1992 PLP 595 (MLD)

10. Section 9 of the FER Act, 1947, which deals with the acquisition of foreign exchange by the Federal Government provides as follows: ‑‑ "Acquisition by Federal Government of Foreign Exchange.‑‑The Federal Government may, by notification in the official Gazette order every person is, or resident in, Pakistan. (a) who owns or holds such foreign exchange as may be specified in the notification, to offer it, or cause it to be offered for sale to the State Bank on behalf of the Federal Government or to such person, as the State Bank may authorise for the purpose within such time as may be specified in the notification and at such price as the Federal Government may fix, being a price which is in the opinion of the Federal Government not less than the market rate of the foreign exchange when it is offered for sale; (b) who is entitled to assign any right to receive such foreign exchange as may be specified in the notification, to transfer that right to the State Bank on behalf of the Federal Government on payment of such consideration therefore as the Federal Government may fix: Provided that the Federal Government may by the said notification or another order exempt any person or class of persons from the operation of such order: Provided further that nothing in this section shall apply to any foreign exchange acquired by a person from an authorised dealer and retained by him with the permission of the State Bank for any purpose."

11. In exercise of the powers conferred by the above section the Federal Government issued Notification NO.S.R.0.1016(I)/73, dated 17th October, 1973, which was amended upto 20th August, 1985, in the following words: ‑‑ "In exercise of the powers conferred by section 9 of the Foreign Exchange Regulation Act, 1947 (VII of 1947), and in supersession of Ministry of Finance Notification No.l(8)EF/58, dated 20th August, 1958 the Federal Government is Faced to order that every citizen of Pakistan in Pakistan and every other person residing continuously for six months or more in Pakistan who owns or holds or who may hereafter become the owner or holder of any foreign exchange whether held in Pakistan or abroad expressed in the currency of any country or territory, excepting the country or territory specified in the Schedule appended hereto, shall before the expiration of three months from the date of this notification or, in the case of a person hereafter becoming such owner or holder, within three months of his so becoming, offer such foreign exchange or cause it to be offered for sale to an authorised dealer, being a person authorised by the State Bank of Pakistan for the purpose, against payment in Pakistan currency at the rate for the time being authorised by the State Bank of Pakistan in pursuance of subsection (2) of section 4 of the said Act for the conversion into Pakistan currency of the foreign currency in which such foreign exchange is expressed; provided further that a citizen of Pakistan not ordinarily resident in Pakistan who comes to Pakistan from abroad may retain with him the foreign exchange brought by him to Pakistan for a period of one year from the date of arrival: Provided that this order shall not apply to foreign exchange held by authorised dealers within the scope of their authority or to any person authorised under any permission, general or otherwise, granted by the State Bank of Pakistan to hold the foreign exchange. The provisions of this notification shall not apply to the following cases, namely: ‑‑ (i) Foreign exchange held abroad by foreign diplomats and foreign nationals employed in Embassies and Missions of foreign countries in Pakistan. (ii) Foreign exchange held abroad by foreign nationals or foreign business houses, except to the extent that it represents their earnings abroad in respect of business conducted in Pakistan or service rendered while in Pakistan. (iii) Foreign exchange held abroad in any country other than Afghanistan, Bengla Desh, India and Israel by residents in Pakistan provided the amount does not exceed in the aggregate US $ 500 or equivalent thereof in other currencies. EXPLANATION.‑‑‑"Resident in Pakistan" includes foreign nationals residing continuously in Pakistan for six months or more, but does not include citizens of Pakistan in foreign countries during the period of their stay outside Pakistan. SCHEDULE (1) Afghanistan."

12. This notification was considered by the learned Tribunal and the plea raised on behalf of the appellant was rejected for the following reasons:‑‑‑ "So far 2nd proposition is concerned, the learned Defence counsel has argued at length stressing on the point that he can retain the Foreign Currency upto three months and that mere possession of the Foreign Exchange by itself constituted no offence. In this context he has invited my attention to the date of arrest of accused viz. 6‑6‑1987 and the date when he was captured in Delhi and was sent back to Lahore on 10‑3‑1987. Thus the period of three months has actually not been completed but this has not impressed me at all for the reason that the period has to be counted from the date person became the owner of the alleged Foreign Currency or came into his possession and or under his control."

13. I regret I am unable to endorse the view taken by the Tribunal. If we are to accept the reasoning given by the Tribunal, it would follow that any person who returns to Pakistan after three months from the date of issue of foreign currency to him would be liable for violation of section 9 of the FER Act, 1947, as soon as he enters into Pakistan. Such period was to be counted from the date of entry of appellant into Pakistan and not from the date of issue g of foreign exchange to him.

14. It may also be noted that the declaration of foreign currency in Form `A' is necessary only for those who went to make purchases from the Duty Free Shop or intend to take back the unspent amount abroad.

15. Thus it is clear that according to Notification referred to in para.12 ante, the appellant could retain the foreign exchange for three months, which period had not elapsed when he was taken into custody in this case. The prosecution of the appellant had, therefore, no legal sanctity.

16. Having regard to the above legal position, the impugned conviction is bad in law and is accordingly set aside. Accordingly the appellant is acquitted. He is on bail and is discharged from his bail‑bond.

17. In the result the appeal is allowed. H.B.T./M‑1483/K??????????????????????????????????????????????????????????????????????????????? Appeal allowed.