Allowed

Sanjay Khan v. A.K. Bal

Bombay HC16 Oct 2008FERA/49/2008

Case brief

AI extract

What is this about?

Two civil appeals challenging a tribunal order that increased foreign exchange penalties without a departmental appeal were allowed. The court set aside the enhancement, holding the tribunal lacked statutory power to increase penalties sua sponte.

What did the court decide?

The orders of the tribunal enhancing the amount of penalties in both appeals are set aside.

What the court decided

AI extract

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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CIVIL APPELLATE JURISDICTION

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FERA APPEAL NO.49 OF 2008

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Sanjay Khan, Managing Director,
M/s.World Resorts Ltd.

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...Appellant

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vs.

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Sri A.K.Bal, Special Director.

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...Respondent.

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AND

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FERA APPEAL NO.50 OF 2008

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M/s.World Resorts Ltd.

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...Appellant

Sanjay Khan Vs A.K. Bal — Writ and Judicial Review | Bombay HC (2008)

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hearing an appeal filed by the appellant
challenging the penalty imposed on them in
the absence of any appeal being filed or
cross objections being filed by the Revenue,
increased the amount of penalty ?”

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deciding this question are that by order passed by
the Special Director dated 14.8.2003 under the
provisions of Section 50 of the FERA Act read with
Section 49(3) & (4) of the FEMA Act, imposing penalty
of Rs.45,00,000/- on the appellant in appeal no.50 of
2008 and penalty of Rs.30,00,000/- on the appellant
in appeal no.49 of 2008. Feeling aggrieved by that
order they filed two appeals before the Tribunal. One
appeal was appeal no.378 of 2003 which was filed by
Sanjay Khan - the appellant in the present appeal
no.49/08 and appeal no.379 of 2003 was filed by
M/s.World Resorts Ltd.- the appellant in the present

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course of hearing the Tribunal gave oral notice to
the appellants to show cause as to why the amount of
penalty should not be increased, and has proceeded to
increase the amount of penalty of Rs.3 crores 15
lakhs against the Company and the Managing Director
viz. appellants in both the appeals before the
Tribunal. The short ground on which the order is
challenged is that the Tribunal had firstly no power
to enhance the amount of penalty in the absence of
there being any appeal by the department, and
secondly, this could not have been done merely by
giving oral notice. It may be pointed out here that
the learned Counsel appearing for appellants stated
before us that so far as the penalty imposed by order
dated 14.8.2003 which was challenged before the
Tribunal is concerned, the appellants have paid the
amount of penalty and they have now no grievance
against that order. Therefore, now the only
question to be considered is “whether the tribunal

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any appeal”. The learned Counsel appearing for
respondent fairly states that she does not find any
such provision in law empowering the Tribunal to
enhance the penalty suo-motto in the absence of any
application or appeal. In the absence of any such
power in the Tribunal, the Tribunal could not have
enhanced the penalty. The appeal is, therefore,
disposed of in terms of the following order:-

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(ii)It is clarified that the appellants do not,
any more, challenge the order dated 14.8.2003 passed
by the Special Director, and therefore, in case that
order is not complied with by the appellants, the
department will be entitled to enforce that order.

Sanjay Khan v. A.K. Bal

Case brief

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What is this about?

What did the court decide?

What the court decided

Issues for consideration

Statutes considered

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Coram

Case details

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