Summons non-compliance under foreign exchange law is punishable; service objection did not defeat the prosecution.

Non-compliance with summons issued under Section 40 of the Foreign Exchange Regulation Act, 1973 was construed as a contravention punishable under Section 56, and the penal provision was held broad enough to cover disobedience of enforcement summons without any requirement that the matter involve a money-value contravention. An objection based on non-service of summons did not defeat the prosecution, because service was treated as immaterial in the circumstances where the respondent was represented before the Trial Court. The High Court's contrary view was set aside and the prosecution was held maintainable on the settled interpretation of Sections 40 and 56.

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Issues: (i) Whether disobedience of summons issued under Section 40 of the Foreign Exchange Regulation Act, 1973 amounts to an offence punishable under Section 56 of that Act; (ii) Whether the objection regarding non-service of summons defeated the prosecution.

Issue (i): Whether disobedience of summons issued under Section 40 of the Foreign Exchange Regulation Act, 1973 amounts to an offence punishable under Section 56 of that Act.

Analysis: The statutory scheme of Sections 40 and 56 was construed to mean that failure to obey summons issued by the Enforcement Authority constitutes a contravention of the Act or of a direction issued under it. The earlier contrary view that punishment under Section 56 depended on the money value involved was rejected. The Court followed the binding interpretation that the expression used in Section 56 is wide enough to cover non-compliance with summons under Section 40.

Conclusion: Yes. Disobedience of summons under Section 40 is punishable under Section 56 of the Foreign Exchange Regulation Act, 1973.

Issue (ii): Whether the objection regarding non-service of summons defeated the prosecution.

Analysis: The question of service was held to be immaterial in the circumstances because the respondent was represented before the Trial Court. In any event, the challenge based on service could not sustain the High Court's decision once the substantive law on Section 40 and Section 56 had been settled.

Conclusion: No. The objection regarding service did not defeat the prosecution.

Final Conclusion: The High Court's view was set aside, and the prosecution was held maintainable on the legal question referred.

Ratio Decidendi: Non-compliance with summons issued under Section 40 of the Foreign Exchange Regulation Act, 1973 constitutes a contravention punishable under Section 56, and the penal provision is not confined to cases involving a money-value contravention.

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