Purposive interpretation of foreign exchange repatriation law extends to completed export sales under firm contracts.

Section 12(2) of the Foreign Exchange Regulation Act was construed purposively to advance conservation of foreign exchange, and the obligation to repatriate export proceeds was held to extend beyond consignment sales to completed sales under a foreign buyer contract. The phrase "person entitled to sell or procure the sale of" was treated as descriptive, not restrictive, so exports under firm sale contracts also fell within the provision. On that construction, non-repatriation of the full export proceeds amounted to contravention, and the finding of liability, with the reduced penalty, was upheld.

---

---

Issues: Whether section 12(2) of the Foreign Exchange Regulation Act, 1947 applies to exports made under a firm contract of sale and whether non-repatriation of the full export proceeds attracted liability under that provision.

Analysis: The provision was construed in the context of the Act's object of conserving foreign exchange resources. The phrase "person entitled to sell or procure the sale of" was treated as descriptive rather than restrictive, so that the obligation under section 12(2) was held to extend beyond consignment sales and to cover completed sales under a foreign buyer contract. The Court preferred the view of the Madras High Court, and held that a literal construction suggested by the contrary view would unduly narrow the working of the statute in relation to foreign exchange control.

Conclusion: Section 12(2) applies to exports under completed sale contracts as well as consignment sales, and the appellant's non-repatriation of export proceeds constituted a contravention. The finding of liability and the reduced penalty were upheld against the appellant.

Ratio Decidendi: A provision in foreign exchange control legislation governing repatriation of export proceeds must be construed purposively so as to advance conservation of foreign exchange, and the statutory expression identifying the person bound by the obligation is descriptive enough to include completed sales under export contracts.

---