P L D 1959 Supreme Court (Pak (PLP)

MUHAMMAD MUNIR, C. J.‑These appeals From the judgment of a Division Bench of the High Court of Dacca raise two questions of law, the importance of which will be appreciated from the following statement of facts. Siddiq Ahmad, the appellant in Appeal No. 11‑D and Kalipada Shaha, the appellant in Appeal No. 10‑D, exported some fish to India between 8th and 12th June, 1956, after obtaining the permission of the relevant authority by an application in which they undertook to repatriate the proceeds of the sale to Pakistan within two months. Having failed to fulfill their undertaking they were prosecuted and tried by the Special Judge, Faridpur, acting as a Tribunal under the Foreign Exchange Regulation Act (VII of 1947) as amended by the Foreign Exchange Regulation (Amendment) Act, XL of 1957. They were both found guilty under S. 23 of the Act and sentenced to 8 months' rigorous imprisonment and a fine of Rs. 20,000 each. Their appeals to the High Court having failed they obtained leave to appeal to this Court on the following two grounds: ‑ (1) that the provision of the Act under which they were convicted was void at the time the alleged offence was com mitted ; and (2) that the State Bank of Pakistan had no jurisdiction to fix the period for repatriation of the proceeds of sale and that since the offence was alleged to consist in not bringing the foreign exchange to Pakistan within that period, the convictions were wrong. The Foreign Exchange Regulation Act is a pre‑Partition Act, having been passed by the Indian Legislature in 1947. The Act was amended in July 1955 by Ordinance XIX of 1955, which in April 1956, became Act XXXII of 1956. The late Constitution came into force on 23rd March 1956, i.e., on a date between the date of the Ordinance and that of the 1956 Act. 1n the Act of 1947 the offences against it were triable by a Court under the Criminal Procedure Code, but the Ordinance and the Act of 1956 introduced into the Act two other bodies, namely, the Adjudication Officer and the Tribunal, to deal with such offences. In Waris Meah v. The State and another (P L D 1957 S C (Pak.) 157), this Court held that the provision of the Act of 1956 which introduced Ss. 23‑A and 23‑B in the Act of 1947 were void because they offended against Article 5 of the Constitution. The argument advanced by Mr. Suhrawardy in the present case is that because the Act of 1956 was held invalid there existed in the Act of 1947 no provision, which made the act of the appellant punishable, the original penal provision of the 1947 Act having been amended in a manner, which was void. The contention is plausible, but on a careful perusal of the judgment of this Court in Waris Mean's case it will be found that it has no force. After giving reasons why Ss. 23‑A and 23‑B of the Act were void, the Court concluded its judgment with the following observations: ‑ "But, as it is, the amending Act which brought the Tribunals and Adjudication Officers into existence, does not at all say which class of cases is to come before a Court and which before each of the newly‑created bodies. Even the preamble of that Act does not mention the reasons why these bodies were created. It cannot, therefore, but be held that the amending Act, XXXII of 1956, which enables the Central Government or the State Bank to divest the ordinary Courts of the jurisdiction to try offences under the special law in accordance with the provisions of the Criminal Procedure Code and to effectuate the jurisdiction of the special tribunals or Adjudication Officers offends against Article 5 of the Constitution and is for that reason void." Because the trial in that case had been held before a Tribunal, the appellants' convictions and sentences were held void and were set aside. From the ratio decidendi of that case, it seems to be perfectly clear that only Ss. 23‑A and 23‑B were held void because they enabled the Central Government or the State Bank to divest the ordinary Courts of their jurisdiction to try offences against the Act in accordance with the provisions of the Criminal Pro cedure Code. There is no finding in the judgment in that case, or any observation to the effect that S. 23 of the Act of 1947 as amended by the Act of 1956 was also void. There is, therefore, no substance in the appellant's contention in these appeals that their act, which was committed after the Act of 1956 had come into force was not an offence under the law at the time of its commission. Section 23 as amended by the Act of 1956 was in no way affected by the decision in Waris Meah's case and under that section read with S. 29 of the Criminal Procedure Code the offence was triable by a Court of Session and liable to be punished with unlimited fine. The change of procedure brought about by Act XL of 1957 under which the appellants have been convicted by a Tribunal does not therefore amount to a retrospective enhancement, of punishment and the sentences imposed by the Tribunal are perfectly legal. Reliance was placed by Mr. Suhrawardy on a judgment of the High Court of West Pakistan in `Hasan Ali v. Collector of Land Customs' (P L D 1958 Lah. 553) which appears to support his contention, but having carefully examined that decision we cannot accept its ratio decidendi as sound. The High Court held in that case that items 8 and 81 of S. 167 of the Sea Customs Act, before their amendment by Ordinance VIII of 1957 which subsequently become Act XXXIV of 1957, were void by reason of Article 5 of the Constitution inasmuch as for the offence mentioned in each of these items the Act provided confiscation with a liability to penalty or, on conviction before a Court, imprisonment for a period not exceeding 7 years and fine, which, if the case were tried by the Court of Session by virtue of S. 29 of the Criminal Procedure Code, could be unlimited in amount. Both items having been held to be void on the authority of Waris Meah's case, the Court arrived at the conclusion that there existed no valid punishing provision at the time the offence was committed in that case. From this the learned Judges drew the further conclusion that because the Act at the time of its commission was not punishable it could not be made retrospectively punishable by Act XXXIV of 1957 which on this construction came into conflict with Article 6 of the Constitution. This result is sustainable only on the assumption that items 8 and 81 of S. 167 were void in their entirety. This however is not the true position because even if Article 6 of the Constitution was applicable the items were void only to the extent of their inconsistency with Article

5. Where an offender invokes Article 5, he can justly complain of discrimina tion only if the harsher of the two alternative procedures is applied to him. Against the more lenient alternative he can have no legitimate grievance. So far therefore as punishment by confiscation and penalty is concerned, it was a valid provision to determine whether the act was punishable at all. There could thus be no question of any contravention of Article

6. The second ground on which the convictions are attacked is equally untenable. What is contended is that because the exporter is required by S. 12 to make a declaration that the full export value of the goods will be paid within the "prescribed period", the time within which the sale proceeds are to be repatriated can be fixed by the Central Government and not by the State Bank. Under S. 27 of the Act the Central Government may make rules for carrying into effect the provisions of the Act ; and under S. 2 (1) `prescribed' means prescribed by rules made under the Act. The point urged is that rules made by the Central Govern ment under S. 27 should themselves have prescribed the period during‑which the sale proceeds of exported goods are to be brought into Pakistan. Rule 3 (2) made by the Central Government in exercise of the powers given to it by S. 27, however, provides that the period within which the amount representing the full export value of goods has to be paid shall be the period specified from time to time by the State Bank for this purpose generally or otherwise by notification in the official gazette with reference to any country or countries. And in exercise of the powers thus conferred on the State Bank it has by notification fixed a period of 2 months from the date of shipment for bringing into Pakistan the value of the goods exported to India. Rule 3 of the Central Government Rules is thus attacked on the ground that it improperly delegates legislative power to the State Bank of Pakistan. We are unable to accept this contention because the authority given to the State Bank is not legislative authority in the sense in which its delegation is void. The State Bank is the institution round which the whole Act turns and if the powers given to the State Bank by the Act itself do not amount to delega tion of legislative powers, it is difficult to see how the authority merely to fix the period of bringing the sale proceeds into Pakistan, a matter of which the Bank has expert knowledge, can be objected to on the ground of delegated legislation. It is true that the period has not been fixed by the rules but by the State Bank of Pakistan, but on its being specified by the Bank it becomes a period prescribed by the rules within the meaning of section

2. Thus both the points, which were urged in support of these appeals fail and the appeals are dismissed. CORNELIUS, J.‑I agree with my Lord the Chief Justice that these appeals should be dismissed. As will appear from the order granting special leave to appeal, the particular point taken on behalf of the appellant Siddiq Ahmad was that the maximum sentence of fine which could be imposed upon him under the law was Rs. 1,000, being the limit of the fine which a 1st Class Magistrate may award. I respectfully agree with the grounds upon which it has been held in the judgment of my Lord the Chief Justice that this contention is untenable. Leave o appeal was granted to the other appellant, Kalipada Shaha on the following ground:‑ " A further point taken is as to the validity of the rule made by the State Bank of Pakistan, fixing a period of 60 days for the repatriation of sale proceeds in cases of this kind. It was argued that power in this respect is vested by the statute in the Central Government alone. In this case, the proceeds were never repatriated and the point can at best relate only to the appropriate date for commencement of the proceedings under section

23. As, however, it is a legal point of general importance, we propose to permit it to be raised." My purpose in writing a separate judgment is to discuss the ground appearing from this quotation in relation to the relevant law. It is not adequately brought out in the final formulation of the grounds, where it is stated as under: ‑ " (2) the validity of the rule made by the State Bank of Pakistan, fixing a period of 60 days for the repatriation of sale proceeds in cases of the present kind." The offence found in these cases is one punishable under section 23 of the Foreign Exchange Regulation Act 1947 as last amended by Act XL of 1957, which applies to any person who "contravenes, attempts to contravene or abets the contravention of any of the provisions of this Act or of any rule, direction or order made thereunder." The particular "point for determination relevant for the purpose was formulated as below by the Special Judge who tried the case as a Tribunal under the Act: ‑ " Did the accused contravene the provisions of the Act‑ by not collecting the full export value of the goods exported beyond Pakistan from their foreign buyers within the stipulated time ?" It was shown that there were "foreign buyers", but there is no proof that the accused persons failed to collect the full export value or any part thereof from them, and all that was found was that whatever the proceeds of the sale of the goods in question, namely, fresh fish, in India, might have been, no foreign exchange was repatriated in relation to the transaction. The export of the fish took place between the 8th and the 12th June 1956. This was under a declaration made by the accused Siddiq Ahmad in compliance with section 12 of the Act that he would "receive the proceeds of the goods within two months of the date of shipment through an authorised dealer in foreign exchange." It was not until the 23rd January 1958 that the State Bank issued notice to Siddiq Ahmad to show cause why he should not be prosecuted for failure to repatriate the proceeds of the exported goods. A similar notice was sent to Kalipada Saha on the 13th February 1958. The earliest of these notices was sent some 19 months after the date of the export, and the reason for the delay appears to be that one of the checks provided by the law in relation to such transactions had been avoided by forging certain bank seals and endorsements upon the declaration forms used in the case. 'These are in Form No.

1. R. P. 4, and are required to show the name and the address of the authorised dealer in Pakistan through whom the export proceeds are to be received in Pakistan. The forms used in the case on their face showed that the authorised dealer in the case was the United Bank of India Limited Pabna Branch, but evidence was led to show that the seal showing the name of this Bank in the appropriate place on the forms used was not the genuine seal in use at that particular Branch. The rules required that a duplicate copy of this declaration should be submitted within 14 days to the authorised dealer together with a copy of the exporters' invoice, and in this case, it seems that this rule was avoided by the use of the forged seat and thus the State Bank of Pakistan may have been prevented from discovering Immediately that there had been non‑repatriation in the particular case. However, that may be the fact remains that the exporter in this case namely, Siddiq Ahmad, and his agent namely, Kalipada Saha were not called to account for the matter with any undue haste, but only after so long an interval of time as was amply sufficient for the purpose of repatriating the money in question if they had had the slightest intention of doing so. It may be mentioned that even now, a year and a half later, the money ha; not been repatriated and the record does not show that any attempt has ever been made to repatriate it. In these circumstances, it seems to me that the true and substantial offence committed by the accused persons is that, having been enabled, through the permission granted to them to export the fish, to acquire foreign exchange as the proceeds of the sale of the fish in India, upon condition that they would repatriate that money, they have failed to repatriate it altogether. Such an action is rendered punishable by section 4 of the Foreign Exchange Regulation Act, 1947, from subsection (3) of which the following relevant portion may be usefully quoted here :‑ "(3) . . . . . . where any person has been permitted con ditionally to acquire foreign exchange, the said person shall not fail to comply with any condition to which the permission granted to him is subject, and where any foreign exchange s acquired cannot be so used or, as the case may be, the conditions cannot be complied with, the :;aid person shall without delay sell the foreign exchange to an authorised dealer." The ascertainment of any such difficulties in the way of the person in question repatriating the foreign exchange, as appear from the concluding clauses in the above quotation would obviously be by means of the show‑cause notices referred to above. As to that the record shows that Siddiq Ahmad made no reply at all, while Kalipada Saha merely said in reply that lie was an employee of Siddiq Ahmad and possessed no authority in the matter of payments. Thus, there was not at any time denial of the tact that foreign exchange had been earned as a result of the export in question, and this may be presumed also from the facts that the goods in question were of a highly perishable nature and were being exported as a commercial commodity, upon the express condition that the proceeds, by sale in the usual course of trade would be repatriated. The argument on behalf of Kalipada Saha has proceeded upon the basis that since the "prescribed period" applied in the present case is one which had been fixed by a "rule" made by the State Bank of Pakistan, and not by the Central Government, therefore, no offence can be deemed to have been committed yet. It seems to me that even if the expression "prescribed period" be construed to mean, as the words seems to me to require, a period fixed by a rule made under the Act, i.e., under the rule‑making power conferred by the Act which by section 27 empowers only the Central Government to make rules having the force of law, yet, the offence cannot be thought to fall under section 12 which relates to "payment for exported goods." In my opinion, subsections (1) and (2) of section 12 should be read together in order to ascertain which are involved in violation of the "prescribed period" or tile "prescribed manner." By subsection (1) a prohibition is placed upon the export of goods unless the exporter make a declaration to the prescribed authority undertaking to repatriate the `'full export value" within the prescribed period and in the prescribed manner. Here the declaration as required by the law has been made; it includes an undertaking as required, and in terms of the impugned rule. Is breach of the undertaking a contravention of the "rule"? That is by no means clear to me, for it is not generally correct to construe an offence out of breaches of undertakings. Therefore, I think it is necessary to see whether the section expressly creates offences, and such a provision i, found in subsection (2). Subsection (2) prohibits actions by the person in question, i.e., the exporter, which might have the effect of delaying the sale to an extent which is unreasonable having regard to the ordinary course of trade, or obtaining payment for the goods otherwise than in the prescribed manner, or otherwise than in full. There is a proviso added to the subsection, which is significant. It reads as tinder: ‑ " 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 aforesaid has not been made in the prescribed manner." It', therefore, in the relevant circumstances, no offence can be found under section 12 except an offence of one of the two kinds specified in subsection (2), then it falls to be observed that it is neither charged nor proved that there has been any delay in the sale of the goods, or that payment has beers received otherwise then in the prescribed manner or otherwise than in full. If there had been proof oil either or both of these points, then it would lave been important that the proceedings should not have been instituted until the expiry of the "prescribed period". But the case is one of simple and apparently deliberate non‑repatriation of the proceeds of the goods, and the duty to repatriate was unequivocally assumed as a condition of the grant of the permit to export. That was the major condition, to which the further conditions of repatriation within a given period and in a specified manner might be thought to be subsidiary. Violation of this major condition is a clear offence against section 4 and it was evident throughout the proceedings that that was the act which was imputed to the accused persons, and which could and should have been made the subject of the charge brought against them. As has been seen, the trial Judge did not put the charge in these terms, but introduced instead the element of failure to collect the full export value of the goods from the foreign buyers, as to which there was neither allegation nor proof. (I may mention that in other cases from East Pakistan under the Act in question, reference is made to section 4 in charging an offence punishable under section 23, ride the case of Badri Narayan Agarwala Criminal Appeal No. 13‑D of 1939 decided by this Court on the 10th June, 1959). The facts as to the existence of a duty to repatriate the foreign exchange earned in this case as a condition of the export and the non‑patriation are indeed so plain that there can be no question, in my opinion, of any prejudice being caused to the accused persons by the failure to charge them in these plain terms, and I conceive that the conviction under section 23 is fully sustainable upon the principle that this is the offence which might and ought to have been charged against the accused persons at their trial. There being a series of acts involved in the transaction, the case is covered by sections 236 and 237, Criminal Procedure Code. In this view of the matter, the validity of the rule prescribing the period is not a condition sine qua non of the validity of the conviction, but I would like to observe that there should be no difficulty in the way of the promulgation of a rule by the Central Government in this behalf, as required by the Act, upon the advice of the State Bank of Pakistan as to the reasonable period in relation to the different countries receiving exports from Pakistan. In the alternative if it is desired that the matter, should be dealt with by the State Bank of Pakistan independently, there need be no difficulty in the way of amending the Act to confer such authority upon the State Bank of Pakistan which already under the Act is charged with a great many functions covering the field of foreign exchange. A.H. Appeals dismissed.