Dissatisfied, the respondents the Company and its Directors filed five separate appeals before the High Court at Madras under Section 54 of FERA, 1973.
Admittedly, the respondents had number obtained any special or general permission from the Reserve Bank of India authorising them lo hold the aforesaid foreign exchange lying with their branch at Kuala Lumpur in Malaysia without repatriating the same to India.
40,000 on the respondent companypany while in respect of the second charge imposed a penalty of Rs.
In the charge sheet, the respondents were alleged to have companymitted two companytraventions of the provisions of FERA, 1947 by the Directorate of Enforcement.
1996 1 SCR 215 The Judgment of the Court was delivered by DR.
2,000 on each of the Directors and to Rs.
a Division Bench of the High Court, allowed all the appeals and set aside the penalty as imposed by the Directorate of Enforcement and modified by the Appellate Board.
4,000 each on its Directors and of Rs.
The first charge related to their failure to repatriate foreign exchange of Malaysian b 62186.42 being the sale proceeds of Nataraja Rubber Estate and Malaysian b 1,25,000, being the Social Welfare Prize money won by the Company in I960 while the second charge related to their failure to repatriate Malaysian b 3,56,222.44 being the profit earned by the Company from the business carried on by the branch of the respondent .company at Kuala Lumpur as per the statement of profit and loss of the Company ending on 31.12,1972.
All the amount admittedly belonged to the Company and had been disclosed by the Company in its balance sheet as well as in the return of income tax for the relevant years.
The Directorate of Enforcement in the departmental proceedings, taken against the respondents, by its order dated 19.9,1977 held the respondents guilty of companymitting both the companytraventions mentioned in the article of charges and in respect of the first charge imposed a penalty of Rs.
2,00,000 on the respondent companypany, under Section 23 l a of FERA, 1947.
20,000 on each of the Directors and a penalty of Rs.
Vide judgment and order dated 9th March.
Against the order dated 19.9.1977 the respondents filed five separate appeals before the Appellate Board, The Board took the view that since it was number a case where foreign exchange had been surreptitiously held abroad with any malafide motive though it was retained in Kaula Lumpur deliberately and intentionally.
5000 each in the case of the Directors in respect of the second charge, while retaining the penalty on the Company, The Board rejected the plea of the Company and its directors that since numbertime limit had been specified for repatriation of the foreign exchange under Section 10 of the Act, the respondents companyld number be held guilty of either of the charges and opined that since numberperiod had been specifically prescribed for repatriation of the foreign exchange, it was implied that foreign exchange had to be repatriated within a reasonable time from the date when the right to receive the same accrued and having regard to the long time taken by the Company, it followed that the Company had failed to repatriate the foreign exchange within a reasonable period.
The companytravention of the provisions was of a technical nature and therefore reduced the penalty to Rs.
Foreign Exchange had number been repatriated even after the expiry of more than 15 years from the date the right to receive it in India accrued .
20.000 on the companypany in respect of the first charge and to Rs.
A.S. ANAND, J. Leave granted.
The respondents, a private limited companypany and its Directors were proceeded against departmentally for having companytravened the provisions of Section 10 1 a of the Foreign Exchange Regulation Act, 1947 hereinafter referred to as the PER A, 1947 .
The gravamen of the departmental case against the respondents was that they had failed to repatriate the foreign exchange lying in Malaysia, which they had a right to receive in India and had thereby failed to take or refrained from taking action which had the effect of number securing the receipt of the foreign exchange in this companyntry.
