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TMI Blog1986 (7) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... n overdrawings by the appellant from its agent and certain adjustments were made on account of the alleged default in shipping the stipulated quantity of cashewnuts, during August, 1971. The statement of accounts submitted by its agents are alleged to have been forwarded to the Reserve Bank of India by the appellant along with its covering letters. One such statement indicated that an amount of U.S. $. 750 was appropriated from the overdrawn balance due to the appellant on various shipments of cashew consignments. A further amount of U.S. $. 203.94 was shown as having been appropriated by the agent as overdrawing made by the appellant but really due to the agent. Proceedings were initiated by the Assistant Director of Enforcement under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the foreign agent relating to all sale transactions were duly forwarded to the Reserve Bank of India, soon after the receipt of such statements, and therefore, no offence was involved in the adjustments effected by the foreign agent. The appellant also took up the position that an offence of contravention of section 12(2) of the Act can take place only in respect of consignment sales and not completed sales. Reference was made to a decision of a Full Bench of the Calcutta High Court in J. E. Works Ltd. v. M. G. Wagh, AIR 1973 Cal 413, in this regard. A contrary view taken by a decision of a Division Bench of the Madras High Court and reported in Venkata Subbu v. Director of EnJ or cement [1969] 1 MLJ 281, was said to have become invalid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Board instead of feeling bound by the incorrect earlier decision of a lesser Bench of the Madras High Court. We do not think that the view expressed by the Madras High Court in the decision reported in Venkata Subbu v. Director of Enforcement [1969] 1 MLJ 281, uras incorrect. The facts of that case were that the exporter had over invoiced and the charge of violation of section 12(2) of the Foreign Exchange Regulation Act, 1947, was based on non-repatriation of the full amount payable by the foreign buyer. The exporters contended that the fact of over invoicing having been found on materials, including their admissions, non-repatriation of the full invoice value could not be sustained. It was also submitted that the terms of section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as considerable discussion on this. Section 12 must be read in its entirety and sub-section (2) interpreted in the context. The language no doubt is rather unhappy but the legislative intent is clear. The person referred to as ' the person entitled to sell or procure the sale of' in the first part of section 12(2) is only descriptive and can include a case where the person has actually sold or procured the sale of the goods. In the Indian Sale of Goods Act, the words buyer and seller, subject to the context, may mean both a person who buys or agrees to buy and a person who sells or agrees to sell, as the case may be. In the context of the provisions under consideration, it appears to me that it can, without violence to the language and bear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt. But, the preamble of the Foreign Exchange Regulation Act, which shall be adopted as the key for understanding its real import, seems to us to justify the Madras view. It has been repeatedly held that in the matter of economic offences, the enactment should be interpreted so as to make it workable and that the rule that a construction in favour of the subject should be accepted does not apply to such laws. We need only refer to the following observations in Union of India v. Shreeram Durga Prasad P. Ltd., AIR 1970 SC 1597 (at p. 1604): "I have to construe an Act which was enacted in the interest of the national economy. A deliberate large-scale contravention of its provisions would affect the interests of every man/woman and child in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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