TMI Blog1987 (5) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... eign Exchange Regulation Act, 1947, before its amendment by Act XXXIX of 1957, denoted only a natural person and an association of persons, such as a firm, would not fall within the connotation of the word "whoever". By the judgment, a learned single judge of the High Court allowed the appeal of the Director of Enforcement under section 54 of the Act and set aside the order of the Foreign exchange Regulation Appellate Board, Bombay, dated January 30, 1981, and restored the order of me Director of Enforcement dated August 17, 1978, holding the appellants guilty of contravention of section 12(2) of the Act read with the notification issued by the Government of India in the Ministry of Finance, New Delhi, dated April 22, 1952, and levying a penalty of Rs. 15,00,000. By its order, the Foreign Exchange Regulation Appellate Board held that there could be no levy of penalty on the appellant-firm for failure to repatriate foreign exchange on shipments of manganese ore made prior to September 20, 1957, i.e. , prior to the amendment of section 23(1) of the Act and the introduction of section 23C by the Amendment Act and accordingly reduced the amount of penalty to Rs. 3,10,000. As a result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced any evidence to show that the contravention in question had taken place without their knowledge or that they had exercised due diligence to prevent such contravention. They were accordingly made liable far contravention of section 12(2) of the Act for failure to repatriate the foreign exchange earned on the aforesaid 52 shipments and he imposed a. penalty of Rs. 15,00,000 on the partnership firm. The Foreign Exchange Regulation Appellate Board, however, disagreed with the Director of Enforcement and accepted the contention of the appellants and accordingly reduced the amount of penalty to Rs. 3,10,000. Shri Asoke Sen, learned counsel appearing for the appellants, with his usual fairness frankly concedes that article 20(1) of the Constitution would not in terms apply, but he contends that the principles embodied therein would still govern. He has confined his submissions to only one point, namely, that the word "whoever" in sub-section (1) of section 23, before its amendment by Act XXXIX of 1957, connoted only a natural person, i.e., those who actually contravened the provisions of section 12(1) of the Act by failure to repatriate the full value of foreign exchange earned on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aving regard to the ordinary course of trade, or (b)payment for the goods is made otherwise than in the prescribed manner or does not represent the full amount payable by the foreign buyer in respect of the goods, subject to such deductions, if any, as may be allowed by the Reserve Bank, on is delayed to such extent as aforesaid : Provided that no proceedings in respect of any contravention of this sub-section shall be instituted unless the prescribed period has expired and payment for the goods representing the full amount as aforesaid has not been made in the prescribed manner." Section 23(1), prior to its amendment and the original sub-section (3) now renumbered as section 23(4), are as follows : "23(1) Whoever contravenes any of the provisions of this Act or of any rule, direction or order made thereunder shall be punishable with imprisonment for a term which may extend to two years or with fine or with both, and any court trying any such contravention may, if it thinks fit and in addition to any sentence which it may impose for such contravention, direct that any currency, security, gold or silver, or goods or other property in respect of which the contravention has ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof shall, unless he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent its commission, be deemed to be guilty of such offence. The Act, therefore, clearly contemplated that adjudication proceedings under sub-section (1) of section 23 prior to its amendment could be initiated not only against the person who actually commits the contravention but also casts a vicarious liability on an association of persons such as a partnership firm or an artificial or a legal entity like a company. It is, therefore, idle to contend that the appellants were not liable to pay penalty for failure to repatriate foreign exchange on 52 shipments of manganese ore effected through the years 1952 to 1958. Upon that view, the learned single judge was right in setting aside the order of the Foreign Exchange Regulation Appellate Board and restoring that of the Director of Enforcement levying a penalty of Rs. 15,00,000 on the appellants for failure to repatriate foreign exchange in contravention of section 12(2) of the Act. The contention of learned counsel that recourse could not be had to the amended section 23(R) read with section 23C of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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