Appellants Bhawandass, Abdus Sattar and Ibrahim were tried and convicted by the Foreign Exchange Tribunal, Karachi, under section 12(1) read with section 23 of the Foreign Exchange Regulation Act Vll of 1947 (hereinafter referred to as the Act), upon failure to repatriate 2000 within four months in terms of the declaration executed while exporting the cinemato graphic film "AJAB KHaN" dubbed in Swahili language to East Africa. Appellant Bhawandass was sentenced to pay a fine of Rs. 25,000 and in default to suffer simple imprisonment for 12 months. Appellants Abdus Sattar and Ibrahim were sentenced to pay a fine of Rs. 8,000 each and in default to suffer simple imprisonment for six months. They have appealed against their conviction.
2. The appellants and one Ishaq, who has absconded, were partners of a firm carrying on business in the name and style of "Falcon Film Corporation". In the year 1963, this firm exported cinematographic film "AJAB KHAN" dubbed in Swahili language to Nairobi in East Africa and executed a declaration (Exh. 2 on 5th February 1963, to repatriate .000 within four months from the date of shipment. The declaration was signed by Bhawan Dass on behalf of the firm as its partner.
Pursuant to the declaration, 750 were repatriated in instalments of 500 and 250 on 23rd April 1963 and 25th July 1963, respectively. However, 1250 still remained to be repatriated but the firm failed to repatriate this amount, whereupon a' show-cause notice was issued to the appellants, in which they were accused of contravening the provisions of section 12 (1) of the Foreign Exchange Regulation Act for failure to repatriate 1250 and they were asked to submit their reply within 15 days from the date of receipt of the notice. Appellant Bhawan Dass submitted his explanation vide letter dated 1st May 1967 and his excuse was that the full amount could not be repatriated as it was a new venture and no distributor was prepared to buy the film for that amount, and it was only on its exhibition that 37,548.08 shillings were earned, out of which 17,548.08 shillings were defrayed on publicity, customs duty and other miscellaneous expenses and the remaining 20,000 shillings- *were repatriated to Pakistan. He, however, requested that as the balance amount could not be earned, the matter be dealt with leniently and the notice should be discharged. Appellant Ibrahim gave the excuse that he was a sleeping partner in the firm and was not aware of the state of accounts and in the circumstances pleaded that the partner having the control of the business should be asked to explain and to account for the non-repatriation of the balance amount. Not being satisfied with these explanations, the State Bank of Pakistan lodged a complaint against the appellants and Ishaq with the Foreign Exchange Tribunal, Karachi, on 31st July 1967. The appellants were summoned to appear and answer the accusation and except for Ishaq, who absconded, the appellants appeared to stand their trial.
3. The gravamen of the charge is, that having exported the the film "AJAB KHAN" upon the undertaking to repatriate .2000, the appellants had failed to repatriate .1250 within the prescribed period of 4 months and thereby contravened the provi sions of section 12(1), punishable under section 23 of the Act. This was also the prosecution case in the show-cause notice (Exh. 3).
Appellant Bhawan Dass, when examined under sec tion 342, Cr. P. C., admitted exporting the film, declaring its value as 2000 and of having given the declaration (Exh. 2) which was signed by him, in which the firm had undertaken to repatriate the above amount within 4 months. His expla nation for not remitting the balance amount was that he had himself gone to East Africa to arrange for the disposal of the film and had given it on rental basis to Pan African Filin Distributors, from whom he received 750 which he remitted to Pakistan, and nothing further could be realised till such time as he stayed there but after his arrival in Pakistan he received a statement of account (Exh. 15) in June 1964, from A. S. G. Kasim & Co., Advocates, in which 189.19 shillings were shown as due to him (Bhawan Dass). He also filed Exh. 16, which is another statement of account along with other supporting documents.
4. Appellants Abdus Sattar and Ibrahim adopted the defence of Bhawan Dass. z\ppellant Bhawan Dass pleaded not guilty while appellants Abdus Sattar and Ibrahim pleaded guilty to tire charge and prayed for mercy. Appellant Bhawan Dass examined Shaft Muhammad, Bashir Ahmad, Imam Khan and Dawood Haji in defence.
5. The Prosecution examined C. D. Butt, M. T. Kaikobad and M. A. Suleman. C. D. Butt had lodged the complaint on behalf of the State Bank of Pakistan and has testified to the prosecution case. He produced the declaration and the show- cause notice and the explanations of Bhawan Dass and Ibrahim (Exits. 4 and 5). According to him, the excuse for not remitting the balance amount of 1250 was not found satisfactory and it was therefore, that the complaint was lodged against the appellants. He was not cross-examined on any aspect of the prosecution case and only one cyiestion was put to him on the point as to on what basis was the film exported and his reply was that it was sent on "consignment basis". Appellant Bhawan Dass did not cross-examine this witness with reference to any of the documents filed by him on the plea taken by him in defence.
The next witness M. T. Kaikobad is an accountant in the Central Bank of India and according to him, Falcon Film Corporation had opened an account in the bank and that this firm had filed the declaration ,(Exh. 2) and exported the film "AJAB KHAN" to East Africa and further that two sums viz., 500 and 250 were received from East Africa, M. A. Subhan is the Investigating Officer, who had investigated . the case after obtaining permission from the Court.
6. Shaft Muhammad, a defence witness, has produced Exh. 25, which is an agreement between appellant Bhawan Dass and Pan African Film Distributors. His evidence is not at all helpful to appellant Bhawan Dass. Bashir Ahmad, another defence witness, who is an accountant in the State Bank of Pakistan, has produced an account of the earnings of Pakistani films exported to East Africa. His evidence is also of no help to Bhawan Dass. The third defence witness is Imam Khan and according to his evidence, the firm where he was employed as a manager, produced a cinematographic film "NILOFAR" dubbed in Swahili language which was exported to Nairobi but on account of language defect it did not sell for any price and ultimately it was brought to Pakistan with the permission of the State Bank. He also testified that the film "AJAB KHAN" suffered from this defect and it also failed, meaning thereby to bring returns. This statement was based on the information conveyed to him by Dawood Haji, who is the last defence witness, and according to him, while! he was in Nairobi in 1964, lie was told that the film "AJAB KHAN" had not faired well as it had only fetched Rs. 10,000 to Rs. 12,000. His evidence is also of no avail. The evidence of these defence witnesses does not mitigate the offence against the appellants, moreover, according to the admission of appellant Bhawan Dass in his reply (Exh. 4) to the show-cause notice, this film had earned 37,548.08 shillings which is much more than what has been estimated by the last two witnesses.. It is even more than the amount remitted to Pakistan. The appellants also failed to repatriate 189.19 shillings which were due to them. No question was put to C. D. Butt to establish whether any permission was taken to spend out of the foreign exchange earnings and from the docu ments filed by appellant Bhawan Dass there is indication that the film had given substantial returns. Whether it was to the extent of 2000 or more, is not possible for the prosecution to establish, but at any rate even according to the figures given by appellant Bhawan Dass it was 37.548.08 shillings equivalent to about 1886. The film was exported on'consign ment basis' upon the declaration of its value as 2000 which the appellants had to repatriate, irrespective of the expenses incurred by appellant Bhawan Dass on account of his own per sonal efforts. The documents filed by him in his defence are not helpful to relieve him o^ the undertaking to repatriate the balance amount of 1250 in the absence of any approval from the State Bank of Pakistan which was not asked for.
7. Mr. Khalilullah, the learned counsel for the appellant Bhawan Dass, was unable to advance any good reason for holding that this appellant had not violated the undertaking. Mr. M. A. Hamid on behalf of appellants 2 and 3 contended that the plea of guilt of these appellants was of no effect as to what they had pleaded to, was not an offence since the prosecution had failed to establish the requisite intention as required by subsection (2) of section 12 of the Act. He laid emphasis on the following words in this subsection :-- "Do or refrain from doing any act with intent to secure."
In support of his contention he cited M. A. fabbar Chowdhry v. The Stale and another (1), Taw hid Alt Sanlar v. The Slate (2) and Abdul Rashid Mir v. The Slate (3).
8. These cases no doubt support the above contention, but in my opinion, the ratio decidendi of these cases cannot be pressed into service in the light of the Judgment of the Supreme Court in Kalipada Shaha v. The State (4). In that case, Kalipada Shaha had exported fish to India but had failed to repatriate the proceeds of sale to Pakistan within 2 months pursuant to the declaration given by him. He was prosecuted for having failed to fulfil the undertaking, found guilty and convicted under section 23 of tiie Act. His appeal to the High Court was also dismissed but leave to appeal was granted by the Supreme Court on the following two grounds :-- "(1) That the provision of the Act under which they were convicted was void at the time the alleged offence was Commit ted ; and
(2) that the State Bank of Pakistan had no jurisdiction to fix the period for repatriation of the proceeds of sale and that since the offence was alleged to consist in not bringing the foreign exchange to Pakistan within that period, the convic tions were wrong."
Muhammad Munir, C. J., as he then was, delivered tiie majority opinion. The contention of the counsel qua the second ground as stated in the judgment is as under :-- "What is contended is that because the exporter is required by section 12 to make a declaration that the full export value of the goods will be paid within the 'prescribed period', the time within which the sale proceeds are to be repatriated can be fixed by the Central Government and not by the State Bank." and the discussion centred around the poiut whether State Bank of Pakistan could specify the period and the following conclusion was reached :-- "it is true that the period has not been lixed by the rules but by the State Bank of Pakistau, but on its being specified by the Bank it becomes a period prescribed by the rules within the meaning of section 2."
Accordingly, the conviction on the charge for failure to repatriate the proceeds of sale to Pakistan was maintained and it was for the violation of the declaration given under section 12(1) of the Act.
Cornelius, J., as he then was, while agreeing with
(1) PLD 1964 Dacca 20 (2) PLD 1969 Dacca 395
(3) 1968 Cr. L J 830 (4) PLD 1959 SC (Pak.) 322 the conclusion of the majority opinion gave a separate judgment and supported the conviction on the basis of the violation of the provisions of subsection (3) of section 4 of the Act and not section
12. In this connection, it will be pertinent to quote the relevant observations appearing at page 328 of the report :-- "In these circumstances, it seems to me that the true and substantial offence committed by the accused persons is that, having been enabled, through the permission granted to them to export the fish, to acquire foreign exchange as the proceeds of the sale of the fish in India, upon condition that they would repatriate that money, they have failed to repatriate it alto gether. Such an action is rendered punishable by section 4 of the Foreign Exchange Regulation Act, 1947, from subsection (3) of which the following relevant portion may be usefully quoted here :-- '(3)......... where any person has been permitted condi tionally to acquire foreign exchange, the said person shall not fail to comply with any condition to which the permission granted to him is subject, and where any foreign exchange so acquired cannot be so used, or, as the case may be, the conditions cannot be complied with, the said person shall with out delay sell the foreign exchange to an authorised dealer'."
Again while holding that the case did not fall within the ambit of section 12 of the Act, it was held as under : -- "In my opinion, subsections (1) and (2) of section 12 should be read together in order to ascertain the offences which are involved in violation of the 'prescribed period' or the 'prescribed manner'. By subsection (I) a prohibition is placed upon the export of goods unless the exporter makes a declaration to the prescribed authority undertaking to repatriate the 'full export value' within the prescribed period and in the prescribed manner. Here the declaration as required by the law has been made ; it includes an undertaking as required, and in terms of the impugned rule. Is' breach of the under taking a contravention of the 'rule'? That is by no means clear to me, for it is not generally correct to construe an offence out of breaches of undertakings. Therefore, I think it is necessary to see whether the section expressly creates offences, and such a provision is found in subsection (2). Sub section (2) prohibits actions by the person in question, L e. the exporter, which might have the effect of delaying the sale to an extent which is unreasonable having regard to the ordinary course of trade, or obtaining payment for the goods otherwise than in the prescribed manner, or otherwise than in full. There is a proviso added to the subsection which is significant. It reads as under :-- "Provided that no proceedings in respect of any contravention of this subsection shall be instituted unless the prescribed period has expired and payment for the goods representing the full amount as aforesaid has not been made in the prescribed manner."
If, therefore, in the relevant circumstances, no offence can be found under section 12 except in offence of one of the two kinds specified in subsection (2), then it falls to be observed that it is neither charged nor proved that there has been any delay in the sale of the goods, or that payment has been received otherwise than in the prescribed manner or otherwise than in full. If there had been proof on either or both of these points then it would have been important that the proceedings should not have been instituted until the expiry of the 'prescribed period'.
9. The minority observations of Cornelius, J. do not appear to have been accepted by the majority opinion. In this connec tion I may, with utmost respect, reproduce what has been held in regard to minority observations by the Full Bench of the erstwhile High Court of West Pakistan in Malik Muhammad Usman v. The State (1): "I now come to an aspect of this reference which has placed this Bench in a somewhat embarrassing position, namely, the contention of the learned Attorney-General that the obser - vations made by Cornelius, J. (as he then was) in Dosso's case are binding on this Court. With the utmost respect, it appears to me that although they are, of course, entitled to the very highest respect, the remarks in question are not the decision of the Supreme Court within the meaning of Article 63 of the Constitution, which lays down :-- 'Any decision of the Supreme Court shall, to the extent that it decides a question of law or is based upon or enunciates a principle of law, be binding on all other Courts in Pakistan'."
10. In this view of the matter, it is the majority opinion which is the decision in the case ; and it has upheld the convic tion for violation of declaration given under section 12 (1) of the Act for failure to repatriate the sale proceeds to Pakistan. Even otherwise Cornelius, J. also upheld the conviction and dismissed the appeal but under a different section. In that view of the matter also, the conviction will hold good in the instant case. Neither in M. A. Jabbar Chowdhry, nor in Tawhid Ali Sardar was this Supreme Court case considered. Agaii^in M. A. Jabbar Chowdhry, no reason was given why reliance was placed on section 12 (2) of the Act. The observa tions in this case were followed in Tawhid Ali Sardar and so also in Abdul Rashid Mir, where Raymond, J., as he then was, considered the judgment of Cornelius, J. in Kalipada Shaha, and particularly to the following observations in it :-- "Subsection (2) prohibits actions by the person in question, i. e., the exporter, which might have the effect of delaying the sale to an extent which is unreasonable having regard to the ordinary course of trade, or obtaining payment for the goods otherwise than in full," and held that there was no contravention of section 12 (2) of the Act. However, I may respectfully point out that there is no
(1) PLD 1965 Lah. 229 N consideration of the majority opinion which is the decision of the Supreme Court in that case, nor of the fact that conviction was upheld under subsection (3) of section 4 of the Act even by Cornelius, J. The cases cited by Mr. M. A. Hamid can therefore, be of no assistance in the context of the decision of the Supreme Court in Kalipada Shaha. I may here also repro duce with advantage the observations of Rahman, J. in Rameshwar Lal Agarwala v. The State (1) :-- "The offence, therefore, did not consist in the exporting of the goods but in the non-repatriation of the amount into Pakistan for the export in question."
These observations follow the view taken by the Supreme Court in Kalipada Shaha. Accordingly the plea fails and is rejected. Appellants Abdus Sattar and Ibrahim are vicariously liable as partners of the firm even though the declaration was signed by appellant Bhawan Dass ; therefore, all the three appellants were rightly convicted.
11. Lastly, the quantum of fine appears to be excessive Appellant Bhawan Dass did remit 750 though he was under an obligation to remit 2000. The sentence of line thus imposed on him is disproportionate to the balance outstanding. Accord ingly I would reduce the amount of line in his case from Rs. 25,000 to Rs. 15,000 but maintain the sentence in lieu of fine. The case of the other two appellants, namely Abdus Sattar and Ibrahim, is on a different footing. They had no control over the actions of appellant Bhawan Dass and they are entitled to a lenient treatment. Accordingly I would reduce the sentence of fine in their case from Rs. 8,000 to Rs. 3,000 each but maintain the sentence in lieu thereof. Subject to this modification in the sentence the appeal stands dismissed. The appellants are ordered to be taken into custody to serve out the sentence in lieu of fine if not paid. .
(1) PLD 1959 Dacca 701