Article 14 classification upheld where foreign exchange contraventions were split between departmental adjudication and criminal prosecution.

Section 23(1A) of the Foreign Exchange Regulation Act was upheld as a valid classification under Article 14 because the legislature could distinguish between contraventions routed through departmental adjudication and those sent directly for criminal prosecution. The classification was treated as based on the object of the Act, practical enforcement difficulties, the nature of evidence ordinarily available, and the need for special enforcement machinery in fiscal and regulatory matters. The Court accepted that under-inclusion does not by itself create discrimination where there is a fair and reasonable basis for the distinction. The provision was therefore not discriminatory, and the constitutional challenge failed.

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Issues: Whether section 23(1A) of the Foreign Exchange Regulation Act, 1947 violated article 14 of the Constitution on the ground that persons contravening the provisions covered by section 23(1)(a) were dealt with by departmental adjudication first, while others were required to face criminal prosecution directly.

Analysis: The classification in section 23 was examined in the light of the object of the Act, the background of its amendment, and the practical difficulties faced in enforcing foreign exchange law. The distinction between the two classes of contraventions was treated as one based on experience, administrative necessity, and the nature of the evidence ordinarily available. The Court accepted that in fiscal and regulatory matters the legislature is entitled to proceed experimentally and in stages, and that under-inclusion does not by itself offend article 14 if there is a fair and reasonable basis for the classification. The provisions routed through departmental adjudication were regarded as primary offences requiring special enforcement machinery, while the remaining offences were treated as secondary offences for which court prosecution was appropriate.

Conclusion: Section 23(1A) was not discriminatory and did not violate article 14. The challenge to its validity failed, and the appellant succeeded.

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