# DARA SINGH v. STATE THROUGH DIRECTOR OF ENFORCEMENT, NEW DELHI

- **Citation:** [1981] 1 S.C.R. 987
- **Court:** Supreme Court of India
- **Decided:** 1980-10-29
- **Case number:** Criminal Appeal No. 76 of 1974
- **Bench:** R. S. Sarkaria, E. S. Venkataramiah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/dara-singh-v-state-through-director-of-enforcement-new-delhi-8194
- **Pages:** 8

## Headnote

Foreign Exchange Regulation Act 1947-Section 23F-Scope of--order
imposing penalty not communicated to the accused-11on·payrr1e11t of penalty
within stipulated period-if amounts to co11trave11tio11 of section 23F-knowledge
of order 011 the date of appearance before Magistrate-if amo11nts to knowledge
of penalty.
An exparte order holding the appellant guilty of certain offences under
the Foreign Exchange Regulation Act and imposing penalty for such contraven ..
tion was passed by the Director of Enforcement. On completion of 45 daY!
of the issue of the order within which period the penalty was required to h~
paid, a complaint was lodged with the Judicial Magistrate, 1st class allegin1
that even though a
copy of the impugned
order had
been served on the
;ippellant, he failed to deposit the penalty and, that, therefore, he was liable
to be punished under section 23F of the Act.
Accepting the appellant's plea that no copy of the impugned order having
been served on him there was no ground to hold him guilty of contravention
of section 23F the Magistrate acquitted him.
The Magistrate, at the same
time, rejected the complainant's contention that even assuming that the im·
pugned order had not been received by the appellant he had come to know
of it on the date he appeared before the Magistrate and when the charge had
been framed against him and
his failure to pay the penalty
de~oite this
knowledge was enough to attract the provisions of section 23F.
Ht> held that
these allegations were stated neither in the complaint nor in the charee and,
therefore, the appellant could not be convicted.
Although the High Court, on appeal, upheld the finding of the Magistrate
that the impugned order had not been served on the appellant, it was of the
view that since the appellant had come to know about the order when he
appeared before the Magistrate but still had not paid the penalty within a
'reasonable time thereafter, he was liable to be punished under section 23F
of tlrn Act.
Allowing the appeal.
HELD: The appellant had not committed any offence punishable under
section 23F of the Act. [993G]
When the law lays down that non-compliance with an order would expose
the person against whom it is made to criminal liability, .it is reascn~ble to
hold that in the absence of proof of knowledge of the order no penal action
can be taken against him for non-compliance with that order. The information
or knowledge which he may gather about such order in the cuur~e of criminal
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proceedings instituted for non-compliance with it cannot be a substitute for
the knowledge of the order, which should ordinarily precede the institution·
of such proceedings. The High Court was, therefore, in error in the circums· !
tances of the case in
setting aside the order of acquittal passed by the
Magistrate and in finding the appellant guilty of the offence complained of.
[992H]
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The rules framed under the Act set out the procedure to be follo.ved
by the Director in holding an enquiry under section 23D of the Act. Although,
there is no rule requiring a person against whom an order is made to appear
before the Director on 1he date of pronouncement of bis order, rule 5 of the
Rules requires that a copy of the order passed under rule 3(7) should be
supplied free of charge to the person against whom the order is made.
Tn
the absence of a provision requiring the service of a notice on such a person
informing him that .the order would be pronounced on a speci~ed future date,
the only date · on which the order can
be deemed to have been effectively
made is the date on which he gets knowledge of the order either by supply
of a copy of the order or by any other means. The period of limitalion to
appeal cannot be computed from a date earlier than the date on which the
aggrieved party has knowledge of the order.
In the absence of proof of
knowledge of the order either by supply of its copy or in any other manner
the

## Text

DARA SINGH
v.
STATE THROUGH DIRECTOR OF ENFORCEMENT, NEW
DELHI
October 29, 1980
[R. S. SARKARIA AND E. S. VENKATARAMIAH, JJ.]
Foreign Exchange Regulation Act 1947-Section 23F-Scope of--order
imposing penalty not communicated to the accused-11on·payrr1e11t of penalty
within stipulated period-if amounts to co11trave11tio11 of section 23F-knowledge
of order 011 the date of appearance before Magistrate-if amo11nts to knowledge
of penalty.
An exparte order holding the appellant guilty of certain offences under
the Foreign Exchange Regulation Act and imposing penalty for such contraven ..
tion was passed by the Director of Enforcement. On completion of 45 daY!
of the issue of the order within which period the penalty was required to h~
paid, a complaint was lodged with the Judicial Magistrate, 1st class allegin1
that even though a
copy of the impugned
order had
been served on the
;ippellant, he failed to deposit the penalty and, that, therefore, he was liable
to be punished under section 23F of the Act.
Accepting the appellant's plea that no copy of the impugned order having
been served on him there was no ground to hold him guilty of contravention
of section 23F the Magistrate acquitted him.
The Magistrate, at the same
time, rejected the complainant's contention that even assuming that the im·
pugned order had not been received by the appellant he had come to know
of it on the date he appeared before the Magistrate and when the charge had
been framed against him and
his failure to pay the penalty
de~oite this
knowledge was enough to attract the provisions of section 23F.
Ht> held that
these allegations were stated neither in the complaint nor in the charee and,
therefore, the appellant could not be convicted.
Although the High Court, on appeal, upheld the finding of the Magistrate
that the impugned order had not been served on the appellant, it was of the
view that since the appellant had come to know about the order when he
appeared before the Magistrate but still had not paid the penalty within a
'reasonable time thereafter, he was liable to be punished under section 23F
of tlrn Act.
Allowing the appeal.
HELD: The appellant had not committed any offence punishable under
section 23F of the Act. [993G]
When the law lays down that non-compliance with an order would expose
the person against whom it is made to criminal liability, .it is reascn~ble to
hold that in the absence of proof of knowledge of the order no penal action
can be taken against him for non-compliance with that order. The information
or knowledge which he may gather about such order in the cuur~e of criminal
987
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proceedings instituted for non-compliance with it cannot be a substitute for
the knowledge of the order, which should ordinarily precede the institution·
of such proceedings. The High Court was, therefore, in error in the circums· !
tances of the case in
setting aside the order of acquittal passed by the
Magistrate and in finding the appellant guilty of the offence complained of.
[992H]
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The rules framed under the Act set out the procedure to be follo.ved
by the Director in holding an enquiry under section 23D of the Act. Although,
there is no rule requiring a person against whom an order is made to appear
before the Director on 1he date of pronouncement of bis order, rule 5 of the
Rules requires that a copy of the order passed under rule 3(7) should be
supplied free of charge to the person against whom the order is made.
Tn
the absence of a provision requiring the service of a notice on such a person
informing him that .the order would be pronounced on a speci~ed future date,
the only date · on which the order can
be deemed to have been effectively
made is the date on which he gets knowledge of the order either by supply
of a copy of the order or by any other means. The period of limitalion to
appeal cannot be computed from a date earlier than the date on which the
aggrieved party has knowledge of the order.
In the absence of proof of
knowledge of the order either by supply of its copy or in any other manner
the person failing to pay the penalty cannot be proceeded against under
section 23F. [991H, 992FJ
In the instant case the Magistrate and the High Court refused to accept
the plea nf the Director that a copy of the impugned order had been served
on the appellant. Neither on the date of the complaint nor on the d<1te on
which process was issued by the Magistrate had the appellant knowledge of
the order imposing the penalty; nor did the charge state that the impugned
order had been communicated to him and that he was being tried for noncompliance with that order .
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 76 of
1974.
.
Appeal by Special Leave from the Judgment dated 9-11-1973 of
the Delhi High Court: in Criminal Appeal No. 174 of 1972.
R . L. Kohli (Amicus Curiae) and R. C. Kohli for the Appellant.
Hardayal Hardy, Miss A. Subhashini and R. · N. Poddar for the
Respondent.
The Judgment of the Court was delivered by
G
VENKATARAMIAH, J.-This appeal by special leave is filed against
the judgment of the High Court of Delhi in Criminal Appeal No. 174
1972
convincting the appellant,
Dara
Singh,
of an offence
punishable under section 23F of the Foreign Exchange Regulation Act, 1947 (Aet No. 7 of 1947)
(hereinafter referred to as
'the Act') and sentencing him to imprisonment for a term of one year
H
·with a direction that the said sent:ence should
be served by him
concurrently with the sentence of imprisonment for life imposed on
him in another case on a charge of murder.
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DARA SI~GH v. DIRECTOR OF ENFORCEMENT CVenkataramiah '·)
98 9
The facts leading to this appeal can be. summarised thus : On
arch 28, 1963 foreign currencies amounting to £ 185
and U.S.
13060 besides Indian currency amounting to Rs. 1,300 were seized
from the appellant by the Railway Police at the Railway Station
-at1 Sangrur. Thereupon proceedings were initiated against the appel·
lant for contravention of sections 4 and 9 of the Act under section
23 (1 )(a) read with section 23D of the Act before
the Director
·of Enforcement of Foreign Exchange Regulation appointed by the
·Central Government for · the purpose of enforcing .the provisions of
the Act.
By an ex-parte order dated May 12, 1967, the Director
of Enforcement held the appellant guilty o~ contravention of provi·
sions of section 9 of the Act read with the Central Government
Notification No. F. 1 (67-EC/ 57, dated 25-9-1958 as amended upto
u-3-1961) and section 4 (1)
of the Act and .imposed on him a
penalty of Rs. 6,000 which the appellant was directed to pay to
the Directorate of Enforcement within forty-five days of the issue of
the order. As the penalty was not paid within forty-five days from
·the date of the issue of the order of the Director -of Enforcement, a
complaint was lodged on November 13, 1969 by the Deputy Director
of Enforcement before the Judicial Magistrat.e, First Class, New Delhi
under section 23F of the Act. In the complaint it was specifically
· stated that a copy of the order of the Director of Enforcement imposing the penalty on the appellant had been served on him on May 4,
1968 and that as the appellant had not deposited the penalty with the
Directorate of Enforcement within forty-five days from the date of
the order, the appellant was liable to be punif>hed under section 23F
of the Act. The appellant denied that he had been served with the
-copy of the order of the Director of Enforcement imposing penalty on
him and further stated that he did not know that he had to pay the
penalty in question. The learned Magistrate acquitted the appellant by
bis order dated July 29, 1972 holding that it had μot been established
that the order passed by .the Director
of En.forcement
had been
served on the appellant on May 4, 1968 as alleged in the complaint
antl that, therefore, there were no groun~s to hold
the appellant
guilty of contravention of s~ction 23F o! the Act which read_ thus :
"23F. If any person fails to pay the penalty imposed by
the Director of Enforcement or the Appe11ate Board or the High
Court, or fails to comply with any of their directions or orders,
he shall, on conviction berore
a Court,
be
punishable with
imprisonment for a term which may extenp to two years, or
with fine, or with bo~h."
The Magistrate while acquitting the appellant rejected the plea
of the complainant that the appellant wa·s liable to be punished under
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section 23F since he had in any event come to know of the order of
the Director of Enforcement on the date on which he appeared in the
Court i.e., on
August
7, 1970 and
the charge
had been
framed by !by Magistrate on March 4, 1972 after the expiry
of a period of forty-five days from the date on which the appellant
had appeared in the court by observing that "he could not be convicted in .the cas~~ on that count because these allegations
are not
~ontained even in the charge much less in the complaint". Aggrieved
by the decision of acquittal of the Magistrate, the Director of
Enforcement filed an appeal before the High Court of Delhi with
the special leave of that court granted under section 417 ( 3) of the
Code of Criminal Procedure. As the appellant who was undergoing.
imprisonment for life imposed on him in another case at the Central
Jail Ferozepur did n.ot make any arrangement for his defence before
the High Court, an advocate was appointed
as
amicus curiae to:
assist the court in .the appeal.
After hearing learned counsel who
appeared in the case,
the High Court by its judgment dated
November 9, 1973 reversed the order of acquittal passed by the
Magistrate, found the appellant guilty of the offence punishable
under section 23F of the Act and sentenced him to imprisonment for
a term of one year.
While doing so, the High Court agreed with
the finding of the Magistrate that the
order of the Director of
Enforcement imposing penalty on the appellant had n1ot been served
on the appellant on May 4, 1968 as alleged in the complaint but it
was of the view that since the appellant had come to know about
the order on August 7, 1970 when he appeared before the Magistote
and he had not paid the penalty within a reasonable time thereafter,
he was liable to be punished under section 23F of the Act. The
relevant part of the judgment of the High Court reads thus :
"The order of acquittal made by the leamed trial Magistrateproceeds, in our opinion, on an altogether erroneous view of
the provisions or section 23F of the Act. For proving the guilt
of Dara Singh in\ the light of the charge framed against him,.
it had only to be established
that he had failed
to pay the·
penalty imposed by the Director •of
Enforcement.
As was,
ordered by the Director of Enforcement the penalty had to be·
paid within 45 days from the date of issue of the adjudication·
order.
Obviously, however, no payment could be made unless
the person on whom the penalty was imposed had come to know
about the order. At the latest Dara Singh came to know about
the adjudication order on: August 7, 1970, if not earlier.
Heshould have, therefore, paid the penalty within
a reasonable
period from that date and in any case within 4'.5 days from
r DARA SINGH v. DIRECTOR OF ENFORCEMENT (Venkataramiah J.)
991
the said date.
The penalty not having been paid or deposited
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by Dara Singh, he was clearly guilty of contravention of the
adjudication order made by the Director of Enforcement and
should have been, convicted under section 23F of the Act".
The question which
arrises
for consideration in this appeal is
whether the High Court was right in the circumstances of the case
in finding the appellant guilty of the offence in question. It is
necessary at this stage to refer briefly to some of the provisions of
ithe Act and the Adjudication Proceedings antcf Appeal Rules, 1957
(hereinaf:ter referred to as 'the Rules') framed under section 27- of
the Act.
Under Clause (a) of sub-section (1) of section 23 of
the Act, the Director of Enforcement is empowered to levy penalty
not exceeding three times the value of the foreign exchange in r_espect
of which the contraventio~ has taken place, or five thousand rupees,
whichever is more, as may be adjudged by him in th~ manner provided in the Act if any person is found to contravene the provisions
of section 4, s~ction 9 or any of the other provisions referred to in
section 23 (1 ~. Section 23D of the Act requires
the Director of
Enforcement to hold an inquiry in the prescribed manner against
any person who is liable to be proceeded against under clause (a) of
section 23 ( 1) after giving him a reasonable opportunity of being
heard and if on such inquiry, the Director of Enforcement is satisfied
that the person has committed the contravention, he may impose such
penalty as. he thin!ks fit in accordance with the provisions of section 23
of the Act. An appeal lies to the Appellate Board under section 23E
of the Act against the order of the Director of Enforcement imposing
penalty. Rules 3, 4 and 5 of the Rules -set out the procedure
to be followed by the' Director of Enforcement in holding the enquiry
under section 23D of the Act.
Rule 3 of the Rules among others
provides for the issue of a notice to the person against whom proceedings are initiated for contravention of the provisions referred
to in section 23 ( 1) of the Act and for giving an opportunity to him
to defend himself in the proceedings before the Director of Enforcement.
Sub-rule (7) of Rule 3 of the Rules provides that if, upon
consideration of the evidence produced befon: the Director, the
Director is satisfied that the person has committed the contravention, he may, by order iq writing impose such penalty as he thinks
fit in accordance with the provisions of clause (a) of sub-section ( 1)
of section 23. There is no rule requiring the person against whom
an order is made to appear before the Director of Enforcement
on any specified date on which the order would be pronounced in
his presence.
Rule 4 of the Rules requires the Director of Enforcement to specify in his order the provisions of the Act or of the Rules,
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directions or orders made thereunder in respect
of which contravention has taken place and to give brief reasons for his decision.
Rule 5 of the Rules requires that a copy of the order made under
sub-rule (7) of Rule 3 shall be supplied free of charge to the person
against whom the order is made and that every copy of such order
shall state that the copy is supplied free of charge for the use of
·the person to whom it is issued and that an appeal lies against that
order to the Appellate Board under section 23E within thirty days
of the date of the order.
Rule 6 of the Rules s'.ates that every·
appeal presented to the Appellate Board under section 23E of the
Act shall be in the form of a memorandum signed by the appellant
· and the memorandum shall be accompanied by a copy
of
the
order appealed against.
Having regard to the aforesaid provisions of the Act an:d the
Rules, it has to be held that the service of a copy of the order made
under sub-rule (7) of Rule 3 of the Rules on the person against
whom the said order is made is not an empty
formality. In the
absence of a provision of law requiring the Director of Enforcement
to pronounce his order in the presence of t.he person against whom
it is made, the only date on which it can be d~emed to have been
effectively made is the date on which he gets the knowledge of the
order either by the supply of a copy of the order or by any o~her
means because first, the statute provides a remedy to the person
against whom the order is made by way of an appeal to be preferred
within the prescribed period from the date of the order to the
Appellate Board under section 23E of the Act and secondly noncompliance with the order would expose him to the punishment
that may be imposed on him
under
section
23F of the Ac~.
It would be wholly unjust to
compute the period
of limitation
to file
an appeal from
a date earlier
than
the
date
on
which the party who is entitled to prefer an appeal
has the
knowledge of the order.
In cases where an order which is appealable is not pronounced in the presence of the person against whom
it is made, it should be assumed that unless there is any specific provision of law to the contrary the date of his knowledge of the order
is the date of the order for the purpose of computing the period of
lirnita'ri.on irrespective of the date on which_ it is actually passed.
(Vide Raja Harish Chandra Raj Singh v. The Deputy Land Acquisi~
tion Officer & Anr.1 )
It is equally so even in the case of an order
non-compliance of which. would lead to prosecution and consequent
imposition of penalty. When the law lays down1 that non-compliance
with an order would expose the person against whom it is made to
(1) [1962] 1 SCR 676.
"" DARA SINGH v. DIRECTOR OF ENFORCEMENT (Venkataramiah J.}
993
-criminal liability, it is reasonable 1o hold that in the absence of proof
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of his knowledge of the order no penal action can be taken against
hi.m for non..(:ompliance with it.
The irfl'ormat~on or knowledge
' which he may gather about such order in the course of the criminal
1
proceedings instituted for non-compliance with it cannot be a substitute for the knowledge of the order as mentioned above, which should
ordinarily precede the institution of such proceedings.
· Ji°
Under section! 23F of the Act if any person fails to pay the
penalty imposed by the Director of Enforcement, he on conviction
is liable to be punished with imprisonment which may extend to two·
years or with fine or with both. No person can be convicted under
section 23F for failure to pay the penal~y imposed on him by the
Director of Enlforcement ·when he is not at all informed earlier about
the imposition of the penalty. Hence in the absence of proof of his
knowledge of the order either by the supply of the copy or the order
under Rule 5 of the Rules or in any other manner, it cannot be said
that such person has failed to pay the penalty imposed on him under
the Act and has become liable to be proceeded against under section
23F.
As mentioned earlier, the specific case set out in the complaint
was that a copy of the order of the Director of Enforcement had been
served on the appellant on May 4, 1968 and that both the ·Magistrate
and the High Court refused to accept it.
The finding of the High
Court is that the appellant must have come to know of the order on!
August 7, 1970 when he appeared before the Magistrate. It is,'
therefore, obvious !hat on the date on which the complaint was filed
before the Magistrate i.e. on November 13, 1969 or on the date on
which process was issued by .the Magistrate on taking cognisance ot
the case to the appellant to appear before him pursuant to which he
appeared before him on August 7, 1970, the appellant had not even
the knlowledge of the passing of the order imposing penalty on him ·
let alone the specific provision of the Act or the .Rules which according to the order he had violated and the reasons in support of tbe
order.
The appellant bad not,
therefore,
committed any offence
punishable under section 23F of the Act on those dates. The Magistrate could not, therefore, take cognisance of any offence punishable
under section 23F of the Act on the date on which he issued process
to the appellant to appear before him.
Even the charge framed
against the appellant did not state that the order imposing penalty
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on him had been communicated to him onl August 7, 1970 and that . H
· he was being tried for an offence. punishable under section 23F for .
non-compliance with the order so communicated on AuguSt: 7·, 1910.
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The charge only contained the gist of what was stated in the complaint
ow November 13, 1969.
The High Court was, therefore, in error
in the circumstance~s of the case in setting aside the order of acquittal
passed by the Magistrate and in finding the appellant guilty of the
offence complained of.
In the resuit, the appeal is allowed and the conviction of the
appellant and the senten{ce imposed on him by the High Court are set
aside.
The order of acquittal passed by the Magistrate· is restored.
At the time of granting special leave to appeaJ. in this case, as
it was stated that the appellant had been acquitted of the charge of
murder, the sentence of imprisonment for life had been cancelled
and that he had been undergoing imprisonment awarded by the High
Court under section 23F of the Act, ,this Court granted bail to the
appellant to the satisfaction of the trial court and directed that he
should be released on bail unless he was required to be in prison in
connection with or on accounjt of any o.ther case.
I! is not known
whether the appellant was in fact released on baiil pursuant to the
above order. If he is on bail, his bail bond stands cancelled.
Ap11eal allowed.
P.B.R.