Module: | MODULE A: INTERNATIONAL BANKING
Q190: Consider the following statements regarding the adjudication and appeals mechanism established for foreign exchange violations:
1. The Central Government appoints Adjudicating Authorities to hold formal inquiries into suspected contraventions of the Act.
2. The Adjudicating Authority has the legal power to order the confiscation of any currency, security, or property related to a confirmed contravention.
3. Appeals against the orders of an Adjudicating Authority must be filed directly before the Supreme Court of India.
Which of the statements given above is or are correct?
2. The Adjudicating Authority has the legal power to order the confiscation of any currency, security, or property related to a confirmed contravention.
3. Appeals against the orders of an Adjudicating Authority must be filed directly before the Supreme Court of India.
Which of the statements given above is or are correct?
✅ Correct Answer: A
🎯 Quick Answer:
Option A is correct because only statements 1 and 2 are accurate.Structural Breakdown: The Central Government appoints Adjudicating Authorities who function like civil judges for foreign exchange matters.
If a contravention is proven, they can levy financial penalties and confiscate the involved assets, validating statements 1 and 2. Statement 3 is incorrect.
The appellate structure is tiered; appeals against an Adjudicating Authority first go to a Special Director of Appeals, and then to the designated Appellate Tribunal, not directly to the Supreme Court.
Historical Context: Under the Finance Act of 2017, the specific Appellate Tribunal for Foreign Exchange was merged into a consolidated tribunal system to streamline judicial efficiency, but the core tiered appeal process remains distinct from direct Supreme Court intervention.
Causal Reasoning: The causal reason for establishing this specialized adjudication hierarchy is judicial efficiency.
Financial markets require rapid certainty; prolonged litigation over trade compliance would paralyze international business operations and deter foreign investors.