Corporate criminal liability under foreign exchange law upheld despite mandatory imprisonment; fine may be imposed on companies instead.

A company or other body corporate is liable to prosecution under section 56 of the Foreign Exchange Regulation Act, 1973 because the term "person" is wide enough to include juristic persons, and the presence of mandatory imprisonment does not confer immunity. For sentencing, where imprisonment cannot be carried out against a corporate offender, the provision may be construed to permit fine alone so the statute remains workable and its object is preserved. The earlier view in Velliappa Textiles Ltd. on this point was overruled. Corporate offenders are therefore not exempt from penal liability merely because imprisonment is impossible to enforce.

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Issues: (i) whether a company or corporate body can be prosecuted for an offence under section 56 of the Foreign Exchange Regulation Act, 1973 even where the prescribed punishment includes mandatory imprisonment; (ii) whether, in the case of a corporate offender, the court can impose fine alone where imprisonment cannot be enforced and the statutory scheme therefore remains workable.

Issue (i): Whether a company or corporate body can be prosecuted for an offence under section 56 of the Foreign Exchange Regulation Act, 1973 even where the prescribed punishment includes mandatory imprisonment.

Analysis: The charging provision uses the expression "if any person", and the term "person" is wide enough to include a company or other body corporate. Corporate criminal liability is not excluded merely because the offender is a juristic person. The fact that imprisonment cannot physically be executed against a company does not negate the substantive liability created by the statute. The legislative scheme does not indicate an intention to confer immunity on corporate offenders for serious economic offences merely because the punishment includes imprisonment.

Conclusion: A company or corporate body can be prosecuted under section 56 of the Foreign Exchange Regulation Act, 1973.

Issue (ii): Whether, in the case of a corporate offender, the court can impose fine alone where imprisonment cannot be enforced and the statutory scheme therefore remains workable.

Analysis: Where the statute prescribes imprisonment and fine, the sentencing provision must be read in a manner that avoids absurdity and makes the enactment workable. For a juristic person, imprisonment is impossible, but fine is capable of enforcement. The principle that law does not compel impossibilities applies, and the court may read the provision so that the mandatory imprisonment operates where possible, while fine is imposed on the company. This construction preserves the legislative object and avoids reverse discrimination between lesser and graver offences. The earlier view in Velliappa Textiles Ltd. is overruled on this point.

Conclusion: In the case of a company, fine alone may be imposed where imprisonment is impossible to carry out, and the prosecution is not vitiated by the presence of mandatory imprisonment in the penal provision.

Final Conclusion: The law does not exempt companies from prosecution for offences carrying mandatory imprisonment, and the sentencing provision must be adapted so that the corporate offender can be punished with the enforceable component of the statutory penalty.

Ratio Decidendi: A corporate offender is not immune from prosecution merely because the statute prescribes mandatory imprisonment, and where imprisonment cannot be imposed on a juristic person, the court may lawfully impose the fine component to give effect to the penal provision.

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