- (1.) A short but interesting question of law had arisen in this case. The appellant is a firm which owned three vessels, by name M.V. Fathel Beri, M.V. Fathel Rehman and M.V. Saad Salam. It carries on export of timber, coir etc. to Gulf countries and imported Euphraez Zabdi Dates on return. Out of the amounts payable in Pounds deducting the price for dates, the appellant had fitted 230 H.P. Gardner engine (second hand) to their vessel Fathelbari and 240 H. P. Kalvin engine (second hand) to their vessel Fathel Rehman, which were purchased at the cost of Rs. 50,000/-and Rs. 55,000/- respectively. Out of the 'amount payable through Nakoda in Basrah, a sum Of Rs. 30,000/- was paid. For the third vessel Saad Salam an agreement was entered into to fit in a second hand engine with M/s. Mohd. Zasim of Kuwait at a price of 2,100 Kuwati Dinars and payable in three annual instalments. The Addl. Director, Enforcement Directorate, Madras adjudicated the proceedings against the appellant and found that the appellant had purchased two engines and got fitted to two motor vessels and agreement to the third engine was also concluded without obtaining the permission of the Reserve Bank of India. Thereby it contravened Ss. 5(1)(a) and 5(1)(b) of the Foreign Exchange Regulation Act of 1947, for short 'Repealed Act'. In this behalf admittedly this contravention was discovered on a raid conducted on the premises of the appellant on October 4, 1974. In consequence of discovery a notice was issued on October 11, 1974 and not having been satisfied with the explanations, a show cause notice was issued on October 18, 1975 an explanation was given by the appellant and found to have committed the contravention of Sec. 5(1)(a) and (b) and penalty was imposed on July 5, 1977. On appeal, while by order dated October 17, 1978, the Appellate Board confirmed the penalties, reduced the penalty from Rupees 50,000/- to Rs. 37,500/-. Questioning the legality thereof the appellant filed this appeal by special leave under Art. 136 of the Constitution of India.
(2.) The two fold main contentions have been raised by the appellant. The first contention is that the Act 7 of 1947 was repealed by Foreign Exchange Regulation Act, 46 of 1973 for short 'the Act'. No action was taken under the repealed Act before the Act came into force on September 19, 1973. The impugned action, therefore, is without jurisdiction and authority of law. It is also contended that the proceedings against the appellant was taken under the Sea Customs Act 1922 and the adjudicating authority imposed a penalty of Rs. 4,30,000/-. On Appeal, the Central Board of Excise and Customs by order dated August 19, 1975 set aside the penalty. For the same offence no proceedings under the Act could be taken. It is also contended that the finding is based on no evidence, since the respondents did not prove the offence under the Repealed Act or under the Act.
(3.) Section 5(1)(a) and (b) of the Repealed Act reads thus : "5(1) - Save as may be provided in and in accordance with any general or special exemption from the provisions of this subsection which may be granted conditionally or unconditionally by the Reserve Bank, no person in or resident in, (India) shall- (a) make any payment to or for the credit of any person resident outside India. xxx xxx xxx (b) draw, issue or negotiate any bill of exchange or promissory note or acknowledge any debt, so that a right (whether actual or contingent) to receive a payment is created or transferred in favour of any person resident outside India." Section 9(1)(a) and (c) of the 1973 Act provide thus : "9(1) Save as may be provided in and in accordance with any general or special exemption from the provisions of this subsection which may be granted conditionally or unconditionally by the Reserve Bank, no person in, or resident in, India shall- (a) - make any payment to or for the credit of any person resident outside India; xxx xxx xxx (c) - draw, issue or negotiate any bill of exchange or promissory note or acknowledge any debt, so that a right (whether actual or contingent) to receive a payment is created or transferred in favour of any person resident outside India." Section 23(1) of the Repealed Act prescribes penalty thus : "No person shall enter into any contract or agreement which would directly or indirectly evade or avoid in any way the operation of any provision of this Act or of any rule, direction or order made thereunder." Section 50 of the Act provides penalty thus : "If any person contravenes any of the provisions of this Act (other than Sec. 13, Clause (a) of sub-section (1) of Sec. 18 and clause (a) of sub-section (1) of Sec. 19) or of any rule, direction or order made thereunder, he shall be liable to such penalty not exceeding five times the amount of the value involved in any such contravention or five thousand rupees, whichever is more, as may be adjudged by the Director of Enforcement or any other officer of Enforcement not below the rank of an Asstt. Director of Enforcement specially empowered in this behalf by order of the Central Govt. (in either case hereinafter referred to as the adjudicating officer)." A comparative study of these provisions of the Repealed Act and the Act clearly adumbrated that save as may be provided in accordance with any general or special exemption from the provisions of this subsection, which may be granted conditionally or unconditionally by the Reserve Bank of India, no person resident in or ourside India shall make any payment to or for the credit of any persons residents outside India draw, issue negotiate any bill of exchange or promissory note or acknowledge any debt so that a right whether actual or contingent to receive a payment is created or transferred in favour of any persons resident outside India, in a contravention of the Repealed Act and the Act as well such person is liable to the penalty prescribed under the respective provisions. Three times the value was the penalty prescribed under the Repealed Act and five times the value has been prescribed under the Act. Except this difference, there is no difference as regards the language, nature of penalty and contraventions are concerned. Section 81 of the Act repeals and saves thus : "Repeal and saving - (1) The Foreign Exchange Regulation Act, 1947 (7 of 1947), is hereby repealed. (2) "anything done"........under the Act hereby repealed shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act. Section 6 of the General Clauses Act, 1897 provides the effect of repeal thus : "Where this Act or any Central Act or Regulation made after the commencement of this Act repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not- xxx xxx xxx (e) affect any investigation, legal proceedings or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment ...... and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed.";