TEXMACO LIMITED AND O P JHUNJHUNWALLA Vs. DEPUTY DIRECTOR ENFORCEMENT DIRECTORATE
LAWS(CAL)-1995-3-8
HIGH COURT OF CALCUTTA
Decided on March 21,1995

TEXMACO LIMITED AND O.P. JHUNJHUNWALLA Appellant
VERSUS
DEPUTY DIRECTOR, ENFORCEMENT DIRECTORATE Respondents


Referred Judgements :-

TATA ENGINEERING AND LOCOMOTIVE CO. LTD. V. SPECIAL DIRECTOR OF ENFORCEMENT [REFERRED TO]
SIRAJ SONS V. DIRECTOR OF ENFORCEMENT [REFERRED TO]
BHARI INDUSTRIAL PROMOTERS (P.) LTD V. DIRECTOR OF ENFORCEMENT [REFERRED TO]
CONSMIQUE EXPORTS LTD. V. DIRECTOR OF ENFORCEMENT [REFERRED TO]
UNITED BREWERIES LIMITED VS. DEPUTY COMMISSIONER OF INCOME TAX ASSESSMENT [REFERRED TO]
M CT M CORPN PVT LTD VS. DIRECTOR OF ENFORCEMENT NEW DELHI [REFERRED TO]


JUDGEMENT

Ruma Pal, J. - (1.)These appeals involve the interpretation of Section 16 of the Foreign Exchange Regulation Act, 1973. Section 16 reads as follows :
"16. Duty of persons entitled to receive foreign exchange, etc.-(1) No person who has a right to receive any foreign exchange or to receive from a person resident outside India a payment in rupees shall, except with the general or special permission of the Reserve Bank, do or refrain from doing anything, or take or refrain from taking any action, which has the effect of securing - (a) that the receipt by him of the whole or part of that foreign exchange or payment is delayed, or (b) that the foreign exchange or payment ceases in whole or in part to be receivable by him. (2) Where a person has failed to comply with the requirements of Sub-section (1) in relation to any foreign exchange or payment in rupees, the Reserve Bank may give to him such directions as appear to be expedient for the purpose of securing the receipt of the foreign exchange or payment, as the case may be."

(2.)The question is whether the "general or special permission" of the Reserve Bank referred to in Sub-section (1) of Section 16 may be given ex post facto or whether such permission must precede the acts prohibited under Section 16(1)(a) and (b).
(3.)The factual background is common to both the appeals. The appellant in the second appeal is a senior officer of the appellant in the first appeal (hereinafter referred to as "the appellant company"). In 1970, the appellant company entered into a contract with India-Malaysia Textiles by which the appellant company was to supply machinery and equipment and spares and erect the same in Malaysia. The appellant company exported the machinery, etc., to the Malaysian concern and erected the same in terms of the contract. The machinery, etc., supplied was of the CIF value of Rs. 23,03,999.57. A separate bill for Rs. 62,405 was raised by the appellant company on account of erection charges. Between 1972-73, the Malaysian concern complained regarding the defective machinery. In 1976, the Malaysian concern called upon the appellant company to withdraw its claim on account of erection charges and also raised a counter claim against the appellant company on account of replacement of defective materials amounting to Malaysian dollars 83,773.37. The appellant wrote off its claim of Rs. 57,087.50 on account of erection charges and the Malaysian concern restricted its claim on account of defective material to Malaysian dollars 45,594.02. In 1977, the appellant applied to the Reserve Bank of India for permission to remit Malaysian dollars 45,594.02 to the Malaysian concern. This was refused by the Reserve Bank of India on March 13, 1979. The appellant made a further representation to the Reserve Bank of India for permission to make the remittance. In 1981, the Reserve Bank of India wrote to the appellant asking under what circumstances the appellant had agreed to write off the dues on account of erection charges and whether the Reserve Bank's approval to write off the debt had been obtained. In answer to this letter, the appellant sought to explain the circumstances under which the erection charges were written off and requested for grant of approval for non-payment of its claim on account of erection charges. This answer was followed by a reminder.
;


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.