Case Note & Summary
The dispute arose from adjudication proceedings initiated by the Director of Enforcement against a partnership firm for failing to repatriate foreign exchange earned from manganese ore exports between 1952 and 1958, contravening Section 12(2) of the Foreign Exchange Regulation Act, 1947. The firm contested its liability, arguing that the amended Section 23(1) and Section 23C, which came into effect on September 20, 1957, were inapplicable to shipments made before that date. They contended that 'whoever' in the unamended Section 23(1) referred only to natural persons, excluding firms. The Director of Enforcement found the firm liable for deliberate underinvoicing and failure to repatriate proceeds, imposing a penalty of Rs. 15,00,000. The Foreign Exchange Regulation Appellate Board initially reduced the penalty, but the High Court restored the original order. The Supreme Court, upon appeal, examined the interpretation of 'whoever' and concluded that it encompassed both natural persons and associations like firms, thus permitting adjudication proceedings against the partnership for contraventions occurring before the amendment. The court upheld the penalty imposed by the Director of Enforcement, affirming the High Court's decision. The appeal was dismissed with costs.
Headnote
A) Foreign Exchange Regulation Act - Interpretation of 'whoever' - Comprehensive enough to include an association of persons - Foreign Exchange Regulation Act, 1947, Section 23(1) - The court held that the term 'whoever' in Section 23(1) included not only natural persons but also associations such as firms, allowing for adjudication proceedings against them for contraventions prior to the amendment. (Paras 143-144).
Issue of Consideration
Whether the word 'whoever' in Section 23(1) of the Foreign Exchange Regulation Act, 1947, before its amendment, denoted only a natural person.
Final Decision
The Supreme Court dismissed the appeal, affirming the penalty of Rs. 15,00,000 imposed by the Director of Enforcement for failure to repatriate foreign exchange, holding that the term 'whoever' included firms and allowed for adjudication proceedings for contraventions prior to the amendment.
Law Points
- Interpretation of 'whoever'
- corporate liability
- adjudication proceedings
- penalty for contravention
