1980 (10) TMI 156 - SC - Companies Law

Whether the High Court was right in the circumstances of the case in finding the appellant guilty of the offence in question? Held that - 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. 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 that he was being tried for an offence punishable under section 23 F for non-compliance with the order so communicated on August 7, 1970. 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 offence complained of.

Issues Involved:
1. Conviction under Section 23F of the Foreign Exchange Regulations Act, 1947.
2. Service of the penalty order and knowledge of the appellant.
3. Legality of the High Court's reversal of the Magistrate's acquittal.

Detailed Analysis:

1. Conviction under Section 23F of the Foreign Exchange Regulations Act, 1947:
The appellant was convicted by the High Court of Delhi under Section 23F of the Foreign Exchange Regulations Act, 1947, for failing to pay the penalty imposed by the Director of Enforcement. The High Court sentenced him to one year of imprisonment, to be served concurrently with a life sentence for a separate murder charge. The appellant challenged this conviction, arguing that he was not aware of the penalty order.

2. Service of the Penalty Order and Knowledge of the Appellant:
The facts of the case revolve around whether the appellant was properly informed about the penalty order. On March 28, 1963, foreign and Indian currencies were seized from the appellant, leading to proceedings under Sections 4 and 9 of the Act. The Director of Enforcement imposed a penalty of Rs. 6,000 on May 12, 1967, which the appellant allegedly did not pay within the stipulated forty-five days. The appellant denied receiving the penalty order, asserting that he was unaware of the requirement to pay the penalty.

The Magistrate acquitted the appellant, stating that it had not been proven that the penalty order was served on him on May 4, 1968. The High Court, however, found that the appellant became aware of the order on August 7, 1970, when he appeared in court. The High Court held that he should have paid the penalty within a reasonable period from that date, concluding that he was guilty under Section 23F for failing to comply with the order.

3. Legality of the High Court's Reversal of the Magistrate's Acquittal:
The Supreme Court examined whether the High Court was justified in convicting the appellant. It highlighted the procedural requirements under the Act and the Adjudication Proceedings and Appeal Rules, 1957. Specifically, the Director of Enforcement must provide a copy of the penalty order to the person concerned, and the period for filing an appeal begins from the date the person gains knowledge of the order.

The Supreme Court emphasized that the service of the penalty order is not an empty formality. The appellant's knowledge of the order is crucial for computing the period to file an appeal and for determining liability under Section 23F. The Court found that the appellant did not have knowledge of the penalty order when the complaint was filed or when he appeared in court on August 7, 1970. Consequently, the appellant could not be convicted for failing to pay the penalty when he was unaware of the order.

The Supreme Court concluded that the High Court erred in setting aside the Magistrate's acquittal and convicting the appellant. The appeal was allowed, the conviction and sentence imposed by the High Court were set aside, and the Magistrate's order of acquittal was restored.

Conclusion:
The Supreme Court allowed the appeal, reinstating the Magistrate's acquittal of the appellant. It underscored the importance of proper service and knowledge of the penalty order for a conviction under Section 23F of the Foreign Exchange Regulations Act, 1947. The appellant's bail bond was canceled, and the Court's earlier order granting bail was acknowledged.

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