1. These are the appeals against the judgment of the Additional Sessions Judge and Foreign Exchange Tribunal, Karachi, convicting the appellants for an offence under section 12(1)/23 of the Foreign Exchange Regulation Act and sentencing each of them to pay a fine of Rs. 2000 or in default to undergo R. I. For 6 months.
2. The appellants along with 3 others are said to be the partners and carried on business in the name of Mangalore Leather Works. They had exported Chappals worth Rs. 4,790 as per GRPI-1 Form No. 620945 and had given an undertaking in writing to repatriate the export value of the good within 4 months but failed to do so. The GRPI-1 form was signed by Nurddin Jehangir who was the Managing Partner of the firm. Since the Amount was not repatriated notices were issued to all the six partners. Appellants Shamim Ahmed and Jamilur Rehman only submitted their explanations, while the others did not make any reply. The explanations submitted by the two appellants were not found satisfactory. Consequently, a complaint was filed against all the partners. The present three appellant were tried as the remaining partners had absconded. The appellants, proclaimed their innocence and denied that they were either the partners of the firm or had exported the goods. Jamilur-Rehman, however, stated that Nuruddin was his friend and he bad received 410 pairs of Chappals from the consignee at Kuwait for sale and he gave the Chappals to one Abdul Saleh at Kuwait and asked him to pay the sale proceeds or the Chappals to the consignee but he did not sell the goods.
3. At the trial the prosecution examined Aziz Jawed Clearing and Forward--ing agent, Mr. Abdul Rauf Deputy Assistant Controller, State Bank, Mr. Saghir Hussain an Officer of Habib Bank and Mr. Manzoor Ahmed S. H. O. While the appellants did not examine any witness in defence.
4. There can be no manner of doubt that leather Chappals worth Rs. 4790. Were exported to Kuwait by the firm known as Mangalore Leather Work and an. Undertaking was given to repatriate the export value of the goods within four months but nothing was repatriated. This has been established by the evidence on record. In the first place there is the evidence of Aziz Jawed Clearing and Forwarding Agent. He stated that Mr: Nuruddin partner of Mangalore Leather Works handed over to him shipping documents is respect of 3 cases to be shipped to Kuwait against GRPI-L form No. 620945 dated 25th May 1966. He prepared the shipping bills and filed the same before the custom authorities. The goods had been shipped by s.s. Dwarka vide gill of Lading No. 2- K dated 27th May 1966. He produced the Bill of Lading Exh. 6 and the Shipping Bill Exh.
8. His evidence has not been challenged.
5. Then is the evidence of Mr. Rauf Ahmed, Deputy Assistant Controller of State Bank, who stated that the accused persons mentioned in the com--plaint exported leather Chappals to Kuwait for sale against GRPI Form No. 620945 and declared their value as Rs. 479/ and undertook to repatriate the full amount to Pakistan within a period of four months from the date of the shipment through Habib Bank Ltd. Karachi, but they failed to repatriate the amount. Notices were issued to all the partners but only Shamim Ahmed and Jamilur Rehman sent the replies which are Exh. 17 and 18 respectively.
6. He further stated in cross-examination that GRPI form was signed by Nuruddin Jehangir as Managing Director of the firm. Copy of the partnership deed Exh. 20 was alto brought on record in the cross---examination, by the learned counsel for Shamim Ahmed appellant.
7. The next witness is Mr. Saghir Hussain an officer of Habib Bank. He stated that the firm Manglore Leather Works had an account with the Cloth Market Branch of the Bank and on 27th May 1966, the firm had exported to the consignee leather Chappals consisting of three cases against GRPI Form Exh. 22 which bore the signature of Nuruddin Jehangir and was certified by the Back. He further stated that on 3-6-66 the accused persons submitted export documents to the Bank for collection of the sale proceeds of the consignment exported to Kuwait and in that the name of the con-- signee was Messrs A.I Abdul Rehman Sultan Kuwait. The documents had to be delivered to the consignee. The amount was to be paid by the con--signee within 45 days of the presentation of the documents to him as per written instructions of the partners of the firm. This letter is Exh.
24. On 22-6-66 export documents were forwarded to their corresponding bank, namely, National Bank of Kuwait, for delivery of the same to the consignee against acceptance. However, the National Bank of Kuwait sent photostat copies of the letter of the consignee and letter of Jamilur Rehman partner of the firm along with his covering letter dated 31-7-67 which he produced as Exhs. 25, 26 and 27.
8. He further stated that no amount had been repatriated against the consignment till he had given the evidence. Hit evidence was recorded on 12-1-71. In cross-examination he stated that A.I Abdul Rehman Sultan were the consignees.
9. The next question to be considered is whether the appellants were partners of the aforesaid firm Appellant Jamilur Rehman had admitted that he was partner of the firm but he pleaded that had resigned from that firm in April 1967. It may be recalled that the goods in question had been exported in May 1966, and, therefore, at the time of the export of the goods he was partner of the firm. That being so it is immaterial whether he subsequently severed his connections with the firm.
10. His liability, if any, would be determined with reference to the date of the export of the Chappal. It may also be pointed out that he was the person who had received the consignment at Kuwait. So far as the remaining two appellants, namely, Shamim Ahmed and Shafiuddin are concerned they denied that they were ever partners of the firm. Their plea is false. In the first place there is a partnership deed Exh. 20 which had been brought on record by the counsel for Shamim Ahmed appellant in cross-examination of prosecution witness Rauf Ahmed. Both these appellants were shown as partners in this deed. The object of the partnership was to manufacture leather goods etc. As well as export and import any item besides goods, as may be agreed upon by mutual consent of the partners and the shipment would be expanded as far as possible. This partnership was formed in 1965. Consequently, notices were served upon the appellants. In pursuance of these notices Shamim Ahmed appellant bad submitted his reply in which he clearly admitted that be was partner of the firm which was subsequently dissolved with effect from 12-4-1967 on account of the resignation of Jamilur Rehman partner. The appellant has denied having sent this reply but his denial is dishonest. The other appellant did not make any reply. So an inference can be drawn that he did no contest his position as partner of the firm.
11. Thus the only question which now remains to be determined is regard--ing the liability of the appellants for the non-repatriation of the export value of tee goods. In this connection the learned counsel for the appellant raised two pleas. In the first place he pleaded that the declaration form was signed by Nuruddin Jehangir who was the Managing partner and, therefore, criminal liability could not be attributed to them for the non---repatriation of the amount by the person who had given the undertaking.
12. The second plea that was taken is that it was the sale price of goods which was to be repatriated and since the goods had not been sold no offence for the non-repatriation of the price of the goods was committed.
13. Taking up the first contention that the declaration form was signed by Mr. Nuruddin Jehangir and, therefore, the other partners were not liable for the repatriation of the amount, I find no force in it. I have already held that all the appellants were partners of the firm and the goods bad been despatched on behalf of the partnership. It was, therefore, the res--ponsibility of every partner to get the amount repatriated. It is immaterial that the declaration from had been signed by one of the partners. He had not signed it in his individual capacity; nor it has been pleaded as such. I is also not the case of the appellants that Nuruddin Jehangir had exported the goods without their consent or knowledge. The partnership deed itself shows that the firm was engaged in exporting leather Chappals and other articles. The offence does not consist in exporting the goods but it is committed only after the earned amount has not been brought to Pakistan. It was the duty of the partners to make efforts to see that the export value pf the goods was repatriated. It has not been pleaded by the appellants that they had made any Such effort. In this connection I may refer to the case of Karimbux Jars v. Start (1969 P Cr. L J 1551) which supports my view. The relevant observation appearing at page 1551, para. 7 reads as under:- "As learned counsel for the appellant has argued vehemently that the appellant ceased to be liable on the dissolution of the firm I shall briefly consider this argument. It is settled law that the dissolution of a firm does not discharge the partners of their liabilities to third parties therefore in the instant case the clause in the deed of dissolution (Exh. 50) discharging the appellant from the liabilities of the firm would be operative only as between him and the absconder Ghulam Rasool.
14. However, learned counsel for the appellant sub--mitted that the undertaking to repatriate the sale proceeds of the goods exported, which bad been given in the GRPI-Forms Exhs. 10, 11 and 12, had been signed by the firm therefore, the appellant was not liable. The argument is devoid of merit. A firm is only a con--venient designation for describing the partners of whom it consists and by itself it is not a legal entity. Further, each partner is liable for the acts of the firm and/or the acts of the other partners in the course of the firm's business, therefore, as the GPRI Forms have been signed by or on behalf of the firm, the appellant and Ghulam Rasool the absconder are both liable under these forms, as they had thereby covenanted to repatriate the proceeds of the goods exported from Pakistan."
15. Dealing with the second contention I would like to reproduce the undertaking which was given. It reads as under "The value declared in (G) bill is a fair valuation of goods which being shipped out on a consignment and I/We undertake that I/We shall deliver to the bank mentioned below the foreign exchange proceeds resulting from the export of these goods within four months of shipment supported by a fully documented accounts sale certified by the consignee."
16. The learned counsel for the appellants in order to press his point, sought in aid the case of State of Pakistan v. Ismail Usman and others (1968 P Cr. L J 1053which was an appeal against acquittal. It was held that there could be no sale proceeds without there first being a sale and, therefore, before such payment could be made the full export value of the goods in question of their proceeds outside Pakistan must first be realised and obtained by the exporter and unless this had happened there was no export value or sale proceeds for him to repatriate or pay back in the prescribed manner. Looking to the declaration given in this case I respectfully agree with the principle; laid down by the aforesaid authority but I would, at the same time, like to add that the exporter trust show that the export value of the goods was not repatriated on account of the circumstances beyond his control. One such circumstance is that the goods bad not been sold without his fault.
17. This principle was elaborated in the case of Tawhid A.I Sardar v. The State" (PLD 1969 Dacca 395The relevant observation reads as under:- "Conviction under section 23 of the Foreign Exchange Regulation Act can only be based upon a finding that the non-repatriation of the export proceeds was intentional and deliberate. There cannot be any conviction under section 23 if the exporter was unable to repatriate the sale proceeds for reasons and circumstances beyond his control. This postulates honest attempts on his part to honour the undertaking. The immunity will not be available to him if his conduct is mala fide. Merely taking some steps to show that he made attempts at repatriation will not exonerate him from the liability of conviction. It is only when it is proved that the accused made bona fide attempts to repatriate the sale proceeds of the exported goods in accordance with his undertaking that he will be entitled to acquittal."
18. Keeping in view the declaration mad: in the present case and in the light of the principle laic) down by the aforesaid authority, there can be no manner of doubt that mere non-repatriation of the export value of the goods does not render the exporter liable under section 23 of the Foreign Exchange Regulation but the offence is committed if the foreign exchange is earned~ and is not repatriated. The earning of the foreign exchange depends upon the sale of the good and the realisation of the amount. So it is ruled that non-repatriation must be wilful and deliberate. In such cases the prosecu--petition is always at a disadvantage to secure evidence. So the determination n of this question depends upon the facts and circumstances of each case one has to be decided on the basis of the evidence produced in the case. If dubious tactics are adopted to defer or avoid repatriation of foreign exchange proceeds within the prescribed period or thereafter within the time allowed by the State Bank, the exporter is guilty of the offence.
19. 1n order to consider the liability -of the applicants it is necessary to refer to various documents which had been brought on record.
20. The first document to be referred to in this connection is the declaration made by Habib Bank, Karachi. The firm had made arrangement with Habib Bank for the realisation of the export proceeds of the goods and the relevant documents were delivered to the bank. It was on this basis that the declaration was given-by the bank that the consignors were known and were bona fade business-men in Pakistan and they had made arrangement with them for the realisation of the export proceeds of the goods. The consignee of the goods was shown to be the resident of Kuwait.
21. According to the evidence the consignee was Messrs A.I Abdul Rehman Sultan. Kuwait. Habib Bank forwarded the papers to their agents at Kuwait. According to the instructions the documents had to be delivered against payment acceptance. It was further provided that in case of non-payment or non-acceptance the foreign agent or correspondent had to be advised to clear and store the goods in their godown at the risk and cost of the consignor. The goods were also required to be insured. Collection of the goods was required to be made on 45 days sight. These instructions are disclosed in document Exh.
48. From the correspondence it appears that the agent of Habib Bank in Kuwait was the National Bank of Kuwait. Letter dated 30th July 1966 Exh. 28 was received from the National Bank of Kuwait by the Habib Bank that they had received copy of letter dated 23-7-1966 addressed by the addressee direct to the drawers showing that the goods did not conform to their order and as such were being held by them pending receipt of the drawers disposal instructions.
22. From this letter it appears that the consignee had taken delivery of the goods without making any payment. Subsequently, Jamilur Rehman who went to Kuwait, took delivery of 410 pairs of Chappals from the consignee, namely. Messrs A.I Abdul Rehman Sultan, and it was also decided that the second representative of the firm of the applicants, namely, Mr. Muhammad Sadiq would go to Kuwait and dispose of the pending lot. This is indicated by letter Exh. 2-7 dated 26-11-1966.
23. Thereafter there is another letter Exh. 50 dated 21-1-1967 purported to have been written on behalf of Messrs A.I Abdul Rehman Sultan to the Manager National Bank of Kuwait that. The situation had changed as the partner of Mangalore Leather Works, Karachi, during his last- visit to Kuwait in the last week of November 1966, had taken over the stock received by them under the bill and had declared that the disposal of the goods was his or his partners responsibility and they had nothing to do with the payment. It was further disclosed in this letter that this undertak--ing was given in writing and, therefore, the question of the payment be considered as closed. Thus; according to this letter, the entire stock was received by the partner of the firm of the applicants and that partner was Jamilur Rehman as indicated by the earlier letter Exh. 27 dated 26-11-1966. Letter Exh.
24. 26 was forwarded by Kuwait Bank to Habib Bank, by letter Exh. 25 dated 31-1-1967. Subsequently, receipt Exh. 42 dated 26-8-1967 was secured by the appellants from A.I Abdul Rehman Sultan to the effect that 410 pairs of Chappals had been delivered to Messrs Abdullah Saleh through Mr. Jamilur Rehman for sale and realisation for onward payment of the bills to the bank through which the documents were retired had been received back by him since they could not be sold except 10 paisa which was sold for Kinar 4:00 only. In 1969 a complaint was said to have been made by the appellants firm to Kuwait Chamber of Commerce and Industry against A.I Abdul Rehman Sultan and the firm was informed by letter Exh. 44 dated 14-8-69 that the firm of A.I Abdul Rehman Sultan had been black listed as there were several other complaints against them. There is another letter Exh. 45 dated 13-8-69 from the Embassy of Pakistan; Kuwait to Messrs A.I Abdul Rehman Sultan calling upon them for the payment of the amount to the exporter.
25. From these documents it is plain. Enough that the appellants had been acting dishonestly and making complaints against A.I Abdul Rehman Sultan in order to raise a defence for the wilful non- repatriation of the amount although the correspondence shows that not- only Jamilur Rehman appellant had taken delivery of 410 pairs of Chappals but another agent was authorised to receive the remaining lot. In view of these facts there was no question of any genuine complaint to be made against A.I Abdul Rehman Sultan or approaching the various authorities at Kuwait to call upon A.I Abdul Rehman Sultan, to make the payment. It may be noted that the goods bad teen sent on consignment basis and there was no previous bargain between the appellant's firm and Messrs A.I Abdul Rehman Sultan. From the circumstances of this case it is clear to me that the goods were not intended for the consignee but the same were to be disposed of by appellants them selves at Kuwait. It was mentioned in one of the letters that the goods did not conform to the standard but this question did not arise as I have already pointed out that the goods had been sent to Kuwait on consignment basis rind nest that there was any previous bargain between the appellants firm and the consignee named in the document. Although the goods had to be delivered on, acceptance of the price but the appellants' firm managed to receive the goods without making any payment to the bank. This was done dishonestly with a view to withhold the sale proceeds of the goods in order to avoid the repatriation, by simply showing that the goods could not be disposed of in the foreign market. The goods had been despatched in May 1966, while the complaint teas filed in July 1969, I.e. After three years and during this entire period no attempt was made by the appellants to approach the State Bank for the assistance as required under section 12(3) of the F. E. Regulation Act in case the goods could not be sold at Kuwait. The learned trial Court rightly came to the conclusion that no bona fide attempt was made to repatriate the amount.