- (1.) A complaint under S. 6 of the Imports and Exports (Control) Act, 1947 dated 24th February, 1964 was presented by the Chief Controller of imports and Exports, New Delhi in the court of the Chief Presidency Magistrate, Madras against (1) K. T. Kosalram, Director-in-charge of Messrs Dina Seithi Ltd.. Madras. (2) K. T. Janakiram. Director, Messrs Dina Seithi Ltd; (3)K. Natarajan, Manager. Messrs Mohan Ram Press, Madras, (4) Messrs Dina Seithi Ltd., Madras, (5) Sri T. N. Ramachandran son of S. Natesa Iyer, Madras and (6) T. Natarajan, Manager, Messrs Dina Seithi Ltd., Madras. According to the broad allegations in the complaint on November 28, 1959 accused no. 4 (hereafter called the Company) was registered under the Companies Act, 1956, as a public limited company with the Registrar of Companies, Madras. Accused nos. 1 and 2 who are brothers were both directors of the Company, accused no. 1 being the Director-in-charge attending to its day to day management and administration. He was also authorised to operate its accounts with the banks. The primary object of the Company was publication of a Tamil daily newspaper "Dina Seithi". Accused no. 3 was the Manager at Messers Mohan Ram Press located in the same building in which the Company was located. Srimati Gomati Devi, wife of accused no. 1 was the sole proprietress of this Press. She had given power of attorney to her husband for operating the bank account of her Press. The daily newspaper (Dina Seithi) used to be printed at this press. Accused no. 5 was a broker engaged in the business of negotiating sale and purchase of printing machinery. Between 1949 and 1951 he was working as Chief Salesman of Printers' House. Madras and before that for about two years he had worked as a salesman with Messrs Standard Printing Machinery Company. Madras. In 1951 he started his independent business as a broker; in addition he also used to work as a correspondent of "Kerala Kaumudi" belonging to the Company. Accused no. 6 was the Manager of the Company and his wife Smt. Sarojini was one of its Directors. On May 5, 1960 accused no. 1 applied on behalf of the Company to the Chief Controller of Imports and Exports, New Delhi for the grant of an import licence in favour of the Company for importing two secondhand rotary printing presses valued at Rs. 3 lakhs in the category of "Actual Users". The Chief Controller of Imports and Exports on the recommendation of the Committee constituted for the purpose, issued in the first instance an import licence for Rs- 1,50,000 (Ex. P.12). The number of this licence was A-759626/ 60/AU/CCI/HQ and it was dated September 19, 1960. Later, on the request of accused no. 2 on behalf of the Company, the value of this licence was raised to Rs. 3 lakhs on the recommendation of the Press Registrar at India. The licence was returned to the Company on December,16, 1960. The original period of validity of the licence having expired on June 19, 1961 accussed no. 2 requested the Licensing Authority on behalf of the Company to extend the period on the ground that the machinery could not be fixed up by "the Company's Directors. Under the orders of the Controller in charge of the newsprint sale, the, validity of the licence was extended upto March 19, 1962. On July 2, 1961 accused no. 1 sought permission of the Licensing Authority on behalf of the Company to import two secondhand rotary presses instead of one already permitted within the licence value of Rs. 3 lakhs under the import licence Ex.P/12 on the ground that one more printing press was required for the proposed office at Madurai (Ex. P/15). After securing further necessary information about the machinery proposed to be imported the Chief Controller approved the request with the result that the amended licence for two presses was sent to the Company on August 16, 1961. On December 19, 1961 the Company, as per letter sent by accused no. 1, informed the Chief Controller that one rotary printing press had been imported and the other was expected to arrive by January, 1962. It was requested that in the import licence the description of the goods be changed from "Rotary Press" to "Rotary Press with Stereo equipment and Turtles". We find from Ex. P/17 and Ex. P/17 (a) that it was represented that the Company was incurring heavy demurrage as the cases were lying on the wharf uncleared for want of the required amendment of the licence. This was described as a purely technical amendment in the licence. This request was granted with the approval of the Chief Controller of Imports and Exports. The amended licence was dispatched to the Company on January 3, 1962. According to Condition (c) reproduced on the reverse of the import licence the licence -holder had to utilise the goods imported only for consumption in his own factory and its sale to or use by other parties was specifically prohibited. The licence-holder was further prohibited from pledging the imported goods in whole or in part except with a scheduled bank duly authorised to deal in foreign exchange and that also with prior permission of the Licensing Authority.
(2.) One Dr. K. G. Thomas owned "Kerala Dhwani", a daily newspaper of Kottayam having circulation in the State of Kerala. It was started on August 20, 1959 and C. J. Mani was its general business manager ever since its inception. On November 10, 1960 Dr. Thomas applied to the Chief Controller of Imports and Exports on behalf of his firm for importing a rotary printing press under a Customs Clearance Permit. But this was rejected. On October 25, 1961 he sent another application dated October 3, 1961 on behalf of the firm requesting for an import licence for importing a secondhand rotary press for the period October-March, 1962. But this was also rejected. Still another application dated May 10, 1962 for licence for importing two mono typefacing units was also rejected on April 29, 1963. C. J. Mani, the General Manager of this concern was also independently trying to secure a rotary printing press through various parties and firms. Accused No. 5 was known to C. J. Mani and during the former's visit to Kottayam in the first quarter of 1961 he learnt that Dr, Thomas was desirous of securing a secondhand rotary printing press. Sometime in April or May, 1961 accused Nos. 2 and 5 visited Kottayam and on meeting Dr. Thomas they told him that accused no. 1 was going to have an import licence for two rotary printing presses but he needed only one, with the result that one R. Hoe and Co. eight-page rotary printing press would be available for sale. After some correspondence and discussion between accused no. 5 and C. J. Mani and Dr. Thomas and after a personal meeting between Dr. Thomas and accused no. 1 (at the instance of accused no. 5) the terms of sale of rotary press to Dr. Thomas were finally settled on July 17, 1961. The price was settled at Rs. 2 lakhs ex-godown, Madras. The same day Dr. Thomas paid to accused no. 5 Rs, 15.000 by means of a cheque by way of advance money. Accused no. 5 issued a stamped receipt which was also signed by accused no. 1. On July 19, 1961 the photo prints of the press offered for sale were forwarded by accused no. 5 to Dr. Thomas. On the reverse of these prints were the rubber stamp impressions of the Company. On August 2, 1961 a further sum of Rs. 25.000 was paid by Dr. Thomas for which a receipt was given by accused nos.1 and 5. Between September 23, 1961 and March 17, 1962 the balance of Rs. 1,76,700 (total being Rs. 2,16,700) was paid by Dr. Thomas in instalments towards the price of the rotary press and its accessories. On September 1, 1961 accused no. 1 had opened a letter of credit with a nil margin with the Indian Overseas Bank Ltd., Madras on Messrs Universal Printing Equipment Company, New York for importing a secondhand rotary press for dollars equivalent to Rupees 1,00,112 against import licence no, A-759626/60/AU/CCI/HQ.On October 28, 1961, the Bank received the relevant import documents and on December 13, 1961 it received from the Company the remittance of the amount in cash towards the letter of credit. On October 20, 1961 Messrs. Binny and Co., Madras, the agents of the Shipping Company Messrs. Isthmian Lines Inc., U. S. A. had requested the Company to remit Rs. 12,712 being the freight payable at Madras towards the consignment of 19 boxes containing secondhand rotary press due to arrive from New York by S. S. "Steel Vendor" so as to enable them to cable to their principals at New York to issue the bills of lading to the shippers. A cheque for Rupees 12,712 was accordingly sent by the Company to Messrs. .Binny and Co., on October 31.1961. The necessary cable was then sent to New York. The import documents pertaining to the rotary press were sent by accused no. 1 on behalf of the Company to Messrs. Natesa Iyer and Co., Clearing Agents, Madras for clearing the goods from the Madras Port by the Indian Overseas Bank Ltd., Pursawalakam. Madras. This invoice was issued by the Universal Printing Equipment Company, Lindhurst in the name of Messrs Dina Seithi Ltd., indicating shipment of the goods imported contained in the 19 boxes bearing marks "Dina Seithi". The customs duty and the clearance charges were paid by the Company. It is unnecessary to state at length further details of the complaint. Suffice it to say that the press erected by the technicians of "Kerala Dhwani" started functioning from May 20, 1962. In March, 1962 the Deputy Superintendent of Police, Madras, visited the premises of this newspaper and found the rotary printing press tallying with the description given in the invoice issued to the Company by R. Hoe and Co., New York/ London. The number 458 assigned to the press was also found on its major parts. No rotary press imported by accused no. 1 on behalf of the Company was found at its (the Company's) premise. The amount received by cheques and drafts from Dr. Thomas were credited to the account of Messrs. Mohan Ram Press of which Smt. Gomati Devi. wife of accused no. 1, was the sole proprietress. On these broad averments it was prayed in the complaint that accused nos. 1 to 3 and 5 and 6 be proved against for offences under S. 120 -B. I. P.C. read with S. 5 of Imports and Exports (Control) Act, 1947 and also for an offence under S. 5 of the said Act. The Company was alleged to be guilty under S. 5 of the said Act read with cl. (5), sub-cl. (iv) of (Control) Order, 1955.
(3.) The Chief Presidency Magistrate who tried the complaint acquitted accused no. 6 holding that he had nothing to do with the impugned transaction but convicted the rest. The Company was sentenced to fine only and so were amused Nos. 3 and 5: three individual accused persons were directed, in case of default to undergo rigorous imprisonment for three months on each count. Leniency was shown to accused Nos. 2, 3 and 5 because they had acted under the directions given by accused No. 1 who was sentenced to rigorous imprisonment for six months under each count and also to pay fine and in default to undergo further rigorous imprisonment for three months.;