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A.R. Ramiah Vs. Reserve Bank of India (Exchange) (Central Department) Fort Glacis and anr. - Court Judgment

LegalCrystal Citation
SubjectFERA
CourtChennai High Court
Decided On
Reported in(1970)1MLJ1
AppellantA.R. Ramiah
RespondentReserve Bank of India (Exchange) (Central Department) Fort Glacis and anr.
Cases ReferredCummings v. London Bullion Co.
Excerpt:
- - the question of giving an opportunity to a person like the petitioner, of being heard will arise only in quasi-judicial proceedings, which will have the effect of affecting the rights of the parties. 5 and 6 of the schedule under which these bills could have been admitted to proof had the acceptors become bankrupt, or would have constituted a good petitioning creditor's debt had the debtors committed an available act of bankruptcy......of india praying for the issue of a writ of certiorari to quash the permission granted by the reserve bank of india on 11th january, 1967 to the second respondent to execute the decree obtained by him against the petitioner herein.2. during the pendency of the writ petition the petitioner preferred a.a.a.o. no. 99 of 1968, (ramiah-appellant v. karuppiah servai-respondent), against the order of the learned subordinate judge of siyaganga made in c.m.a. no. 31 of 1967, to which i had made reference already. this appeal was dismissed at the stage of admission itself by alagiriswami, j. the contention that was put forward before the learned judge was that section 21 (3) (c) of the act contemplated an obligation on the part of the reserve bank of india to give an opportunity to the.....
Judgment:
ORDER

M.M. Ismail, J.

1. While the petitioner herein was carrying on business in Burma, he executed two promissory notes in favour of one V. R. Manickam, and, thereafter in March, 1965, he came to India. The said V. R. Manickam assigned the promissory notes in favour of the second respondent herein, who filed O. S. No. 500 of 1965, on the file of the Court of the District Munsif of Sivaganga, within whose jurisdiction the petitioner was residing. The petitioner in his defence put forward a contention that the suit was not maintainable by reason of the Burma Foreign Exchange Regulation Act, 1947, am. that in any event, only a conditional decree could be passed under that Act. The learned District Munsif, overruled the defence and decreed the suit. Thereafter, the second respondent herein applied to the first respondent for permission under Section 2l (3) (c) of the Foreign Exchange Regulation Act, 1947, hereinafter referred to as the Act, for executing the decree and that permission was granted to the second respondent by an order dated 11th January, 1967. Armed with this permission, the second respondent sought to execute the decree and the petitioner's objection was overruled. Against the order of the executing Court overruling the objection of the petitioner, the petitioner filed Civil Miscellaneous Appeal No. 31 of 1967. on the file of the Court of the Subordinate Judge of Sivaganga, and that appeal also was dismissed on 12th December, 1967. It is at this stage the petitioner filed the present writ petition under Article 226 of the Constitution of India praying for the issue of a writ of certiorari to quash the permission granted by the Reserve Bank of India on 11th January, 1967 to the second respondent to execute the decree obtained by him against the petitioner herein.

2. During the pendency of the Writ petition the petitioner preferred A.A.A.O. No. 99 of 1968, (Ramiah-Appellant v. Karuppiah Servai-Respondent), against the order of the learned Subordinate Judge of Siyaganga made in C.M.A. No. 31 of 1967, to which I had made reference already. This appeal was dismissed at the stage of admission itself by Alagiriswami, J. The contention that was put forward before the learned Judge was that Section 21 (3) (c) of the Act contemplated an obligation on the part of the Reserve Bank of India to give an opportunity to the judgment-debtor before granting permission to the decree holder for executing the decree. The learned Judge overruled this contention. This learned Judge, after referring to the provision contained in Section 21 (3) (c) of the Act stated that the provision was merely for the purpose of enabling the authority granting permission to satisfy itself as to whether the permission should be granted and also to have the necessary materials for the purpose of so deciding. The learned Judge was of the view that it was not obligatory on the authority granting permission to give notice either to a judgment-debtor or to a creditor and that it does not speak of an opportunity being given to either of them and that the provision only enables the authority competent to grant the permission to ask either the judgment-debtor or the creditor to produce documents or to give information. The learned Judge held that it was only an enabling provision and not a provision which confers any right either on the judgment-debtor, or on the creditor. It is in this view the learned Judge dismissed the appeal.

3. In the present writ petition, Mr. V. N. Srinivasa Rao, learned Counsel for the petitioner, contends that the power to grant permission conferred on the Reserve Bank of India under Section 21 (3) (c) of the Act is coupled with a duty and, therefore, the Reserve Bank of India ought to have given notice to the petitioner herein before granting the permission to the second respondent. Alternatively, the learned Counsel contends that the principles of natural justice require that the petitioner should have been heard before the permission asked for by the second respondent was granted.

4. I am of the opinion that, for more than one reason, the writ petition is liable to be dismissed and that there is no substance in the contention of the learned Counsel for the petitioner. In the first place, the identical question as to the validity of the permission granted by the Reserve Bank of India, was the subject-matter of A. A. A. O. No. 99 of 1968, on the file of this Court, and the question raised was decided against the petitioner by a learned Judge of this Court. The fact that the appeal was dismissed at the stage of admission does not in any way obliterate the fact that there is the decision of this Court on the point raised by the petitioner against him. Hence the same question cannot be agitated in proceedings under Article 226 of the Constitution of India. Mr. V. N. Srinivasa Rao contended that the scope of the jurisdiction under the said A. A. A. O. and the jurisdiction under Article 226 of the Constitution of India are distinct and different and therefore it is open to me to go into the question again. I am of the view that this argument is not tenable at all. As a matter of fact, when the High Court deals with an appeal against an appellate order, it will be enough if a question of law is present for admitting the appeal. On the other hand, it is not every question of law that gives jurisdiction to the High Court under Article 226 of the Constitution of India to interfere with an order passed by a Subordinate Tribunal and the error of law which justifies interference must be an error of law apparent on the face of the record. Consequently, if at all, the jurisdiction, under Article 226 of the Constitution of India in this respect is narrower than the jurisdiction of the High Court considering an appeal against an appellate order with reference to Section 100 of the Civil Procedure Code. Therefore, I am unable to accept this argument.

5. Mr. V.N. Srinivasa Rao then contended that I am not bound by the conclusion of Alagiriswami, J., that it is open to me to consider the matter afresh and come to a different conclusion and that in this case I must come to such a different conclusion. I am not able to appreciate the argument in the way in which it is presented. Normally speaking, the judgment of a single Judge of this Court is binding on another single Judge unless the latter Judge comes to the conclusion that the conclusion of the former Judge is plainly wrong and, in that event, he cannot take upon himself the responsibility of dissenting from the other learned Judge and the only course open to him, in order to maintain the comity between the Judges of this Court, and in order that the entire matter is not thrown into a field of uncertainty is to place the matter, before the Honourable the Chief Justice for haying the master decided authoritatively by a Bench of this Court. Apart from this aspect, in this particular case, I am in entire agreement with the view of Alagiriswami, J., with reference to the scope of Section 21 (3) (c) of the Act. ,.

6. At this stage, it is necessary to refer to the entire Section 21 (3) of the Act, which is as follows : -

Neither the provisions of this Act nor any term (whether expressed or implied) contained in any contract that anything for which the permission of the Central Government or the Reserve Bank is required by the said provisions shall not be done without that permission shall prevent legal proceedings being brought in India to recover any sum which, apart from the said provisions and any such term, would be due whether as a debt, damages or otherwise, but-

(a) the said provisions shall apply to sums required to be paid by any judgment or order of any Court as they apply in relation to other sums ; and

(b) no steps shall be taken for the purpose of enforcing any judgment or order for the payment of any sum to which the said provisions apply except as respects so much thereof as the Central Government or the Reserve Bank as the case may be, may permit to be paid, and

(c) for the purpose of considering whether or not to grant such permission, the Central Government or the Reserve Bank, as the case may be, may require the person entitled to the benefit of the judgment or order and the debtor under the judgment or order, to produce such documents and to give such information as may be specified in the requirement.

7. From the very language of Section 21 (3) (c) it is clear that it does not impose any obligation whatever on the Central Government, or the Reserve Bank of India or the person competent to grant the permission to hold an enquiry or to give any notice or opportunity either to the creditor or to the judgment-debtor. From the very nature of the case it is the creditor who applies for the permission. Once be applies for the permission, the Reserve Bank of India or the person granting the permission has necessarily to satisfy himself whether such permission should be granted or not, taking into account the object of the Act in question. It is only for that purpose the power has been conferred to call for particulars and certainly not for the purpose of giving an opportunity to any party to represent his case or put forward any grievance of his own. Therefore, from the very nature of the case, there is no scope for the argument that Section 21 (3) (c) of the Act confers a power on the Reserve Bank of India coupled with a duty.

8. Mr. Srinivasa Rao then contended that the principles of natural justice require that before granting the permission, the Reserve Bank of India ought to have given the petitioner an opportunity of being heard. I am unable to accept this argument. The question of giving an opportunity to a person like the petitioner, of being heard will arise only in quasi-judicial proceedings, which will have the effect of affecting the rights of the parties. As far as the permission contemplated by Section 21 (3) (c) of the Act is concerned, it does not purport to affect the rights of any of the parties. The rights and obligations of the parties have already been determined in the suit or legal proceedings initiated in which a decree has been passed in favour of the one party against the other. Once a decree has been passe, the Judgment-debtor is under an obligation to discharge the decree debt and it is not the intention or object of the Act to wipe out or obliterate that obligation or to confer any benefit on him with reference to that obligation. The Act was enacted in the interest of National economy and for preserving the foreign exchange of the country. In view of such an object, it is entirely foreign to contend that before the permission as contemplated by Section 21 (3) (c) of the Act is granted, a notice must be given to the judgment-debtor and the judgment-debtor must be given an opportunity of being heard. What exactly are the requirements of the principles of natural justice and whether they have been complied with or not, will have to be determined with reference to the facts and circumstances of each case. Having regard to the object and provisions of the Act, there is no scope for insisting that the principles of natural justice require that before the Reserve Bank of India grants permission to a decree-holder under Section 21 (3) (c) of the Act for executing the decree it must give an opportunity to the judgment-debtor and hear him.

9. Mr. V.K. Thiruvenkatachari, learned Counsel for the Reserve Bank of India, brought to my notice the decision of the House of Lords in Contract and Trading Company (Southern) Ltd. v. Barbey and Ors. (1960) A.C. 244 : (1960) 2 W.L.R. 15 : (1959) 3 All E.R. 846. That case dealt with an action on bills of exchange with reference to the provisions contained in the Exchange Control Act, 1947. In that case, the respondents who carried on business and were resident outside the ' scheduled territories ' as defined in the Exchange Control Act, 1947, were holders in due course of three bills of exchange of which the appellants were acceptors and which were dishonoured on presentation. The respondents brought an action in the High Court for the amount of the bills and the appellants contended that by reason of the term implied in the bills by Section 33 (1), the bills were not due and payable since Treasury permission had not been given. That contention was overruled by all the Courts including the House of Lords. I may mention here that the provisions of Section 33 (1) of the Exchange Control Act, 1947, correspond more or less to the provisions contained in Section 23 of the Act. In dealing with the question Viscount Simonds approved the following observations of Lord Justice Somervell expressed in Cummings v. London Bullion Co., Ltd. (1952) 1 All E.R. 383 : (1952) 1 K.B.

The person entitled to the payment issue a writ. The fact that permission has not been obtained is not a defence to the action. On the one hand the plaintiff can obtain judgment, the money due under the judgment being subject to Part 2 of the Act and the rules to which I have referred. The defendant assuming that he is admitting liability, apart from the provisions of the Act, can make a payment into Court. The act is not to be used to enable the defendant to retain the money in his pocket, but to control its reaching its destination, namely, the plaintiff.

In the same judgment, Lord Goddard stated thus:

That the Act does not provide a moratorium for debtors but only controls that immediate destination of the payments they make, is also shown I think, by paras. 5 and 6 of the schedule under which these bills could have been admitted to proof had the acceptors become bankrupt, or would have constituted a good petitioning creditor's debt had the debtors committed an available act of bankruptcy.

These observations of the House of Lords with reference to the Exchange Control Act, 1947 are equally applicable to show the purposes and object of the Foreign Exchange Regulation Act, 1947. In the context of these objects, neither the provisions of Section 21 (3) (c) of the Act, nor the principles of natural justice can be said to require that before the Reserve Bank of India giants permission to a decree-holder to execute a decree against the judgment-debtor, an opportunity of being heard should be given to the judgment-debtor.

10. For these reasons, I am of the opinion that there is no substance in the Writ Petition and the same fails and is dismissed. There will be no order as to costs.


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