Knowledge of penalty order is required before criminal liability for non-payment can arise under foreign exchange law.

Penal prosecution for non-payment of a penalty under the Foreign Exchange Regulation Act cannot be sustained unless the person proceeded against is proved to have had knowledge of the adjudication order. Where the penalty order was not pronounced in the person's presence, service of the copy was a substantive requirement, not a mere formality, and the order became effective only on knowledge. Because the complaint and charge did not establish communication of the order on the relevant date, the failure to pay could not attract criminal liability. The conviction and sentence were therefore set aside and the acquittal restored.

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Issues: Whether liability under section 23F of the Foreign Exchange Regulation Act, 1947 can arise for non-payment of a penalty order without proof that the person concerned had knowledge of the order, and whether conviction could be sustained when the complaint and charge did not establish such knowledge.

Analysis: The statutory scheme under sections 23D, 23E and 23F of the Foreign Exchange Regulation Act, 1947 and rules 3(7), 4, 5 and 6 of the Adjudication Proceedings and Appeal Rules, 1957 shows that an adjudication order imposing penalty is required to be supplied to the person proceeded against and that the order becomes effective for practical and legal purposes only when the person has knowledge of it. Where the order is not pronounced in the presence of that person, service of the copy is not a mere formality. In the absence of proof of knowledge of the penalty order, failure to pay the penalty cannot amount to a failure attracting criminal liability under section 23F. Since the complaint proceeded on an asserted service date that was not proved, and the charge also did not allege communication of the order on the date found by the High Court, the conviction could not be sustained.

Conclusion: The requirement of knowledge of the penalty order before prosecution under section 23F was not satisfied, and the conviction was unsustainable.

Final Conclusion: The appellant succeeded, the conviction and sentence were set aside, and the acquittal was restored.

Ratio Decidendi: Penal prosecution for non-compliance with an adjudication order cannot be maintained unless the person proceeded against is proved to have had knowledge of the order, where the order was not made in his presence and no contrary statutory provision dispenses with such knowledge.

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