Document requisitions under foreign exchange law require specific relevance, applied mind, and a clear statutory nexus.

Section 19(2) of the Foreign Exchange Regulation Act, 1947 requires deliberate application of mind, specification of the documents sought with sufficient particularity, and a real nexus between the requisition and the Act's statutory purpose. An omnibus order covering many papers, including materials unrelated to that purpose, does not satisfy the condition precedent and is liable to be quashed. A separate challenge based on mala fides and want of authority under Article 77 failed because the record did not establish bad faith and the order was issued by an authorised officer on behalf of the President.

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Issues: (i) Whether the impugned order under section 19(2) of the Foreign Exchange Regulation Act, 1947 was invalid for want of due application of mind, absence of specification of the documents, and lack of nexus with the statutory purpose; (ii) Whether the challenge based on mala fides and want of authority under Article 77 of the Constitution of India succeeded.

Issue (i): Whether the impugned order under section 19(2) of the Foreign Exchange Regulation Act, 1947 was invalid for want of due application of mind, absence of specification of the documents, and lack of nexus with the statutory purpose.

Analysis: Section 19(2) permits a written order only when the Central Government or the Reserve Bank considers it necessary or expedient to obtain and examine specified information, books, or documents. The expression requires deliberate consideration and careful application of mind. The order must identify the information or documents with sufficient particularity, and there must be a real nexus between the documents demanded and the purpose of the Act. An omnibus direction covering numerous documents, including materials having no relevant connection with the statutory purpose, does not satisfy the condition precedent. The impugned order required production of a wide range of papers and documents, many of which had no apparent relevance to the purposes of the Act.

Conclusion: The impugned order was not in conformity with section 19(2) of the Foreign Exchange Regulation Act, 1947 and was liable to be quashed.

Issue (ii): Whether the challenge based on mala fides and want of authority under Article 77 of the Constitution of India succeeded.

Analysis: The material did not establish that the officer who issued the order acted mala fide or that the order was invalid for want of authority under Article 77. The earlier allegation of mala fides against the concerned officer failed, and the order was found to have been issued by an authorised officer on behalf of the President.

Conclusion: The challenge on the grounds of mala fides and want of authority was rejected.

Final Conclusion: The statutory requirement under section 19(2) was held to be mandatory, and the impugned order failed for non-compliance with that requirement, resulting in relief to the appellants.

Ratio Decidendi: An order requiring production of documents under section 19(2) is valid only if the authority has carefully applied its mind to the necessity of obtaining each specified document and the order shows a clear nexus with the statutory purpose.

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