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TMI Blog1975 (3) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... GUPTA, JJ. L.N. Sinha, G.L. Sanghi and Girish Chandra for the Appellant. A.K. Sen, Mrs. Liela Seth and U. K. Khaitan for the Respondent. JUDGMENT Mathew, J. - The respondents were tried before the Presidency Magistrate, 11th court, for having committed offences under sections 4(3), 20(3) and 22 of the Foreign Exchange Regulation Act, 1947 (hereinafter called "the Act"), read with section 120B of the Indian Penal Code and section 23 of the Act. The court discharged the respondents in view of the decision of the High Court of Calcutta in Serajuddin Co. v. Union of India Civil Rules Nos. 2183(W), 2184(W) of 1966 and Cases Nos. 1998 and 1999 of 1963 decided on 16-9-1971 holding that section 23(1A) was violative of article 14 of the Constitution. The appellant filed a revision petition against the order, before, the High Court. The court concurred with the decision of the trial court and dismissed the revision. This appeal, by special leave, is against that order. The question for consideration is whether section 23(1A) of the Act violates article 14 of the Constitution. Section 23(1) as it originally stood in the Act provided that whoever contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aint in writing to the court. The argument of the respondents was that section 23 provides for two different procedures for dealing with contravention of the provisions of the Act; that while persons contravening the provisions of the Act specified in section 23(1)( a ) have to be dealt with by the Director of Enforcement in the first instance and need face trial in a criminal court only if he is of opinion that, having regard to circumstances of the case, the penalty he is empowered to impose would not be adequate, the persons contravening the other provisions of the Act are liable to be prosecuted in the first instance in a criminal court without an inquiry by the Director of Enforcement which would give them the possibility to escape prosecution in a criminal court. In other words, the argument was that persons who have contravened the provisions specified in section 23(1)( a ) and are found guilty by the Director of Enforcement need not face prosecution in a criminal court if the Director is of opinion that the penalty he is empowered to impose would be adequate punishment, whereas the persons alleged to contravene the other provisions of the Act have necessarily to face pros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeway to the legislature. This approach of judicial restraint and presumption of constitutionality requires that the legislature is given the benefit of doubt about its purpose. How far a court will go in attributing a purpose which, though perhaps not the most probable, is at least conceivable and which would allow the classification to stand depends to a certain extent upon its imaginative power and its devotion to the theory of judicial restraint. At this stage, it is necessary to sharpen the focus to understand the real grievance of the respondents. As already indicated, their submission is that since they are similarly situated with persons contravening the provisions of the Act specified in section 23(1)( a ), they should have been included in that class and dealt with by the Director of Enforcement in the first instance so that they might also have the benefit of inquiry by him with the possible advantage of escaping with penalty even if they are found guilty of the offences. Their grievance, therefore, is that the classification made in section 23(1) is under-inclusive and is, therefore, unreasonable. Oftentimes the courts hold that under-inclusion does not deny the equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FJR 381, 401; AIR 1974 SC 1300. The court said: "The piece-meal approach to a general problem permitted by under-inclusive classifications, appears justified when it is considered that legislative dealing with such problems is usually an experimental matter. It is impossible to tell how successful a particular approach may be, what dislocations might occur, what evasions might develop, what new evils might be generated in the attempt. Administrative expedients must be forged and tested. Legislators, recognizing these factors, may wish to proceed cautiously, and courts must allow them to do so (37 California Rev. 341). " The background of the amendment of section 23 of the Act will be relevant for appreciating the reason for making the distinction between the two classes of contraventions. From April, 1949, to December, 1952, the Reserve Bank was handling all cases including those relating to unauthorized import, export of gold and silver. The bank had an enforcement section. In 1952, the Central Government authorised the Customs and Central Excise officers to investigate and prosecute cases of import or export of gold and silver in contravention of the provisions relating to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ul prosecution of these offences in many cases was not possible for want of legal evidence; secondly because, the criminal courts were not equipped with the training, expertise and experience necessary to deal with the intricate and ingenious methods adopted by the persons contravening them. The Government, therefore, thought that imposition of penalty by departmental adjudication would prove a more effective means of checking these types of foreign exchange offences as against the previous system of prosecution of all offences on the basis of the strict standard of proof required for criminal prosecution which proof was, by and large, so much within the special knowledge of the offender and so much out of the reach of the department. It may be noted that after the amendment in 1957, further amendments of section 23 were made in 1964 whereby sections 10, 17, 18A and 18B were also brought within the purview of section 23(1)( a ). The introduction of these sections within section 23(1)( a ) was the result of further experience gained during the succeeding years. It was only on the basis of the experience gained by the working of the Act that a decision could be taken about the clas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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