P L D 1957 Supreme Court (Pak (PLP)

MUHAMMAD MUNIR, C. J.‑

These Criminal Appeals Nos. 11 and 12 of 1956 by Waris Meah and Nos. 13 and 14 of 1956 by Noor Muhammad, are from four different judg ments of the High Court of Dacca dismissing the appellants' appeals from convictions and consequent sentences of imprisonment and fine under section 2313 of the Foreign Exchange Regulation Act, 1947. The appellants are exporters of fish from Pakistan to India. During the period charged they exported fish, but did not, as required by law, repatriate the sale proceeds to Pakistan through an authorized dealer and thus committed an offence under section 22A read with section 2313 of the Foreign Exchange Regulation Act. The appellants had pleaded guilty but special leave to appeal was granted to them in order to consider the question raised before this Court for the first time that section 23B of the Foreign Exchange Regulation Act hereinafter referred to as the Act is unconstitutional inasmuch as it offends against Article 5 of the Constitution which makes all citizens equal before the law and declares them to be entitled to equal protection of the law. The point arises in the following manner. In the Act, as it was originally passed, the penalty and procedure section was in the following terms :‑ "23. (1) Whoever contravenes any of the provisions of this Act or of any rule, direction or order made there under shall be punishable with imprisonment for a term which may extend to two years or with fine or with both, and any Court trying any such contravention may, if it thinks fit and in addition to any sentence which it may impose for such contravention, direct that any currency, security, gold or silver, or goods or other property in respect of which the contravention has taken place shall be con fiscated. (2) No Court shall take cognizance of any offence punishable under this section or under section 54 of the Indian Income‑tax Act, 1922, as applied by section 19 of this Act, except upon complaint in writing made by a person authorised in this behalf by the Central Government or the Reserve Bank Provided that where any such offence is the contraven tion of any of the provisions of this Act or any rule, direction or order made thereunder which prohibits the doing of an act without permission no such complaint shall be made unless the person accused of the offence has been given an opportunity of showing that he had such permission. (3) If the person committing an offence punishable under this section is a company or other body corporate, every director, manager, secretary, or other officer thereof shall unless he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent its commission, be deemed to be guilty of such offence." Thus, by reason of entry No. 3 under "offences against other laws" in the Second Schedule to the Code of Criminal Procedure, an offender against the Act could be tried by a Court of Session, a Presidency Magistrate or a Magistrate of the 1st or 2nd Class in accordance with the procedure prescribed by that Code, provided his prosecution was instituted upon complaint in writing made by a person authorised by the Central Government or the State Bank. The Act, however, was amended by the Foreign Exchange Regulation (Amendment) Act, XXXII of 1956, by which two more alternative procedures were provided for the trial and punishment of offences against the Act. These procedures are detailed in sections 23A and 23B which are as follows :‑ "23A. (1) Whoever is proceeded against under this section shall, on an order being passed in writing by an Adjudication Officer, pay as penalty a sum not exceeding three times the value of the amount involved in the offence committed, and the Adjudication Officer may, if he thinks fit and in addition to the penalty imposed as aforesaid, direct that any currency, security, gold or silver, or goods or other property in respect of which the offence has been committed shall be confiscated. (2) For the purposes of this section the Central Govern ment shall appoint one or more Adjudication Officers for such area or areas as may be specified in this behalf. (3) No Adjudication Officer shall take cognizance of any offence punishable under this section except on a report in writing of the facts constituting such offence made by a person authorised by the Central Government or the State Bank in this behalf: Provided that where any such offence is in contravention of any of the provisions of this Act or any rule, direction or order made thereunder which prohibits the doing of an act without permission, no such report shall be made unless the person accused of the offence has been given an opportunity of showing that he had such permission. (4) An Adjudication Officer shall, for the purposes of ordering an investigation in respect of a complaint made under subsection (3) and for the issuing of process, have the same powers as are vested in a Magistrate of the First Class under sections 155 and 204 of the Code of Criminal Procedure, 1898. (5) No order under subsection (1) shall be passed without giving to the person accused of the offence reasonable opportunity of being heard personally or through a duly authorised agent or without taking and recording such evidence as may be produced and may be considered to be reasonably required for defence. (6) An Adjudication Officer shall, for the purposes of this section, have the same powers as are vested in a Court under the Code of Civil Procedure, 1908, when trying a suit in respect of the following matters, namely :‑ (a) enforcing the attendance of any person and examining him on oath or affirmation ; (b) compelling the production of documents, articles and things ; (c) requisitioning any record from any person, office or department (d) issuing commissions for the examination of witnesses ; (e) any other matter which may be prescribed and shall also have the powers of a Magistrate of the First Class under sections 94, 96, 97 and 98 of the Code of Criminal Procedure, 1898, for the purpose of issuing search warrants. (7) Any proceeding before an Adjudication Officer under this section shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Pakistan Penal Code and for the purposes of section 196 thereof, and the Adjudication Officer shall be deemed to be a Court for the purposes of sections 172 to 190 of the said Code and sections 480 and 482 of the Code of Criminal Procedure, 1898. (8) The Adjudication Officer may forward to the Collector a certificate under his signature specifying the amount of penalty due from any person under this section, and the Collector, on receipt of such certificate, shall proceed to recover from such person the amount specified therein as if it were an arrear of land revenue Provided that without prejudice to any other powers of the Collector in this behalf, he shall for the purpose of recovering the said amount have the powers which under the Code of Civil Procedure, 1908, a civil Court has for the purpose of the recovery of an amount due under a decree." "23B. (1) Whoever is proceeded against under this section shall, on conviction by a Tribunal, be punished with imprisonment which may extend to two years and shall also be liable to fine, and the Tribunal may, if it thinks fit and in addition to any sentence which it may impose, direct that any currency, security, gold or silver, or goods or other property in respect of which the offence has been committed shall be confiscated. (2) For the purposes of this section, the Central Govern ment shall appoint by notification in the official Gazette, for such area or areas as may be specified in the notification one or more Tribunals consisting of such member or members as may be prescribed. (3) No Tribunal shall take cognizance of any offence punishable under this section except upon complaint in writing made, subject to the proviso to subsection (3) of section 23A, by a person authorized by the Central Govern ment or the State Bank in this behalf. (4) A Tribunal shall have in respect of proceedings under this section all the powers of a Magistrate of the First Class in relation to criminal trials and shall follow in all respects the procedure provided for trials before such Magistrates in the Code of Criminal Procedure, 1898, and shall also have powers as provided in the said Code in respect of the following matters, namely (a) directing the arrest of the accused ; (b) issuing search warrants ; (c) ordering the police to investigate any offence and report ; (d) authorising detention of a person during a police investigation ; (e) ordering the release of the accused on bail. (5) Any proceeding before a Tribunal under this section shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the P. P. C. and for the purposes of section 196 thereof and the provisions relating to the execution of sentence of 'imprisonment as contained in the Code of Criminal Procedure, 1898, shall, so far as may be, apply to the sentence of imprisonment passed by a Tribunal under this section. (6) In passing a sentence of fine a Tribunal shall have the powers of a Court of Session." By section 22A, inserting by the amending Act, a person committing an offence against the Act can be proceeded against either in accordance with the ordinary, procedure prescribed by the Code of Criminal Procedure or before an Adjudication Officer or before a Tribunal according as the complaining authority, namely the Central Government or the State Bank of Pakistan, decides. if the proceed ings are taken before a Tribunal, the Tribunal has in respect of such proceedings the powers of a Magistrate of the 1st Class in relation to criminal trials and has to follow in all respects the procedure provided for trials before such Magistrate in the Code of Criminal Procedure, 1898, but in passing a sentence of fine it has the powers of a Court of Session. An accused person, so proceeded against, must if convicted, be punished with imprisonment which may extend to two years and is also liable to an unlimited amount of fine. If, on the other hand, the proceedings are taken under section 23, namely, under the ordinary law, the offender is "punishable with imprisonment for a term which may extend to two years or with fine or with both" according to the powers of the Court trying him. In the proceedings taken before an Adjudication Officer the offender cannot be required to pay as penalty a sum exceeding three times the value of. the amount involved in the offence com mitted, and there can be no sentence of imprisonment. From a closer examination of the relative provision governing each of the three modes of trial, the situation that emerges is: (1) that under section 22A an offender against the Act can only be proceeded against either in a Court under the ordinary law or before a Tribunal under section 23B or before an Adjudication Officer under section 23A ; (2) that when proceeded against under the ordinary law the sentence on conviction may be that of imprisonment, and if the case is committed to the Court of Session, of fine in any amount ; (3) that if convicted by the Tribunal, the accused must be awarded a sentence of imprisonment, and the sentence of fine may be in any amount, though there have been no commitment proceedings and the trial has not been held with the aid of a jury or assessors ; (4) that if the accused is taken before an Adjudication Officer, he cannot be sentenced to imprisonment and the maximum penalty that can be imposed upon him cannot exceed three times the value of the amount involved in the commission of the offence ; (5) that whether a person is to be tried under the ordinary law or by a Tribunal or by an Adjudication Officer depends on the will of the Central Government or of the State Bank ; and (6) that though the State Bank in the exercise of its functions may under section 25 be controlled by general or special directions of the Central Government, the Central Government itself has as uncontrolled and unrestricted power to decide how each offender has to be dealt with. It is therefore contended by the learned counsel for the appellants that these provisions which make the mode of trial of an offender depend upon the mere will of the Central Government are unconstitutional on the ground (1) that they are in excess of the limits of the power that can properly be delegated by the legislature, and (2) that they are ex facie discriminatory, and therefore repugnant to Article 5 of the Constitution which declares all citizens to be entitled to equal protection of the law. The objection on the ground of excessive delegation of legislative authority need not detain us long because it must be decided in favour of the State on the principle of the Privy Council decision in King Emperor v. Benoari Lal Sharma (72IA57). In that case, the question was whether those provisions of Ordinance II of 1942 which left it to the local government or to some officer of the local Government empowered by it in that behalf, to direct what offences or class of offences or cases or class of cases should be tried by the special Courts set up under that Ordinance, amounted to unconstitutional delegation of legislative powers. The Federal Court from whose judgment the appeal had been taken to the Privy Council had ruled that because the Act permitted the local government or some officer empowered by it to take a case or cases or offence or offences out of the jurisdiction of ordinary Courts and to have them tried in accordance with the special procedure prescribed by the Ordinance, those provisions of the Act which conferred such wide and unqualified powers constituted illegal dele gation of legislative authority. In differing from that view, Viscount Simon L. C. who delivered the judgment of the Board said: "With the greatest respect to these eminent Judges, their Lordships feel bound to point out that the question whether the Ordinance is intra vires or ultra vires does not depend on considerations of jurisprudence or of policy. It depends simply on examining the language of the Government of India Act and of comparing the legislative authority conferred on the Governor‑General with the provisions of the Ordinance by which he is purporting to exercise that authority. It may be that as a matter of wise and well‑framed legislation it is better, if circumstances permit to frame a statute in such a way that the offender may know in advance before what Court he will be brought if he is charged with a given crime ; but that is a question of policy, not of law. There is nothing of which their Lordships are aware in the Indian Constitution to render invalid a statute, whether passed by the Central legislature or under the Governor‑General's emergency powers, which does not accord with this principle. Rowland J. at the beginning of his dissenting judgment, collects a number of striking quotations from previous judgments delivered in the Privy Council as to the proper rule of construction. Again and again, this Board has insisted that in construing enacted words we are not concerned with the policy involved or with the results, injurious or otherwise, which may follow from giving effect to the language used. The learned Judges who were in the majority in the Federal Court would presumably not contest this proposition, and their Lordships rather understand their view to be based on the conception that there is something underlying the written Constitution of India which debars the executive authority, though specially authorized by the Statute or Ordinance to do so, from giving directions after the accused has been arrested and charged with crime as to the choice of Court which is to try him. Their Lordships are unable to find that any such constitutional limitation is imposed." This decision was given under the Government of India Act, 1935, and if the objection to the present Act had merely been founded on the ground of unauthorized delegation of legislative authority, we would have been bound to repel it, not merely by reason of the aforesaid judgment of the! Privy Council, but because our own view of the extent to A which legislative function may rightly be delegated and of what amounts to unconstitutional delegation of such functions completely accords with that of the Privy Council. The second objection, however, is more formidable and after hearing full arguments we have arrived at the conclusion that the amending Act, XXXII of 1956, makes the Act ex facie discriminatory and infringes the subjects' fundamental right to equal protection of the law guaranteed by Article 5 of the Constitution, inasmuch as that Act has the effect of constituting three punishing authorities, each with a different power and procedure, without attempting, or giving any indication of, any classification of the cases that may be tried by each of these authorities and leaving it entirely to the Central Government or the State Bank to determine which authority should try each case as it arises. Section 22A expressly permits that a person accused of a contravention of the Act may be proceeded against under the ordinary law or before a Tribunal or before an Adjudi cation Officer. On a true construction of this section, we are bound to hold that each of the three authorities was intended by the Act to function side by side with the other two because if the intention had been of conferring exclusive jurisdiction on each of these authorities in a particular class of case, section 22A would not have been worded as it is and such jurisdiction would either have been stated or permitted to be stated by rule and not made to depend on the mere will of the Central Government or the State Bank. And if these authorities are functioning simultaneously, the result cannot but be discriminatory, because while a person who is proceeded against before an Adjudication Officer escapes merely by paying a penalty the maximum of which is limited to three times the value of the amount involved, a person placed before a Tribunal must, if con victed receive a sentence of imprisonment and may be ordered to pay fine in any amount. Similarly a person who is prosecuted under section 23 may not get a sentence of imprisonment at all, and if he is tried by a Magistrate of the 1st Class, the amount of fine cannot exceed RS. 1,

000. And if the Magistrate taking cognizance of the offence considers that the accused should receive a higher sentence of fine he can only commit him to the Court of Session in which case the accused has the advantage of a trial with the aid of a Jury or assessors, and the benefit of commitment proceedings, rights which are denied to a person proceeded against before a Tribunal. If, therefore, the Act is admi nistered in its true spirit, discrimination must result from the action taken by the Central Government or the State Bank, which action is not subjected to rules or restrictions and is the result of the mere will of the complaining authority. Indeed it may well be said, as Sir Harold Derbyshire, C. J. said in Benoari Lal Sharma's case that the Central Government or the State Bank makes procedural "legislation ad hoc for the man's case." Mr. Brohi relied on the judgment of this Court in Jibendra Kishore Achharya Chowdhury v. The Province of East Pakistan (P L D 1957 S C (Pak.) 9) in support of the contention that because the amended Act merely gives a discretion to the Central Government and the State Bank to decide before which authority an accused person is to be brought, and it has not been shown that in the actual prosecution of offenders any discrimination has in fact been observed, the Act cannot be held to be ultra vires. We have anxiously considered the merits of this argument, but are satisfied that there is no analogy whatsoever between the present Act and the one whose constitutionality was challenged in Jibendra Kishore Achharya Chowdhury's case. In that case, after examining the history and the various provisions of the East Bengal State Acquisition and Tenancy Act, 1950, XXVIII of 1951, we found it to be perfectly clear that the intention of that Act was to eliminate all rent‑receiving interests in all the lands in the Province and to create a uniform class of tenants directly under the Provincial Government and that section 3 of that Act merely gave to the Provincial Govern ment the power or discretion to acquire simultaneously or from time to time, as was considered to be expedient, the interests which had been decided upon to be terminated. We, therefore, held that the conferment of such discretion could not be pronounced to be void on the ground of dis crimination though the action taken in exercise of that power, if it was unjust, oppressive and partial, could be called in question for the reason that the person or persons less favourably treated had been denied equal protection of the law. We emphatically rejected the contention that the Act questioned in that case was on the face of it discriminatory and proceeded to hold that where a statute is not ex facie discriminatory but is capable of being administered in a discriminatory manner, the party challenging the consti tutionality of that statute must show that it has actually been administered to the detriment of a particular ‑class and in a partial, unjust and oppressive manner. In the present case, the question to be determined is whether the impugned Act is ex facie discriminatory, and we have no hesitation in saying that it is. Three tribunals with different powers and procedures have been set up. The Act creating them contains no indication as to which class or classes of cases are to go before a Court and which before the Tribunal and the Adjudication Officer and it does not impose upon the Central Government, the obligation, or expressly confer on it the power, of making rules with a view to classifying the cases to be tried by each of these tribunals. Nor does it define the principle or policy on which such classification may be made by the Central Government or the State Bank. The Central Government has not exercised its power of issuing any directions to the State Bank or of making any rules under section 27 for carrying into effect the provisions of the Act. The result, therefore, is that in the present state of the law no person who is alleged to have contravened any provision of the Act can know by which Court he is to be tried, and the question whether on conviction he shall be punished with imprisonment or should be punished with imprisonment and fine which may extend to any amount, or whether he should be let off with a mere penalty of three times the value of the amount involved rests entirely on the action that the Central Government or the State Bank may choose to take. It was contended on behalf of the State that in the present cases, it could not be said that discretion had not been exercised in a fair and reasonable manner by the State Bank, in electing to send the cases to a Tribunal. On the allega tions, the cases Were of a serious character, and merited severe punishment. The mischief of the Act is, however, not susceptible of so simple a cure. It confers discretion of a very wide character upon stated authorities, to act in relation to subjects falling within the same class in three different modes varying greatly in severity. By fur nishing no guidance whatsoever in regard to the exercise of this discretion, the Act, on the one hand, leaves the subject, falling within its provisions, at the mercy of the arbitrary will of such authority, and, on the other, prevents him from invoking his fundamental right to equality of treat ment under the Constitution. The Constitution declares in Article 5 (1) that "All citizens are equal before law and are entitled to equal protec tion of law" and Article 4 (1) provides that "Any existing law . . . . . in so far as it is inconsistent with the pro visions of this Part, shall, to the extent of such incon sistency, be void." That duty of declaring that a law is void, for violating a Fundamental Right defined in Part II rests on the Courts. That duty cannot be performed, so as to ensure that a law operates equally in relation to all persons within its mischief, if the law itself provides for differential operation in relation to such persons, not in accordance with any principle expressed or implicit in the law, not on the basis of any classification made by or under the law, but according to the unfettered discretion of one or more statutory authorities. Here, not only is there discretion in the specified authorities whether they will proceed at all against any member of the class concerned, viz. offenders against the Act, but there is also an unfettered choice to pursue the offence in any one of three different modes which vary greatly in relation to the opportunity allowed to the alleged offender to clear himself, as well as to the quantum and nature of the penalty which he may incur. The scope of the unguided discretion so allowed is too great to permit of application of the principle that equality is not infringed by the mere conferment of unguided power, but only by its arbitrary exercise. For, in the absence of any discernible principle guiding the choice of forum, among the three provided by the law, the choice must always be, in the judicial viewpoint, arbitrary to a greater or less degree. The Act, as it is framed, makes provision for discrimination between persons falling, qua its terms, in the same class, and it does so in such manner as to render it impossible for the Courts to determine, in a particular case, whether it is being applied with strict regard to the requirements of Article 5 (1) of the Constitution. In our view such a law has the effect of doing indirectly i.e., by leaving the discrimination within the unguided and unfettered discretion of statutory authorities, what it could not do directly i.e., to treat unequally persons falling within the same class, upon a basis which bears no reason able relation to the purposes of the law. The Act is, therefore, in our opinion, in relation to its discriminatory provisions, inconsistent with the declaration of equality in Article 5 (1). of the Constitution. If the question we are called upon to determine had arisen in the United States of America, the Act would undoubtedly have been held violative both of the "due process" clause and the "equal protection of the law" clause of the Constitution. And the decision would certainly have been against the Act if the question had arisen in India where the Supreme Court in a series of decisions vide The State of West Bengal v. Anwar Ali Sarkar (1952 S C R 284) ; Lachmandas Kewalram Ahuja and another v. The State of Bombay (1952 S C R 710); Suraj Mall Mehta & Co. v. A. V. Visvanatha Sastri and another (1955 S C R 448) and Shree Meenakshi Mills Ltd., Madurai v. Sri A. V. Visvanatha Sastri and another (1955 S C R 787), has been consistently holding such legislation to be discriminatory and in violation of the equality of protection clause of the Indian Constitu tion. In the present case, if the Act had merely set up a Tribunal of exclusive jurisdiction, though with a procedure different from that prescribed by the Criminal Procedure Code for the trial of ordinary offences, no objection could successfully have been taken to the constitutionality of the Act because the offenders against the Foreign. Exchange Regulation could validly and reasonably be considered to be a class different from offenders under the ordinary law. Nor, could any objection on the strength of Article 5 of the Consti tution succeed if the Act itself had indicated the classes of cases which were to be tried by the ordinary Courts, the Tribunals and the Adjudication Officers respectively. Even if the Act itself made no such classification but had required the Central Government to make it, the discretion so vested in the Central Government would have been constitutional, provided the classification made by the Government proceeded on a rational and reasonable basis and was not arbitrary, capricious or whimsical. 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 reason 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 P. C. 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. Some reference was made to the rules which the State Bank has made in classifying the cases which are to go before the Tribunal and the Adjudication Officer respectively, but no rule‑making power has been given to that Bank by the Act and the rules are no more than mere instructions regulating the Bank's own practice in the matter. They are certainly not a part of the law and would have been relevant only if the Act had not been ex facie discriminatory. The result, therefore, is that the present appellants have been tried by an incompetent Tribunal and that their convictions and' sentences are void. Accordingly we accept the appeals and set aside the convictions and sentences of both the appellants. A.H. Appeals accepted.