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TMI Blog1977 (2) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... to section 23(1B). Section 4(1) lays down: "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 otherwise acquire or borrow from, or sell or otherwise transfer or lend to, or exchange with, any person not being an authorised dealer any foreign exchange. " Section 23(1) (a) provides : " If any person contravenes the provisions of section 4, section 5, section 9, section 10, sub-section (2) of section 12, section 17, section 18A or section 18B or any rule, direction or order made thereunder, he shall- (a) be liable to such penalty not exceeding three times the value o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant, Director, Enforcement Directorate, Ministry of Finance, asked the respondent to show cause why the Indian currency recovered from his possession, which admittedly was the sale proceeds of foreign currency, should not be confiscated. The second appellant was the authority adjudging under section 23(1)(a) an alleged contravention of the provisions of section 4. On October 14, 1966, the second appellant held on the evidence before him that the respondent was guilty of contravening the provisions of section 4(1) and imposed a penalty of Rs. 50,000 under section 23(1)(a). He further directed the sum of Rs. 78,481 seized from the respondent to be confiscated under section 23(1B). The respondent moved the High Court of Delhi under article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Indian Railways Act, 1890, has held that they are very wide. It seems to us that in the context of section 23(1B) "in respect of " has been used in the sense of being " connected with ", and we have no difficulty in holding that the currency in respect of which there has been contravention covers the sale proceeds of foreign currency, sale of which is prohibited under section 4(1). The intention of the legislature is clear from the Explanation to sub-section (IB) of section 23 which provides that "for the purposes of the sub-section, property in respect of which contravention has taken place shall include deposits in a bank, where such property is converted into such deposits". If for this sub-section any property in respect of whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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