Vicarious liability for foreign exchange penalties cannot be imposed on legal representatives without express statutory authority.

Legal representatives of a deceased sole proprietor could not be fastened with a penalty for the proprietor's alleged foreign exchange contravention under the Foreign Exchange Regulation Act, 1947, because the contraventions were said to have occurred during the father's lifetime and there was no material showing the sons' role, control, or knowledge of the transactions. The Court treated vicarious liability in penal regulatory statutes as exceptional and held that it cannot be extended in the absence of an express statutory provision. The penalty order was therefore unsustainable and was set aside.

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Issues: Whether the legal representatives of a deceased sole proprietor could be made liable for a penalty imposed for the proprietor's alleged contravention of foreign exchange restrictions under the Foreign Exchange Regulation Act, 1947.

Analysis: The liability arose from alleged contraventions committed in the lifetime of the father while he was conducting the business as a sole proprietorship. The sons had no role in the management or control of that business at the relevant time, and there was no material showing that they had knowledge of the transactions relied upon by the department. The Act did not contain any provision making legal representatives vicariously liable for the contraventions of the deceased, and the principle of vicarious liability in statutory offences was treated as exceptional and not to be extended unless the statute clearly so provides.

Conclusion: The penalty could not be sustained against the sons as legal representatives, and the impugned levy was unsustainable.

Final Conclusion: The writ petition succeeded and the penalty order was set aside because liability for the father's alleged contravention could not be fastened on the petitioners by invoking vicarious liability.

Ratio Decidendi: In the absence of an express statutory provision, legal representatives cannot be made vicariously liable for penalties arising from a deceased person's contravention of a penal regulatory statute.

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