Legal Heirs Have Right To Seek Impleadment In Pending Appeals Under FEMA: Delhi High Court

The Delhi High Court has observed that legal heirs have right to seek Impleadment after the appellant's death in pending appeals under the Foreign Exchange Regulation Act, 1973, and the Foreign Exchange Management Act, 1999.

“…the right to seek impleadment of legal heirs in such circumstances is not one that arises dehors the statute; rather, it is one that is expressly recognised and preserved within the statutory framework of both FERA, 1973 and FEMA, 1999,” Justice Swarana Kanta Sharma said.

The Court said that Section 55 of FERA, does not provide any timeline within which the legal representative of the deceased is required to file an application for impleadment.

It further noted that Section 43 of FEMA goes a step further in providing that an appeal shall not abate by reason of death, and that all rights and obligations of the deceased shall devolve upon his legal representatives.

“In view of this statutory scheme, the right of the present applicant to seek substitution as legal representative and to continue the present appeal cannot be curtailed, for such a right is specifically preserved under the governing statute,” the Court said.

Justice Sharma was dealing with a plea filed by a son seeking condonation of delay of 3621 days in filing an application for his impleadment as the legal heir of his late father.

The deceased had filed the appeal in 2007. The matter originated after a show cause notice was issued in 2001 by ED to Abdul Kalam Azad Islamic Awakening Centre and its President (deceased) for alleged contravention of Sections 8(1) and 14 of FERA, replaced by FEMA.

An adjudication order was passed by the Special Director, DoE, imposing a penalty of Rs. 2 lakhs each on the Centre as well as on the deceased, which was duly deposited by them.

However, about two years, the ED preferred a revision petition seeking modification of the adjudication order which was disposed of by the Appellate Tribunal. Vide the said order, the order was quashed and the matter was remanded back for fresh adjudication. The deceased had challenged the Appellate Tribunal in appeal.

The matter was listed for the first time in 2007 and notice was issued. Next year, an interim order was granted in favour of the deceased which was subsequently made absolute in 2009. The appeal was then directed to be listed in the category of 'regular matters as per their own turn'.

Additionally, the deceased and the Centre had also filed separate appeals challenging framing of charges against them by the trial court, which were also tagged along with the appeal in question. The matters were directed to be listed in due course.

The appeal was not taken up for hearing after April 2009 and the revision petitions were not taken up after July 2013. In August 2013, the appellant passed away. The appeal was then listed after 13 years in 2022, however, the matter continued to remain in the 'regular matters' but it was not listed thereafter. The revision petitions came up for hearing after a long interval in 2023.

After coming to know about the case, the legal heir (son) decided to pursue the same by filing an application for his impleadment as legal heir of the deceased. Along with the said application, he also filed the application seeking condonation of delay in moving the impleadment application.

The ED opposed the plea on the ground that the statute does not expressly provide for condonation of delay and thus, the relief cannot be granted to the legal heir.

It was also argued that as the FEMA, 1999, does not provide for any extension of limitation beyond what is stipulated under Section 35, the application seeking condonation of delay was not maintainable.

Condoning the delay in filing the impleadment application, the Court said that Section 55 of FERA expressly confers a statutory right upon the legal representatives of a deceased appeallant to continue the appeal pending before the High Court in substitution of the original appellant.

“Given that the appeal had not been listed for hearing at any time between 2009 and 2022, it cannot be said that it was unreasonable on the part of the applicant to file the present application for substitution as legal representative only in 2023, upon learning of the pendency of the appeal. The long non-listing of the matter, coupled with the absence of any proceedings during this period, provides a satisfactory and justifiable explanation for the delay,” the Court said.

“The statutory provisions of FERA, 1973 and FEMA, 1999 themselves confer a right upon the legal representatives to continue pending proceedings, and the applicant had filed these applications upon acquiring knowledge of the pendency of appeal, after the same were taken up for hearing in the years 2022-2023,” it concluded.

The Court listed the appeal for hearing on November 10.

Title: ABDUL HAMEED REHMANI v. SPECIAL DIRECTOR ENFORCEMENT DIRECTORATE

Citation: 2025 LiveLaw (Del) 1377

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