Report No. 47
II. Foreign Exchange (Regulation) Act, 1947
Amendment of section 19D.
In section 19D in sub-section (1) for the words 'has reason to believe', the words 'honestly believes' shall be substituted1.
1. Para. 15.36H of the Report.
Section1 to be inserted in the Foreign Exchange Act.2
"19DD. (1) If any document, parcel or thing in the custody of the Postal or Telegraph authorities is, in the opinion of the Director of Enforcement or any officer not below the rank of Assistant Director authorised by the Director of Enforcement, wanted for the purpose of any investigation, inquiry or other proceeding under this Act in respect of an offence relating to foreign exchange the value whereof exceeds rupees one lakh or for the detection of any such offence, such officer may-
(a) require the Postal or Telegraph authorities, as the case may be, to deliver such document, parcel or thing to such person as such officer directs, or
(b) intercept, detain, open and examine any such document, parcel or thing, pending a requisition by him under clause (a).
(2) If the document consists of any message received for transmission by telegraph by the telegraph authorities, such officer may require the telegraph authorities not to transmit the message to the person to whom it is addressed, pending an order under sub-section (1).
(3) If any such document, parcel or thing is, in the opinion of any other Enforcement Officer, wanted for any such purpose, he may require the Postal or Telegraph Department as the case may be, to cause search to be made for and to detain such document, parcel or thing pending the orders of any such officer as is mentioned in sub-section (1).
(4) The provisions of this section shall not apply in relation to any letter or telegram unless the letter or telegram amounts to incitement to commit an offence under this Act or constitutes evidence of such incitement.
(5) No document, parcel or thing shall be retained in the custody of such officer for a period exceeding fifteen days (excluding holidays) unless he has obtained the approval of the Director".
1. This is a very tentative draft.
2. See para. 15.36 of the Report.
Section to be inserted.1
1. See para. 15.31 of the Report.
19DDD. Seizure of containers.- Where any goods in a package are liable to seizure under this Act-
(a) the package and any other goods contained therein,
(b) any goods used for concealing them, shall also be liable to seizure.
Explanation.-In this section, 'goods' does not include a conveyance used as a means of transport.
[Cf. section 118-119, Customs Act].
Re-draft of section 23(1), Foreign Exchange (Regulation) Act, 1947.1
23. Penalty and procedure.-
(1) If any person contravenes the provisions of section 4 section 5, section 9, section 10, sub-section (2) of section 12, section 17, section 18A, or section 18B or of any rule, direction or order made thereunder, he shall-
(a) be liable to such penalty not exceeding five times the value of the foreign exchange in respect of which the contravention has taken place, or five thousand rupees whichever is more2, as may be adjudged by the Director of Enforcement in the manner hereinbefore provided, or
(b) upon conviction by a court, be punishable,-
(i) in the case of an offence relating to foreign exchange of the value whereof exceeds one lakh of rupees or in the case of a second of subsequent conviction for an offence under this Act, with imprisonment for a term which may extend to seven years, and with fine:
Provided that in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than six-months:
Provided further that where the person convicted has, as a result of the offence, made any illegal gain, the court shall in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court sentence him to fine not less than the amount of such gain.
(ii) in any other case with imprisonment for a term which may extend to three years, or with fine, or with both.
1. See paras. 15.9 and 15.33 of the Report.
2. The question whether the wording should also be changed to cover offences in Indian currency should be considered when the actual amendment is drafted.
Amendment of section 23(1B)1
In section 23 in sub-section. (1B).
(i) the Explanation shall be re-numbered as Explanation 1, and
(ii) after Explanation 1 is so re-numbered the following Explanation shall be inserted namely-
"Explanation 2-For the purposes of this sub-section the property in respect of which a contravention is committed shall include Indian currency into which the property may have been converted."
1. Para. 15.32 of the Report.
Explanations to be inserted in the Foreign Exchange Act in section 23C (section relating to liability of officers of corporation).1-2
Explanation 2.-Where a person, being the Chairman or Managing Director of a company has, on behalf of the company, signed an application for permission under this Act, any contravention of the conditions of that permission shall, so long as such person holds an office in the company, be conclusively presumed to have been committed with his consent or connivance.
Explanation 3.-Where an application for permission under this Act is signed by an officer of a company other than the Chairman or Managing Director, it shall, for the purpose of this section, be deemed to have been signed also by the Chairman and the Managing Director of the Company."
1. Present Explanation to section 23C to be re-numbered as Explanation 1.
2. See para. 8.18 of the Report.
New section to be inserted.1
23CC. Public condemnation of corporation.-
(1) When a corporation is convicted of an offence under this Act, it shall be competent to the court before which the conviction takes place, to pass on the corporation a sentence of public condemnation, in addition to any other punishment to which the corporation may be sentenced.
(2) When such a sentence is passed, the court shall cause the name and place of business of the corporation, the offence, the fact that the corporation has been so sentenced, and, any other punishment imposed, and such other particulars as the court m# consider to be appropriate in the circumstances of the case, to be published at the expense of the corporation in such news papers or in such other manner as the court may direct.
(3) The expenses of such publication shall be recoverable from the corporation in the, same manner as fine.
1. See para. 8.1 of the Report.
Section to be inserted in the Foreign Exchange Act1
23CCC. Where a person, having been convicted of an offence under this Act, is again convicted of another offence under this Act, and the court by which such person is convicted is satisfied that in order to prevent repetition of the offence by him such a discretion is necessary, the Court may, in addition to any penalty which may be imposed on him under the Act, by order direct that, that person shall not carry on such business as the court may specify, being a business, which is likely to necessitate or facilitate the commission of an offence under this Act, for such period, not exceeding three years, as may be specified by the Court in the order.2-3
1. See para. 15.21 of the Report.
2. Cf. section 7(3), Essential Commodities Act, 1955.
3. This can be place as section 23CCC.
Section to be inserted in the Foreign Exchange Act.1
23FF. Any tax assessed, penalty levied or any other amount due under this Act from a person may, without prejudice to any other mode of collection, be recovered, on application to any Magistrate, by such Magistrate, as if it were a fine imposed by him.2
1. See para. 15.27 of the Report.
2. To be inserted as section 23FF, Foreign Exchange (Regulation) Act.
Section to be inserted.1
23FFF. If a person makes preparation to commit an offence under this Act, and from the circumstances of the case it may be reasonably inferred that if not prevented by circumstances independent of his will, he is determined to carry out his intention to commit the offence, he shall be punishable with imprisonment for three years, or with fine or with both.2
1. This can be inserted as section 23FFF.
2. See para. 15.20 or the Report.
Re-draft of section 24A.1
24A. Where any document is furnished by any person under sub-section (2) of section 19, section 19E or section 19F, or has been seized under section 19A or section 19C or section 19D or under any other law from the custody or control of any person, or received from any place outside India, in the course of any investigation against any person, and such document is tendered by the prosecution in evidence against him or against any other person, the Court or the officer adjudicating under clause (a) of sub-section (1) of section 23 shall, unless the contrary is proved, presume-
(a) the truth of the contents of such documents;
(b) that the signature and every other part of such document which purports to be in the handwriting of any particular person or which the court or the officer adjudicating under clause (a) of sub-section (1) of section 23 may reasonably assume to have been signed by, or to be in the handwriting of, any particular person, is in that person's handwriting, and in the case, of a document stamped executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested."
1. See paras. 12.2 to 12.4 and para. 15.30 of the Report.