2025 PLP 871 (PTD)

MUHAMMAD SHAFI SIDDIQUI, J.

Foreign Exchange Operations Department of State Bank of Pakistan filed a complaint before the Adjudicating Officer in respect of non-repatriated amount against M/s. Pak Terry Mills (Pvt.) Ltd. and its directors. The complaint was heard and the Adjudicating Officer adjudged the petitioner as willful defaulter as provisions of Foreign Exchange Regulation Act, 1947, were contravened. Consequently, the directors of the petitioner were directed to deposit the amount of penalty in the Government account maintained with State Bank of Pakistan. Being aggrieved of it, an appeal before the Foreign Exchange Regulation Appellate Board was preferred which in compliance of Section 23,C(4) of the Regulations required the petitioner to deposit the amount in cash. Learned counsel for the petitioner has relied upon a judgment of Lahore High Court passed in Case No. W.P. No.36748/2022 which considered the requisite provisions of Section 23,C(4) as violative of fundamental rights in terms of para 7 of the order and the counsel has also relied upon the ad-interim injunctive order such as one passed in C.P. No.D-1075/2024 where the Court ordered that the respondents may not take any further coercive action against the petitioner therein till the next date of hearing.

2. We have heard the learned counsel and perused the record.

3. The petitioner exported goods and were under the obligation to repatriate the outstanding export proceeds in foreign exchange, wherein they failed within the stipulated period from the date of shipments. Consequently, the four points as framed by the Adjudicating Officer were adjudged against the petitioner and its directors under the law. The repatriation of the export proceeds is the sole responsibility of the accused as foreign exchange was involved. There was no evidence of genuine efforts for the repatriation of the amount, as adjudged by Adjudicating Officer, however, subject to outcome of appeal before board. This is contravention of Section 12(1) of Foreign Exchange Regulation Act, 1947, and is liable to be dealt with within the frame of the Act referred above. The failure to repatriate the amount has triggered subsection (4) of Section 23B of the Foreign Exchange Regulation Act, 1947, and the amount was adjudged payable. This petition was filed on the grounds that the conditions prescribed by board for security at the time of hearing appeal is unlawful and the action is contrary to the fundamental rights of the petitioner and its directors and that it was so adjudged to be in violation of the fundamental rights by a Bench of Lahore High Court, which conclusion be followed by this Bench, as argued.

4. Article 10-A of the Constitution of Islamic Republic of Pakistan, 1973 is in respect of trial and not appeal. Original proceedings were initiated by Adjudicating Officer and no such restrictions were imposed at that point in time; hence requirement of Article 10-A were not violated. The appeal before the Board was filed under the relevant law which required the appellant or the petitioner to secure the amount by way of deposit of a cash. The law is clear and no interference is required. Similarly, petitioner has lost the case before adjudicating authority in terms of the judgment dated 16.05.2024; it is only the Appellate Board which under proceedings required the petitioner / appellant to deposit the amount and as we understand this is not violation of any fundamental right. Fair trial is / was not burdened by any restriction. Appeal, for the purposes of re-appreciating the evidence and record, is considered as continuation of trial but financial restriction for the appellate stage is the lawful / statutory cap as legislated. Appeal is a creation of statute, and although right of appeal is a fundamental right but conditions attached could not be deemed to be unconstitutional. Reliance is placed on the following cases:- i) The Supreme Court of India - AIR 1980 SC 2097 (Seth Nand Lal and another v. State of Haryana and others) ii) The Supreme Court of India - AIR 1975 Supreme Court 1234 (Anant Mills Co. Ltd. v. State of Gujarat and others) iii) The Supreme Court of India - AIR 1999 Supreme Court 1818 (The Gujarat Agro Industries Co. Ltd. v. Municipal Corporation of City) iv) The Supreme Court of India - Civil Appeal No.3464 of 2022 arising out of SLP (Civil) No.30369 of 2017 (The Director, Employees State Insurance Health Care and others v. Maruti Suzuki India Limited and others)

5. If the proposed question / argument is considered as violation of fundamental rights then the litigation involving finances will never be secured. Summary chapter trial imposes condition even during trial but was not adjudged as violative of fundamental rights. So are the cases covered under FIO, 2001 where leave is inevitable to contest the suit. Case of Searl IV Solution (Pvt.) Ltd. is a prime example where the Hon'ble Supreme Court restricted right by compelling the litigant to deposit 50% of the tax calculated by authorities. The statute has restricted hearing subject to deposit. On this count, the argument that the fundamental right of the petitioner has been infringed by virtue of an order which required them to deposit the amount in terms of the relevant law i.e. Section 23,C(4) of the Foreign Exchange Regulation Act, 1947, is not convincing; more importantly the relevant law is not challenged before us in this petition and for no reason we should continue to proceed for a challenge when the law itself was not challenged. The ad-interim order passed in C.P. No.D-1075/2024 (another Constitution Petition not fixed before us) by this Court also does not suggest any law of the nature as under discussion was challenged, nor is that binding on this Bench being ad-interim order; hence no interference is required. Pre-requisites of appeals, requiring leave, security, or deposits, do not violate the right to fair trial and due process. When legislature can give right of appeal, it can attach conditions with such appeal. Courts in both Pakistan and India have upheld these mechanisms as consistent with constitutional principles, provided they are reasonable, uniformly applied, and not excessively onerous. These measures strike a balance between preventing frivolous litigation and ensuring access to justice, thereby upholding the principles of fairness and due process, especially in financial matters. Needless to say that fair trial and due process is to be adopted as per the relevant statute/law and Constitution, not otherwise. The petition is dismissed in limine along with all listed applications. MQ/P-16/Sindh Petition dismissed.