Statutory control on choice between adjudication and prosecution upheld; fresh complaint after omission of a penal rule held incompetent.

A statutory scheme that permits either adjudication with penalty or prosecution for the same contravention does not offend Article 14 where the power to choose is guided by an express criterion requiring prior adjudication and prosecution only if the available penalty would be inadequate; the challenge to the prosecution provision therefore failed. A fresh complaint for breach of a Defence of India Rule after that rule had been omitted was not maintainable because the omission carried only a limited saving and did not preserve new prosecutions begun after the rule ceased to exist; the complaint was consequently incompetent and the quashing applications should have been allowed.

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Issues: (i) Whether the prosecution machinery under section 23 of the Foreign Exchange Regulation Act VII of 1947, read with section 23D(1), offended Article 14 of the Constitution of India by leaving the choice between adjudication and prosecution to the unguided discretion of the Director of Enforcement; (ii) Whether a complaint filed for contravention of Rule 132A(2) of the Defence of India Rules, 1962 after omission of that rule was maintainable.

Issue (i): Whether the prosecution machinery under section 23 of the Foreign Exchange Regulation Act VII of 1947, read with section 23D(1), offended Article 14 of the Constitution of India by leaving the choice between adjudication and prosecution to the unguided discretion of the Director of Enforcement.

Analysis: Section 23(1) provided two alternative consequences for the same contravention: adjudication and penalty under clause (a), or prosecution and punishment under clause (b). The governing safeguard was section 23D(1), which required the Director of Enforcement first to proceed with adjudication and permitted a complaint to Court only where, having regard to the circumstances of the case, the penalty available to him would not be adequate. Read together, the provisions were held to supply a statutory for choice and to exclude arbitrary executive discretion. The challenge based on discriminatory treatment therefore failed.

Conclusion: The challenge to section 23(1)(b) on the ground of Article 14 was rejected.

Issue (ii): Whether a complaint filed for contravention of Rule 132A(2) of the Defence of India Rules, 1962 after omission of that rule was maintainable.

Analysis: The omission of Rule 132A contained only a limited saving for things already done or omitted to be done under that rule. It did not preserve a new prosecution initiated after the rule had ceased to exist. The general rule applicable to repealed or expired enactments did not assist the prosecution because the omission of the rule was not accompanied by any saving provision equivalent to section 6 of the General Clauses Act. The complaint, having been instituted after omission of the rule, was incompetent.

Conclusion: The complaint was invalid insofar as it charged an offence under Rule 132A(4) of the Defence of India Rules, 1962.

Final Conclusion: The proceedings on the complaint could not be sustained, and the applications for quashing ought to have been allowed.

Ratio Decidendi: Where a statute authorises alternative penal consequences for the same contravention, the power to choose the more severe course must be controlled by an express statutory criterion and cannot be left to unguided discretion; likewise, after omission of a penal rule, a fresh prosecution cannot be instituted unless the omission is accompanied by a saving that clearly preserves such proceedings.

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