TMI Blog1971 (12) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated May 22. 1966 under section 19(2) of the Foreign Exchange Regulation Act, 1947 (Act VII of 1947) (hereinafter referred to as the Act) and other consequential reliefs was dismissed. The other appeal is directed against the order of the High Court refusing to certify the case to be fit for appeal to the Supreme Court under Articles 132 and 133 of the Constitution against the aforesaid judgment. The respondents impleaded are (1) Shri A. J. Rana, Deputy Director, Enforcement Directorate, Ministry of Finance, (2) Shri R. C. Dutt, Secretary to the Government of India, Ministry of Finance, (3) Shri M. L. Wadhwa, Enforcement Officer, Enforcement Directorate and (4) Union of India. through the Secretary of Finance. The first appellant was registered as a public limited com- pany in 1961 with its registered office at Ramavaram in Andhra Pradesh. The second appellant, who is the sole proprietor of a concern named Trans world Trades, was appointed the Managing Director of the appellant company. On May 19, 1965. an order was issued on behalf of the Company Law Board under clause (b) of section 237 of the Companies Act, 1956 appointing four persons as inspectors to investigate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This Court then passed an order that the respondents (1 3-7) will deposit in this Court all the books, papers and other documents that they have seized under the order that has been quashed by our judgment in this case, within ten days from today. They also give an undertaking that they will not inspect those papers while in their possession, and after a fortnight from today, the appellants will be entitled to receive them from the custody of this Court without further orders. In pursuance of the above order, the seized documents were. deported on 19th of May 1966 with the Registrar of this Court. An application thereafter was field in this Court by Shri P. R. Krishnan, Assistant Director in the Enforcement Directorate, praying for a direction to the Registrar of the Court to accept service of an order under section 19(2) of the Act and to hand over the documents in the custody of the Registrar to the Enforcement Directorate. The said application was disposed of without any specific orders. On 22nd of May 1966, the following order was issued by respondent No. 1 No. V(358)65 (Part File) (i) ENFORCEMENT DIRECTORATE MINISTRY OF FINANCE Department of Revenue Insur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... WG. 4. Letter dated 21-11-1961 from Transworld Trades signed by L. A. Shandero, Director of Agencies to L. A. Mitchell Ltd., Harvester House, 37, Peter Street, Manchester-2. 5. Copy of telegram dated 24-7-61 from P. N. Balasubramanian, 186-Golf Links, New Delhi- 3 to Lt. Mitchell, Inspection Manchester England booked at C.T.O. New Delhi. 6. Letter dated 30-6-1961 from L.A. Mitchell Ltd. Chemical Engineers, Harvester House, 37, Peter Street,, Manchester-2 to Mr. P. N. Balasubramanian, Transworld Trades, 186 Golf Links, New Delhi-3. 7. All other books, papers and other documents relating to Shri P. N. Balasubramanian Transworld Trades and the Barium Chemicals Ltd., in the possession of the Registrar of the Supreme Court of India under an order dated 6th May 1966 passed by the Hon'ble Supreme Court of India in Civil Appeal No. 381 of 1966 (Barium Chemicals Ltd., Vs. Company Law Board and others). The order was addressed to the appellant company. Another copy of the order was addressed to appellant No. 2. The appellants thereupon filed petition under Art. 226 of the Constitution of India in the Andhra Pradesh High Court for the issuance of a writ, as mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as he had nothing to do with the issuing of the impugned order. It was further held that necessary material had been placed before the Finance Minister with a view to enable him to form an independent opinion as to the necessity of issuing the impugned order under section 19(2) of the Act. The contention that the impugned order was not in conformity with section 19 (2) of the Act was repelled. Shri Rana respondent. it was further held, was authorised to sign on behalf of the President. The impugned order as such was found to be in conformity with Art. 77 of the Constitution. The appellant did not press the ground that section 19(2) of the Act was violative of Articles 14, 19(1) (f) and (g) and 20(3) of the, Constitution in view of an earlier decision of this Court but reserved the right to agitate the question in appeal in this Court. The High Court also overruled an objection taken on behalf of the respondents relating to territorial jurisdiction. In the result, the petition, as stated earlier, was dismissed. Before proceeding further, it may be mentioned that the Act was enacted, as according to its preamble, it is expedient in the economic and financial interests of India t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reserve Bank, for such person to obtain and furnish that information, book or other document, the Central Government or the Reserve Bank may, by order in writing, require such person to obtain and furnish to the Central Government or the Reserve Bank or any person specified in the order such information, book or other document. It would, therefore, follow that the power under the above provision can be exercised either by the Central Government or by the Reserve Bank. The occasion for the exercise of this power Would arise when either of them, viz., the Central Government ,or the Reserve Bank, considers it necessary or expedient for the purpose of the Act to obtain and examine any information, booker document. It is only when the said requirement is satisfied that the Central Government or the Reserve Bank, as the case may be, can proceed in the manner indicated above in clause 2(a) or 2(b). We are in the present case not concerned with the Reserve Bank nor with the situation wherein it was considered expedient to obtain and examine any information, book or other document. The impugned order purports to have been made by the Central Government because, according to it, the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its own opinion for that of the authority concerned regarding the --necessity to obtain the documents in question. The language of section 19(2) of the Act points to the conclusion that while an order under it may be made with respect to .any information', book or other document, it is essential that such information, book or other document should be specified in the order. This is apparent from the concluding part of the said .sub-section wherein there is reference to 'such information, book or other document. The word 'such' points to the necessity of specifying the information, book or other document in the order. It is, no doubt, true that the order can relate to a large number of books, documents or information, it is all the same imperative that the same should be particularized in the order. According to sub-section (1-A) of section 23 of the Act, if any person contravenes any of the provisions of this Act or of any rule, direction or order made thereunder, for the contravention of which no penalty is expressly provided, he shall, upon conviction by a ,court, be punishable with imprisonment for a term which may ,extend to two years, or with fine, or with b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m compounds. A number of shares certificates of the appellant company in the name of the appellant, his wife and minor child are also in the custody of the Registrar. We are at a loss to understand as to how it was considered necessary for the purpose of the Act to obtain and examine any of the above mentioned documents. It cannot be gainsaid that there has to be- some nexus between the documents sought to be obtained and tic purpose of the Act. Where such a nexus is missing and the document has no relevance for the purpose of the Act, the condition precedent to the making of an order under section 19(2) must be held to be non-existent. The fact that an omnibus order was made in respect of all documents relating to the appellants, which were in the custody of the Registrar under the orders of this Court, including some of the documents which have not even the remotest bearing on the matters covered by the Act, goes to show that there was no due application of the mind by the authority concerned. As mentioned earlier, an essential condition precedent to the making of an order under section 19(2) is that the authority concerned should have considered it necessary to obtain-and exa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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