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TMI Blog1965 (8) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... 30-8-1965 - K. SUBBA RAO, J.R. MUDHOLKAR AND R. S. BACHAWAT, JJ. A. V. Viswanatha Sastri and J.P. Goyal for the Appellant. Bishan Narain, R.N. Sachthey and B.R. G. K. Achar for the Respondent. JUDGMENT Subba Rao, J . This appeal by special leave raises the short question whether the appellant contravened the provisions of sub-sections (1) and (3) of section 4 of the Foreign Exchange Regulation Act, 1947 (VII of 1947), hereinafter called the Act. During the years 1951 to 1956 the appellant, Ram Rattan Gupta, visited the Far Eastern Countries after obtaining the necessary foreign exchange from the Government of India. During that period the, appellant opened current accounts with the Chartered Bank of India, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hange was given to him without any. condition imposed thereon, and that on the said facts there was no scope to invoke either sub-section (1) or sub-section (3) of section 4 of the Act. We will read the relevant provisions of the Act in order to appreciate the said contentions. "4 Restrictions on dealing in foreign exchange -(1) Except with the previous general or special permission of the Reserve Bank, no person other than an authorised dealer shall in India and no person resident in India other than an authorised dealer shall outside India, buy or borrow from, or sell or lend to, or exchange with, any person not being an authorised dealer, any foreign exchange... (3) Where any foreign exchange is acquired by any person other tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here may be a debt created without contracting a loan, in other words, the concept of debt is more comprehensive than that of loan. It is settled law that the relationship between a banker and a customer qua moneys deposited in the bank is that of debtor and creditor. This court in Shanti Prasad Jain v. Director of Enforcement [1963] 2 SCR 297, 324; [1963] 33 Comp. Cas. 231 ,250 restated the principle in the following words: "Now the law is well settled that when moneys are deposited in a bank, the relationship that is constituted between the banker and the customer is one of debtor and creditor and not trustee and beneficiary. The banker is entitled to use the monies without being called upon to account for such user, his only liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The next question is whether the appellant was guilty of contravening the provisions of sub-section (3) of section 4 of the Act. Under the relevant part of that sub-section; where any foreign exchange was acquired by a person for any particular purpose and where the foreign exchange so acquired cannot be used, the said person shall without delay sell the foreign exchange to an authorised dealer. Admittedly, the foreign exchange was acquired by the appellant for the purpose of meeting his expenditure during his tour of the Fast East countries; but he had not used the entire foreign exchange for the said purpose. If so, under the express provisions of sub-section (3) of section 4 of the Act, he should have without delay sold the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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