TMI Blog1967 (2) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the adjudication was made and penalties levied by the Director of Enforcement, in that case, was misconceived; the adjudication has, therefore, to be necessarily set aside. In other individual cases, there are special grounds such as an alleged absence of adequate opportunity to show cause, or uncertainty with regard to the firm or individual really penalised, etc. This explains why the present procedure has been adopted, and also the scope of the present judgments. 2. As a separate enclosure to this judgment, a table is appended, with regard to the first six out of these cases, as an illustrative statement. The columns relate to the names of the parties or firms concerned, the value of the exports as per the G.R. 1 forms, the amounts realised, the amounts outstanding, the purchase of foreign exchange by the party in coatraveation of Section 4 (1) of the Act, the value of the import licences obtained, figures relating to the sale of such import' licences by the party, where these were available and, finally, the penalty or penalties imposed by the Director of Enforcement. Better than any description, these figures will show the true state of affairs, revealed during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ending exporters. A major and indisputable fact, in all these cases, is that the relevant declarations and licences were upon the scale of figures that were heavily over invoiced, at the moment, using purely neutral expressions, we may state that these figures did not represent any existing or even remotely probable contracts for sale and purchase at the foreign markets, but were fictitious. 5. Naturally, in many of these cases, nothing even amounting to a fraction of the ex facie export values could be realised or brought home to this country, as repatriated foreign exchange. On the contrary, what happened was that, in certain cases, goods to a very small extent were sold, and some foreign exchange was thus obtained and repatriated. In other cases in order to meet the legal obligations of the situation under the Foreign Exchange Regulation Act, the exporters tried to obtain extra foreign exchange by other and sureptitious means but this, as would be obvious to any student of economic trends, proved a self-limiting situation, or a vicious circle. By reason of the very demand for surreptitious modes of acquiring this extra foreign exchange abroad, the rates in the unauthorised or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the adjudication, and the further fact that they pleaded guilty to the charges. 7. Per contra, to put it very briefly, the learned Advocate-General contends that the orders of the Director ought not, in fairness, to be viewed in a perspective which excludes the situation from which they arose. The parties invited adjudication, made voluntary and full disclosures and with full knowledge and consciousness of their acts, pleaded guilty to charges under Section 4 (1) and Section 12 (2) of the Foreign Exchange Regulation Act. The entire question of a failure to exercise jurisdiction on the part of the Director or a misconception of the ingredients ought to be considered with this background kept in view. Apart from this, the learned Advocate-General contends that the substance of the charge was made out on the established facts, if, as the Director had every right to do, he ignored the fraudulent contrivances of the parties, euphemistically termed as over-invoicing, held them to the consequences of their own declarations. Further, the learned Advocate-General has powerfully urged that the writ of certiorari, though it is. sometimes issued ex debito judtitsiae, is not a writ of cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate-General, the charge under Section 12 (2) was established, and was rightly held to have been established by the Director of Enforcement. According to learned Counsel for the petitioners, particularly Mr. M. K. Nambiyar, Mr. Govind Swaminathan and Mr. R. M. Seshadri, who made this the main plank of their arguments the Director hopelessly misconceived the true ingredients of the offences. They cannot follow from the facts, which he has accepted in the detailed prologue, since over invoicing cannot, by any interpretation, be an offence rendered punishable under Section 12 (2). There is thus a failure of jurisdiction, or an error of law apparent on the face of the record. Irrespective of the pleas, the orders are liable to be struck down. (iii) According to the learned Advocate-General, it is very clear that the petitioners have approached the Court with unclean hands, in respect of a discretionary remedy like certiorari which is not available ex debtio justitiae, to a party thus seeking to pollute the very fountains of justice. The maxim ex turpi causa non oritur actio applies in this case, and there are ample authorities to support this view. The learned Advocate-General would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely by Mr. R. M. Seshadri, in particular, with the support of certain decisions, to which we shall later refer. (vi) The existence of alternative remedies under the Act has been canvassed during arguments. It is urged for the petitioners that the alternative remedy is onerous, since it requires the full deposit of the penalty, before the appeal can even be heard, and that where the alternative remedy is thus a very heavy burden on the party seeking relief, its mere existence would be no bar to the exercise of writ jurisdiction. (vii) The question whether, in certain of these cases, a firm can be penalised as a person has been canvassed by Mr. Srinivasan who has also sought to argue, with reference to his party, that the offence under Section 4 (1) is not made out, on the facts, and the true interpretation of that section; this is special to his case, though in other cases this was not adverted to. 9. We shall proceed to consider seriatim these grounds, and in dealing with the second ground, a somewhat elaborate analysis of the procedure and the terms of Section 12 (2) will be necessary. In a very real sense, the true interpretation of Section 12 (2), in relation to the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basic fact that these pleas were made. Per contra, it is argued that a plea of guilty is never with reference to the formal semblance of the charge, but with reference to its substance. For instance, even if the plea is there, if the substance has been misconceived or the ingredients are patently lacking, a party cannot be punished on his plea alone, and Courts of appeal will not uphold this. This is a familiar phenomenon in criminal jurisprudence, in particular; a man may plead guilty to a charge of murder, but his conviction therefor will not be upheld, if the facts established that he is guilty only of the lesser offence of culpable homicide not amounting to murder. Here, we think that the true answer is that both the invitations to adjudication, which appear to have been earnestly made in these cases, and the -actual pleas, will necessarily have to be kept in mind by this Court, in interpreting the orders of the Director of Enforcement, and in considering whether he misconceived his jurisdiction, or the ingredients of the law. But these grounds are not any absolute bar to a party seeking redress, if he can otherwise show that he is entitled to the issue of the writ ex debito ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant in the discussion. We are further extracting Rule 6 of the Foreign. Exchange Regulation Rules, 1952, dated 22nd April, 1952. 12. (1) The Central Government may by notification in the Official Gazette, prohibit the taking or sending out by land, sea or air (hereafter in this section referred to as export) of any goods or class of goods specified in the notification from India, directly or indirectly to any place so specified unless a declaration supported by such evidence as may be prescribed or so specified, is furnished by the exporter to the prescribed authority that the amount representing the full export value of the goods has been or will within the prescribed period be, paid in the prescribed manner. (2) Where any export of goods has been made to which a notification under Sub-section (1) applies, no person entitled to sell, or procure the sale of, the said goods shall, except with the permission of the Reserve Bank, do or refrain from doing any act with intent to secure that: (a) the sale of the goods is delayed to an extent which is unreasonable having regard to the ordinary course of trade, or (b) payment for the goods is made otherwise than in the presc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Sub-section (2) of Section 12, Section 17, Section 18-A or Section 18-B or of any rule, direction or order made thereunder, he shall: (a) be liable to such penalty not exceeding three times the value of the foreign exchange in respect of which the contravention has taken place, or five thousand rupees, whichever is more, as may be adjudged by the Director of Enforcement in the manner hereinafter provided, or (b) upon conviction by a Court, be punishable, with imprisonment for a term which may extend to two years, or with fine, or with both. (2) Notwithstanding anything contained in Section 32 of the Code of Criminal Procedure (V of 1898), it shall be lawful for any Magistrate of the First Class, specially empowered in this behalf by the State Government, and for any Presidency Magistrate to pass a sentence of fine exceeding two thousand rupees on any person convicted of an offence punishable under this section. (3) No Court shall take cognizance: (a) of any offence punishable under Sub-section (1) except upon complaint in writing made by the Director of Enforcement.... * * * 23-C. (1) If the person committing a contravention is a company every person who, at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of shipment of the goods: Provided that in the case of goods exported to Pakistan or Afganistan, the amount representing the export value shall be received within three months from the date of export: Provided further that the Reserve Bank, in its discretion, may, for sufficient and reasonable cause shown, extend the said period of six months or three months, as the case may be. The procedure is that the intending exporter applies in the G.R. 1 Form, which is of great importance for a true understanding of the terms of Section 12 (2) of the Act. The following particulars are relevant. He states: I hereby declare that I am the seller /consignor of the goods in respect of which this declaration is made and that the particulars given above are true and (a) that the invoice value declared is the full export value of the goods and is the same as that contracted with the buyer. (b) that this is a fair valuation of the goods which are unsold. 13. The record makes it very clear that where he applies as the seller, which is the relevant fact in these instances, he furnishes certificate (a) in the above form, and strikes out certificate (b). It is only if he is a mere c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vocate-General has been at some pains to gather the authorities on this aspect, and, in particular, he has placed before us the decision in Smyth Co. v. Bailey Co. (1940) 3 All E.R. 60 (H.L.), Income-tax Commissioner v. P.M. Rathod Co. , and B. K. Wadeyar v. Daulatram Rameshwar Lal . Our conclusion, on this aspect, must be that there can be no rigid line of demarcation in this respect; since such commercial contracts are of two broad categories, every thing would depend upon the particular terms, whether the property does or does not pass to the buyer, when the goods are placed on board the vessel for export. 15. Certain inferences, however, would appear to be fairly clear. The words no person entitled to sell, or procure the sale of the said goods, are clearly descriptive; they refer to the person in the capacity of the seller of the goods, or to a person entitled to procure the sale of the same, after the export of the goods has been made. But this does not necessarily imply, as far as we can gather, that the export must only be to a nominee of the consignor at the other end. On the contrary, any such interpretation would render meaningless the certificate in the G.R. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e were only with regard to goods actually sold, and they represented only a fraction of the originally declared, full export value. They were repatriated, at least in some cases, and hence the orders have to be set aside. 17. This, I think, confuses two distinct arguments. On a question of interpretation;, it seems clear that, in the light of the certificate furnished in the G.R. 1 Form, the full export value would certainly be the full amount payable by the foreign buyer, except, indeed, where other circumstances, such as an adverse rate of exchange, have affected the liabilities of the foreign buyer. If such circumstances were germane to the present issues, it must certainly be held that the Director has failed to address himself to the proper question, or to the establishment of the proper ingredients. But, in all these cases, solemn certificates were furnished by these parties, not merely to the effect that a particular amount was the full export value but also specifically that this represented the bargain or contract with the foreign buyer. The argument now is not that the two have varied, owing to other supervening causes. The argument based upon under-invoicing relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e obtaining of export and import licences by fictitious figures declared, which is over-invoicing. Irrefutable evidence to this effect can be found in one of the cases argued by Sri R.M. Seshadri, where learned Counsel appeared before the Director, and pressed the argument that the offence under Section 12 (2) was quite distinct from over-invoicing and, indeed, that the two were not particularly reconcilable. The Director then stated in his order as follows: It was however argued by Shri R.M. Seshadri, Advocate, that mere over-invoicing by itself is not punishable under Section 12 (2) of the Foreign Exchange Regulation Act and that the mere inability of an exporter to repatriate the full export proceeds without any violation or omission on his part would not constitute an offence. In my opinion the above arguments are untenable. For one thing the charge in this case is not for mere over-invoicing on exports but is one under Section 12 (2) which does not refer to any over-invoicing at all. Under Section 12 (2) (a) (as it stood before 30th December, 1964) an exporter should not do or refrain from doing any act with intent to secure that the sale of the goods is unreasonably del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e guilt, he makes it clear that he is aware of this distinction. But he holds the parties, in effect, to their assurance in the relevant certificates. In terms of these assurances, though the terminology might have been erroneous in one or other context, what he finds is that these persons manifestly failed to repatriate the foreign exchange representing the full amount payable by the foreign buyer, which has to be taken in the light of the certificates as identical with the full export value. In the light of this interpretation Section 12 (2) itself becomes clear, and we are unable to see that the order is vitiated by any failure to exercise jurisdiction in the proper manner, or any error of law apparent on the face of the record. It has to be reiterated that the orders have to be construed in the situations in which they were made, the parties having invited the adjudication, and deliberately pleaded guilty to the charges under Section 12 (2) of the Act. Even if there be a formal defect in the charge, in the light of those facts, the Court will clearly be justified in declining to exercise its jurisdiction under Article 226 of the Constitution. We now come to the ground relati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication to other cases though the Court might well recoil from the previous admitted conduct of the party at a, prior stage of the history of the case. I think it will be sufficient to cite the authorities here : U. C. Rekhi v. The Income-tax Officer A.I.R. 1951 Simla 1 Ratan Chandra v. Adhar Biswas A.I.R. 1952 Cal. 72, Kaboolchand v. Deputy Custodian . Deptylal V. Collector of Nilgiris (1959) 2 M.L.J. 208 : A.I.R. 1959 Mad, Marappa Gounder v. Central R. T. Board (1956) 1 M.L.J. 324, Manibhai Hathibai v. C. W. E. Arbuthnot A.I.R. 1947 Bom. 413, Hindustan Motors Ltd. v. Union of India and Baldev Singh V. Government of Pepsu A.I.R. 1954 Pepsu 98. 20. But, as the learned Advocate-General contends, I think with great force and plausibility, on the facts of the present matter, the case is very strong against the petitioners. In a recent decision of the Supreme Court, Public Passenger Service Ltd. v. M.A. Khadar , their Lordships have expressed the principle thus at page 492: ...the maxim (Ex turpi causa non oritur actio) does not mean-that every improper conduct of the applicant disentitles him to equitable relief. The maxim may be invoked where the conduct complained of is unf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions on the law. 22. On a careful consideration of this aspect of the case I think it is clear that there were two kinds of bars in equity, if I may so term it, with regard to a relief, by way of issue of writ of certiorari, which does not issue ex debito ustitiae, except within the well-recognised limits of the law. One bar certainly is that the party is disentitled by his depravity of conduct in the very proceeding, such as the filing of a false affidavit, or any other conduct which might be characterised as a resort to the Court of justice with unclean hands, pertinent to his conduct of the cause itself. That principle has been recognised in the decisions cited by Mr. M. K. Nambiar, including Rex v. Kensington, Income-tax Commissioners, Ex parte de Poligaac Princes Edmond (1917) 1 K.B. 486. But this category is not necessarily exhaustive. Equally, a party cannot pray to the Court for relief, based on the recognition of his own fraud or fraudulent contrivances, the substance of his defence being that the recognition of this fraud-will preclude the application of some other provisions of law to his case; in these instances, Section 12 (2) of the Foreign Exchange Regulation Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Enforcement. But the Director is not left without any statutory guidance in respect of the exercise of his discretion, whether to act under Section 23 (1) (a) or to resort to a complaint to Court, which may ultimately lead to a conviction under Section 23 1 (b). Under Section 23 (d) (1) proviso, the Director is to have regard, with reference to its scope, to the circumstances of the case and the fact that the penalty, which he is empowered to impose would not be adequate. Sri K. Srinivasan has argued that this refers to another category of cases, and not to cases where ab initio the Director desires to make a complaint. However, that might be, the statute itself furnishes the guidance and we are, hence, quite unable to hold that Section 23 (1) (a) per se offends Article 14 of the Constitution. 24. The next argument is that advanced by Mr. Srinivasan that Section 23 (1) (a) is violative of the Article 14, because it furnishes no basis for the Director to exercise the quasi-judicial discretion between the minimum of ₹ 5,000 and an unascertained maximum. As observed by the Supreme Court in F. N. Roy v. Collector of Customs , 651, the discretion is certainly not uncontrolled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hstanding an argument of Mr. Srinivasan that we may notice here, for this purpose, that the misconceived or illadvised export promotion scheme of the Government, itself virtually forced the parties to over-invoicing. But the learned Advocate-General stresses that, apart from some objective events, such as proceedings initiated or investigations conducted on certain dates, the rest of this narrative is really culled from facts disclosed in the statements of the parties; those were the sources which the Director has drawn upon and, even now, the parties do not claim that their statements could not have been acted upon. Where, the extraneous matter, so-called, truly relates to statements made by parties in the very proceedings, which are relevant material, we do not see how this argument of intrusion of prejudicial matter can be sustained. It may be that, here and there, the Director has used somewhat strong expressions; they represent his reactions to the disclosures, and cannot be termed unnatural, though it may be claimed that he should have been more careful, and that he should have Used more neutral terms. However that might be, such facts, as the procurement of import licences o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more restricted, and certainly not any exact replica of the terms of Section 4 (1) of the Act under consideration. The terms of Section 4 (1) are wider, and presumably, deliberately made so. It is difficult to follow the argument that these persons did not acquire foreign currency, though the modus operandi may have been such that, finally Indian rupees alone came into this country. It is the nominee or the agent who appears to have obtained the foreign currency for the concerned petitioners; and converted the foreign currency into Indian currency. But even this may well fall within the ambit of Section 4 (1) of the Act. 29. Concerning the last point, that the word person may not include a firm at all, the matter would appear to be concluded by the definition of that word in Section 3 (42) of the General Clauses Act. Indeed, it was not argued in any of the other cases that a firm was not a person and was not liable as such; the argument was the other way round, that the liability of partners, who were not directly concerned, should have been carefully scrutinised, within the scope of Section 23-C of the Act. But this is a matter to be dealt with, upon individual petitions. 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 1947, published in notification ENF. II/52, dated 22nd April, 1952, the amount representing the full export value of the goods shall be received from the country of final destination of the goods and shall be paid to the exporter within six months from the date of shipment through the authorised dealers unless permitted otherwise by the Reserve Bank. The applicants in Writ Petition No. 3651 of 1965 admitted that the firm exported handicraft goods (zari brocades) to Singapore, that they had grossly over valued the goods in the invoices, that the values mentioned in the invoices did not represent the correct value of the goods, that based on the values mentioned in the invoices they got import entitlements, and that a portion of the values mentioned in the invoices were alone repatriated to this country even the amount repatriated being something more than the actual value of the goods. The difference, the applicants stated, was made up by acquisitions of foreign exchange from other sources. The total value of goods exported by the applicants as per their invoices is ₹ 4,68,359. Out of this a sum of ₹ 55,622 is said to have been repatriated as earned from the goods ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gn consignees within the prescribed time as aforesaid in the prescribed manner the said....Shri Chenna Krishna Textiles, appear to have contravened the provisions of Section 12 (2) of the Foreign Exchange Regulation Act, 1947 as amended up to 1964 read with the Central Government Notification No. 6 (8) ENF.II/52, dated 22nd April, 1952 and have thereby rendered themselves liable to be proceeded against under Section 23 (1) (a) of the said Act. Now, therefore, the said Messrs. Chenna Krishna Textiles, Vembadithalam and their partners mentioned below are required to show cause in writing within 10 days of the receipt of this memorandum, why adjudication proceedings should not be held against them for the said contraventions as contemplated in Section 23 (2) of the Foreign Exchange Regulation Act, 1947. On this the applicants referring to the facts set out in their voluntary statements pleaded guilty to the charge of having contravened the provisions of Sections 12 (2) of the Act in respect of the outstanding bills of the f.o.b. value of ₹ 4,12,737--prayed for an enquiry and submitted themselves for adjudication. On 27th July, 1965 the Director of Enforcement, New Delhi, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed authority that the amount representing the full export value of the goods has been, or will within the prescribed period be paid in the prescribed manner. (2) Where any export of goods has been made to which a notification under Sub-section (1) applies no person entitled to sell, or procure the sale of, the said goods shall, except with the permission of the Reserve Bank, do or refrain from doing any act with intent to secure that: (a) the sale of the goods is delayed to an extent which is unreasonable having 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, or is delayed to such extent as aforesaid: (The Act as it stood before 1st April, 1965, prior to its amendment by Act LV of 1964 being the relevant Act is set out here). Provided that no proceedings in respect of any contravention of this subsection shall be instituted unless the prescribed period has expired and payment for the goods representing the full amount as afore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration is whether there has been contravention of Section 12 (2). Section 23 which provides penalty for contraventions ran thus before its amendment by Section 23, Act LV of 1964: (1) If any person contravenes the provisions of Section 4, Section 5, Section 9 or Sub-section (2) of Section 12 or of any rule, direction or order made thereunder he shall: (a) be liable to such penalty not exceeding three times the value of the foreign exchange in respect of which the contravention has taken place, or five thousand rupees, whichever is more, as may be adjudged by the Director of Enforcement in the manner hereafter provided, or (b) upon conviction by a Court, be punishable with imprisonment for a term which may extend to two years, or with fine, or with both. (1-A) Whoever contravenes, (a) any of the provision of this Act or of any rule, direction or order made thereunder, other than those referred to in Sub-section (1) of this section and Section 19 shall, upon conviction by a Court, be punishable with imprisonment for a term which may extend to two years, or with fine, or with both; (b) any direction or order made under Section 19 shall, upon conviction by a Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in form G.R. 1. It requires a statement of the invoice value of the goods stating the currency and other particulars. The actual declaration in the form runs: I hereby declare that I am the Seller / Consignor of the goods in respect of which this declaration is made and that particulars given above are true and (a) that the invoice value declared is the full export value of the goods and it is the same as that contracted with the buyer, (b) that this is a fair valuation of the goods which are unsold. I/my principals undertake that I/they will deliver to the Bank mentioned below foreign exchange/rupee proceeds resulting from the export of these goods on or before.... It is stated that the Director of Enforcement in all the cases finds that the exported goods had been sold abroad for a very low price and the amount realised which was only the real value has been duly repatriated. He, it is also stated, finds that the balances shown as outstandings not repatriable by the exporters are fictitious figures and unreliable and that obviously even at the time of export the exporters had no intention of repatriation of the export proceeds. At this stage I am considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he undertaking is that the exporter will deliver to the specified bank the foreign exchange /rupee proceeds resulting from the export of the goods by the specified date. The bank which has to collect the proceeds of the export in case of consignments for sale when delivering the shipping documents takes an undertaking or trust receipt from the consignee for payment for the goods by the prescribed date. The contravention alleged in all these cases in express terms is the failure of the exporters, to realise the full export value of the goods from the country of destination within the prescribed time and manner in contravention of Section 12 (2) read with the notification dated 22nd April, 1952. The question is, is there a contravention falling under Section 12 (2). 35. With reference to the case under consideration, the material part of Section 12 (2) if extracted will read: Where any export of goods has been made--no person....shall, except with the permission of the Reserve Bank, do or refrain from doing any act with intent to secure that....payment for the goods.... does not represent the full amount payable by the foreign buyer in respect of the goods... There is no que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies to a case where there is a seller and a specified buyer who has contracted to buy the export being on sale. To my mind the words full amount payable by the foreign buyer, may conceivably also take in a possible buyer or would be buyer in the case of an export to a consignee for sale. The assurance given by the exporter in his G.R. 1. form, a statutorily prescribed form, to repatriate the foreign exchange proceeds resulting from the export of goods by a fixed date, provides a key to such interpretation. It is a determinable objective value, and may be more or less than the full export value. It is what actually results from the export, of course, which is bona fide earned on the export. In that view the fact that the person entered as buyer in the form turns out to be in fact a consignee for sale, or a nominee of the buyer, as is claimed, for some of the exporters may not be material. Foreign buyers must obviously be in contemplation of the exporter when the invoice value is given in the G.R. 1. form. Declaration (a) in the form brings out clearly that every dollar or shilling of foreign exchange available by the export must be secured to the country. The four expressions therei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sider here such contingency. Bat I would interpret the full amount payable by the foreign buyer found in Section 12 (2) (b) as the amount which a sale of the goods in the open export market would fetch for the goods where the buyer and seller are independent of each other and the price is their sale consideration and they are not influenced by any commercial or financial or other relationship except as buyer and seller. Also no part of the proceeds or profits by re-sale or use or disposal of the goods should accrue either directly or indirectly to the seller; 39. Now to come to the contravention of Section 12 (2), assuming for the moment that the exporter should be held to his declaration and will not be permitted to plead otherwise, can it be said, that after the export he has done or refrained from doing any act with intent to secure that the payment for the goods does not represent the full amount payable by the foreign buyer in respect of the goods? What is it the exporter can be said to have done or refrained from doing after export of the goods with intent that the full amount as declared is not realised? If his case is accepted, he had exported goods which could not fetch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat they can have no market. In fact his plea is that they are not marketable goods at all. No further intent is necessary after the export to secure that the full amount, why even a fair fraction of it, is not realised. 40. True, interpreted in this manner, the exporter escapes from his obligation and his contravention will not fall under Section 12 (2). It may be that he is pleading his own fraud and falsity to escape from the penalty provided under the section, a deliberate dereliction of duty and an offence to society in the present context of the country's economy of a very grave nature. But penalties are purely creatures of the Legislature. They cannot be created by judicial implication and must be expressly imposed by a statute. For the imposition of a penalty the provision of law must be clear and free from doubt. Laws imposing penalties cannot be extended by construction to anything beyond the letter of the law even though within their spirit. It must be noted that in this case Section 23 provides also for criminal prosecution where heavy punishment is necessary. The language of the statute cannot be construed as having one meaning if criminal proceedings are brough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his assurance, to ignore the plea that the goods even at the time of the export had no value in the market, to hold the declarant to the value he has assured to repatriate and charge him with failure to repatriate funds in terms of his undertaking. The Director may consider that the so-called confession of fraud and falsity may itself be false and refuse to accept the same. As this is a possible approach by the Director of Enforcement,, consideration of this aspect of the matter will have to be taken up when examining the orders of the Director individually. In interpreting the orders, the Court has to bear in mind the manner in which adjudication has been invited by voluntary disclosure the so-called confession and the plea of guilty to the charges framed. Scrutiny of the facts of each individual case and sifting of evidence by the Director has been avoided by the parties by their conduct in the proceedings. When we take up the individual cases for examination, we have to see whether apart from referring to the confessions, their truth is accepted by the Director. It is one thing to narrate and refer to the confessional statement for adjudicating penalty; it is quite a different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of their action. The principle of estoppel, it has been said, has always been made for righteousness and operated to defeat grossly dishonest claims or defence. When an exporter is being proceeded against for contravention of Section 12 (2), in the proceedings the exporter does not make any claim of his own. He seeks to avoid the penalty that may be levied or defend against the conviction. Offences are defined by statutes and have to be founded on facts proved or established or deemed by statutes to have been proved or established and not on presumptions or assumed state of circumstances. Justice has to be administered according to law and even a felon has to be judged only under the law. Then only is justice rendered. A man cannot be convicted even on his own confession of guilt if the Court finds that the confession is not true or on the facts confessed he is not guilty of the offence to which he pleads guilty. If in a particular case before us it is found that the foreign exchange proceeds actually resulting from the export of goods, is not the invoice value or full export value of the goods as declared and the proceeds of the export realised, fall considerably short of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue of certiorari is strictly a matter of discretion, the relief being granted for the advancement of justice and to strike down injustice. But Mr. M.K. Nambiar, Counsel for one set of applicants, contends that discretion both in the granting and withholding of relief now runs more or less in fairly well evolved channels and that it is only certain conduct in relation to the very proceedings in Court that would disentitle the applicants to relief. Other Counsel appearing for the applicants adopted this argument and it is stated that the requirement in this regard is that the applicants should not make before the Court in the proceedings for certiorari any statement which is false or conceal something from the Court which is relevant. It is stated that if the Court has reason to be satisfied that there has been deliberate concealment of facts so as to mislead the Court, the Court will decline to consider the merits of the case and reject the application. A number of cases were cited where the rule has been applied and relief refused to the applicants. In view of the strenuous arguments of learned Counsel that the conduct pleaded in the present cases is not of the type contempl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the passage at page 140 in Halsbury's Laws of England, volume XI, Simonds edition, wherein with respect to application for certiorari by a party aggrieved it is observed: Although the order is not of course it will though discretionary nevertheless be granted ex debito justitiae, to quash proceedings which the Court has power to quash, where it is shown that the Court below has acted without jurisdiction or in excess of jurisdiction, if the application is made by an aggrieved party and not merely by one of the public and if the conduct of the party applying has not been such as to disentitle him to relief. Ex debito justitiae only means from what is due to justice. It is interesting to note that the cases given in the footnote with reference to the principle that the conduct of a party may disentitle him to relief are grouped under the following heads : acquiescence in irregularity complained of; second application on amended affidavits, undue delay in applying for the writ; acquiescence in jurisdiction of Court below; failure to object below to constitution of Court; and waiver of the right to object on the ground of interest of the Tribunal. The argument naturally is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed himself from taking an objection, the Court will not permit him to take it (Regina v. The South Holland Drainage Committee Men, Ex parte Prest (1838) 8 L.J.Q.B. 64. 46. In S.A. De Smith's Judicial Review of Administrative Action it is stated at page 3I6: Waiver, acquiescence and laches are not the only discrtionary bars to : the award of certiorari and prohibition. The Court is entitled to have regard generally to the conduct of the applicant and to the special circumstances of the case in deciding whether to grant him the remedy he seeks. 47. Of the three cases relied on by the learned author in the footnote for the proposition, in one case the application for prohibition was refused because the applicant had misrepresented and suppressed the material facts in her affidavit. Another application for certiorari was refused because of the serious misrepresentations in the counter affidavit. With reference to the third case, Ex parte Fry (1954) 2 All E.R. 118, which I shall be referring to presently the learned author states that the ground for refusal of certiorari was the exceedingly foolish and unreasonable conduct of the applicant. The learned Advocate-General, apa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem. The premises in question had been released to the petitioner earlier for his personal use and applications for allotment were made by others contending that he has sub-let the premises in contravention of the release order. The petitioner ostensibly was having the business in partnership with others in the premises. The Rent Control and Eviction Officer found that the deed of partnership was not a genuine one, but a transaction transferring possession of the godown to others for consideration and that it was an illegal form of sub-letting and a device to evade the provisions of the rent control law. On this finding he declared the godown vacant for allotment. It is this order that was sought to be quashed in the certiorari proceeding. The learned Judge on the writ held that there was material on record to justify the finding. The passage quoted above comes after this finding the learned Judge ultimately observing that the petitioner would not have been entitled to any relief under Article 226 even if he had made out a case, which he had not. Earlier the learned Judge observed that the petitioner had not been candid with the Court in his presentation of facts in the affidavit s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51. The Judgment in Ex parte Fry (1954) 2 All E.R. 118, relied upon by the learned Advocate-General has been considered to be a case of non-interference on the ground that the applicant was exceedingly foolish and his conduct was unreasonable. The applicant in that case was a fireman who had disobeyed an order to clean his superior officer's uniform and was given a caution by the Chief Fire Officer under the Fire Services (Discipline) Regulations. For refusing the relief it was stated at page 122: The applicant is a member of a service which is of great public importance. For the good of that service and of those who are employed in the service the Secretary of State has made regulations so that their position may be ascertained and there may be as few difficulties as possible. There is ' a complete code '. If a man feels that he is ordered to do something which he ought not to be ordered to do, he can raise the matter in the way that I have said, but if, instead of doing that, he deliberately sets out to disobey the order given to him by a superior officer, he is only making difficulties for himself and for the whole of the service, and that is something which h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed on certiorari was refused at the instance of a party who had waived the regular notice to treat and allowed the inquisition to be taken before the proper time and who had allowed the calculations to be taken for compensation in a mode not authorised by the Act. It was made out in the affidavit in answer that the defect in the procedure was as a result of express consent and waiver on the part of the applicant. With reference to the calculations the applicant was a party to the arrangement under which the calculations were made. There was another objection and it is that which is relevant here, that compensation had been provided as. if it was freehold land whereas in fact it was copyhold property and that compensation ought to have been provided for the Lords of the manor in respect of their interest in the premises. The Lord of the manor also appeared at the hearing as his interest was involved, the assessment of the compensation being final and conclusive upon all parties and the Jury had only to apportion the compensation among the different interests. It was doubtful whether copyholds could be taken at all. Lord Denman, C.J., in discharging the rule observed at page 65: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement and for the first time before this Court pleaded their inequity and fraud and asked this Court to grant them relief, as Section 12 (2) would not apply to a case of over-invoicing, this Court may, in my opinion, in limine reject the applications for relief. In such cases, the case for relief is founded on the plea of fraud. The basis for the prerogative relief of certiorari then would be that the applicants had deceived the Department but that on the true facts as disclosed for the first time in the affidavit before Court, there could be no contravention of Section 12 (2). In such cases even if the Department is not in a position to contradict the facts, this Court will refuse relief as the relief is directly founded on fraud. This Court is then asked to accept the dishonesty and fraud of the applicants as a fact and grant them relief on that basis--but nemo allegans turpitudinem suam est audiendus (no one alleging his own baseness is to be heard). It may be different if the applicant is not asking this Court to accept his plea of falsity and grant him relief on that ground. In a case, where the applicant states that the Tribunal has accepted and found the true facts and uncov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant lacked uberrima fides and where there was suppression of material facts the application was refused. Cases may be referred to where the discretion is exercised in favour of an applicant when his laches or acquiescence is the result of ignorance, accident, etc. Relief has also been denied if the claim to relief is founded on the applicant's own fraud or dishonesty. The Court looks to the conduct of the applicant when the question is, which way the discretion has to be exercised. It is not every improper conduct of the applicant that should disentitle him to relief. Depravity of conduct on the part of the applicant or falsity or dishonesty on his part that would preclude him from claiming relief, apart from special circumstances of a particular case must in my view ordinarily be so related to the relief claimed that recognition of the dishonesty or falsity or depravity of conduct by the Court is first called for before relief is granted. Ordinarily to deny the applicant the justice he is found entitled to, the relief must rest on the prayer to the Court to accept his depraved conduct as the truth. But that is not to say that conduct of the applicant when not made the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir declaration. In fact it is beyond my comprehension how such a huge fraud had been committed without detection. Lakhs and lakhs worth of handicraft goods are stated to have been exported on export permits and it is stated now that the goods were of no value and were worthless goods which had no market even at the time of export. Section 12 (6) of the Act authorises the authority to call for evidence to show that the full amount payable by the foreign buyer in respect of the goods will be paid in the prescribed manner. It is astonishing that despite the wide powers the authorities have, the nature of the goods exported has escaped detection before shipping. These exports were made after incentive had been offered by import licences and import licences were granted in advance before receipt of the proceeds of export. One would expect, in such circumstances, grater scrutiny and vigilence on the part of those who look after these exports and imports. Is it supine indifference to what was passing under their very nose, lack of diligence or gross dereliction of duty, or what? Naturally, Mr. K. Srinivasan, Counsel for one set of applicants submits to us, that over-invoicing has been the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the respondents had no effective remedy, for they could not file an appeal without depositing as a condition precedent the large amount of penalty imposed on them. That apart, the existence of an effective remedy does not oust the jurisdiction of the High Court, but it is only one of the circumstances that the Court should take into consideration in exercising its discretionary jurisdiction under Article 226 of the Constitution. In this case, the High Court thought fit to exercise its jurisdiction under Article 226 of the Constitution and we do not see any exceptional circumstances to interfere with the discretion. 58. I fail to see how these observations can help the applicants in these cases The existence of an alternative remedy of course does not bar this Court from interfering under Article 226 when interference is necessary. But this Court has discretion in the matter and it will have to consider whether in a particular case the other remedy is futile. In Sales Tax Officer v. Shiv Ratan , their Lordships observed at page 144: We are of the opinion that the High Court should have declined to entertain the petition. No exceptional circumstances exist in this case t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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