Bhargava, J. - (1.) We have come to the finding that this was a fit case where the High Court of Madras should have allowed the applications under Section 561-A of the Code of Criminal Procedure and should have quashed the proceedings taken on the basis of the complaint dated 17th March, 1968. Consequently, the appeals are allowed. The order of the High Court is set aside and the proceedings are quashed. The detailed reasons will follows. These appeals, by certificate, challenging a common Order of the High Court of Madras dismissing applications under Section 561-A of the code of Criminal Procedure presented by the appellants in the two appeals for quashing proceedings being taken against them in the Court of the Chief Presidency Magistrate, Madras, on the basis of a complaint filed on 17th March, 1968 by the respondent the Director of Enforcement, New Delhi. The Rayala Corporation Private Ltd., appellant in Criminal Appeal No. 18 of 1969, was accused No.1 in the complaint, while one M. R. Pratap, Managing Director of accused No.1, appellant in Criminal Appeal No. 19/1969 was accused No. 2. The circumstances under which the complaint was filed may be briefly stated.
(2.) The premises of accused No. 1 were raided by the Enforcement Directorate on the 20th and 21st December, 1968 and certain records were seized from the control of the Manager. Some enquiries were made subsequently and, thereafter, on the 25-8-1967, a notice was issued by the respondent to the two accused to show cause why adjudication proceedings should not be instituted against them for violation of Secs. 4 and 9 of the Foreign Exchange Regulation Act VII of 1947 (hereinafter referred to as "the Act") on the allegation that a total sum of 2,44,713.70 Swedish Kronars had been deposited in a Bank account in Sweden in the name of accused No. 2 at the instance of accused No. 1 which had acquired the foreign exchange and had failed to surrender it to an authorised dealer as required under the provisions of the Act. They were called upon to show cause in writing within 14 days of the receipt of the notice. Thereafter, some correspondence went on between the respondent and the two accused and, later, on 4th November, 1967, another notice was issued by the respondent addressed to accused No.2 alone stating that accused No. 2 had acquired a sum of Sw. Krs. 88,913.09 during the period 1963 to 1965 in Stockholm, was holding that sum in a bank account, and did not offer or cause it to be offered to the Reserve Bank of India on behalf of the Central Government, so that he had contravened the provisions of Section 4 (1) and Section 9 of the Act, and affording to him an opportunity under Section 23 (3) of the Act of showing, within 15 days from the receipt of the notice that he had permission or special exemption from the Reserve Bank of India in his favour for acquiring this amount of foreign exchange and for not surrendering the amount in accordance with law. A similar show cause notice was issued to accused No. 1 in respect of the same amount of 20th January, 1968, mentioning the deposit in favour of accused No. 2 and failure of accused No. 1 to surrender the amount, and giving an opportunity to accused No. 1 to produce the permission or special exemption from the Reserve Bank of India. On the 16th March, 1968, another notice was issued addressed to both the accused to show cause in writing within 14 days of the receipt of the notice why adjudication proceedings as contemplated in Section 23-D of the Act should not be held against them in respect of a sum of Sw. Krs. 1,55,801.41 which were held in a bank account in Stockholm in the name of accused No. 2 and in respect of which both the accused had contravened the provisions of Sections 4 (3), 4 (1), 5 (1) (e) and 9 of the Act. The notice mentioned that it was being issued in supersession of the first show cause notice dated 2nd August, 1967, and added that it had since been decided to launch a prosecution in respect of Sw. Krs. 88,913.09. The latter amount was the amount in respect of which the two notices of 4th November, 1967 and 20th January, 1968 were issued to the two accused, while this notice of 16th March, 1968 for adjudication proceedings related to the balance of the amount arrived at by deducting this sum from the original total sum of Sw. Krs. 2,44,713.70. The next day, on 17th March, 1968, a complaint was filed against both the accused in the Court of the Chief Presidency Magistrate, Madras, for contravention of the provisions of Sections 4 (1), 5 (1) (e) and 9 of the Act punishable under Section 23 (1) (b) of the Act. In addition, the complaint also charged both the accused with violation of Rule 132-A (2) of the Defence of India Rules (hereinafter referred to as "the D. I. Rs.") which was punishable under Rule 132-A (4) of the said Rules. Thereupon, both the accused moved High Court for quashing the proceedings sought to be taken against them on the basis of this complaint. Those applications having been dismissed, the appellants have come up in these appeals challenging the order of the High Court dismissing their application and praying for quashing of the proceedings being taken on the basis of that complaint.
(3.) In these appeals, Mr. A. K. Sen, appearing on behalf of the appellants has raised three points. In respect of the prosecution for violation of Section 4 (1), 5 (1) (e) and 9 of the Act punishable under Section 23 (1) (b) of the Act the principal ground raised is that Sec. 23 (1) (b) of the Act is ultra vires Article 14 of the Constitution inasmuch as it provides for a punishment heavier and severer than the punishment or penalty provided for the same acts under Section 23 (1) (a) of the Act. In the alternative, the second point taken is that, even if Section 23 (1) (b) is not void, the complaint in respect of the offences punishable under that section has not been filed properly in accordance with the proviso to Section 23-D (1) of the Act, so that proceedings cannot be competently taken on the basis of that complaint. The third point raised relates to the charge of violation of Rule 132-A (2) of the D. I. Rs. punishable under Rule 132-A (4) of those Rules, and is to the effect that Rule 132-A of the D. I. Rs. was omitted by a notification of the Ministry of Home Affairs dated 30th March, 1965 and, consequently, a prosecution in respect of an offence punishable under that Rule could not be instituted on 17th March, 1968 when that Rule had ceased to exist. On these three grounds, the order quashing the proceedings being taken on the complaint in respect of all the offences mentioned in it has been sought in these appeals.;