1. These appeals laid under the Foreign Exchange Regulation Act, 1973, raise an interesting point.
2. It is seen from the two certificates dt. 20-6-1972, issued by the office of the High Commissioner of India at Colombo that A.S.G. Chelliah Nadar son of A. S. Ghanamuthu Nadar, was a general merchant carrying on business at 168 Maliban St. Colombo, and is one of the persons affected by the Ceylon Government's Scheme of Repatriation of Indian Nationals and was returning to India for good. He had remitted moneys from Colombo through P. Edward Vedanayagam and the appellant in C.M.A. 409 of 1980 had received Rs. 50,000/- during March 1970 from Edward Vedanayagam after tendering a number E. 86 contained in a letter sent by his father from Colombo. A sum of Rs. 29,076/- being the balance of the said sum of Rs. 50,000/- was seized by the Director of Enforcement. From the account books handed over by the appellant to the Director of Enforcement, the name and address of the parties to whom amounts were disbursed as per instructions of A.S.G. Chelliah Nadar, are found. The original authority of Director of Enforcement issued show cause notice both to the appellant in C.M.A. 409 of 1980 and Edward Vedanayagam, the appellant in C.M.A. 410 of 1980, accusing them of having contravened S. 5(1)(aa) and 5(1)(c) of the Foreign Exchange Regulation Act 1947 and imposed the following penalty on Edward Vedanayagam :-
SCN-I for contravention of S. 5(1)(aa) Rs. 15,000/- (Rs. to the extent of Rs. 1,45,000/- consisting fifteen thousand only) of 4 payments (Two payments viz. Nos. 5 and 6 have been dropped by the Deputy Director) SCN-II for contravention of S. 5(1)(c) to Rs. 25,000/- (Rs. Twenty the extent of Rs. 1,47,191/- consisting of five thousand only) 389 payments : SCN-III for contravention of S. 5(1)(c) Rs. 100/- (Rs. one read with S. 23B to the extent of Rs. hundred only) consisting of 3 payments. SCN-IV for contravention of S. 5(1)(aa) Rs. 2500/- (Rs. two to the extent of Rs. 50,000/- consisting thousand five hundred of one payment. only) SCN-V for contravention of S. 5(1)(c) to Rs. 15000/- (Rs. fifteen extent of Rs. 80061/- consisting of 267 thousand only) payments. SCN-VI for contravention of S. 5(1)(c) read Rs. 500/- (Rs. five with S. 23B to the extent of Rs. 2760/- hundred only) consisting of 5 payments.
and on the appellant in C.M.A. 409 of 1980 the three amounts viz. Rs. 28,076/-, Rs. 1,000/- and Rs. 100/- which were directed to be confiscated to the Government of India. The appellants preferred appeals to Foreign Exchange Regulation Appellate Board, viz. A Nos. 341 of 1977 and 372 of 1977 respectively. The appeals were dismissed except that the order regarding the charge under S. 5(1)(c) read with S. 23B against Vedanayagam (appellant in C.M.A. 410 of 1980) was set aside. Hence these appeals.
3. Mr. Chellaswamy, learned counsel for the appellants, did not dispute the contravention of the Foreign Exchange Regulation Act by the appellants. Nonetheless, three points were placed before us by the said learned counsel. The first contention is that the policy of the Central Government as could be seen from Notification No. 22-7-1970-I.T.A. of Central Board of Taxes dated 5-8-1971, and from the letter bearing reference No. 1(10/69) TFL dated 28-8-1970, addressed by the Under Secretary.
Central Board of Taxes, is to grant all reliefs to the Indian National repatriates from Ceylon and that in view of the said policy, the Central Board of Taxes, one wing of the Central Government had waived production of direct or documentary evidence in the shape of transfer through banks, hundies, etc., to support remittances from Ceylon, provided it is established that (i) the assessee has migrated India from Ceylon on or after 1-11-1964, (ii) the assessee had sufficient resources in Ceylon to which the remittance could be reasonably attributed, (iii) the assessee had no source of income either in India or in any foreign country other than Ceylon prior to migration and he was not assessed as resident in India either for the assessment year preceding the year in which he migrated or for earlier years and (iv) the assessee has intimated the Income-tax Officer concerned about the sum brought over and the date of its introduction in the books of accounts within two months of the date of his arrival in India and in the case of persons who have already migrated by 31st October 1971, the above concession in the first instance was to an over-all ceiling of Rs. 60,000/-, but later it was raised to Rs. 2,00,000/-. In this case, it is seen from the two letters issued by the High Commissioner of India, Colombo that Chelliah was carrying on business and had enough resources at Colombo. It is also fairly established that the said Chelliah Nadar, and Indian National repatriate from Ceylon had come down to India and settled here once and for all. The other conditions are also complied with are not disputed. Thus, the said Chelliah Nadar had complied with the four conditions which would enable him to claim the benefits as per the directions issued by the Central Board of Direct Taxes stated supra.
4. It is strenuously contended by the learned counsel for the appellants that when the illegality in bringing the amount from Ceylon is condoned a special case so far as Indian National repatriates from Ceylon with a view to rehabilitate them, the above illegality has also to be ignored even by Foreign Exchange Regulation authorities, as otherwise, the very purpose behind the Government's policy would be frustrated. In his submission, when an illegality is condoned by one wing of the Central Government, another wing of the Central Government - in the instant case, the respondent - is also bound to follow the said policy. Secondly, it is contended that under S. 23(D) of the 1947 Act, the corresponding section in 1973 Act being 51, there is a direction vested in the Director of Enforcement to impose such penalty as he thinks fit in accordance with the provisions of the said S. 23 and that taking into consideration the Government's policy referred to above, the original authority ought not to have proceeded to impose penalty. The last contention is that in a case similar to the two cases on hand, penalty was not imposed and that imposition of penalty in the instant case alone amounted to discrimination within the meaning of Art. 14 of the Constitution of India. On the contrary, the learned Additional Government Standing Counsel reiterated the reasons that weighed with the authorities below and further submitted that the present line of argument advanced before us by the learned counsel for the appellant was not placed before the authorities below.
5. After all, the policy of the Government as reflected from the documents referred to in the beginning, is not in dispute. The crucial point for consideration is whether the policy of the Government would not bind all the wings of the Central Government. We have to point out that the objective behind such policy is to rehabilitate the Indian National repatriates from Ceylon. That is because such repatriates are not in a position to remit or carry to India their possessions in Ceylon converted in terms of currency through lawful means or media. The situation is such that they cannot stay any more in Ceylon but to seek shelter in India their mother land. Their mere return without such resources they could ransack and could be brought to India by means not recognised under Indian Law, would undoubtedly create irksome problem to our Nation. As already stated, their such resources they could manage to lift from Ceylon to India are necessary to enable them to make a living. If therefore Foreign Exchange Regulation Act were to be applied and consequent thereto, confiscations and penalty were to be inflicted on such repatriates from Ceylon who deserve all assistance and sympathetic consideration, the very purpose of rehabilitation would be thrown to the winds and that would be an additional strain on our Nation.
6. We believe, the Central Government would have taken such sympathetic attitude, had the repatriates made representations to the Government through proper channel as rightly pointed out by the learned counsel for the respondents. But we must point out that the sufferings and hardship of the repatriates cannot brook any delay. They must have immediate funds to make a living, if not to find a home and to secure a status. After all, Courts of Justice shall not remain a helpless spectator, when the Central Government had expressed their policy to render all possible assistance to these repatriates. We may add that without such policy being indicated by the Government, the Central Board of Direct Taxes would not have issued the Notification referred to at the outset. We wish to add that the above policy is such that it would not permit stripping of the possession of the money the repatriates were able to salvage and to bring the same from Ceylon to India. This vital factor is enough in our view to hold that the action taken by the respondent against the two appellants who after all acted under the directions and in the interest of Chelliah Nadar, the repatriate, is opposed to the Government's policy. We may point out here that the moneys according to the records seized indisputably point out that they were sent by Chelliah Nadar. In our view, it would be rather unjust to enforce the Foreign Exchange Regulation Act against the appellants in the teeth of the said policy. This is a unique case where it is possible to blend the law harmonise with fair play and justice.
7. We are therefore emboldened to allow the appeals and set aside the orders of Foreign Exchange Regulation Appellate Board, affirming the orders of the original authority and to direct refund of the confiscated amount and the penalty if collected. In the peculiar circumstances, we make no order as to costs.
8. Appeals allowed.