DARA SINGHversusSTATE THROUGH DIRECTOR OF ENFORCEMENT, NEW

                                                                                   987


                               DARA SINGH                                           A
                                       v.
STATE THROUGH DIRECTOR OF ENFORCEMENT, NEW
                   DELHI
                              October 29, 1980                                      B
           [R. S. SARKARIA AND E. S. VENKATARAMIAH, JJ.]
    Foreign Exchange Regulation Act 1947-Section 23F-Scope of--order
imposing penalty not communicated to the accused-11on·payrr1e11t of penalty
within stipulated period-if amounts to co11trave11tio11 of section 23F-knowledge
of order 011 the date of appearance before Magistrate-if amo11nts to knowledge
of penalty.
                                                                                    c
     An exparte order holding the appellant guilty of certain offences under
the Foreign Exchange Regulation Act and imposing penalty for such contraven..
tion was passed by the Director of Enforcement. On completion of 45 daY!
of the issue of the order within which period the penalty was required to h~­
paid, a complaint was lodged with the Judicial Magistrate, 1st class allegin1       0
that even though a copy of the impugned order had been served on the
;ippellant, he failed to deposit the penalty and, that, therefore, he was liable
to be punished under section 23F of the Act.
     Accepting the appellant's plea that no copy of the impugned order having
been served on him there was no ground to hold him guilty of contravention
of section 23F the Magistrate acquitted him. The Magistrate, at the same
time, rejected the complainant's contention that even assuming that the im·
pugned order had not been received by the appellant he had come to know
                                                                                   !E
of it on the date he appeared before the Magistrate and when the charge had
been framed against him and his failure to pay the penalty de~oite this
knowledge was enough to attract the provisions of section 23F. Ht> held that
these allegations were stated neither in the complaint nor in the charee and,
therefore, the appellant could not be convicted.
     Although the High Court, on appeal, upheld the finding of the Magistrate       F
that the impugned order had not been served on the appellant, it was of the
view that since the appellant had come to know about the order when he
appeared before the Magistrate but still had not paid the penalty within a
'reasonable time thereafter, he was liable to be punished under section 23F
of tlrn Act.

    Allowing the appeal.                                                            G
     HELD: The appellant had not committed any offence punishable under
section 23F of the Act. [993G]
    When the law lays down that non-compliance with an order would expose
the person against whom it is made to criminal liability, .it is reascn~ble to
hold that in the absence of proof of knowledge of the order no penal action
can be taken against him for non-compliance with that order. The information
                                                                                    H
or knowledge which he may gather about such order in the cuur~e of criminal
~·ss                            SUPREME COURT REPORTS              [1981] 1   s.c~
A      proceedings instituted for non-compliance with it cannot be a substitute for
       the knowledge of the order, which should ordinarily precede the institution ·
       of such proceedings. The High Court was, therefore, in error in the circums· !
       tances of the case in setting aside the order of acquittal passed by the
       Magistrate and in finding the appellant guilty of the offence complained of.
       [992H]
            The rules framed under the Act set out the procedure to be follo.ved
B      by the Director in holding an enquiry under section 23D of the Act. Although,
       there is no rule requiring a person against whom an order is made to appear
       before the Director on 1he date of pronouncement of bis order, rule 5 of the
       Rules requires that a copy of the order passed under rule 3(7) should be
       supplied free of charge to the person against whom the order is made. Tn
       the absence of a provision requiring the service of a notice on such a person
       informing him that .the order would be pronounced on a speci~ed future date,
c      the only date · on which the order can be deemed to have been effectively
       made is the date on which he gets knowledge of the order either by supply
       of a copy of the order or by any other means. The period of limitalion to
       appeal cannot be computed from a date earlier than the date on which the
       aggrieved party has knowledge of the order. In the absence of proof of
       knowledge of the order either by supply of its copy or in any other manner
       the person failing to pay the penalty cannot be proceeded against under
D      section 23F. [991H, 992FJ
            In the instant case the Magistrate and the High Court refused to accept
       the plea nf the Director that a copy of the impugned order had been served
       on the appellant. Neither on the date of the complaint nor on the d<1te on
       which process was issued by the Magistrate had the appellant knowledge of
        the order imposing the penalty; nor did the charge state that the impugned
       order had been communicated to him and that he was being tried for non-
.
E      compliance with that order.
           CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 76 of
       1974.     .
           Appeal by Special Leave from the Judgment dated 9-11-1973 of
       the Delhi High Court: in Criminal Appeal No. 174 of 1972.
            R . L. Kohli (Amicus Curiae) and R. C. Kohli for the Appellant.
           Hardayal Hardy, Miss A. Subhashini and R. · N. Poddar for the
       Respondent.
            The Judgment of the Court was delivered by
G            VENKATARAMIAH, J.-This appeal by special leave is filed against
       the judgment of the High Court of Delhi in Criminal Appeal No. 174
        1972 convincting the appellant, Dara Singh, of an offence
       punishable under section 23F of the Foreign Exchange Regu-
        lation Act, 1947 (Aet No. 7 of 1947) (hereinafter referred to as
        'the Act') and sentencing him to imprisonment for a term of one year
H      ·with a direction that the said sent:ence should be served by him
        concurrently with the sentence of imprisonment for life imposed on
        him in another case on a charge of murder.
        DARA SI~GH v. DIRECTOR OF ENFORCEMENT CVenkataramiah '·)                  98 9

               The facts leading to this appeal can be. summarised thus : On        A
           arch 28, 1963 foreign currencies amounting to £ 185 and U.S.
            13060 besides Indian currency amounting to Rs. 1,300 were seized
        from the appellant by the Railway Police at the Railway Station
        -at1 Sangrur. Thereupon proceedings were initiated against the appel·
        lant for contravention of sections 4 and 9 of the Act under section
        23 (1 )(a) read with section 23D of the Act before the Director             B
       ·of Enforcement of Foreign Exchange Regulation appointed by the
       ·Central Government for · the purpose of enforcing .the provisions of
       the Act. By an ex-parte order dated May 12, 1967, the Director
        of Enforcement held the appellant guilty o~ contravention of provi·
        sions of section 9 of the Act read with the Central Government
       Notification No. F. 1 (67-EC/ 57, dated 25-9-1958 as amended upto
                                                                                    c
        u-3-1961) and section 4 (1) of the Act and .imposed on him a
        penalty of Rs. 6,000 which the appellant was directed to pay to
        the Directorate of Enforcement within forty-five days of the issue of
       the order. As the penalty was not paid within forty-five days from
     · the date of the issue of the order of the Director -of Enforcement, a        D
        complaint was lodged on November 13, 1969 by the Deputy Director
        of Enforcement before the Judicial Magistrat.e, First Class, New Delhi
       under section 23F of the Act. In the complaint it was specifically
     · stated that a copy of the order of the Director of Enforcement impos-
        ing the penalty on the appellant had been served on him on May 4,
        1968 and that as the appellant had not deposited the penalty with the       E
        Directorate of Enforcement within forty-five days from the date of
        the order, the appellant was liable to be punif>hed under section 23F
        of the Act. The appellant denied that he had been served with the
       -copy of the order of the Director of Enforcement imposing penalty on
       him and further stated that he did not know that he had to pay the
       penalty in question. The learned Magistrate acquitted the appellant by      F
       bis order dated July 29, 1972 holding that it had µot been established
       that the order passed by .the Director of En.forcement had been
        served on the appellant on May 4, 1968 as alleged in the complaint
        antl that, therefore, there were no groun~s to hold the appellant
       guilty of contravention of s~ction 23F o! the Act which read_ thus :
                                                                                   G
                   "23F. If any person fails to pay the penalty imposed by
~-            the Director of Enforcement or the Appe11ate Board or the High
              Court, or fails to comply with any of their directions or orders,
              he shall, on conviction berore a Court, be punishable with
              imprisonment for a term which may extenp to two years, or
              with fine, or with bo~h."
          The Magistrate while acquitting the appellant rejected the plea
     of the complainant that the appellant wa·s liable to be punished under
990                      SUPREME COURT REPORTS            l 19&IJ I S.C.
A     section 23F since he had in any event come to know of the order of
      the Director of Enforcement on the date on which he appeared in the
      Court i.e., on August 7, 1970 and the charge had been
      framed by !by Magistrate on March 4, 1972 after the expiry
      of a period of forty-five days from the date on which the appellant
      had appeared in the court by observing that "he could not be con-
B     victed in .the cas~~ on that count because these allegations are not
      ~ontained even in the charge much less in the complaint". Aggrieved
      by the decision of acquittal of the Magistrate, the Director of
      Enforcement filed an appeal before the High Court of Delhi with
      the special leave of that court granted under section 417 ( 3) of the
c     Code of Criminal Procedure. As the appellant who was undergoing.
      imprisonment for life imposed on him in another case at the Central
      Jail Ferozepur did n.ot make any arrangement for his defence before
      the High Court, an advocate was appointed as amicus curiae to:
      assist the court in .the appeal. After hearing learned counsel who
      appeared in the case, the High Court by its judgment dated
D     November 9, 1973 reversed the order of acquittal passed by the
      Magistrate, found the appellant guilty of the offence punishable
      under section 23F of the Act and sentenced him to imprisonment for
       a term of one year. While doing so, the High Court agreed with
      the finding of the Magistrate that the order of the Director of
      Enforcement imposing penalty on the appellant had n1ot been served
E     on the appellant on May 4, 1968 as alleged in the complaint but it
      was of the view that since the appellant had come to know about
       the order on August 7, 1970 when he appeared before the Magistote
      and he had not paid the penalty within a reasonable time thereafter,
       he was liable to be punished under section 23F of the Act. The
       relevant part of the judgment of the High Court reads thus :
F
                "The order of acquittal made by the leamed trial Magistrate-
           proceeds, in our opinion, on an altogether erroneous view of
           the provisions or section 23F of the Act. For proving the guilt
           of Dara Singh in\ the light of the charge framed against him,.
           it had only to be established that he had failed to pay the·
G          penalty imposed by the Director •of Enforcement. As was,
           ordered by the Director of Enforcement the penalty had to be·
           paid within 45 days from the date of issue of the adjudication·
           order. Obviously, however, no payment could be made unless
           the person on whom the penalty was imposed had come to know
           about the order. At the latest Dara Singh came to know about
H           the adjudication order on: August 7, 1970, if not earlier. He-
           should have, therefore, paid the penalty within a reasonable
           period from that date and in any case within 4'.5 days from
 rDARA SINGH v. DIRECTOR OF ENFORCEMENT (Venkataramiah J.)                   991

     the said date. The penalty not having been paid or deposited             A
     by Dara Singh, he was clearly guilty of contravention of the
     adjudication order made by the Director of Enforcement and
     should have been, convicted under section 23F of the Act".
    The question which arrises for consideration in this appeal is
whether the High Court was right in the circumstances of the case             B
in finding the appellant guilty of the offence in question. It is
necessary at this stage to refer briefly to some of the provisions of
ithe Act and the Adjudication Proceedings antcf Appeal Rules, 1957
(hereinaf:ter referred to as 'the Rules') framed under section 27- of
the Act. Under Clause (a) of sub-section (1) of section 23 of
the Act, the Director of Enforcement is empowered to levy penalty
not exceeding three times the value of the foreign exchange in r_espect
of which the contraventio~ has taken place, or five thousand rupees,
whichever is more, as may be adjudged by him in th~ manner provi-
ded in the Act if any person is found to contravene the provisions
of section 4, s~ction 9 or any of the other provisions referred to in
section 23 (1 ~. Section 23D of the Act requires the Director of              D
Enforcement to hold an inquiry in the prescribed manner against
any person who is liable to be proceeded against under clause (a) of
section 23 ( 1) after giving him a reasonable opportunity of being
heard and if on such inquiry, the Director of Enforcement is satisfied
that the person has committed the contravention, he may impose such
                                                                              E
penalty as. he thin!ks fit in accordance with the provisions of section 23
of the Act. An appeal lies to the Appellate Board under section 23E
of the Act against the order of the Director of Enforcement imposing
penalty. Rules 3, 4 and 5 of the Rules -set out the procedure
to be followed by the' Director of Enforcement in holding the enquiry
under section 23D of the Act. Rule 3 of the Rules among others                F
provides for the issue of a notice to the person against whom pro-
ceedings are initiated for contravention of the provisions referred
 to in section 23 ( 1) of the Act and for giving an opportunity to him
 to defend himself in the proceedings before the Director of Enforce-
 ment. Sub-rule (7) of Rule 3 of the Rules provides that if, upon
 consideration of the evidence produced befon: the Director, the              G
 Director is satisfied that the person has committed the contraven-
 tion, he may, by order iq writing impose such penalty as he thinks
fit in accordance with the provisions of clause (a) of sub-section ( 1)
 of section 23. There is no rule requiring the person against whom
 an order is made to appear before the Director of Enforcement
 on any specified date on which the order would be pronounced in
 his presence. Rule 4 of the Rules requires the Director of Enforce-
ment to specify in his order the provisions of the Act or of the Rules,
992                        SUPREME COURT REPORTS             c19s11 1 s.cJ

A       directions or orders made thereunder in respect of which contra-
        vention has taken place and to give brief reasons for his decision.
        Rule 5 of the Rules requires that a copy of the order made under
        sub-rule (7) of Rule 3 shall be supplied free of charge to the person
        against whom the order is made and that every copy of such order
        shall state that the copy is supplied free of charge for the use of
B     ·the person to whom it is issued and that an appeal lies against that
        order to the Appellate Board under section 23E within thirty days
        of the date of the order. Rule 6 of the Rules s'.ates that every·
        appeal presented to the Appellate Board under section 23E of the
        Act shall be in the form of a memorandum signed by the appellant
      · and the memorandum shall be accompanied by a copy of the
        order appealed against.
             Having regard to the aforesaid provisions of the Act an:d the
      Rules, it has to be held that the service of a copy of the order made
      under sub-rule (7) of Rule 3 of the Rules on the person against
      whom the said order is made is not an empty formality. In the
·n    absence of a provision of law requiring the Director of Enforcement
      to pronounce his order in the presence of t.he person against whom
      it is made, the only date on which it can be d~emed to have been
      effectively made is the date on which he gets the knowledge of the
      order either by the supply of a copy of the order or by any o~her
      means because first, the statute provides a remedy to the person
E     against whom the order is made by way of an appeal to be preferred
      within the prescribed period from the date of the order to the
      Appellate Board under section 23E of the Act and secondly non-
      compliance with the order would expose him to the punishment
      that may be imposed on him under section 23F of the Ac~.
      It would be wholly unjust to compute the period of limitation
      to file an appeal from a date earlier than the date on
      which the party who is entitled to prefer an appeal has the
      knowledge of the order. In cases where an order which is appeal-
       able is not pronounced in the presence of the person against whom
      it is made, it should be assumed that unless there is any specific pro-
      vision of law to the contrary the date of his knowledge of the order
       is the date of the order for the purpose of computing the period of
       lirnita'ri.on irrespective of the date on which _ it is actually passed.
       (Vide Raja Harish Chandra Raj Singh v. The Deputy Land Acquisi~
       tion Officer & Anr. 1 ) It is equally so even in the case of an order
       non-compliance of which. would lead to prosecution and consequent
       imposition of penalty. When the law lays down1 that non-compliance
       with an order would expose the person against whom it is made to

           (1) [1962] 1 SCR 676.
 "" DARA SINGH v. DIRECTOR OF ENFORCEMENT (Venkataramiah J. }                  993

  -criminal liability, it is reasonable 1o hold that in the absence of proof     A
  of his knowledge of the order no penal action can be taken against
   hi.m for non..(:ompliance with it. The irfl'ormat~on or knowledge
' which he may gather about such order in the course of the criminal
1  proceedings instituted for non-compliance with it cannot be a substi-
   tute for the knowledge of the order as mentioned above, which should
  ordinarily precede the institution of such proceedings.                      · Ji°

        Under section! 23F of the Act if any person fails to pay the
  penalty imposed by the Director of Enforcement, he on conviction
  is liable to be punished with imprisonment which may ex tend to two ·
  years or with fine or with both. No person can be convicted under
  section 23F for failure to pay the penal~y imposed on him by the
  Director of Enlforcement ·when he is not at all informed earlier about
  the imposition of the penalty. Hence in the absence of proof of his
  knowledge of the order either by the supply of the copy or the order
  under Rule 5 of the Rules or in any other manner, it cannot be said
  that such person has failed to pay the penalty imposed on him under
   the Act and has become liable to be proceeded against under section
   23F.

         As mentioned earlier, the specific case set out in the complaint
   was that a copy of the order of the Director of Enforcement had been
   served on the appellant on May 4, 1968 and that both the ·Magistrate
   and the High Court refused to accept it. The finding of the High         .E
   Court is that the appellant must have come to know of the order on!
   August 7, 1970 when he appeared before the Magistrate. It is,'
   therefore, obvious !hat on the date on which the complaint was filed
   before the Magistrate i.e. on November 13, 1969 or on the date on
   which process was issued by .the Magistrate on taking cognisance ot
   the case to the appellant to appear before him pursuant to which he
    appeared before him on August 7, 1970, the appellant had not even
    the knlowledge of the passing of the order imposing penalty on him ·
    let alone the specific provision of the Act or the .Rules which accord-
    ing to the order he had violated and the reasons in support of tbe
    order. The appellant bad not, therefore, committed any offence           G
    punishable under section 23F of the Act on those dates. The Magis-
    trate could not, therefore, take cognisance of any offence punishable
    under section 23F of the Act on the date on which he issued process
    to the appellant to appear before him. Even the charge framed
    against the appellant did not state that the order imposing penalty
    on him had been communicated to him onl August 7, 1970 and that . H
  · he was being tried for an offence. punishable under section 23F for .
    non-compliance with the order so communicated on AuguSt: 7·, 1910.
·994

.A
                           SUPREME COURT REPORTS


                                                                            "
                                                              f1981] 1 S.C.R.

       The charge only contained the gist of what was stated in the complaint
       ow November 13, 1969. The High Court was, therefore, in error
       in the circumstance~s of the case in setting aside the order of acquittal
       passed by the Magistrate and in finding the appellant guilty of the
       offence complained of.

B            In the resuit, the appeal is allowed and the conviction of the
       appellant and the senten{ce imposed on him by the High Court are set
       aside. The order of acquittal passed by the Magistrate· is restored.
            At the time of granting special leave to appeaJ. in this case, as
       it was stated that the appellant had been acquitted of the charge of
       murder, the sentence of imprisonment for life had been cancelled
       and that he had been undergoing imprisonment awarded by the High
       Court under section 23F of the Act, ,this Court granted bail to the
       appellant to the satisfaction of the trial court and directed that he
       should be released on bail unless he was required to be in prison in
       connection with or on accounjt of any o.ther case. I! is not known
       whether the appellant was in fact released on baiil pursuant to the
D      above order. If he is on bail, his bail bond stands cancelled.
                                                              Ap11eal allowed.
P.B.R.