To analyse and understand the provisions of Foreign Exchange Management (Adjudication Proceedings And Appeal) Rules, 2000. We shall understand the provisions relating to imposition of penalty, the adjudicating authority, inquiry proceedings and the various aspects of appeal.

1. Appeals and Adjudication: FEMA
Perspective
CA Divakar Vijayasarathy

2. Credits and Acknowledgments
Harish Kumar R
Thirumal V
CA Jugal Gala

3. Legends used in the Presentation
AA Adjudicating Authority
CG Central Government
FEMA Foreign Exchange Management Act, 1999
FEM Foreign Exchange Management
RBI Reserve Bank of India
Act refers to Foreign Exchange Management Act, 1999
Rule refers to FEM (Adjudication Proceedings And Appeal) Rules, 2000

4. Presentation Schema
Introduction Definitions
Appointment of
Adjudicating
Authority
Holding of Inquiry
Appeal to Special
Director (Appeals)
Procedure before
Special Director
(Appeals)
Appeal to Appellate
Tribunal
Procedure before
Appellate Tribunal
Powers of Special
Director (Appeals)
and Appellate
Tribunal
Appeal to High Court Summary

5. Introduction
FEMA facilitates external trade and payments and promotes orderly
development and maintenance of foreign exchange market in India
Contraventions under FEMA can invite penalties
CG has appointed Adjudicating Authority to look into matters of
contraventions and levy appropriate penalties which are within its power
 Chapter V of the FEMA contains provisions relating to ‘Adjudication and Appeal’
 By virtue of powers conferred by FEMA, the CG has prescribed FEM (Adjudication Proceedings And Appeal) Rules, 2000

6. Definitions
Adjudicating Authority An officer appointed by the CG under the Act
Applicant
An aggrieved person who makes an appeal before Special Director
(Appeals) or Appellate Tribunal, as the case may be
Appellate Tribunal The Appellate Tribunal for Foreign Exchange established under the Act
Appointed by the CG under the ActSpecial Director
(Appeals)

7. Adjudicating Authority

8. Appointment of Adjudicating Authority - Sec 16
The CG by an order published in the Official Gazette, appoint as many officers of the CG as it may think fit, as the
Adjudicating Authorities for holding an inquiry
The person against whom complaint has been made shall be given reasonable opportunity to prove
himself/herself of non-guilty
If Adjudicating Authority is of opinion that the said person is likely to abscond or evade in any manner
It may direct the said person to furnish a bond or guarantee for such amount and subject to such conditions
as it may deem fit
The CG shall specify the respective jurisdictions for the appointed officers
Adjudicating Authorities cannot hold enquiry unless a complaint in writing made by any officer authorized
by a general or special order by the CG
The person against whom allegation is made may appear either in person or take the assistance of a legal
practitioner or a Chartered Accountant of his choice for presenting his case before the Adjudicating Authority
Every Adjudicating Authority shall have the same powers of a civil court which are conferred on the Appellate Tribunal

9. Rule 3 - Appointment of Adjudicating Authority
The Adjudicating Authorities can
be appointed by CG by an order
passed in the Official Gazette
No restriction in the number of
officers appointed
Such appointed officers can hold
inquiry under the provisions of
contravention and penalties

10. Rule 4 – Holding of Inquiry
• Adjudication Authority can issue a notice to any person who contravenes the provisions of
FEMA
• Call for show cause within such period as specified in the notice
• Requiring why such an inquiry should not be held against him (not less than 10 days)
Notice issued shall indicate the nature of contravention alleged to have been committed
If Adjudicating Authority after considering the cause, is not satisfied, shall
issue a notice fixing a date for the appearance of that person either
Personally
Legal practitioner
Chartered Accountant
• Adjudicating Authority shall on the date fixed, explain the contravention alleged to have been
committed by such person
• Indicate the provisions of the Act or of rules, regulations, notifications, directions or orders
• Such person shall be given an opportunity to produce such documents or evidence which may be
considered relevant to the inquiry
• If necessary the hearing may be adjourned to a future date

11. Contd.
Order shall be supplied free of charge to the person against whom the order is made and all other
copies of proceedings shall be supplied at payment of Rs 2
The order issued shall possess the date, sign of Adjudicating Authority, the basis on which
contravention has taken place and hold the reasons for such decision
Upon consideration of evidence produced, Adjudication Authority may impose such penalty as he
thinks fit by an order in writing
If any person fails, neglects to appear for hearing, the Adjudicating Authority may proceed with the
adjudication proceedings in the absence of such person after recording the reasons for doing so
Adjudicating Authority has the power to summon and enforce attendance of any person acquainted
with the facts and circumstances of the case to give evidence or to produce any document

12. Special Director (Appeals)

13. Appeal to Special Director (Appeals) – Sec 17
The CG shall, by notification, appoint one or more Special Directors (Appeals) and shall also specify, the matter
and places in relation to which the Special Director (Appeals) may exercise his jurisdiction
Any person aggrieved by an order made by the Adjudicating Authority, being an Assistant Director of
Enforcement or a Deputy Director of Enforcement, may prefer an appeal to the Special Director (Appeals)
Special Director (Appeals) may after giving the parties to the appeal an opportunity of being heard, pass such
order thereon as he thinks fit confirming, modifying or setting aside the order appealed against
Shall send a copy of every order made by him to the parties to appeal and to the concerned Adjudicating
Authority
Shall have the same powers of a Civil Court which are conferred on the Appellate Tribunal
Appeal to Special Director (Appeals) shall be filed within 45 days of receipt of Order of Adjudicating Authority

14. Right of Appellant to Take Assistance to Appoint Presenting
Officers – Sec 32
A person preferring an appeal to the Special Director (Appeals) under FEMA may either
appear in person or take the assistance of a legal practitioner or a chartered accountant of
his choice to present his case before the Special Director (Appeals)
The CG may authorise one or more legal practitioners or chartered accountants or any of its
officers to act as presenting officers and every person so authorised may present the case
with respect to any appeal before the Special Director (Appeals)

15. Rule 5 - Appeal to Special Director (Appeals)
• Every appeal presented to Special Director (Appeals) shall be in Form I signed by the
applicant
• The appeal shall be in triplicate and accompanied by three copies of order appealed
against him
• Every appeal shall be accompanied by a fee Rs. 5,000 in the form of cash or Demand
Draft
The Appeal shall contain the grounds of objection and such grounds shall be numbered
consecutively
• Where the appeal is presented after the expiry of the period of 45 days,
• It shall be accompanied by a petition, in triplicate, duly verified and supported by the
documents, if any, relied upon by the applicant,
• Showing cause how the applicant had been prevented from preferring the appeal
within the said period of 45 days

16. Rule 6 - Procedure before Special Director (Appeals)
Copy of appeal together with a copy of the order appealed against shall be sent to
Director of Enforcement on receipt of such appeal by the Special Director (Appeals)
Special Director (Appeals) shall issue notices to the applicant and the Director of
Enforcement fixing a date for hearing of the appeal
On the date fixed for hearing of the appeal or any other day to which the hearing
of the appeal may be adjourned, the applicant as well as the presenting officer
of the Directorate of Enforcement shall be heard
If the applicant or the presenting officer fail to appear when the appeal is called
for hearing, the Special Director (Appeals) may decide the appeal on the merits
of the case

17. Rule 7 - Contents of the Order in Appeal
The order of Special Director
(Appeals) shall be in writing
and shall state briefly the
grounds for the decision.
The order shall be signed by
the Special Director (Appeals)
hearing the appeal

18. Rule 8 - Representation of Party
Any applicant may appoint :
Legal practitioner or
Chartered Accountant
To appear and plead and act on his behalf before the Special Director (Appeals) under the Act

19. Rule 9 - Service of Notices, Requisitions or Orders
A notice, requisition or an order issued under these rules shall be served on any person in the following manner:
By delivering or tendering to that person or his duly authorised person
By registered post with acknowledgement due to the address of his place of residence or his last known place
By affixing it on the outer door or some other conspicuous part of the premises in which the person resides or is
known to have last resided and that written report thereof should be witnesses by two persons
If cannot be served through above means then it can be done by publishing in a leading newspaper (both in
vernacular and in English)

20. Appellate Tribunal

21. Appeal to Appellate Tribunal – Section 19
Any person may prefer an appeal for order passed by AA or Special Director (Appeals) to the Appellate Tribunal
If appeal against order of penalty - deposit the amount of penalty with prescribed authority
If Appellate Tribunal is of opinion that depositing penalty would cause undue hardship – may dispense with such
deposit subject to fulfilment of prescribed conditions
Appeal shall be filed within 45 days (allowed after if sufficient cause) from the date of receipt of order passed by AA
or Special Director (Appeals)
Appellate Tribunal shall pass an order, after providing an opportunity of being heard and calling for records,
confirming, modifying or setting aside previous order
Appeal filed before the Appellate Tribunal shall be disposed off within 180 days from the date of receipt of the appeal
(if not, reasons in writing)
Person aggrieved by order of Appellate Tribunal can file an appeal to High Court (only question of law) within 60 days
– additional 60 days if sufficient cause for non-filing

22. Rule 10 - Appeal to the Appellate Tribunal
Showing cause how the applicant had been prevented from preferring the appeal within the said period of 45 days
It shall be accompanied by a petition, in triplicate, duly verified and supported by the documents, if any, relied upon
by the applicant,
Where the appeal is presented after the expiry of the period of 45 days,
The Appeal shall contain the grounds of objection and such grounds shall be numbered consecutively
Every appeal shall be accompanied by a fee of Rs. 10,000 in the form of cash or demand draft
The appeal shall be sent in triplicate and accompanied by three copies of the order appealed against
The appeal shall be presented in Form II

23. Rule 11 - Procedure before Appellate Tribunal
s
Copy of appeal together with a copy of the order appealed against shall be
sent to Director of Enforcement on receipt of such appeal by the Appellate
Tribunal
Issue notices to the applicant and the Director of Enforcement fixing a date
for hearing of the appeal
On the date fixed for hearing of the appeal or any other day to which the
hearing of the appeal may be adjourned, the applicant as well as the
presenting officer of the Directorate of Enforcement shall be heard
The applicant or the presenting officer fail to appear when the appeal is
called for hearing, the Appellate Tribunal may decide the appeal on the
merits of the case

24. Rule 12 - Contents of the Order in Appeal
The order of Appellate
Tribunal shall be in
writing and shall state
briefly the grounds for
the decision
The order shall be signed
by the Chairman or
Member of the
Appellate Tribunal
hearing the appeal

25. Rule 13 - Representation of Party
Any applicant may
appoint
Legal practitioner or
Chartered
Accountant
To appear and plead
and act on his behalf
before the Special
Director (Appeals)
under the Act

26. Rule 14 - Service of Notices, Requisitions or Orders
A notice, requisition or an order issued shall be served on any person in the following manner:
By delivering or tendering to that person or his duly authorised person
By registered post with acknowledgement due to the address of his place of residence or his last known
place
By affixing it on the outer door or some other conspicuous part of the premises in which the person
resides or is known to have last resided and that written report thereof should be witnesses by two
persons
If cannot be served through above means then it can be done by publishing in a leading newspaper (both
in vernacular and in English)

27. Powers of Appellate Tribunal and Special Director (Appeals) – Sec
28
Power to regulate its own procedures, guided by natural justice
Powers of civil court
Orders passed shall be executable as a decree of civil court
Order passed can be transmitted to civil court having local jurisdiction for the purpose of execution
Proceedings before Appellate Tribunal and Special Director (Appeals) shall be deemed to be a judicial proceeding
Civil Court shall not have any jurisdictions over the matters where Adjudicating Authority, Special Directors (Appeals) and
Appellate Tribunal are empowered under the Act

28. High Court

29. Appeal to High Court – Sec 35
• Any person aggrieved by any decision of the Appellate Tribunal
• May file an appeal to the High Court
• Within 60 days from the date of communication of the decision
• On any question of law* arising out of such order
If the appellant was prevented from filing the appeal within 60 days, and proved
before High Court, additional period not exceeding 60 days can be granted
Meaning of High Court
The High Court within the jurisdiction of which the aggrieved party ordinarily resides
or carries on business or personally works for gain and
Where the CG is the aggrieved party, the High Court within the jurisdiction of which the
respondent(s), ordinarily resides or carries on business or personally works for gain
*Question of Law - an issue regarding the application or interpretation of a law

30. Summary
Further Appeal to Appellate Tribunal within 45 days
Adjudicating Authority suspects FEMA contravention
Issue notice
Call for show cause
Hearing (personally or through legal practitioner or Chartered Accountant
Adjudicating Authority not satisfied with the evidence produced at hearing
Adjudicating Authority Levies penalty as he deems to be fit
Such person not satisfied with the order shall appeal to Special Directors (Appeals) within 45 days
Further Appeal to High Court within 60 days on Questions of Law

31. Thank You
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