The federal cabinet has given the right of appeal to moneychangers found guilty of violating Foreign Exchange Regulation Act (Fera) 1947, official sources told Business Recorder.
The cabinet had given this right to the moneychangers on the recommendations of law ministry, on a summary of finance ministry in which amendments were proposed in FERA for imposing penalty on those exchange companies, which would violate the new law to be approved by the Parliament.
The ministry proposed that without prejudice to provisions of section 3AA, 23 or 23 B, if any person, exchange company, firm, corporation or company in the opinion of SBP, contravenes any provision of this Act, or any other, rule, regulation or direction issued thereunder and it is necessary to take immediate action to deal with such contravention, an officer of SBP not below the rank of Joint Director may, after giving him a show cause notice to be replied within 15 days and affording such person an opportunity of being heard, impose fine which may extend to one million rupees and whereas the contravention is continuous one with a further fine which may extend to one thousand rupees per day during such contravention period.
The ministry was of the view that if any person, company, firm, corporation or organisation fails to pay any penalty, within the stipulated time, SBP may without any notice to such person, company, firm, corporation or organisation, recover the amount of such penalty from any account, or assets, monetary or otherwise, of the defaulters held with the Central Bank or any bank or financial institution.
"The proposed provision creates offence but does not provide forum to the affected persons to seek redress against the action taken against them," the sources quoted law ministry as saying in its comments.
The ministry was of the view that this aspect of the matter may be taken into consideration otherwise affected parties would be constrained to invoke writ jurisdiction of the High Court under article 199 of the constitution. The draft has been revised to provide for appeal to the appellate tribunal.
Further, the provision authorising action without notice to the affected party are against the principle of natural justice. No one should be condemned unheard, may thus not stand test of judicial scrutiny if challenged in a court of law, the ministry said adding that the draft has been amended to provide for opportunity of being heard in person against an adverse order.
The sources said that amendments proposed by the Law Ministry have been made a part of the draft submitted by the finance ministry on behalf of the SBP.