Repeal, Savings and the Sunset

In one line

Section 49 repealed FERA, dissolved its Appellate Board, and gave the department two years in which to take up FERA matters, after which they were barred. Precisely: section 49(1) repeal and dissolution; 49(2) the members vacate office; 49(3) the two-year sunset; 49(4) offences under the repealed Act continue to be governed by it; 49(5) general savings; and 49(6) the General Clauses Act 1897.

Why a repeal needs transitional provisions

Because a repeal does not decide what happens to what was already under way. When FEMA came into force on 1 June 2000 there were FERA investigations in progress, FERA adjudications part heard, FERA prosecutions pending in criminal courts, and a very large number of alleged contraventions known to the department but not yet taken up.

Three questions had to be answered and section 49 answers each. By what law are past acts judged? For how long may they be taken up? And what happens to the institutions the old Act created?

The tension is a real one and stating it is what makes the chapter more than a recital. Parliament had decided that dealings in foreign exchange should no longer be criminal, which is an argument for wiping the slate. But it had not decided that people who broke the law while it was the law should escape, which is an argument for preserving liability. Section 49 resolves it by preserving the law but limiting the time, which is the classic compromise.

The provisions

Section 49(1) provides that the Foreign Exchange Regulation Act 1973 (46 of 1973) is hereby repealed and the Appellate Board constituted under sub-section (1) of section 52 of the said Act, hereinafter referred to as the repealed Act, shall stand dissolved.

Section 49(2) provides that on the dissolution of the said Appellate Board, the person appointed as Chairman of the Appellate Board and every other person appointed as Member and holding office as such immediately before such date shall vacate their respective offices, and no such Chairman or other person shall be entitled to claim any compensation for the premature termination of the term of his office or of any contract of service.

The express exclusion of compensation is deliberate. A statutory office holder whose office is abolished before the end of his term would otherwise have an arguable claim, and Parliament closed it on the face of the section.

Section 49(3) is the sunset and it is the examinable provision. 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.