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PETITIONER: DARA SINGH

       Vs.

RESPONDENT: STATE THROUGH DIRECTOR OF ENFORCEMENT, NEW DELHI

DATE OF JUDGMENT29/10/1980

BENCH: VENKATARAMIAH, E.S. (J) BENCH: VENKATARAMIAH, E.S. (J) SARKARIA, RANJIT SINGH

CITATION:  1981 AIR  427            1981 SCR  (1) 987  1980 SCC  (4) 586

ACT:      Foreign Exchange  Regulation Act 1947-Section 23F-Scope of-order imposing  penalty not  communicated to the accused- non-payment of  penalty within  stipulated period-if amounts to contravention  of section  23F-Knowledge of  order on the date of appearance before Magistrate-if amounts to knowledge of penalty.

HEADNOTE:      An  exparte  order  holding  the  appellant  guilty  of certain offences  under the  Foreign Exchange Regulation Act and imposing  penalty for  such contravention  was passed by the Director of Enforcement. On completion of 45 days of the issue of  the order  within which  period  the  penalty  was required to  be  paid,  a  complaint  was  lodged  with  the Judicial Magistrate,  1st class  alleging that even though a copy of the impugned order had been served on the appellant, he failed  to deposit  the penalty  and, that, therefore, he was liable to be punished under section 23F of the Act.      Accepting the  appellant’s plea  that no  copy  of  the impugned order having been served on him there was no ground to hold  him guilty  of contravention  of  section  23F  the Magistrate acquitted  him. The Magistrate, at the same time, rejected the  complainant’s contention  that  even  assuming that the  impugned  order  had  not  been  received  by  the appellant he  had come to know of it on the date he appeared before the  Magistrate and  when the  charge had been framed against him  and his failure to pay the penalty despite this knowledge was  enough to  attract the  provisions of section 23F. He  held that  these allegations were stated neither in the  complaint   nor  in  the  charge  and,  therefore,  the appellant could not be convicted.      Although the  High Court, on appeal, upheld the finding of the  Magistrate that  the impugned  order  had  not  been served on  the appellant  it was  of the view that since the appellant had  come to know about the order then he appeared before the  Magistrate but  still had  not paid  the penalty within a  reasonable time  thereafter, he  was liable  to be punished under section 23F of the Act.      Allowing the appeal. ^      HELD: The  appellant  had  not  committed  any  offence

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punishable under section 23F of the Act. [993G]      When the  law lays  down that  non-compliance  with  an order would  expose The  person against  whom it  is made to criminal liability,  It is  reasonable to  hold that  in the absence of proof of knowledge of the order no penal action H can be taken against him for non-compliance with that order. The information  or knowledge which he may gather about such order in the course of criminal 988 proceedings instituted  for non-compliance with it cannot be a substitute  for the  knowledge of  the order, which should ordinarily precede  the institution of such proceedings. The High Court  was, therefore, in error in the circumstances of the case  in setting  aside the order of acquittal passed by the Magistrate  and in  finding the  appellant guilty of the offence complained of. [992H]      The rules framed under the Act set out the procedure to be followed  by the  Director in  holding an  enquiry  under section 23D of the Act. Although, there is no rule requiring a person  against whom an order is made to appear before the Director on  the date  of pronouncement of his order, rule 5 of the  Rules requires that a copy of the order passed under rule 3(7)  should be  supplied free  of charge to the person against whom  the  order  is  made.  In  the  absence  of  a provision requiring the service of a notice on such a person informing him  that the  order  would  be  pronounced  on  a specified future  date, the only date on which the order can be deemed to have been effectively made is the date on which he gets knowledge of the order either by supply of a copy of the order or by any other means. The period of limitation to appeal cannot  be computed from a date earlier than the date on which  the aggrieved party has knowledge of the order. In the absence  of proof  of knowledge  of the  order either by supply of its copy or in any other manner the person failing to pay the penalty cannot be proceeded against under section 23F. [991H, 992F]      In the  instant case  the Magistrate and the High Court refused to  accept the  plea of  the Director that a copy of the impugned order had been served on the appellant. Neither on the  date of  the complaint  nor on  the  date  on  which process was  issued by  the  Magistrate  had  the  appellant knowledge of  the order  imposing the  penalty; nor  did the charge state  that the  impugned order had been communicated to him  and that  he was being tried for non-compliance with that order.

JUDGMENT:      CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 76 of 1974.      Appeal by  Special Leave  from the Judgment dated 9-11- 1973 of  the Delhi High Court in, Criminal Appeal No. 174 of 1972.      R. L.  Kohli (Amicus  Curiae) and  R. C.  Kohli for the Appellant.      Hardayal Hardy, Miss A. Subhashini and R. N. Poddar for the Respondent.      The Judgment of the Court was delivered by      VENKATARAMIAH, J.-This appeal by special leave is filed against the  judgment of the High Court of Delhi in Criminal Appeal No. 174 1972 convicting the appellant, Dara Singh, of an offence  punishable under  section  23F  of  the  Foreign Exchange  Regulation   Act,  1947   (Act  No.   7  of  1947) (hereinafter referred to as ’the Act’) and sentencing him to

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imprisonment for  a term  of one  year with a direction that the said  sentence should be served by him concurrently with the sentence  of imprisonment  for life  imposed on  him  in another case on a charge of murder. 989      The facts  leading to  this appeal  can  be  summarised thus: On  March 28,  1963 foreign  currencies amounting to $ 185 and  U.S. $  13060 besides  Indian currency amounting to Rs. 1,300  were seized  from the  appellant by  the  Railway Police  at   the  Railway   Station  at  Sangrur.  Thereupon proceedings  were   initiated  against   the  appellant  for contravention of  sections 4  and 9 of the Act under section 23 (1)  (a) read  with section  23D of  the Act  before  the Director  of  Enforcement  of  Foreign  Exchange  Regulation appointed by  the Central  Government  for  the  purpose  of enforcing the  provisions of  the Act.  By an ex-parte order dated May  12, 1967,  the Director  of Enforcement  held the appellant guilty of contravention of provisions of section 9 of the Act read with the Central Government Notification No. F. 1(67-EC/57, dated 25-9-1958 as amended upto 6-3-1961) and section 4(1)  of the Act and imposed on him a penalty of Rs. 6,000 which  the  appellant  was  directed  to  pay  to  the Directorate of  Enforcement within  forty-five days  of  the issue of  the order.  As the  penalty was  not  paid  within forty-five days  from the  date of the issue of the order of the Director  of Enforcement,  a  complaint  was  lodged  on November 13,  1969 by  the Deputy  Director  of  Enforcement before the Judicial Magistrate, First Class, New Delhi under section 23F of the Act. In the complaint it was specifically stated  that  a  copy  of  the  order  of  the  Director  of Enforcement imposing  the penalty  on the appellant had been served on  him on  May 4, 1968 and that as the appellant had not  deposited   the  penalty  with  the  1  Directorate  of Enforcement within  forty-five days  from the  date  of  the order, the appellant was liable to be punished under section 23F of the Act. The appellant denied that he had been served with the  copy of  the order  of the Director of Enforcement imposing penalty  on him  and further stated that he did not Know that he had to pay the penalty in question. The learned Magistrate acquitted  the appellant  by his order dated July 29, 1972  holding that  it had not been established that the order passed  by the Director of Enforcement had been served on the  appellant on May 4, 1968 as alleged in the complaint and that,  therefore, there  were no  grounds  to  hold  the appellant guilty  of contravention of section 23F of the Act which read thus:           "23F. If  any person  fails  to  pay  the  penalty      imposed by the Director of Enforcement or the Appellate      Board or the High Court, or fails to comply with any of      their directions  or orders,  he shall,  on  conviction      before a  Court, be  punishable with imprisonment for a      term which  may extend  to two  years, or with fine, or      with both."      The Magistrate  while acquitting the appellant rejected the plea of the complainant that the appellant was liable to be punished under 990 section 23F  since he  had in  any event come to know of the order of the Director of Enforcement on the date on which he appeared in the Court i.e., on August 7, 1970 and the charge had been framed by the Magistrate on March 4, 1972 after the expiry of a period of forty-five days from the date on which the appellant  had appeared  in the  Court by observing that "he could not be convicted in the case on that count because these allegations  are not contained even in the charge much

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less  in  the  complaint".  Aggrieved  by  the  decision  of acquittal of  the Magistrate,  the Director  of  Enforcement filed an  appeal before  the High  Court of  Delhi with  the special leave  of that court granted under section 417(3) of the Code  of Criminal  Procedure. As  the appellant  who was undergoing imprisonment  for life  imposed on him in another case  at  the  Central  Jail  Ferozepur  did  not  make  any arrangement for  his  defence  before  the  High  Court,  an advocate was  appointed as amicus curiae to assist the court in the appeal. After hearing learned counsel who appeared in the case,  the High  Court by its judgment dated November 9, 1973  reversed   the  order   of  acquittal  passed  by  the Magistrate,  found  the  appellant  guilty  of  The  offence punishable under section 23F of the Act and sentenced him to imprisonment for  a term  of one  year. While  doing so, the High Court  agreed with  the finding  of the Magistrate that the order of the Director of Enforcement imposing penalty on the appellant had not been served on the appellant on May 4, 1968 as alleged in the complaint but it was of the view that since the  appellant had  come to  know about  the order  on August 7, 1970 when he appeared before the Magistrate and he had  not   paid  the   penalty  within   a  reasonable  time thereafter, he  was liable  to be punished under section 23F of the  Act. The  relevant part  of the judgment of the High Court reads thus:           "The order  of acquittal made by the learned trial      Magistrate proceeds,  in our  opinion, on an altogether      erroneous view  of the provisions of section 23F of the      Act. For  proving the  guilt of Dara Singh in the light      of the  charge framed  against him,  it had  only to be      established that  he had  failed  to  pay  the  penalty      imposed by  the Director of Enforcement. As was ordered      by the  Director of  Enforcement the  penalty had to be      paid within  45 days  from the  date of  issue  of  the      adjudication  order.  Obviously,  however,  no  payment      could be made unless the person on whom the penalty was      imposed had come to know about the order. At the latest      Dara Singh  came to  know about  the adjudication order      on’ August  7, 1970,  if not  earlier. He  should have,      therefore, paid  the penalty within a reasonable period      from that date and in any case within 45 days from 991      the said  date. The  penalty not  having been  paid  or      deposited by  Dara Singh,  he  was  clearly  guilty  of      contravention of  the adjudication  order made  by  the      Director of Enforcement and should have been, convicted      under section 23F of the Act".      The question  which arises  for consideration  in  this appeal  is   whether  the   High  Court  was  right  in  the circumstances of the case in finding the appellant guilty of the offence  in question.  It is  necessary at this stage to refer briefly  to some  of the provisions of the Act and the Adjudication Proceedings and Appeal Rules, 1957 (hereinafter referred to  as ’the  Rules’) framed under section 27 of the Act. Under  Clause (a)  of sub-section  (1) of section "3 of the Act,  the Director  of Enforcement  is empowered to levy 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  him in  the manner  provided in  the Act in any person is  found to  contravene the provisions of section 4, section 9  or any  of the  other provisions  referred to  in section 23(1).  Section 23D of the Act requires the Director of Enforcement  to hold  an inquiry in the prescribed manner against any  person who  is liable  to be  proceeded against

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under clause  (a) of  section 23  (1)  after  giving  him  a reasonable  opportunity  of  being  heard  and  if  on  such inquiry, the  Director of  Enforcement is satisfied that the person has  committed the  contravention, he may impose such penalty as  he thinks  fit in accordance with the provisions of section  23 of  the Act.  An appeal lies to the Appellate Board under  section 23E of the Act against the order of the Director of  Enforcement imposing  penalty. Rules 3, 4 and 5 of the  Rules set  out the  procedure to  be followed by the Director of Enforcement in holding the enquiry under section 23D of  the Act.  Rule 3  of the Rules among others provides for the  issue of  a  notice  to  the  person  against  whom proceedings  are   initiated  for   contravention   of   the provisions referred  to in  section 23(1) of the Act and for giving an  opportunity to  him  to  defend  himself  in  the proceedings before the Director of Enforcement. Sub-rule (7) of Rule  3 of the Rules provides that if, upon consideration of the  evidence produced  before the Director, the Director is   satisfied   that   the   person   has   committed   the contravention, he  may, by  order  in  writing  impose  such penalty as  he thinks  fit in accordance with the provisions of clause  (a) of sub-section (1) of section 23. There is no rule requiring  the person  against whom an order is made to appear before  the Director  of Enforcement on any specified date on which the order would be pronounced in his presence. Rule 4  of the Rules requires the Director of Enforcement to specify in  his order  the provisions  of the  Act or of the Rules, 992 directions or  orders made  thereunder in  respect of  which contravention has  taken place and to give brief reasons for his decision.  Rule 5  of the  Rules requires that a copy of the order  made under  sub-rule  (7)  of  Rule  3  shall  be supplied free of charge to the person against whom the order is made  and that  every copy of such order shall state that the copy  is supplied  free of  charge for  the use  of  the person to  whom it is issued and that an appeal lies against that order  to the  Appellate Board under section 23E within thirty days  of the  date of  the order.  Rule of  the Rules states that  every appeal  presented to  the Appellate Board under section  23E of  the Act  shall be  in the  form of  a memorandum signed  by the appellant and the memorandum shall be accompanied by a copy of the order appealed against.      Having regard  to the  aforesaid provisions  of the Act and the  Rules, it has to be held that the service of a copy of the  order made under sub-rule (7) of Rule 3 of the Rules on the  person against whom the said order is made is not an empty formality.  In the  absence  of  a  provision  of  law requiring the Director of Enforcement to pronounce his order in the  presence of  the person against whom it is made, the only date on which it can be deemed to have been effectively made is the date on which he gets the knowledge of the order either by  the supply of a copy of the order or by any other means because  first, the  statute provides  a remedy to the person against whom the order is made by way of an appeal to be preferred  within the  prescribed period from the date of the order  to the  Appellate Board  under section 23E of the Act and  secondly noncompliance  with the order would expose him to  the punishment  that may  be imposed  on  him  under section 23F of the Act. It would be wholly unjust to compute the period  of limitation  to file  an appeal  from  a  date earlier than  the date on which the party who is entitled to prefer an  appeal has  the knowledge  of the order. In cases where an  order which is appealable is not pronounced in the presence of the person against whom it is made, it should be

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assumed that  unless there  is any specific provision of law to the  contrary the  date of  his knowledge of the order is the date  of the  order for  the purpose  of  computing  the period of limitation irrespective of the date on which it is actually passed.  (Vide Raja Harish Chandra Raj Singh v. The Deputy Land Acquisition Officer & Anr. It is equally so even in the  case of  an order non-compliance of which would lead to prosecution  and consequent  imposition of  penalty. When the law  lays down  that non-compliance  with an order would expose the person against whom it is made to 993 criminal liability,  it is  reasonable to  hold that  in the absence of  proof of  his knowledge  of the  order no  penal action can  be taken against him for non-compliance with it. The information  or knowledge which he may gather about such order in  the course  of the criminal proceedings instituted for non-compliance  with it  cannot be  a substitute for the knowledge of  the order  as mentioned  above,  which  should ordinarily precede the institution of such proceedings.      Under section 23F of the Act if any person fails to pay the penalty  imposed by  the Director  of Enforcement, he on conviction is  liable to be punished with imprisonment which may extend to two years or with fine or with both. No person can be  convicted under  section 23F  for failure to pay the penalty imposed  on him by the (Director of Enforcement when he is  not at  all informed  earlier about the imposition of the penalty.  Hence in the absence of proof of his knowledge of the  order either  by the supply of the copy of the order under Rule  5 of the Rules or in any other manner, it cannot be said  that such  person has  failed to  pay  the  penalty imposed on  him under  the Act  and has  become liable to be proceeded against under section 23F.      As mentioned  earlier, the specific case set out in the complaint was  that a  copy of  the order of the Director of Enforcement had  been served on the appellant on May 4, 1968 and that  both the  Magistrate and the High Court refused to accept it.  The finding  of the  High e  Court is  that  the appellant must  have come to know of the order on! August 7, 1970  when   he  appeared  before  the  Magistrate.  It  is; therefore, obvious  that on  the date on which The complaint was filed before the Magistrate i.e. On November 13, 1969 or on the date on which process was issued by the Magistrate on taking cognisance  of the  case to  The appellant  to appear before him  pursuant to  which he  appeared  before  him  on August 7,  1970, the appellant had not even the knowledge of the passing  of the  order imposing penalty on him let alone the specific  provision  of  the  Act  or  the  Rules  which according to  the order  he had  violated and the reasons in support of  the order.  The appellant  had  not,  therefore, committed any  offence punishable  under section  23F of the Act on  those dates.  The Magistrate  could not,  therefore, take cognisance  of any offence punishable under section 23F of the  Act on  the date  on which  he issued process to the appellant to  appear before  him.  Even  the  charge  framed against the  appellant did not state that the order imposing penalty on  him had  been communicated  to him  on August 7, 1970 and  the he  was being  tried for an offence punishable under section  23F for  non-compliance  with  the  order  so communicated on August 7, 1970. 994 The charge only contained the gist of what was stated in the complaint  on   November  13,  1969.  The  High  Court  was, therefore, in  error in  the circumstances  of the  case  in setting  aside   the  order   of  acquittal  passed  by  the Magistrate and  in  finding  the  appellant  guilty  of  the

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offence complained of.      In the result, the appeal is allowed and the conviction of the appellant and the sentence imposed on him by the High Court are  set aside.  The order  of acquittal passed by the Magistrate is restored.      At the  time of grating special leave to appeal in this case, as it was stated that the appellant had been acquitted of the  charge of  murder, the  sentence of imprisonment for life had  been cancelled  and that  he had  been  undergoing imprisonment awarded  by the High Court under section 23F of the Act,  this Court  granted bail  to the  appellant to the satisfaction of  the trial court and directed that he should be released  on bail  unless he was required to be in prison in connection  with or  on account  of any other case. It is not known whether the appellant was in fact released on bail pursuant to the above order. If he is on bail, his bail bond stands cancelled. P.B.R.                                       Appeal allowed. 995