1965 (10) TMI 63 - SC - FEMA

High Court quashes adjudication proceedings under Foreign Exchange Regulation Act, 1947, deeming sections 23(1)(a) and 23D unconstitutional. Upholds accused's trial rights.

UNION OF INDIA Versus SUKUMAR PYNE

The High Court quashed adjudication proceedings under the Foreign Exchange Regulation Act, 1947, finding sections 23(1)(a) and 23D unconstitutional and ... Whether s. 23 (1) (a), having, been substituted by the Amending Act XXXIX of 1957, would have retrospective operation in respect of the alleged offence, which took place in 1954? Held that:- 23(1) (a) prescribes a minimum penalty while under the old s. 23(1) the Magistrate had an option of fixing a fine less than the minimum prescribed under s. 23 ( 1 ) (a). But we are unable to agree with him that the new section prescribes any minimum. What it does prescribe is a maximum. The words 'not exceeding' cover not only the expression 'three times the value of the foreign exchange' but also the words 'five thousand rupees' Therefore, no greater penalty than might have-been levied under the old section has been prescribed by the new section 23 (1 ) (a), and consequently there is no breach of art. 20(1) of the Constitution. the offence is alleged to have been committed in 1954 and notice of adjudication was sent in 1958 and now we axe in the year 1965. It would be expedient if the adjudication proceedings are disposed of as expeditiously as possible. Appeal allowed. Issues:- Quashing of adjudication proceedings under the Foreign Exchange Regulation Act, 1947.- Validity of s. 23(1)(a) and s. 23D of the Act.- Retroactive application of the amended provisions to offenses committed before the amendment.- Vested right to be tried by an ordinary court.- Constitutional objections under art. 14 and art. 20(1) of the Constitution.Analysis:The judgment pertains to an appeal challenging the quashing of adjudication proceedings under the Foreign Exchange Regulation Act, 1947. The respondent was issued a notice for contravention of the Act after the recovery of foreign currency in 1954. The High Court accepted a petition under art. 226 of the Constitution and quashed the adjudication proceedings based on the grounds that s. 23(1)(a) and s. 23D were ultra vires of the Constitution and that the proposed adjudication was illegal and without jurisdiction.Regarding the validity of s. 23(1)(a) and s. 23D, the High Court held that the amended provisions did not apply retrospectively to offenses committed before the amendment. It was argued that the accused had a vested right to be tried by an ordinary court, which the High Court upheld, leading to the quashing of the adjudication proceedings.The judgment also addressed constitutional objections under art. 14 and art. 20(1) of the Constitution. The counsel for the respondent contended that the new provisions contravened art. 20(1) by prescribing a minimum penalty. However, the Court disagreed, stating that the new section did not prescribe any minimum penalty but a maximum, thereby not breaching art. 20(1) of the Constitution.The Court emphasized that no person has a vested right in any course of procedure, and alterations in procedure are generally retrospective unless there is a constitutional objection. The judgment highlighted that the offense was alleged to have been committed in 1954, and expedient disposal of the adjudication proceedings was urged.In conclusion, the appeal was accepted, the petition under art. 226 was dismissed, and the appellant was awarded costs. The judgment clarified the application of the amended provisions, the concept of vested rights, and the constitutional validity of the new sections under the Foreign Exchange Regulation Act, 1947.