Foreign exchange adjudication can survive later service of notice, parallel firm-and-partner penalties, and corroborative customs statements.
The saving clause in the successor foreign exchange enactment preserved proceedings under the repealed law, and timely issuance of the show cause notice within the prescribed period was sufficient even if service occurred later. The company-liability provision also permitted separate penalties on a firm and its responsible partners, as the statute treats a firm as a company and its partners as directors for this purpose. Statements recorded under the Customs Act could be used as corroborative material in foreign exchange adjudication, and the collapse of customs proceedings did not bar independent action under the foreign exchange law on the same facts.
Issues: (i) Whether the show cause notice initiating proceedings under the repealed foreign exchange law was barred by the saving clause in the successor enactment. (ii) Whether separate penalties could be imposed on the firm and its partners under the provision dealing with offences by companies. (iii) Whether statements recorded under the Customs Act could be relied upon in adjudication under the foreign exchange law. (iv) Whether the failure of proceedings under the Customs Act barred action under the foreign exchange law on the same facts.
Issue (i): Whether the show cause notice initiating proceedings under the repealed foreign exchange law was barred by the saving clause in the successor enactment.
Analysis: The saving provision preserved proceedings under the repealed law, subject only to the restriction that notice of contravention had to be taken within two years from commencement of the successor Act. The notice was issued within that period. Service of the notice later did not affect its validity, because the statutory requirement was initiation within time, not service within that period.
Conclusion: The notice was not time-barred and the challenge on the ground of the sunset clause failed.
Issue (ii): Whether separate penalties could be imposed on the firm and its partners under the provision dealing with offences by companies.
Analysis: The provision expressly treats a company, and in the case of a firm its partners, as liable where the contravention is committed by the entity and the persons in charge are shown to be responsible. The explanation expands the concept of company to include a firm and treats a partner as a director for that purpose. The statutory language therefore permits liability of both the firm and the responsible partners.
Conclusion: Separate penalties on the firm and its partners were permissible and the challenge failed.
Issue (iii): Whether statements recorded under the Customs Act could be relied upon in adjudication under the foreign exchange law.
Analysis: Proceedings under the foreign exchange law are quasi-criminal, but the standard is proof beyond reasonable doubt. Statements recorded under the Customs Act may be used as material evidence if they corroborate the incriminating circumstances. In this case, the statements were not the sole basis of liability; they were treated as corroborative of seizure of unaccounted money and incriminating documents.
Conclusion: Reliance on the Customs Act statements was valid and the objection was rejected.
Issue (iv): Whether the failure of proceedings under the Customs Act barred action under the foreign exchange law on the same facts.
Analysis: The Customs Act proceedings and the foreign exchange law proceedings are distinct in nature and operate in separate fields. Setting aside the customs confiscation did not extinguish liability under the foreign exchange law, and the foreign exchange adjudication could proceed independently on its own statutory footing.
Conclusion: The customs result did not preclude action under the foreign exchange law.
Final Conclusion: All substantive challenges were rejected. The questions of law were answered against the appellants and the penalties sustained by the appellate authority remained undisturbed.
Ratio Decidendi: Where the statute expressly saves initiation of contravention proceedings within a defined period, timely issuance of notice is sufficient notwithstanding later service; and under the company-liability provision, both the firm and responsible partners may be penalised, with corroborative use of Customs Act statements permissible in foreign exchange adjudication.
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