TMI Blog1969 (2) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3537 of 1968, are raised. In the circumstances, the batch of writ petitions may be disposed of by a common order. 2. The points that are raised in these writ petitions may be classified under the following heads: Firstly, the validity of Sections 23(1) (a), 23(1)(b) and 23-F are Questioned on the' ground that they are ultra vires of the Constitution, in that they conferred on the Director unfettered, unguided and arbitrary powers in choosing the procedure for imposing the punishment on persons charged of offences under the Foreign Exchange Regulation Act. It was submitted that as the Director has an option to choose one of the two criminal proceedings without, any guidance, the proceedings are violative of the provisions of the Constitution. Secondly, it was contended that as the Foreign Exchange Regulation Act has prescribed its own procedure for investigation of offences under the Act and also specifically provided that no court shall take cognisance of an offence under the Act except upon a complaint in writing by the Director of Enforcement, the provisions of the Criminal P. C. relating to investigation are, to that extent, not applicable and the police are not entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irections or orders, he shall, on conviction before a court, be punishable with imprisonment for a term which may extend to two years or with fine or with both. 4. The procedure envisaged under Sections 23(1) (a), 23(1) (b), 23-D and 23-F is that the Director has a discretion, for a contravention of the provisions enumrated in Section 23, either to adjudicate under Section 23(1) (a) or to prefer a criminal complaint in writing to a court. Even after an adjudication proceeding has been started by the Director, at any stage of the enquiry, if he is of opinion that having regard to the circumstances of the case, the penalty which he is empowered to impose would not be adequate, he shall instead of imposing any penalty himself, make a complaint in writing to the court. An appeal is provided against the order of the Director of Enforcement passed under Section 23, to the Central Government and a further appeal to the High Court on questions, of law from any decision or order of the Appellate Board under Sub-section (3) or Subsection (4) of Section 23-E. On a person's failure to pay the penalty imposed by the Director of Enforcement or the Appellate Board or the High Court or of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lure to comply with any of their directions or orders, even the ' adjudication proceeding under Section 23(1) (a) has become criminal, for, after the conclusion of the adjudication proceedings, the person becomes liable for conviction in a criminal court for non-payment of the penalty imposed. The learned counsel is right in his contention that Section 23-F Is an extraordinary provision which makes nonpayment of the penalty imposed by the Director, a criminal offence. The Act has not prescribed any mode for recovery of the penalty that may be imposed by the Director of Enforcement like Section 142 of the Customs Act. The Legislature, instead of creating a machinery for collecting the penalty Imposed by the Director of Enforcement by provisions analogous to Section 142 of the Customs Act, has made non-payment of, the penalty an offence punishable by a Criminal Court. The provision relating to the collection of the penalty however drastic it may be cannot render the adjudication proceedings criminal in nature. The adjudication proceedings in enactments like the Incomertax Act and the Customs Act were held to be civil proceedings and parallel proceedings in respect of the same mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and officials subordinate to him. Section 19-A confers upon the enforcement officer power to search suspected persons. Section 19-B confers a power of arrest, Section 19-C a power to stop and search conveyances, Section 19-D a power to search premises, Section 19-E a power to examine persons and Section 19-F power to summon persons to Rive evidence and produce documents. The powers of investigation and enquiry are conferred on the Director of Enforcement under Section 19-A to Section 19-F. Section 19-J (2) provides that notwithstanding anything contained in the Criminal Procedure Code, 1898, any police officer not below the rank of Inspector of Police, or any other officer of the Central Government or a State Government authorised by the Central Government in this behalf may enter any public place and search and arrest without warrant any person found therein who is reasonably suspected of having committed or of committing or of being about to commit a contravention of Sub-section (1) of Section 4. Under this sub-section, power is specifically conferred on the police to arrest without warrant persons found in any public place who were reasonably suspected to have committed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned. Section 23(3) states that Bo Court shall take cognisance of any offence punishable under Sub-section (1) except upon complaint in writing made by the Director of Enforcement. Section 190. Crl. P. C, enumerates the circumstances under which the court can take cognisance of an offence, and as cognisance of an offence under the Act cannot be taken without a complaint in writing by the Director of Enforcement, cognisance cannot, be taken on a report by the police officer. Section 173, Crl. P. C. requires the police officer in charge of the police station to forward to a Magistrate empowered to take cognisance of the offence on a police report, a report after completion of the Investigation. The submission is that unless the Magistrate is empowered to take cognisance of the offence on a police report, the Chapter relating to information to the police and their powers to investigate, namely, Ch. XIV, cannot be made applicable for offences under the Foreign Exchange Regulation Act, and therefore the police officers' are not competent to investigate such offences. In the Criminal Procedure Code, itself there are certain offences which prohibit the taking of cognisance, unles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Act, except that covered by Section 19-J(2), the petitioner would be right in his contention that the police are not empowered to investigate under Ch. XIV, Crl. P. C, But in W. P. 3536 of 1968, where the jurisdiction of the police to investigate is questioned, the offences registered against the petitioner and three others are that the petitioner and others entered into a criminal conspiracy to import stainless steel sheets under the licence obtained by the petitioner declaring , them as special steel in coils. It is also alleged that the information now available discloses the offences of conspiracy under Section 120B, I.P.C., Section 23 read with Sections 4 and 5 of the Foreign Exchange Regulation Act, Section 5 of the Imports and Exports (Control) Act. 1947 and Section 420 read with Section 511, I.P.C. So far as the offence under Section 420, I.P.C. is concerned, it is a cognisable offence and the right of the police to investigate cannot be Questioned. In investigating a cognisable offence which they are entitled to, it may be that certain facts which may amount to an offence under special Act may also be disclosed. But that would not deprive the police of their power to inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be investigated by the Delhi Special Police Establishment. Section 4 provides that the superintendence of the Delhi Special Police Establishment shall vest in the Central Government Section 5(1) is important in connection with the point, raised and may be set out in full:-- The Central Government may by order extend to any area (including Railway areas) in a State, not being a Union Territory, the powers and jurisdiction of members of the Delhi Special Police Establishment for the investigation of any offences or classes of offences specified in a notification under Section 3. Sub-sections (2) and (3) empower the police officer of the Central Government to discharge the function of the police officer in the area in which the offence is committed and to exercise the powers of an officer in charge of the police station. It will thus be seen that under Section 5 power is taken by the Central, Government to extend to any area in a State the power and jurisdiction of the members of the Delhi Special Police Establishment for investigation of offences specified by A notification under Section 3. As this section, envisages the extension of the power of the Delhi Special Police ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to be rejected, 11. The validity of Sections 5 and 6 of the Delhi Special Police Establishment Act which empowers the Central Government to extend to any area in a State, the powers and jurisdiction of members of the Delhi Special Police Establishment for investigation of any of the offences specified under Section 3 with the condition that the consent of the State Government concerned should be obtained, is challenged as beyond the competence of the Indian Legislature. It was also submitted that Section 5 conferred unguided discretion on the Central Government to discharge police functions in State areas under orders of the Central Government without any guidance as to how and in what case such orders can be made and that the conferment of such powers on the Central Police Officers concurrently with the powers of the State Officers is not valid in law. Item 39 of List I, Seventh Schedule in the Government of India Act provided as follows-- Extension of the powers and jurisdiction of members of a Police force belonging to any part of British India to any area in another Governor's province or Chief Commissioner's Province, but not so as to enable the police of one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate to any area outside that State with the latter State's consent. The Act as it was passed in 1946 before the Constitution came into force, has been kept alive under Article 372 of the Constitution. In South India Corporation (P) Ltd. v. Secy., Board of Revenue, , the Supreme Court observed thus-- The object of this Article (372) is to maintain the continuity of the pre-existing laws after the Constitution came into force till they were repealed, altered or amended by a competent authority. Without the aid of such an Article, there would be utter confusion in the field of law. The assumption underlying the Article is that the State laws may or may not be within the legislative competence of the appropriate authority under the Constitution. The Article would become ineffective and purposeless if it was held that pre-Constitution laws should be such as could be made by the appropriate authority under the Constitution. The words subject to the other provisions of the Constitution should, therefore, be given a reasonable interpretation, an interpretation which would carry out the intention of ' the makers' of the Constitution and also which is in accord with the Co ..... 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