Sen, J. - (1.) The short question involved in this appeal by special leave directed against the judgment and order of the High Court of Bombay dated March 7, 1986 is whether the word 'whoever' in sub-s. (1) of S. 23, Foreign Exchange Regulation Act, 1947, before its amendment by Act XXXIX of 1957 denoted only a natural person and association of persons, such as a firm, would not fall within the connotation of the word 'whoever'. By the judgment, a, learned single Judge of the High Court allowed the appeal of the Director of Enforcement under S. 54 of the Act and set aside the order of the Foreign Exchange Regulation Appellate Board. Bombay. dated January 30, 1981 and restored the order of the Director of Enforcement dated August 17, 1978 holding the appellants guilty of contravention of S. 12(2) of the Act read with the notification issued by the Government of India in the Ministry of Finance, New Delhi, dated April 22, 1952 and levying a penalty of Rs. 15,00,000. By its order the Foreign Exchange Regulation Appellate Board held that there could be no levy of penalty on the appellants-firm for failure to repatriate foreign exchange on shipments of manganese ore made prior to September 20, 1957, i.e.. prior to the amendment of S. 23(1) of the Act and the introduction of S. 23C by the Amendment Act and accordingly reduced the amount of penalty to Rs. 3.10.000. As a result of the decision of the High Court, the order of the Director of Enforcement levying a penalty of Rs. 15,00,000 on the appellants has been restored.
(2.) The facts giving rise to the appeal are as follows. Messrs Rai Bahadur Seth Shreeram Durgaprasad were a partnership firm engaged in the business of winning, extracting and getting manganese ore from their manganese mines at Tumsar on a very large scale. During the period from 1952 to 1958. the partnership firm made 52 shipments of manganese ore to various foreign countries and earned huge amount of foreign exchange. It however failed to repatriate the full value in foreign exchange against the aforesaid 52 shipments and thereby contravened S. 12(2) of the Act. The Director of' Enforcement accordingly initiated adjudication proceedings against the appellants under S. 23(1) as amended for contravention of S. 12(2) as well as S. 4(1) of the Act. The appellants stated before the Director of Enforcement that they did not contest the charge under S. 12(2) of the Act but questioned the liability of the firm on the ground that the amended S. 23(1) as well as S. 23C introduced by the Amendment Act came into force on September 20, 1957 and were therefore inapplicable to the export shipments from the year 1952 onwards till that date, and if at all, the firm could only be held liable under the amended S. 23(1) read with S. 23C as from that date. It was contended that the word whoever in sub-s. (1) of S. 23 of the Act before its amendment denoted only a natural person and association of persons, such as a firm, would not fall within the connotation of the word 'whoever'. The Director of Enforcement by his order dated August 17, 1978 repelled the contention and held that the firm and its partners had deliberately underinvoiced shipments at the time of export and also diverted the undeclared proceeds to their accounts with foreign banks with an intention not to repatriate the sale proceeds in the prescribed manner within the prescribed period in respect of each shipment. He dealt with the evidence in detail with reference to the books of account and came to the conclusion that both Durgaprasad Saraf and Umashanker Aggarwal were in charge of, and responsible for the conduct of the business of the partnership firm during the relevant period. Neither of them produced any evidence to show that the contravention in question had taken place without their knowledge or that they had exercised due diligence to prevent such contravention. They were accordingly made liable for contravention of S. 12(2) of the Act for failure to repatriate the foreign exchange earned on the aforesaid 52 shipments and were imposed a penalty of Rs. 15,00,000 on the partnership firm. The Foreign Exchange Regulation Appellate Board however disagreed with the Director of Enforcement and accepted the contention of the appellants and accordingly reduced the amount of penalty to Rs. 3, 10,000.
(3.) Shri Asoke Sen, learned counsel appearing for the appellants, with his usual fairness frankly concedes that Art. 20(1) of the Constitution would not in terms apply but, he contend, the principles embodied therein would still govern. He has confined his submissions to only one point namely, that the word 'whoever' in sub-s. (1) of S. 23 before its amendment by Act XXXIX of 1957 connoted only a natural person, i.e., those who actually contravened the provisions of S. 12(1) of the Act by failure to repatriate full value of foreign exchange earned on exports and would not take in corporate liability and therefore association of persons, such as a firm, would not fall within the connotation of the word 'whoever'. The learned counsel further contends that by the Amendment Act, new S. 23(1) was substituted and S. 23C introduced w.e.f. September 20, 1957 and the effect of these provisions was that after that date, adjudication proceedings or criminal proceedings could be taken in respect of a contravention mentioned in S. 23(1) while before the amendment only criminal proceedings before a Court could be instituted to punish the offender. We are afraid, the contention cannot prevail. It is not correct to say that the amended S. 23(1) of the Act does not apply to contraventions which took place before the Amendment Act came into force. Shri Madhusudan Rao, learned counsel appearing for the respondents rightly contends that on a combined reading of Ss. 23(1) and 12(2), the only possible construction is that the word 'whoever' includes a person and therefore initiation of adjudication proceedings against the partnership firm was permissible. He draws sustenance from the provision contained in sub-s. (4) of S. 23 which clearly contemplates prosecution of a company or other body corporate. As regards the applicability of the amended S. 23(1) read with S. 23C with regard to initiation of adjudication proceedings in respect of contraventions which took place before the Amendment Act came into force, he rightly contends that the matter is concluded by the decision of this Court in Union of India v. Sukumar Pyne, (1966) 2 SCR 34.;