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TMI Blog1994 (4) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... as subsequently retracted by a letter dated August 21, 1992. It is not necessary for this court to go into the question as to the character of possession of the currencies and whether the same was acquired in a lawful manner or not. While Writ Petition No. 1279 of 1994 relates to the power to retain the currency under section 41 of the Foreign Exchange Regulation Act beyond a particular period, Writ Petition No. 1280 of 1994 relates to the validity of the show-cause notice issued on August 4, 1993. For the purpose of understanding the scope of the argument in W. P. No. 1279 of 1994, the following dates are material : 1. The date of seizure of the currency 18-8-1992 2.The date of amendment to section 41 of the Foreign Exchange Regulation Act 8-1-1993 3.The date of the show-cause notice 4-8-1993 4.The date of service of the show-cause notice 24-8-1993 The argument is that after January 8, 1993, section 41 of the Foreign Exchange Regulation Act, empowers the authorities to retain the currency only for a period of six months, unless of course proceedings had been initiated as per sub-clauses ( i ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgument is that by a specific notification dated September 22, 1989, the Government has exercised the power under sub-section (1) of section 4 read with clause ( e ) of section 3 of the Foreign Exchange Regulation Act and appointed one S. S. Renhgen to be an Officer of Enforcement with the designation of Special Director of Enforcement giving him powers adjudication under section 50 of the Act. The contention is the delegation of powers to the incumbent of the first respondent is perfectly legal and in accordance with sections 3 and 4 of the Foreign Exchange Regulation Act. Consequently, it is contended that the show-cause notice is valid and not liable to be quashed. I will first deal with the power to retain the documents, namely, the currency notes in accordance with section 41 of the Foreign Exchange Regulation Act and whether the respondent has lost the power and is bound to return the currency notes. A decision on this aspect will depend on the question whether the amended provisions of section 41 of the Foreign Exchange Regulation Act, which came into force on January 8, 1993, are prospective or retrospective. The argument of the petitioner that even after the amended prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sted right not only to apply for execution but also in the period within which he can apply." In Khondkar Mahomed Saleh v. Chandra Kumar Mukerji, AIR 1930 Cal 34, a Division Bench of the Calcutta High Court has analysed all the aspects of the case relating to the alteration of the period of limitation and the circumstances under which the amended provisions will or will not apply. In that case, the due date under a mortgage deed, for payment of the mortgage money, was April 12, 1904. The original mortgagee died in December, 1905. The only legal representative being his minor son brought the suit in 1906 and a preliminary decree was passed on November 30, 1906. A final decree was passed on January 7, 1907. After the sale of the mortgaged property, there was still a balance to be paid to the mortgagee. The minor legal representative of the mortgagee attained majority on September 23, 1924, and applied under Order 34, rule 6, Civil Procedure Code, for a personal decree against the mortgagor. The mortgagor pleaded that the application was barred by limitation. The trial court had overruled the plea of limitation and granted a personal decree against the mortgagor. The appeal agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 18 Q.B. 343. It is not necessary in this case to lay any stress upon the fact that the Limitation Act of 1908 was passed in August, 1908, and it was to come into operation on January 1, 1909. That fact might have been important if the position of the plaintiff was such that he would have no time under the new law to make any application after the Act came into operation. But as a matter of fact, as I have already pointed out, he had two years nine months under the new law within which he could make his application. Therefore, in my judgment, it cannot be doubted that the rule of limitation applicable to the present case should be that laid down by the Act 9 of 1908." However, the Calcutta High Court referred to and distinguished the case of Promotha Nath v. Sourav Dasi [1920] 31 C.L.J. 463, in the following words (at page 37 of AIR 1930 Cal) : "The learned judges held that section 66 of the Code had no retrospective operation as it actually took way a right of suit which is a vested right." Finally, the Calcutta High Court concluded by approving the following passage in Maxwell's Interpretation of Statutes, 6th Edition, at page 399. "In both of the above cases, howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hange Regulation Act, there was a short period from January 8, 1993, to February 17, 1993, for initiating action and consequently retaining the documents. But one can easily visualise other cases where for instance a seizure is made on or before July 8, 1992. In respect of such seizure if the new section 41 of the Foreign Exchange Regulation Act is applied the period of six months will expire by January 8, 1993, when the new Act came into force. In other words, in respect of a seizure made prior to July 8, 1993, when the authorities were contemplating action within a period of one year as per the unamended Act they are suddenly faced with a situation that the period has been reduced to six months and, therefore, they are bound to return the documents, because no action had been initiated. Therefore, the proper interpretation of a statute of limitation reducing or shortening the period will be to see whether the amended Act gives an outer date by which actions should be initiated in respect of applications which get barred by the amended provisions. One can easily advert to several such enactments like the Limitation Act, 1963, and the Land Acquisition Act 64 of 1884. These enactmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ril 1, 1951. They cannot, therefore, avail themselves of the benefit of section 30." Let me now find out whether section 41 of the Foreign Exchange Regulation Act, which was amended to reduce the period of retention of documents by the authorities from one year to six months contains any such salient provisions like section 30 of the Indian Limitation Act, 1908. If there is no such safeguard in the amended provisions of section 41 of the Foreign Exchange Regulation Act, the contention of the respondents that the substantial right of the Department to retain the documents for a period of one year cannot be reduced to six months and the documents directed to be returned to the persons from whom they were seized, loan be taken as well founded. A careful perusal of the amended provision of section 41 of the Foreign Exchange Regulation Act shows that after reducing the period to six months a proviso was added. It is as follows : "Provided that the aforesaid period of six months may, for reasons to be recorded in writing, be extended by the Director of Enforcement for a further period not exceeding six months." It is thus clear that where in stated cases the department is faced wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng any investigation or obligation arising out of an Act being proceeded with as if the repealing Act had not been passed. The shortening of the period of limitation and the retrospective or prospective application of the amendment will depend only upon the considerations already referred to and as decided by various courts, including the apex court. The prayer in Writ Petition No. 1279 of 1994 has necessarily to be conceded based on the judgment of the Supreme Court of India in S. L. P. (Civil No. 3997 of 1976 in Arjunan Chettiar v. Enforcement Officer [1977] 2 MLJ 5 (SC)). Consequently, a writ of mandamus will issue directing the respondents to return the seized currency to the tune of Rs. 1,65,000 to the petitioner herein within eight weeks from today. Writ Petition No. 1279 of 1994 is allowed in the above manner. The above decision will not automatically result in prayer in W. P. No. 1280 of 1994 being granted. I have already noticed the fact that in this writ petition the challenge is to the show-cause notice dated August 4, 1993, on the ground that the Special Director, S. S. Renghen has no jurisdiction to issue the notice. The argument of Mr. S. K. L. Rattan is as fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wering a whole class of officers." In answer to the above contention Mr. C. A. Sundaram points out that in the instant case there was a specific notification dated September 22, 1989, published in the Gazette of India which specifically authorises the Special Director to be an Officer of Enforcement for the purpose of enforcing the provisions of the Act and to exercise the power under section 50 of the Act. These notifications purport to have been issued in the exercise of the power conferred by section 4(1) read with section 3( e ) of the Foreign Exchange Regulation Act. I am of the opinion that the argument of the petitioner is without any force because section 4(1) categorically says that the Central Government may appoint any person as it thinks fit to be an Officer of Enforcement. Mr. S. S. Renghen has been specifically appointed as an Officer of Enforcement with the designation of a Special Director of Enforcement. There can, therefore, be no dispute that the impugned show-cause notice is valid. That apart, as rightly pointed out by learned counsel for the respondents, the doctrine of factum valet or the defect theory will apply to this case. For this proposition, learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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