Subba Rao, J. - (1.) This appeal by special leave raises the short question whether the appellant contravened the provisions of sub-ss. (1) and (3) of S. 4 of the Foreign Exchange Regulation Act, 1947 (VII of 1947), hereinafter called the Act.
(2.) During the years 1951 to 1956 the appellant, Ram Rattan Gupta, visited the Far Eastern Countries after obtaining the necessary foreign exchange from the Government of India. During that period the appellant opened current accounts with the Chartered Bank of India, Australia and China at Singapur, Hong Kong, Osaka and Tokyo, without the general or the special permission of the Reserve Bank of India. In the different branches of the said Bank he deposited the unspent part of the foreign exchange given to him. The balance of the said deposits made at the various branches of the Bank was £ 40 (sterling). The appellant received payments from those accounts even after he returned to India. The Director, Enforcement Directorate, Foreign Exchange Regulation Act, took proceedings against the appellant under S. 19 (2) of the Act and, after making the necessary enquiries, found him guilty of contravening the provisions of sub-ss. (1) and (3) S. 4 of the Act and imposed him a penalty of Rs. 2,500 under S. 23(1)(a) of the Act. On appeal, the Foreign Exchange Regulation Appellate Board agreed with the view expressed by the Director of Enforcement that the appellant contravened the said provisions of the Act and dismissed the appeal. The appellant has preferred the present appeal, by special leave, against the judgment of the said Board.
(3.) Mr. A. V. Viswanatha Sastri, learned counsel for the appellant, contended that the total of the amounts kept by the appellant in the branches of the said Bank was a negligible balance of the free quota of foreign exchange given to him, that there was no relationship of creditor and debtor between the appellant and the Bank in regard to the said amounts, that the free quota of foreign exchange was given to him without any condition imposed thereon, and that on the said facts there was no scope to invoke either sub-s. (1) or sub-s. 3. of S. 4 of the Act.;