Sabyasachi Mukharji, J. - (1.) This appeal arises out of the judgment and order of P. K. Banerjee, J. dated July 29, 1970 whereby the learned Judge has set aside the order passed under Section 3 (2) of the Foreign Exchange Regulation Act. 1947 by the Deputy Controller, Reserve Bank of India, cancelling the authorisation in favour of the petitioner under Section 3 (1) of the said Act. It appears that since 1944 the petitioner had a licence to deal in foreign currency granted to the petitioner subject to such conditions as might from time to time be notified by the Reserve Bank of India. On March 25, 1947 the petitioner was granted an authorisation or a licence to deal in foreign currency by the Reserve Bank of India in exercise of the power conferred by Section 3 of the Foreign Exchange Regulation Act, 1947. The said authorisation was to purchase and sell foreign currency notes and coins at 34, Garden Reach Road, Kidderpore and Dura Dum Airport, Calcutta, subject to such conditions as might be notified from time to time by the Reserve Bank of India. On January 9, 1968 it is alleged that one Mr. J. G. Bayliss had tendered at the Dum Dum Airport to the petitioner a sum of Rs. 792 for conversion into foreign currency and the petitioner firm gave him in exchange a sum of U. S Dollars 68 instead of U. S. Dollars 104 due to him at the prevalent rate. This allegation of Mr. Bayliss was contained in a letter dated January 22, 1968 written to the Finance Minister, Government of India, wherein he had stated that in the interest of India tourism action should be taken to rectify such conduct. In paragraph 5 of the petition it has been stated that in a letter dated February 6, 1968 the Reserve Bank of India Informed the petitioner firm about the allegation made by Mr. Bayliss in the aforesaid letter. On February 13, 1988 the petitioner firm wrote to the Reserve Bank of India stating that Bayliss had tendered only Rs. 578.80 paise and not Rs. 792 as stated by him and further stated that Mr. Bayliss should be asked to produce some evidence on the basis of which he had made the aforesaid allegation against the petitioner firm. On April 26, 1968 there were two authorisations issued under Section 19-H and Section 19 (2) of the Foreign Exchange Regulation Act by the Deputy Controller. Reserve Bank of India, in favour of one Shri J. Ranganathan Rao, Assistant Controller of Exchange Control Department to investigate and inspect the accounts and affairs of the petitioner firm. The said inspection was carried out by the said J. Ranganathan Rao on April 26, 1968 and April 27, 1968. What happened therein has been reiterated by him in his affidavit affirmed in this proceeding on April 19, 1969. He stated, inter alia, that the petitioner firm has three booths, the first at the Dum Dum Airport, the second in the city at Stephen House, Dalhousie Square and the third at the Kidderpore Docks. He further stated that he went to the Dum Dum Airport to see the records there and asked the man in charge of the counter at the Airport of the petitioner firm to produce all the records relating to the sale of U. S. Dollars 68 on January 19, 1968 to Mr. J.G. Bayliss, J. Ranganathan Rao has further stated that after searching his records the person in charge of the petitioner's counter informed him in writing that the relevant records had been removed to the Stephen House and thereupon he went to the Stephen House office at about 3-45 p.m. It appears that the allegation of Mr. Bayliss was brought by the said J. Ranganathan Rao to the notice of the petitioner and the allegation was that on January 9. 1968 Bayliss had tendered Rs. 792 and he was given 68 U. S. Dollars and therefore he was short paid to the extent of 36 Dollars. The version of the petitioner was that he received a sum of Rs. 518.80 paise from the said Mr. J.G. Bayliss and accordingly he was paid 68 U. S. Dollars being the equivalent sum of rupees tendered. J. Ranganathan Rao inspected the account of register of daily sale and purchase of the foreign exchange and on perusal of the same he found that on January 9, there was a sale of 68 U. S. Dollars to Mr. J.G. Bayliss and the same was entered. The rupee equivalent on 68 U. S. Dollars purchased at the rate being 1 Dollar = Rs. 7.60 paise worked out to Rs. 516.80 and not Rupees 518.80 as the petitioner had stated in his letter dated February 13, 1968. Therefore, the petitioner firm was asked by J. Ranganathan Rao to have the calculation. The petitioner, it is asserted by J. Ranganathan Rao, sought to explain that he had recovered Rs. 2 as his commission in addition to the cost of exchange the value of exchange being Rs. 516.80 paise. Thereupon, attention, of the petitioner was drawn to footnote A to the Exchange Control Manual Paragraph 11 (ii) of Section XVIII in terms of which it was permissible for a money changer to recover commission of Rs. 2 where the value of the individual sale transaction of U. S. Dollar and Pounds did not exceed Rs. 300. It was stated on behalf of the petitioner that the commission had been recovered in the instant case through mistake. Thereafter, J. Ranganathan Rao has referred to the rate board exhibited at the money change counter at the Dum Dum Airport wherein it was stated inter alia "Rs. 2 will be charged as commission on every transaction of sale of Sterling and Dollar currency." Attention was drawn of the petitioner by the said J. Ranganathan Rap to the instruction issued to the authorised money changers to issue certificate to foreign tourists in respect of foreign currency notes on conversion of rupees at the time of departure from India. It was stated by the petitioner that such certificate had been issued to Mr. Bayliss, but no office copy could be supplied by the petitioner of such certificate granted to Mr. Bayliss. J. Ranganathan Rao has stated further in his affidavit that the petitioner was asked to state the nature of internal checks it exercised to verify the correctness of the sale transactions of foreign exchange handled by his staff. It was stated by the petitioner that the staff obtained from the tourist a receipt which indicated the amount of the exchange paid. A specimen copy was produced. It was further stated that these slips are cross-checked with the entries in the sale and purchase register. But such slips, it was further asserted were destroyed after a week or ten days. Therefore, the petitioner firm was unable to produce any such receipt in the case of Bayliss as more than ten days had elapsed at the time of inspection. The petitioner was asked to produce the cash book containing the entries of January 9, 1968 to see whether if any surplus rupee in cash had been received on that date. It was said that the said book was not in the Stephen House, but later what was produced was a sheet of paper containing cash transaction of January 9, 1968. It was stated by the petitioner that this was a provisional cash account and its Accountant wrote out the pucca cash account on the basis of these entries. The petitioner did not maintain a cash account in a pucca way on a daily basis and the rupee portion of the foreign exchange transactions account also merged with the personal account of the petitioner. From the said paper sheet dated January 9, 1968 it appears that the amount recorded in the sale register was U. S. Dollars 133.00 and this tallied with the entries of January 9, in the cash, account Next there was a checking up of the purchase of U. S. Dollars for January 9. 1968. The purchases, however, recorded for the day were U. S. Dollars 227 00 but the cash ac- count showed purchase to the extent of U. S. Dollars 247.00; therefore, there was an excess of 20 Dollars. The petitioner could not explain excess purchase There were certain other small purchase transactions as mentioned in the affidavit of J. Ranganathan Rao of about Rs. 23.75 p. It was stated that small changes represented tips to the airport staff who had attended on the tourists and usually exchanged the small changes at the petitioner's counter at the airport. Attention was drawn to the letter of February 13, 1968 addressed to the Bank in which the petitioner had reiterated that Mr. Bayliss had tendered Rs. 518.80 and not Rs. 792 and he was asked to produce some evidence on the basis of which this statement had been made. The petitioner said that he was unable to produce any evidence as he did not maintain a rupee account in respect of each individual sale or purchase transaction. He said that he merely applied the selling rate of U. S. Dollar 1 = Rs. 7.60 paise for converting U. S. 68 Dollars to the product of Rupees 516.80 paise and he added his commission of Rs. 2 which gave a total figure of Rs. 518.80. In this connection it has to be mentioned that in this proceeding on behalf of the petitioner a letter purporting to be a letter by two employees or porters at the airport addressed to the Manager of the petitioner was forwarded to the Reserve Bank of India and has been relied on, wherein it was stated by the said porters that they asked the petitioner to oblige them with Indian currency in exchange of the foreign currency paid to them by some foreign tourists who were in a hurry on January 9, 1968 in the evening on which they were on duty. It was further stated as they were very poor people it would be very helpful if the petitioner would kindly encash the foreign currency into Indian currency in order to enable them to make use of the same. It must be stated that this was relied on along with the affidavit-in-opposition on behalf of the petitioner, in an attempt to explain 20 U. S. Dollars which remained unexplained and this was apart from the excess of Rs. 23.75 which was admitted to be tips in the explanation given to J. Ranganathan Rao. It has been subsequently stated that this discrepancy occurred because the person who was writing the cash book on the next day forgot to make the proper posting and as such it escaped the attention and it was only after attention was drawn of the petitioner firm pursuant to the investigation in April, 1968 that in June, 1968 the petitioner gave this explanation to the Reserve Bank of India about this alleged discrepancy of 20 Dollars, which remained unaccounted in the document produced by the petitioner. It appears that after J. Ranganathan Rao had made his report on June 25, 1968 a show cause notice was issued. As good deal of argument has been made about the procedure adopted in connection with the show cause notice it would be necessary to set out the relevant portions of the said show cause letter. The said letter stated that it was brought to the notice of the Reserve Bank that the petitioner in carrying on the business of money changer had not acted properly, inter alia, as follows : "(i) You have not maintained proper and correct books of accounts relating to the transactions in foreign exchange entered into by you. You have also not maintained any record or account of Indian rupees tendered by the customers to you or given by you to them in exchange for foreign currency, with the result that it is not possible to check whether the proper amount of foreign exchange, or, as the case may be, Indian rupees, was paid by you to the customer. (ii) Your daily cash book is not maintained properly in that it consists of loose sheets, and that entries (relating to?) transactions in foreign exchange and entries relating to your personal accounts are mixed up. (iii) There are discrepancies between the cash account and the purchase registers maintained by you. (iv) You have unauthorisedly collected commission in respect of money changing transactions where the value of sale of exchange was over Rs. 300, whereas as per footnote 'A' in the Exchange Control Manual (Paragraph 11 (ii) of Section XVIII) you are not entitled to recover commission of Rs. 2 where the value of individual sale transaction is over Rs. 300. (v) From the papers relating to your transactions of 9th January, 1968, as furnished to our Officer who inspected your office on the 26/27th April, 1968 it is found that you have not reported to us the following amounts received by you on the 9th January, 1968 for exchange : JUDGEMENT_48_AIR(CAL)_1975Html1.htm Items (iv) and (v) constitute violations of the provisions of Foreign Exchange Regulation Act, 1947, and the orders and directions issued thereunder. It appears to us that, haying regard to the above, there is sufficient reason to warrant revocation of our authorisation to you to deal in foreign exchange (granted as per our licence No. CA/MC/3 dated 25th March, 1947 as amended from time to time) and we propose to revoke the same. You are, therefore, called upon to show cause within 15 days from the receipt of this letter why, the aforesaid authorisation issued to you should not be revoked in terms of clause (iii) of subsection (2) of Section 3 of the Foreign Exchange Regulation Act, 1947. If you fail to show cause within the said period, it will be taken that, you have no such cause to show." The petitioner on July 10. 1968, showed cause and gave a reply to the aforesaid letter which stated as follows :-- "We beg to reply to your queries as follows : -- (i) We have all through regularly submitted to your goodselves the various statements relating to all our transactions in foreign exchange as directed by you and the same has so long met with your approval and there has not been any complaint in this regard. You will no doubt agree that unless accounts are maintained we could not have submitted the statements. The accounts of Indian Rupees tendered by the customers to us or given by us to them in exchange for foreign currency are noted in our daily Cash Book from where the same can be verified. It may be mentioned that after the visit of your Officer on 27th April, 1968 and as suggested by him we are since recording the Indian Currency equivalent in respect of our transactions on the Sale and Purchase Registers as well. (ii) Our daily cash book has all through been maintained properly in Tokchas (sheets) having regard to the insufficiency of space at our counter (hardly 20 sq. ft.) and for which we are for a long time making representations to the Civil Aviation Authority, Dum Dum Airport, This system of keeping accounts in Tokchas has never been objected to by you and has all along been accepted by you and has all along been accepted by our Auditors. The Tokchas are carried to the Head Office for entry in the books of account in due course. Since the drawings are also made for our personal use out of the Indian currency standing to the credit of our business at Dum Dum Airport the personal accounts are also shown on the cash book separately. There has not been so far any mixing up of the accounts and the two accounts are shown clearly and separately on the cash book. (iii) There are no real discrepancies between the cash accounts and the purchase registers and superficial discrepancies, if any, can be only attributable to bona fide clerical errors and did not affect the actual position. (iv) It is always our endeavour to see that collection of commission in respect of money changing transaction is limited to Rs. 300 in value as envisaged by the Rules and we have been sparing no pains to ensure that there is no violation in this regard. If we have charged commission in any transaction exceeding Rs. 300 in value we beg to say that the discrepancy, if any, in this regard is due to bona fide clerical error for which we express our sincere reget. (v) In respect of the foreign currency mentioned in paragraph (v) we have to confirm and as was pointed out to your officer during his visit on the 26/27th April, 1968 that the same was correctly recorded in our cash book but was not recorded in the purchase register in the circumstances mentioned below and therefore, was omitted to be reported in the statements submitted to you. It is well known that the foreigners at the time of leaving airport pay tips to the menials and the same are ordinarily entered in the name of the particular foreigner in the purchase register but ;n case the foreigners pay the tips after they had left our counter, we purchase the foreign exchange from the menials in their names against Indian currency after taking receipts from them. In the instant case after the discrepancy was pointed out by your officer, we made enquiries and came to know in January, 1968 that the menials took the Indian currency in exchange of the foreign currencies mentioned in paragraph (v) but as they were in a hurry for the passengers to move into the plane they promised to give the receipts after sometime and, accordingly, the transactions were noted aside by our clerk on duty and also entered in the cash book. The duty of the clerk concerned was thereafter changed and new clerk came in and the receipts obtained by the new clerk were kept in abeyance for verification by The previous clerk and was thereafter unfortunately overlooked and not reported to us and, therefore, was omitted to be included in the Purchase Register. We state and submit and as you will kindly agree, there was no violation of Foreign Exchange Rules in this regard. In any event, the total value of the foreign exchange is only Rs. 171.00. The said purchases have since been noted in our Purchase Register. We are including the said purchases in our returns to you for June, 1968. In conclusion, we beg to submit that we are carrying on the business as money changer both at Dum Dum Airport, Stephen House and at Kidderpore Docks under the authority granted by your goodselves since 1941 without any blemish and have served our customers to their satisfaction. Our yearly turn over has now risen to about Rs. 19,00,000 and you will kindly appreciate that in the course of such voluminous dealings within such a small space there may be minor bona fide clerical errors but even that has not happened so far. We beg to submit again that there has been no violation in respect of item (iv) and that there has been no violation in respect of item (v) and the discrepancies, if any, are due to bona fide clerical error and, in any event, the total amount involved is Rs. 171 only which is under the permissible limit for keeping the foreign exchange worth Rs. 250 only (granted by your goodself). We submit that there has been no cause for revoking our licence and we fervently hope that you will have no grievance against us and will allow us to continue to deal in foreign exchange as money changer under your kind authority as heretofore."
(2.) Thereafter, on December 30, 1968 the communication which is the subject-matter of challenge in this case was issued by the Deputy Controller, Reserve Bank of India, in which after referring to the letter dated June 25. 1968 and the reply thereto dated July 10, 1968, it was stated that the Reserve Bank of India had considered the explanation given by the petitioner and the several irregularities in the conduct of the business and the contravention of the provisions of the Foreign Exchange Regulation Act, 1947. It was further stated that the Reserve Bank of India found the explanation as unsatisfactory. It was further stated that it was observed that the petitioner had admitted many of the irregularities and contraventions but had attempted to ascribe these as 'bona fide clerical errors'. In the premises, it was reiterated that there was sufficient reason for revoking the licence as proposed in the letter dated June 25. 1968 and in exercise of the power conferred under clause (iii) of Sub-section (2) of Section 3 of the Foreign Exchange Regulation Act. 1947, the authorisation granted on March 25, 1947 was being revoked. It is the validity and the propriety of this order of revocation which was under challenge in the application by the petitioner under Article 226 of the Constitution. By a judgment delivered and an order passed on July 29, 1970 the learned trial Judge has come to the conclusion that the impugned order was an order which was required to be passed in accordance with the principles of natural justice and in the facts and in the circumstances of the case, according to the learned Judge, there has been violation of such principles of natural justice inasmuch as no reasonable opportunity had been given to the petitioner. The learned Judge therefore, came to the conclusion that the order in question was passed arbitrarily and set aside the impugned order of revocation.
(3.) In the appeal before us the familiar controversy, whether the impugned order is an order which is required to be passed quasi-judicially or is an order of administrative nature and whether it was open for the court to examine the grounds of the revocation of the licence or exercise of the power by the Reserve Bank of India under Section 3 (2) (iii) of the Foreign Exchange Regulation Act, 1947, has been raised. It was contended on behalf of the appellant that Section 3 (2) of the Foreign Exchange Regulation Act, 1947 was an instance of case where an administrative discretion was given to an administrative authority to be exercised for administrative purposes and if the order was passed or the power was exercised bona fide within the ambit of the provisions of law, such an administrative action was beyond the purview of scrutiny in a Writ Petition. It was, further, contended that the section did not give any right of appeal to the party aggrieved. It was stressed that unlike some other provisions of the Foreign Exchange Regulation Act like the provisions of Section 23 (iv), Section 9 or Section 22 (iv) of the Act the section did not indicate or lay down that any reasonable opportunity or any notice or any hearing should be given to the party concerned. It was argued that where a particular statute contained provisions, in respect of some of which it was specifically provided that notice or opportunity should be given to the party concerned while the other provisions contained no such provision, it was the expression of legislative intent that the later provisions were intended to exclude the operation of the principles of natural justice and the actions proposed under the later type of the provisions were administrative in nature. It was, further, urged that in this case as there was no provision for appeal, unlike some other sections, of the Foreign Exchange Regulation Act, was also an indication of the fact that the action and the power contemplated by Section 3 (2) (iii) of the Foreign Exchange Regulation Act was administrative in nature to be exercised neither quasi-judicially nor by giving elaborate reasons. It was submitted that all that was required for action was there should be reasons which should be considered sufficient by the Reserve Bank of India and no objective condition was required to be fulfilled before taking action under Section 3 (2) (iii) of the Foreign Exchange Regulation Act, 1947. In support of this argument counsel for the appellant relied on the decisions in the cases of (Radheshyam Khare v. The State of Madhya Pradesh) , (The Kesava Mills Co Ltd v. Union of India) , (Pearlberg v. Varty, Inspector of Taxes) (1972) 2 All ER 6, (Union of India v. M.L. Capoor) . It was further contended that where public economy was concerned, a control of this nature and exercise of the power of this nature should be subject only to the administrative discretion. In support of this proposition reliance was placed on the decision of the Australian High Court in the case of (Election Importing Co. Proprietary Ltd. v. Courtice) 80 Comm. WLR 657 (Aus.) also Haji Sattar v. J. C. C. of Imports and Exports) : (R. D. and Chemical Co. v. Company Law Board) . Counsel also drew our attention to the decision in the case of (R. v. Metropolitan Police Commissioner) (1953) 2 All ER 717 at p. 718 where revocation of a cabman's licence was held not to be quasi-judicial but administrative. Reliance was also placed on the decision in the case of (State of Maharashtra v. Mayer Haus George) .;