabilities were preserved by statutory savings provisions. The nature and history of the underlying adjudication were therefore decisive to the issue before the Court.

The second major aspect of the judgment was its treatment of Union of India v. Jagadish Prasad Nandalal. The Enforcement Directorate had relied on the Special Bench decision to argue that statutory appeals under Section 35 of FEMA should be instituted before the Original Side Registry in accordance with Chapter XXXVIII, Part 20 of the Calcutta High Court Original Side Rules.

The Court distinguished that precedent rather than treating it as controlling in the present circumstances. It observed that Jagadish Prasad Nandalal concerned appeals arising from civil contraventions under FEMA and did not address penal adjudications originating under FERA where the liabilities continued to be protected by statutory savings provisions.

That distinction was material. A precedent must be understood in the context of the legal question it decided and the nature of the proceedings before the court. A ruling on the procedural treatment of appeals arising from civil contraventions under FEMA does not necessarily resolve the classification of appeals challenging penal adjudications under the repealed FERA regime. The underlying legal framework and the effect of repeal may differ significantly between the two situations.

By distinguishing Jagadish Prasad Nandalal, the Calcutta High Court indicated that the procedural rules governing civil revenue appeals could not automatically be extended to the appeals before it without examining their statutory origin and the consequences preserved by law. The ED’s reliance on the Special Bench ruling was therefore insufficient to displace the appellants’ contention that their appeals should proceed on the criminal appellate side.

The Court also relied on the Supreme Court’s decision in M/s. P.V. Mohammad Barmay Sons v. Director of Enforcement. As recorded in the case summary, that decision recognised the effect of statutory savings in preserving legal consequences and liabilities arising under the repealed FERA regime. The precedent supported the proposition that the repeal of FERA had to be considered alongside the provisions that preserved the consequences of earlier proceedings.

The importance of this authority lay in its treatment of the legal transition between the two foreign exchange statutes. The Court’s analysis was not based merely on the historical fact that the penalties had been imposed before FEMA replaced FERA. Instead, it considered the legal effect of the repeal and the continuing force of liabilities that the savings provisions preserved.

The Court thereby treated the statutory savings framework as an operative part of the jurisdictional analysis. The appellants’ cases could not be classified solely by reference to the newer statute under which the appeals were brought. The underlying FERA proceedings and the survival of their legal consequences remained relevant to the appropriate procedural treatment of the appeals.

Another important consideration was the Delhi High Court’s decision in Rakesh Jain v. Union of India. The Calcutta High Court noted that appeals filed by co-accused MMTC Ltd. and B.C. Mallick against the same adjudication order had been entertained under the Delhi High Court’s Criminal Appellate Jurisdiction. Those appeals were subsequently allowed on merits, and the impugned orders were set aside.

The procedural history of those connected appeals provided a further reason for the Court to reject the ED’s objection. The appeals before the Calcutta High Court arose from the same adjudication order, and the challenges brought by the co-accused had already been considered by another High Court under its criminal appellate procedure. Although a decision of another High Court does not automatically dictate the registry procedure of the Calcutta High Court in every case, the treatment of connected appeals was a relevant consideration in assessing consistency.

The Court emphasised the importance of consistency in dealing with challenges arising from the same penal adjudication. If appeals against the same underlying order were to be assigned different procedural characters without a legally sufficient distinction, that could lead to inconsistent treatment of similarly situated challenges. The Court considered the common origin of the proceedings and the treatment of the co-accused’s appeals as supporting the conclusion that the present appeals should also be entertained under the Criminal Appellate Jurisdiction.

This aspect of the decision complemented, rather than replaced, the statutory analysis. The Court did not rely solely on the fact that the Delhi High Court had entertained connected appeals. Its conclusion was supported by the savings provisions, the distinction drawn from Jagadish Prasad Nandalal and the Supreme Court’s recognition of the survival of legal consequences under the former FERA regime. The treatment of the connected appeals reinforced the need for a consistent procedural approach to the same adjudication.

The Court’s ruling also demonstrates why the classification of an appeal is not necessarily resolved by identifying the provision under which it has been filed. A statutory appeal may be brought uder a provision of the legislation currentl