TMI Blog1962 (10) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... e meaning. Like the main section, the remaining part would have covered cases of owning and holding foreign exchange in the past as well as in the future. The clause has been added only to clarify the position, and that is all. We are therefore of opinion that the notification is completely intra vires section 9. Appeal dismissed. - 617 OF 1961 - - - Dated:- 4-10-1962 - B.P. SINHA, P.B. GAJENDRAGADKAR K.N. WANCHOO K.C. DAS GUPTA AND J.C SHAH, JJ. Sachin Chaudhri, N. Bajoria and B.P. Maheshwari for the Appellant. Bishan Narain, Dr. V.D. Mahajan and P.D. Menon for the Respondent. JUDGMENT Wanchoo, J. This is an appeal from the order of the Foreign Exchange Regulation Appellate Board and arises in the following circumstances: Appellant No. 1 went to Europe and the United States of America in connection with business, and his wife, appellant No. 2, accompanied him. The first appellant is the chairman of Sahu Jain Limited. They left India on June 30, 1958, and visited several countries in Europe including West Germany. Eventually they reached the United States of America on August 5, 1958. They left the United States on September 22, and arrived a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the appellants had failed to sell the foreign exchange amounting to 3,500 U.S. dollars referred to above required by them abroad within one month of their becoming owners thereof as require by section 9 of the Act read with the said notification The appellants showed cause which was more or less the same as the explanation they had already given earlier. The Director of Enforcement then held adjudication proceedings and came to the conclusion that the sum of 3,500 U.S. dollars was received by the appellants as gift and they were owners of it, and as they had not offered to sell this foreign exchange as required by section q and the notification made thereunder, they were liable to penalties for contravening section 9. The Director ordered the forfeiture of the travellers cheques to the extent of 1,990 U.S. dollars found with the appellants. He also imposed a penalty of Rs. 18,000 on the first appellant under section 23 of the Act; no penalty was imposed on the second appellant. The appellants then went in appeal to the Appellate Board, and the contention that was raised there was that they were not the owners of this foreign exchange which had been given to them merely to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... might have been to spend the amount on their trip in the United States of America. Further, as the Appellate Board has rightly pointed out, it is obvious that the money was given to the appellants outright, as otherwise the appellants would not have offered the amount found on them on October 1, 1958, for sale through the Reserve Bank as they did on October 25, 1958. There can, therefore, be no doubt that the appellants became owners of this foreign exchange. This brings us to the main point that was urged before us that the notification is beyond the terms of section 9. Section 9 (omitting the portion not relevant for the purpose of this appeal) is in these terms: "9. Acquisition by Central Government of foreign exchange. The Central Government may, by notification in the Official Gazette, order every person in, or resident in, India ( a ) who owns or holds such foreign exchange as may be specified in the notification, to offer it, or cause it to be offered for sale to the Reserve Bank on behalf of the Central Government or to such person, as the Reserve Bank may authorise for the purpose, at such price as the Central Government may fix, being a price which is in the opin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as left to the discretion of the Central Government to decide on a consideration of the foreign exchange situation at a particular time as to which kind of foreign exchange would have to be offered for sale as directed by section 9. For example, the notification may direct that U. S. dollars must be offered to sale but, may not direct that English pounds should be so offered for sale. The section as it stands is clearly applicable to foreign exchange owned or held at the date the Act came into force as well as to foreign exchange which a person may acquire after the Act came into force. Learned counsel for the appellants conceded that section 9 was not confined only to foreign exchange held or owned by persons in, or resident in, India on the date the Act came into force but would also apply to any foreign exchange subsequently owned or held; but his contention is that though the section applies not only to foreign exchange owned or held on the date the Act came into force but also on any subsequent date so long as the Act continues in force, the notification could only be issued with reference to foreign exchange owned or held on the date of the notification. It is, therefore, con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich leads to such a startling result cannot possibly be accepted. Besides, as we have already said, the words of section 9 are clear and they apply not only to foreign exchange owned or held at the date of the Act but to foreign exchange which, might be held or owned at any time thereafter and the notification is mainly required to indicate the kind of foreign exchange which may have to be offered for sale, under section 9. We are therefore of opinion that the notification is completely intra vires section 9. If that is so, it is not disputed by the appellants that section 9 read with the notification was contravened in this case in view of the finding of fact that the foreign exchange to the extent of 3,500 U.S. dollars was gifted to the appellants and was owned by them. It was also urged on behalf of the appellants that all that the notification required was that they should offer the foreign exchange within one month of their return to India and the appellants complied with that. This contention has no force for the notification requires that the offer should be made within one month of a person becoming the owner of foreign exchange. There is no warrant for reading in the n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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