Section 21 FEMA Act 1999: Qualifications for Special Director (Appeals)
Section 21 of the Foreign Exchange Management Act, 1999 specifies who is legally qualified for appointment as a Special Director (Appeals). The provision was substituted by the Finance Act, 2017 with effect from 26 May 2017.
What does Section 21 provide?
A person is not qualified for appointment as a Special Director (Appeals) unless the person satisfies either of the two statutory service requirements stated in Section 21.
Section 21 - Qualifications for appointment of Special Director (Appeals)
A person must have either:
(a) been a member of the Indian Legal Service and held a post in Grade I of that Service; or
(b) been a member of the Indian Revenue Service and held a post equivalent to a Joint Secretary to the Government of India.
Meaning and legal context
Special Director (Appeals): Under FEMA, appeals from specified orders of Adjudicating Authorities lie to the Special Director (Appeals) in accordance with Section 17. Section 21 sets the minimum statutory service qualification for appointment to that appellate office.
The two alternatives in Section 21 are specific. The first concerns senior service in the Indian Legal Service, requiring the person to have held a Grade I post. The second concerns senior service in the Indian Revenue Service, requiring a post equivalent to Joint Secretary to the Government of India.
Finance Act 2017 amendment
The present Section 21 was substituted by Section 165 of the Finance Act, 2017 with effect from 26 May 2017. Before that substitution, Section 21 also contained qualifications relating to the Chairperson and Members of the then Appellate Tribunal structure.
The 2017 changes reorganised the appellate framework. Section 18 now identifies the Appellate Tribunal constituted under Section 12(1) of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 as the Appellate Tribunal for FEMA purposes. Accordingly, the former Chairperson/Member qualification language should not be presented as the current text of FEMA Section 21.
Why Section 21 matters
Section 21 is an eligibility provision. It limits appointment as Special Director (Appeals) to persons with the specified senior-level experience in the Indian Legal Service or Indian Revenue Service. This supports the specialised legal and revenue expertise required for appellate functions under FEMA.
Related FEMA provisions
- Section 17: Appeal to Special Director (Appeals).
- Section 18: Appellate Tribunal.
- Section 19: Appeal to Appellate Tribunal.
- Section 23: Terms and conditions of service of Special Director (Appeals).
- Section 28: Procedure and powers of Appellate Tribunal and Special Director (Appeals).
- Section 35: Appeal to High Court.
Official legal sources
For the authoritative and updated statutory text, refer to the Foreign Exchange Management Act, 1999 on India Code. The substitution of Section 21 can also be verified in the Finance Act, 2017 on India Code.