Foreign-exchange regulatory power extends to indirect effects, and mandamus will not lie without an enforceable legal right.

The Reserve Bank's foreign-exchange regulatory power extends to transactions whose direct or indirect effects may affect foreign exchange resources, including travel permissions under Form P. A writ of mandamus is available only where there is a corresponding legal duty and an enforceable legal right; where no such right exists, the court will not compel permission merely because no direct foreign exchange release is sought. The Bank's refusal was treated as within its statutory and policy authority, and not shown to be arbitrary or beyond power.

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Issues: Whether a writ of mandamus could be issued to compel the Reserve Bank of India to grant passage permission in Form P for foreign where no release of foreign exchange was sought, and whether the Bank's refusal was beyond its statutory authority.

Analysis: The statutory scheme under the Reserve Bank of India Act, 1934 and the Foreign Exchange Regulation Act, 1947 conferred wide powers on the Reserve Bank to regulate foreign exchange and matters affecting the country's exchange position. The relevant policy documents and circulars showed that travel abroad under the guest hospitality category could be restricted even where no foreign exchange was directly requested, because the authorities were entitled to consider the indirect economic consequences of such permissions on foreign exchange resources. A writ of mandamus lies only where there is a corresponding legal duty and an enforceable legal right. In the present case, the respondent had no enforceable right to demand permission merely because no direct foreign exchange outgo was involved, and the Bank's policy decision was not shown to be arbitrary or without authority.

Conclusion: No writ of mandamus could issue, and the Reserve Bank's refusal to grant Form P permission was within its regulatory power.

Ratio Decidendi: The Reserve Bank's foreign-exchange regulatory power extends to transactions whose direct or indirect consequences may adversely affect foreign exchange resources, and mandamus will not lie absent a corresponding legal duty and enforceable right.

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