# 80 2 SUPERINTENDENT AND REMEMBRANCER OF LEGAL . AFFAIRS, WEST BENGAL v. GIRISH KUMAR NA V ALAKHA & ORS

- **Citation:** [1975] 3 S.C.R. 802
- **Court:** Supreme Court of India
- **Decided:** 1975-03-03
- **Bench:** A. N. Ray, Cj .. K. K. Mathew, v. R. KRISHNA IYER, A. C. Gupta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/80-2-superintendent-and-remembrancer-of-legal-affairs-west-bengal-v-girish-6386
- **Pages:** 8

## Headnote

Constitution oi India, 1950, Art. 14-Purpose of dzaUenged classification
in doubt-Concept of 'purpose' and 'similar situations', when can be resorted
to-Legislature if can be given benefit of doubt abo'ut its purpose.
A
B
Constitution of India, 1950, Art. 14-Under-inclusive classification. meaning
C
of-Under-inclusive classification, when permissible.
'
Foreign Exchang.~ Regulation Act, 1947, Section 23-Two difjer!'llf prvcedures for dealing with persons cdntra1•eni11g the Act-Benefit of inquiry by
Director of Enforcement not available to persons dealt with under s. 23 (I A)--
Classification, if unreasonable.
.
The respondents were tried for having committed offences under s. 4 ( 3),
20(3) and 22 of the Foreign Exchange Regulation Act, 1947 read with s. 120-11
of 1he Indian Penal Code and s. 23 of the Act. The Court discharged th1~
respondents in view of the decision of the H:gh Court of Calcutta in M,I s Serlljuddin & Co. and Ors. v. Union of India and Ors. Civil Rules Nos. 2183 (W) of
1966 and cases Nos. 1998 and 1999 of 1963 decided on 16-9-1971, holding that
s. 23(Al) was violative of Art. 14 of the Constitution. The appellaii.t filed :a
revision pet.ition against the order, before the High Court. The High Court
conc;urred with the decision of the trial Court and dismissed the revision. This
appc:al, by special Jeave, is against that order dismissing the revision,
It was contended for the respondents that s. 23 pro¥ides for two different
procedures for deali11g with contravention of the provisions of the Act. That
is tc> say, irersons who have contravened the provisions specified in s. 23 (I) (a)
and are found guilty by the Director of Enforcement need not face prosecution
in a criminal court if the Director is of opinion that the penalty he is empowered to impose would be ad~quate punishment, whereas, the peraons aJleged
to contravene the other provisions of the Act have necessarily to face prose·
cution in criminal court without being given the benefit of an inquiry by the
· Din:ctor of Enforcement and the opportunity to the delinquents to convince
him that imposition of penalty by him would be adequate punishment even if
they are found guilty. The classification made in s. 23 (1) is under-inclusive
and is, therefore, unreasonable.
Allowing 1he appeal,
HELD : (i) When th1~ purpose of a challenged classification is in doubt,
D
E
F
the courts attribute to the classification the purpose thought to be most proG
hable. Instead of asking what purpose or purposes the statute and other
materials reflect, the court may ask what constitutionally permissible objective
this statute and other rele1<ant materials could plau~ibly be construed to reflect.
The latter approach is the proper on~ in economic regulation· cases. The
decisions dealing with economic regulation indicate that courts have used the
concept of 'purpose' and 'similar situations' in a manner which give consider·
abte k~way to the legislature. This approach of judicial restraint and presumption of constitutionality requires that the legislature is given the benefit
H
of doubt about its pu·pose. [805H-806C]
(ii) Often times the courts hold that unc1er0inclusion does not deny the
equal protection of Jaws under Article 14. In str1.ct theory, this involves an
A
lB
D
F
I
IH
SUPDT. LEGAL AFFAIRS v. GIRISH (Mathew, J.)
803
abandonment of the principle that classification must include all who are similarly situated with respect to the purpose'. This under-inC!usion is often explained by sa}'ing thav the legislature, is free to remedy parts of a mischief or
to recognize degrees of evil ana strike at the harm where it thinks it most
acute. There are two main considerations to justify an under-inclusive classification. First, administrative necessity.
Second, the legislature might not
be fully convinced that the particular policy which it adopts will be fully succe~sf'ul or wise. Thus to demand application of the policy to all whom it
might logically encompass would restrict the

## Text

80 2
SUPERINTENDENT AND REMEMBRANCER OF LEGAL
. AFFAIRS, WEST BENGAL
v.
GIRISH KUMAR NA V ALAKHA & ORS.
March 3, 1975
[A. N. RAY, CJ .. K. K. MATHEW, v. R. KRISHNA IYER AND
A. C. GUPTA, JJ.]
Constitution oi India, 1950, Art. 14-Purpose of dzaUenged classification
in doubt-Concept of 'purpose' and 'similar situations', when can be resorted
to-Legislature if can be given benefit of doubt abo'ut its purpose.
A
B
Constitution of India, 1950, Art. 14-Under-inclusive classification. meaning
C
of-Under-inclusive classification, when permissible.
'
Foreign Exchang.~ Regulation Act, 1947, Section 23-Two difjer!'llf prvcedures for dealing with persons cdntra1•eni11g the Act-Benefit of inquiry by
Director of Enforcement not available to persons dealt with under s. 23 (I A)--
Classification, if unreasonable.
.
The respondents were tried for having committed offences under s. 4 ( 3),
20(3) and 22 of the Foreign Exchange Regulation Act, 1947 read with s. 120-11
of 1he Indian Penal Code and s. 23 of the Act. The Court discharged th1~
respondents in view of the decision of the H:gh Court of Calcutta in M,I s Serlljuddin & Co. and Ors. v. Union of India and Ors. Civil Rules Nos. 2183 (W) of
1966 and cases Nos. 1998 and 1999 of 1963 decided on 16-9-1971, holding that
s. 23(Al) was violative of Art. 14 of the Constitution. The appellaii.t filed :a
revision pet.ition against the order, before the High Court. The High Court
conc;urred with the decision of the trial Court and dismissed the revision. This
appc:al, by special Jeave, is against that order dismissing the revision,
It was contended for the respondents that s. 23 pro¥ides for two different
procedures for deali11g with contravention of the provisions of the Act. That
is tc> say, irersons who have contravened the provisions specified in s. 23 (I) (a)
and are found guilty by the Director of Enforcement need not face prosecution
in a criminal court if the Director is of opinion that the penalty he is empowered to impose would be ad~quate punishment, whereas, the peraons aJleged
to contravene the other provisions of the Act have necessarily to face prose·
cution in criminal court without being given the benefit of an inquiry by the
· Din:ctor of Enforcement and the opportunity to the delinquents to convince
him that imposition of penalty by him would be adequate punishment even if
they are found guilty. The classification made in s. 23 (1) is under-inclusive
and is, therefore, unreasonable.
Allowing 1he appeal,
HELD : (i) When th1~ purpose of a challenged classification is in doubt,
D
E
F
the courts attribute to the classification the purpose thought to be most proG
hable. Instead of asking what purpose or purposes the statute and other
materials reflect, the court may ask what constitutionally permissible objective
this statute and other rele1<ant materials could plau~ibly be construed to reflect.
The latter approach is the proper on~ in economic regulation· cases. The
decisions dealing with economic regulation indicate that courts have used the
concept of 'purpose' and 'similar situations' in a manner which give consider·
abte k~way to the legislature. This approach of judicial restraint and presumption of constitutionality requires that the legislature is given the benefit
H
of doubt about its pu·pose. [805H-806C]
(ii) Often times the courts hold that unc1er0inclusion does not deny the
equal protection of Jaws under Article 14. In str1.ct theory, this involves an
A
lB
D
F
I
IH
SUPDT. LEGAL AFFAIRS v. GIRISH (Mathew, J.)
803
abandonment of the principle that classification must include all who are similarly situated with respect to the purpose'. This under-inC!usion is often explained by sa}'ing thav the legislature, is free to remedy parts of a mischief or
to recognize degrees of evil ana strike at the harm where it thinks it most
acute. There are two main considerations to justify an under-inclusive classification. First, administrative necessity.
Second, the legislature might not
be fully convinced that the particular policy which it adopts will be fully succe~sf'ul or wise. Thus to demand application of the policy to all whom it
might logically encompass would restrict the opportunity of a state to make
experiment. These techniques would shew that some sacrifice
of
absolute
equality may be required in order that the legal system may preserve the
flcxib'..lity to evolve new solutions to social and economic problems. [806E; H807B]
Missouri K. and T. Rly. v. May, (1903) 194 U.S. 267 at p. 269- and
Gujarat v. Ambicao Mills A.I.R. 1974 S.C.
1~00 referred to.
(iii) The experience of the Government was that persons contravening .the
provisions of the Act specified in s. 23 (1) (a) invariably escaped
without
punishment : firstly because, successful prosecution of these offences in many
·Cases was not possible for want of legal evidence; secondly because, the criminal courts were not equipped with the training, expertize and experience necessary to deal with the intricate .and ingenious methods adop•ted by the persons
contravening them. The Government, therefore, thought that imposi_tion of
penalty by deparlml!ntal adjudication would prove a more effective ·means of
checking \hese ·types of foreign-exchange offences as against the previous system
of prosecution of all offences on the basis of the strict standard of proof required for criminal prosecution-which proof was, by and large, so much
within the special knowledge of the offender and so much out of the reach
of th~ department. [808D-FJ
The basis of classification was that in cases where there was likelihood of
g~tting sufficientfy unimpeachable evidence as, for instance. in cases involving
contravention of sections 14, 13(2), 15, 18 etc., where the Reserve Bank of
Jndia as a specialized agency comes into the picture and· be in possession of
relevant materials, those cases were left to be dealt with under s. 23(1:\) by
criminal courts. The classification made in s. 23(1A) is, therefore, not discriminatory. [808H;-809£.]
CRIMIN.AL APPELLATE JURISDICTION : Criminal Appeal No. 203
of 1973.
A'Ppeal by special leave from the Judgment and Order 'dated the
14th March, 1973 of the Calcutta High Court in Criminal Revision
No .. 613 of 1972.
L. N. Sinha, Solicitor-General, G. L. Sanghi and Girish Chandra
for the Appellant.
A. K. Sen, Mrs. Liela Seth and U. K. Khaitan for the Respondents.
1he Judgment of the Court was delivered by ·
MATHEW, J.
The respondents were tried before the Presidency
Magistrate, 11th Court for' having committed offences un(ier sections
4(3), 20(3) and 22 of the Foreign Exchange Regulation Act, 1947
(he<einafter called 'the A.ct') read with s. 120-B of the Indian Penal
Code and s. 23 of the Act. The Court discharged the respondents in
view of the decision of the High Court of Calcutta in M/s. Serajuddin
& Co. and Others v. Union of India and Others(1) holding that s.
.{I) Civil Rules Nos. 2183 (W), 2184 (W) of 1966 and cases Nos. 1998 and 1999
of 1963 decided on 16-9-1971.
s 04
SUPREME COURT REPORTS
U975l 3 s.c . R.
23 (1 A) was violative of Article 14 of the Constitution. The appeHant
filed a revision petition against the order, before the High. Co.urt. The
Court concurred with the decision of the trial Court and d1sm1ssed the
revi~ion. This appeal, by special leave, is against that order.
The question fo1
consideration is whether s. 23 (lA) of the Act
violates Article 14 of the Constitution.
Section 23 ( l) as it originally stood in the Act provided that whocwr
conLravenes any of the provisions of the Act or of any rule, direction or
order ma<l2 thereunder shaU be punishable with imp1iwnm.;11t for a
term which may extend to two years or with fine or with both, and
any Court trying any such contravention may, if it thinks fit and in
addition to any senteece which it may impose for such contravention,
direct that any currency, security, gold or silver or goods or other
property in respect of which the contravention has taken place shall b~
confiscated. Section 23 was amended in 1950 and 1952. We an! not
concerned with those amendments.
In 1957, the section was further
amentied by the Foreign Exchange Regulation
(Amendment)
Act,
1957 (Act No. 39 of 1957).
This amendment provided for depart-·
mental adjudication in respect of contravention of certain provisions of
the Act.
The section as amended read as under :
"23 (1) If any person contravenes the provisions of s. 4,
s. 5, s. 9 or sub-section (2) of s. 12 or of any rule, direction
or order made thereunder, he shall-
( a) be liable to such penalty not excec'ding three times
the value of the foreign exchange in respect of which
the contravention has taken place, or five thousand
rupees, whichever is more, as may be adjudged by the
Director of Enforcement in the manner hereinafter
provided or,
(b) upon conviction by a Court, be punishable with imprisonment for a term which may extend to two years,
or with fine or with 'both,
(lA) Whoever contravenes-
(a)
(b)
any of the provisions of this Act or of any ruk
direction. or order made thereunder, other than thos~
referred to in sub-section (1) of this section ands. 19 ·
shall, upon conviction by a ceurt, be punishable with
imprisonment for a term which may extend to two
years, or with fine or with both.
any ~ir.ection or order made under s. 19 shall, upon
conv1ct1on by a Court, be punishable with fine which
may extend to two thou.sand rupees."
By s. 23D it was provided that the Director of Enforcement shall for the
purpose of adjudicating under clause (a) of sub-section (1) of s. 23
A
B
c
D
E
F
G
H
A
B
D
E
F
G
ff
SUPDT •. LEGAL AFFAIRS v. GIRISH (Mathew, J.)
sos
hold an inquiry after notice to the person proceeded against and impo;c
a penalty, but if at any stage of the. inquiry he is of opinion that having
regard to the circumstances of the case, the penalty he is empowered
Ill impose would not be adequate, he shall, instead of imposing a iJenalty.
file a complaint in writing to the Court.
·
The argument of the respondents was that s. 23 provides for twu
different procedures for dealing with contravention of the provi~iuns of
the Act; that while persons contravening the provisions of th<) Act specllied in s. 23 (l) (a) have to be dealt with by the Director of Enforcement in the first inst':lnce and need face trial in criminal court only if he
is of opin.ion that having regard to circumstan~es of the case the penalty
he is empowered to impose would not be adequate, the persons contravening the other provisions of the Act are liable to be prosecuted in the
first instance in criminal court without an injury by the D:rcL·t.1r of
Fnforcemcnt which would give them the possibility to cscap~ prosecution in a criminal court.
In other words the argument was that p.?rsons
who have contravened the provisions specified in s. 23 (1 )(a) and arc
tound guilty by the Director of Enforcement need not face prosccutkm
in a criminal court if the Director is of opinion that the penalty he i;
empowered to impose would be adequate punishment, whereas, the persuns alleged to contravene the other provisions of the Act have necessarily to face prosecutioQ in criminal court without being given the
benefit of an inquiry by the Director of Enforcement and the opportumty to the delinque.nts to convince him that imposition of penalty by
him would be adequate ·punishment even if they are found guilty.
The question, therefore, is whether persons contravening the provisions specified in s. 23 (I) (a) are similarly situated with persons conLravenin~ the other provisions of the Act with respei;t to the purpose or
object of the Act or whether by reason of the nature of the offences
resulting from the contravention of the provisions ~pecified in s. 23 (1 )-
(a) the persons contravening them form a class by themselves distinct
from the persons contravening the other provisions of the Acf and
therefore the legislative judgment to deal with them under a different
procedurr was justified with reference to the ultimate purp9se of the
Ad
.
l'he preamble provides the key to the general purpose of the Act.
That purpose is the regulation of certain payments, dealings in foreign
exchange and securities and the import and export of currency and
bullion in the economic and financial interest of India.
The general
purpose or ob,iect of the Act given in the preamble may not show the
specific purpose of the classification made ins. 23(1) (a) ands. 23(1A).
The Court has therefore to ascribe a purpose to the statutory classifica"
tion and coordinate the purpose with the more general purpose of the
A.·t and with other relevant Acts and public policies.
For achieving
this the Court may not only consider the language of s. 23 but also
other public knowled~e abQut the evil sought to be remedied, the prior
law, the statement of the purpose of the change in the prior law and the
interna 1 legislative history. When the purpose of a challenged classifi-
\.1ltion is in doubt, the courts attribute to the classification the purpose
806
SUPREME COURT REPORTS
(19751 3 s.c.R.
thought to be most probable. Instead of asking what purpose, or purposes the statute and other materials reflect, the court may
a~:k what
1:onstitutionally permissible objective this statute and other . relevant
materials i.:ould plausibly be construed to reflect.
The latter aipp-roach
is the proper one in economic regulation cases.
The decisions dealing
with economic regulation indicate that courts have used the concept of
·purpose' and 'similar situations' in a manner which give considerable
leeway to the legislature.
This approach of ju~icial restraint and presumption of constitutionality requires that the legislature is given the
benefit of doubt about its purpose. How far a court will go in attribut-·
ing a purpose which though perhaps not the most probable is at least
concdvable and which would allow the classification to stand depends
to a certain extent upon its imag!nanve power and its devotion to the
theory of judicial restramt.
At this stage, it is necessary to sharpen the focus to understand
the real grievance of the respondents.
As already indicated, their
submission is that since they are similarly situated with persons contravening the provisions of the Act specified in s. 23, (1) (a), they
should have been included in that class· and dealt with by the Director
Enforcement in the first instance so that they might also have the
benefit of inquiry by him with the possible advantage of escaping with
penalty even if they are found guilty of the offences. Their grievance
therefore is that the classification made in s. 23 (1) is under-inclusive
and is, therefore, unreasonable.
Often times the courts hold that under-inclusion does not de111iy the
equal protection of laws under Article 14. In strict theory, this jnvolves an abandonment of the principle that classification must include:
all who are similarly situated with respect to the
purpose.
. This;
under inclusion is .often explained by saying that the legislature is
free to remedy parts of a mischief or to recognize degrees of evil and
strike at the harm where it thinks it m0st acute.
The Courts have recognised the very real difficulties under which
legislatures operate-difficulties arising out of both the nature of the
legislative process and of the society 'which legislation attempts. perennially to re-shape- and they have refused to strike down indis-
. criminately all legislation embodying classificatory inequality here
under consideratio•a .. _ Mr. Justice Holmes, in urging tolerance of
under-inclusive classifications, stated that such legislation should not
be disturbed by the Court unless it can clearly see that there is no
fair reason for the law which would not require with equal forc:e its
extension to those whom it leaves untouched.
See Missouri K. and
T. Rly. v. May(1i).
What, then, are the fair reasons for non-extensi0n ? What should a court do when it is faced with a law making
an under-inclusive classification in areas relating to economic
and
tax matters?
c
D
E
F
G
'TI1ere are two main considerations to justify an
under-inclusive
cl~ssification. First, administrative necessity.
Serond, the legislature
H
might not be fully convinced tnat the particular policy which it adopts /
(I) (1903) 193 U.S. 267 at p. 269.
A
B
c
D
E
F
G
H
!.UPDT. LEGAL AFFAIRS v. GIRISH (Mathew,!.)
807
will be fully successful or wise.
Thus to demand application of the
policy to all whom it might logically encompass would restrict the
opportunity of a state to make experiment. These techniques would
show that some sacrifice of absolute equality may be required in order
that the legal system may preserve the flexibility to evolve new solutions to social and economic p~oblems. The gradual and piece-meal
change is often regarded as desirable and legitimate th0ugh in principle
it is achieved at the cost of some equality. It would seem that in fiscal
and regulatory matters the court not only entertains a greater presumption of constitutionality but also places the
burden on the party
challenging its validity to show that it has nn reasonable basis for making the classification. This was the approach of this Court in State of
Gujarat v. Ar.ibica- Mills('). The Court said:
"The piecemeal approach to a general problem permitted by under-inclusive
classifications, appears · justified
when it is considered that legislative dealing with such prohlems is usually an experimental matter. It is impossible to
tell how successful a particular appr0ach may be, what dislocations might occur, what evasions might develop, what
new evils might be generated in the attempt. Administrative
expedients must be forged and tested.
Legislators, recognizing these factors, may wish to proceed cautiously, and
courts must allpw them to do so (37 California Rev. 341)."
The background of the amendment of s. 23 of the Act will
be
relevant for appreciating the reason for making the distinction between the two classes of contraventions.
From April, 1949 to DecenJber, 1952, the Rese.rve Bank was handling all cases including those
relating to unauthorized import, e'xport of gold and silver.
The Bank
had an enforcement section.
In 1952, the Central
Government
authorised the Customs and Central Excise officers to investigate and
prosecute cases if import or export of gold and silver in contravention
of the provisions relating to them. In May, 1956, the· Central Government took over the work relating to enforcement, i.e., the residuary
work done by tO.e Reserve Bank other than those entrusted to Customs
Department. . A Directorate of Enforcement was set
up in May,
1956 with the ,idea that there should be a specialized agency to deal
with specified categories of offences.
Between April, 1949 and April
1956, when the duty of enforcement was with the Reserve Bank, the
Bank had completed investigation in about 200 cases but prosecutions
could be launched in respect of 66 cases only and out of these 60
cases ended in convictions.
No prosecution could be launched in
respect of other cases in view of the fact that evidence legally necessary to secure conviction in a court was not forthcoming.
When the
work was transferred to the Enforcement Directorate of the Ministry
of Finance, its experience was also similar.
From May, 1956 till
about 1957, the Directorate had handled 832 cases. But prosecutions
could be launched only in respect of 32 cases. This w'as due to . the
fact that legal evidence necessary for establishing the cases beyond
(I) A.LR. 1974 S.C. 1300.
808
SUPREME COURT R.EPOR7S
[19751 3 s.c.tt
doubt in a court of law was not forthcoming partly because it was
iifficult to secure cooperation of the foreign collaborators in getting
the incriminating documents against the suspects and partly bemuse
the banks in fJreign countries were under no obligation to furnish
statements of accounts niaintained by the suspects in them.
.Faced
with this diflicuhy, the Government had to consider other ways of
enforcing the provisions of the Act more effectively. The Government,
after considering the pros and cons decided t'J provide for departmental enquiry and adjudication of contravention or certain provisions of
the Act by an authority specially constituted for that purpose.
In
the statement of Objects and Reas·Jns to the Foreign ExchangG Regulation Bill, 1957, it was stated ;
" .... The most important of _these amendments is th-:
one providing for departmental inquiry and adjudication of
torc1gn ex.change offences by an authority
constituted by
Government on the Sea Customs Act."
In short, the reason for the amendments made in 1957 was the
experience gained in the working of the Act till then. That experience
was that persons contravening the provision of the Act specified in s.
23 (1) (a) invariably escaped without punishment : firstly because,
successful pros•ecution of these ·0ffences in many cases · was
not
possibk for want of legal evidence; secondly because,
the criminal
cm1rts were not equipped with the training, expertize and experknce
necessary to deal . with the intricate and ingenious methods adopt<:d by
the persons contravenfog them.
..
The Government therefore thought that imposition of penalr'y by
departmental adjudicati0n would prove a more effective means of
checking these types of foreign-exchange offences as against the previous system of prosecution of all offences on the basis of the strict
standard of pro'Jf required for criminal prosection-which proof was
by and large, si::i much within the special knowledge of the offender
and so· much out of the reach of the department. It may be noted
that after the amendment in 1957, further ljmendments of s. 23 were
made in 1964 whereby sections 10, 17, I 8(A) and 18(B) were also
brought within the purview of s. 23(l)(a). The introduction of these
sc:ctions within s. 23(1)(a) was _the result of further experie'lce gained
during the succeeding years. It was only on the basis of the experience
gained by the working of the Act that a decision could be taken abo~t
the classification of offences in respect c; which a ti •. J by a cJiurt
would be expedient and those in respect of which summary pro1;edure visualized bys. 23(1) (a) might be necessary.
Generally speaking, therefure, the basis of the classification was
that in cases where there was likelihood of getting sufficiently unim·
peachable evidence as, for instance, in cases involving contravention
of sections 14, 13(2), 15 18, etc., where the Reserve Bank of India
as a specialized agency comes into the picture and be in possession
of relevant materials, those cases were left to be dealt with und1:r
s. 23(1A) by criminal courts.
A
H
c
D
F
G
H
A
c
D
E
F
SUPDT. LEGAL AFFAIRS v. '..JIRISH (Mathew, J.)
8 0 9
In paragraph 117 of the affidavit of Shri M. L. Sharma,
Under
Secretary, ~inistry of Finance, Department of
Economic
Affairs,
filed with t~e permission of this Court, the reasons why the legislature
:;cb:ted th~ contravention of certain provisions of the Act for being
dc:.ilt with 'by thr criminal courts in the first instance have been fully
stated.
According to that al1ldavit, broadly speaking, the classes of
offences whicl1 iLvc been brought under sections 23(1) and 23A arc
whfit may be tbrmccl as 'primary' offences and those brought under
o. 'iJ (l A) may be termed as 'secondary' o!Iences.
Primary offences
ale those which need detection and action at executive or field level
by the concerned specialized agency. There is greater need f'iir ta~ing
deterrent. measures in rcspe~t of these offences. It is not- a question
of the scricmsness or gravity of the offences.
Both pr}-;nary and
secondary o~·ences may be grave or serious and involve large an'iounts.
Hut the difference is th'at primary offences are distin,guished bv the
volume and areas ·of incidence and may need greater deterrence which
sometimes may lie in large pecuniary penalty and ·sometimes in criminal
punishment by w,ay of imprisonment. A delinquent who has become
an· insolvent may not feel any deterrent effect however large
the
p::cuniary penalty may be and such a ca~e may call for a sentence of
inm;·isonment.
In respect of
secondary offences there are already
built-in institutional checks laid down by the Reserve Bank ·Jr other
Government agencies.
As indicated above, where contraventions
<lo take place in regard to- other sections, there would normally
~e
adequate or reasonable documentary evidence, etc., and these will
facilitate prosecution in courts of Jaw.
-
We do not think that there is any m~rit in the contention that.the
classification made in s.23(1 A) is discriminatory.
Even according
to the respondents, it is the classification made in s.23(1 )(a) which
is under inclusive and is, therefore, unreasonable. If this Court were
to declare th~t the classification made in s. 23 (1) (a) is under inclusive
and therefore unreasonable, the result would be that contraventions
of the provisions specified ins. 23(l)(a) would also fall withins. 23(1A)
and would have to be dealt with by the Criminal Court-a consummation which the respondents devotedly want to avoid.
We do not think that• the High Court was right in holdin;i that
s. 23(1A) was bad. We set a~ide the order of the ~igh Comt and
allow the appeal.
·
A;1iJt'ii! allowed.
V.M.K
.;.
"