1971 (12) TMI 107 - SC - FEMA

words considers it necessary - meaning of the word consider is to view attentively to survey examine inspect (arch) to look attentively to contemplate mentally to think over meditate on give heed to take note of to think deliberately be think oneself. to reflect

Summary

Issues Involved:
1. Legality of the order under section 19(2) of the Foreign Exchange Regulation Act, 1947.
2. Allegations of mala fide intent.
3. Competency of the authority issuing the order.
4. Conformity of the order with Article 77 of the Constitution.
5. Violation of Articles 14, 19(1)(f) and (g), and 20(3) of the Constitution.
6. Territorial jurisdiction of the High Court.

Issue-wise Detailed Analysis:

1. Legality of the order under section 19(2) of the Foreign Exchange Regulation Act, 1947:
The Supreme Court found that the impugned order did not satisfy the requirements of section 19(2) of the Act. The Court emphasized that the power under this provision can only be exercised when the Central Government or the Reserve Bank considers it necessary or expedient to obtain and examine any information, book, or other document for the purpose of the Act. The Court held that the impugned order lacked due application of mind, as it included documents that had no relevance to the purpose of the Act. The order was therefore quashed.

2. Allegations of mala fide intent:
The appellants alleged that the order was passed mala fide at the instance of Shri Dutt, who was previously Chairman of the Company Law Board and later Secretary to the Government of India, Ministry of Finance. The High Court found that Shri Dutt had nothing to do with the issuing of the impugned order, and this finding was upheld by the Supreme Court.

3. Competency of the authority issuing the order:
The appellants contended that Shri Rana, respondent No. 1, was not competent to make the impugned order. The High Court held that Shri Rana was authorized to sign on behalf of the President, and this finding was not contested further in the Supreme Court.

4. Conformity of the order with Article 77 of the Constitution:
The High Court found that the impugned order was in conformity with Article 77 of the Constitution, which requires that all executive actions of the Government of India shall be expressed to be taken in the name of the President. This finding was upheld by the Supreme Court.

5. Violation of Articles 14, 19(1)(f) and (g), and 20(3) of the Constitution:
The appellants did not press this ground in the High Court in view of an earlier decision of the Supreme Court but reserved the right to agitate the question in appeal. The Supreme Court did not address this issue in detail as the appeal was allowed on other grounds.

6. Territorial jurisdiction of the High Court:
The High Court overruled the objection relating to territorial jurisdiction, and this finding was not contested further in the Supreme Court.

Conclusion:
The Supreme Court allowed Civil Appeal No. 1452 of 1971, set aside the judgment of the High Court, and quashed the impugned order. The Court held that the impugned order did not satisfy the requirements of section 19(2) of the Foreign Exchange Regulation Act, 1947, due to lack of due application of mind. Civil Appeal No. 1453 of 1971 was dismissed as infructuous. The records in question were to be returned to the appellants after a month unless another order was made under section 19(2) of the Act or other provision of law.