1. ' S. AHMED SARWANA, J.--- The brief facts of C.P. No,D-2273 of 1997 are as follows:-- ' Muhammad Irshad, Muhammad Shamshad and MRs, Ishrat Jehan are Directors of Messrs Sana Textile (Pvt.) Limited (Sana) which was in the business of exporting garments. On or about 30-11- 1998 and 1-1-1989 Sana exported 100% Cotton Heavy Sweat shirts valuing US $ 18,000 and US $ 28,992 to New York on D.A. 120 days basis under Form "E" Nos, IFIC 2383, 2082, 2083 and 2084 through International Finance Investment and Commerce Bank Limited, Karachi (the Bank). While exporting the aforesaid goods Sana had given an undertaking on Form "E" that they shall deliver to the Bank the Foreign Exchange proceeds resulting from the exported goods within four months from the date of shipment/export. They failed to deliver the Foreign Exchange proceeds of the exported goods within the stipulated period which according to the State Bank of Pakistan (SBP) constituted an offence under section 12(1) of the Foreign Exchange Regulation Act, 1947 (The FER Act). On 14-11-1991 Deputy Director of Adjudication, State Bank of Pakistan issued a notice to three Directors of Sana to show-cause why a penalty up to five times of the value of the goods should not be imposed upon them under section 23B(4) for contravention of section 12(1) of the said Act.
2. Not being satisfied with the reply to the show-cause notice, the Adjudicating Officer issued summons to the accused Directors to appear in person or through their Advocate. The petitioners appeared through Imran Ahmed, Advocate who sought several adjournments and was later replaced by another Advocate but without any progress. On 12-11-1993 Muhammad Irshad, petitioner No,1 appeared before the Director Adjudication and submitted an application together with photo copies of an Advance Payment Receipt dated 24-10-1992 amounting to US $28,000 together with a Bank Certificate dated 7-11-1992 both from Rupali Bank and a Fax message dated 2-11-1992 from the consignee Messrs Daniels of Dallas Inc., authorizing the exporters (Sana) to adjust the said advance payment of US $28,000 against the outstanding Form "E" Nos,IFIC 2083 and 2084 totalling US $18,000 and US $10,560 respectively. The accused/Directors were asked to furnish authority from the Exchange Department to adjust the said advance payment against the outstanding bill as the exporters had been authorized by the consignees to do so. Petitioners Advocate sought several adjournments to provide the required sanction/ authority from the Exchange Department but failed to appear before him or submit any document for effecting the required adjustment of the advance payment against the outstanding exported proceeds as was promised by them. Consequently, the adjudicating Officer was constrained to proceed ex parte under rule 4(10) of the Adjudication Proceedings and Appeal Rules, 1988 and on the basis of the material on record and the evidence of the Bank's representative and the representative of the SBP found the three Directors guilty of contravention of section 12(1) of the FER Act, 1947 and by Order dated 17-10-1993 imposed a penalty of Rs,2,00,000 each payable immediately.
3. ' Only Muhammad Irshad and MRs, Ishrat Jehan, petitioners herein, filed Appeal No,1 of 1993 under section 23-C(3) of the Foreign Exchange Regulation Act, 1947 before the Foreign Exchange Regulation Appellate Board Sindh at Karachi as allegedly Muhammad Shamshad, the third Director, had expired in the meantime. After hearing the appellants/petitioners, the Appellate Board dismissed the appeal by order dated 31-10-1994. On or about 27-9-1997 Deputy Director Adjudication issued a notice to the petitioners for recovery of the said penalty as arrears of land revenue. The petitioners alleged that they came to know about the recovery proceedings on 27-10- 1997 when the demand notice was received by them and filed the present petition seeking a declaration that the order dated 17-10-1993 passed by the Deputy Director Adjudication and judgment dated 31-10-1994 passed by the Foreign Exchange Regulation Appellate Board, Sindh at Karachi are without lawful authority, void, illegal, without jurisdiction and a direction to respondent No,2 not to take any action against the petitioneRs, ' The facts and circumstances giving rise to the filing of the other petitions enumerated hereinabove are similar to the facts of C.P. No,2273 of 1997 filed by Muhammad Irshad except that none of them have taken the plea that they had received any clean advance from foreign buyers which could be adjusted against the proceeds of goods exported by them under Form "E".
4. Consequently, all of them were issued show-cause notices, their cases were heard and decided by the Deputy Director Adjudication who found them guilty of contravention of section 12(1) of the Act and imposed various fines. On perusal of the files it transpires that only 9 out of 67 petitioners filed appeals before the FER Appellate Board which were dismissed. The reliefs claimed in all the petitions are similar' to the ones in C.P. No,D-2273 of 1997 and all of them are being disposed of by this judgment.
5. ' After conclusion of the arguments, we asked Mr. A.R. Akhtar, learned counsel for the petitioners to present before us evidence from IFIC Bank Limited stating that it a SUM of US $28,000 received as advance payment were still available with the bank for adjustment against the outstanding bills of Sana. More than three months have passed but Mr. A.R. Akhtar has not provided any document in support of his statement that US $28,000 was and is available for adjustment against the proceeds of exports under Form "E". In view of the above facts, it is apparent that the case of all the petitioners is based upon the interpretation of the various provisions of the FER Act 1947, Rules made thereunder and the undertaking given by the petitioners in Forms "E" which were signed by all of them.
6. ' Mr. A.R. Akhtar, learned counsel for the petitioners, contended as follows:--
(i) There was no charge of violation or contravention of any Rule, Direction or Order in the show- cause notice except of section 12(1), FER Act which does not create any offence but only specifies a positive obligation that the amount representing the full export value of the goods will be paid within the time prescribed. The petitioners had fulfilled their obligation by executing Form "E" and making all possible efforts to get the export proceeds from the foreign buyers and therefore, no offence under section 12(1) had been committed by them.
(ii) Section 12(2), FER Act creates an offence if payment is received by the exporter otherwise than in the ;prescribed manner, is unreasonably delayed or not received in full. In the present case as no payment had been received at all, the petitioners could be said to be guilty of offence under section 12(2) for which they had not been charged and in any case it was not triable under section 23-B. The conviction therefore, was illegal and without jurisdiction. He referred to 1971 SCMP 642 and 1968 SCMR 323 in support of his arguments.
(iii) In the proceedings for violation of section 12(1), FER Act the onus of proof was on SBP to prove complicity of the exporter under section 24(2) of FER Act which had not been discharged by SBP.
(iv) Insertion of section 23-B in the FER Act under the Finance Act of 1987 creating a new forum in additior to the Sessions Judge and Additional Sessions Judge who are already empowered to try cffences under section 23-A, FER Act is unConstitutional being violative of Articles 70 and 73(3) of the Constitution and adjudication proceedings before the Officers of SBP under section 23-B were without jurisdiction.
7. ' Mr. Khalid Farooqui, Advocate, for the petitioners in C.P. No,D-1051 of 1992, 1132-1140 of 1995, 1175 to 1182 of 1995, 1736 of 2000 and 1745 of 2000 adopted the arguments of Mr. Akhtar and contended that there had been no contravention of any provision of the FER Act and, as such, the penalty imposed was unlawful and without jurisdiction.
8. ' Mr. Abdul Qadir Khan, learned counsel for the petitioner in C.P. No,D-124 of 1997 also adopted the arguments of Mr. Akthar and in support of his contention that insertion of section 23-B in the FER Act under the Finance Act of 1987 is un-Constitutional, referred to the cases reported in 1994 SCM R 2123, 1998 SCM R 1404 and 1998 SCM R 383 where leave to consider the above question was granted and relying upon 2001 M LD 1554 submitted that refusal to grant 'of leave to appeal would not amount to confirmation of the High Court's order or judgment.
9. ' In reply, Mr. H. A. Rehmani, learned counsel for State Bank of Pakistan (SBP) and respondents Nos,2 and 3 submitted as follows:--
(i) Finance Act, 1987 changed the FER Act substantially by adding, inter alia, section 23B which stated various contraventions of specific sections of FER Act, provided penalty therefor and created a new forum for trying persons who contravene or attempt to contravene the provisions of the sections specified therein. Prior to the amendment all offences were triable under section 23 read with section 23A of FER Act by a Sessions Judge or Additional Sessions Judge who was declared to be a Tribunal for this purpose and after the amendment i,e, insertion of section 23B in the Act, the offence under section 12(1) and other specified sections of FER Act were made triable by an officer of SBP who is a Director of Adjudication, an Additional Director of Adjudication, a Senior Deputy Director of Adjudication, Deputy Director of Adjudication and an Assistant Director of Adjudication to be called the Adjudicating Officer. Therefore, all the proceedings conducted by the said officers and the Appellate Board under section 23C were in accordance with law and valid.
(ii) Section 12(1) of FER Act prohibits export of any goods unless a declaration supported by such evidence, as may be prescribed, is given by the exporter to the prescribed authority that the amount representing the full export value of the goods has been or shall within the prescribed period be paid in the prescribed manner. Petitioners were allowed to export the goods on the clear undertaking given in Form "E" that they shall deliver to the Bank the Foreign Exchange proceeds of the goods exported by them within four months from the date of shipment. The petitioners were bound to fulfill their obligation and if they prove that in spite of all efforts the Foreign Exchange could not be repatriated a concession could be given to them. He added that the provisions of section 12(2) of the Act cannot be used for giving concession to the exporter for contravention of section 12(1) of the Act which casts a specific obligation and which had been made an independent specific offence by the 1,987 Amendment. The petitioners did not deliver to the Bank the Foreign Exchange proceeds of the goods as promised until 1992 and made no efforts to recover and deliver the proceeds and were therefore, rightly convicted under section 23B(4) for contravention of section 12(1) of the Act.
(iii) Section 12(2), FER Act requires that the payment shall not be delayed or received by the exporter except in accordance with the prescribed manner and in the full amount. It does not mean that the petitioners are absolved of their obligation of bringing Foreign Exchange. Proceeds as required under the provisions of section 12(1), FER Act. Any reference to this section was irrelevant as the petitioners were tried for contravention of section 12(1) which has been specially made punishable under section 24B(4) FER Act.
(iv) The insertion of section 23B in the FER Act by Finance Act, 1987 is in accordance with law and constitutionally valid.
10. ' Mr. Abrar Hasan, Advocate for SBP in C. P. No,D-2069 and 2070 of 1992 adopted the arguments of Mr. Rehmani and added that in his two petitions the goods had been shipped from Dubai and no evidence whatsoever was produced by the exporter that they had made any effort to repatriate the proceeds of the export.
11. ' Mr. I.H. Zaidi, Advocate for SBP in C.P. No,D-1051 of 1992 also adopted the arguments of Mr. Rehmani and emphasized that there was an additional factor In the petition being opposed by him which was that the petitioners had promised to repatriate the export proceeds which they had not fulfilled.
12. ' Mr. Nadeem Azhar Siddiqui, learned D.A.-G. Supported the arguments advanced by Mr. Rehmani and stated that he had nothing further to add thereto.
13. ' We have heard Mr. A.R. Akhtar. Mr. Khalid Farooqui and Mr. Abdul Qadir Khan, learned counsel for the petitioners and Mr. H.A. Rehmani, Mr. Abrar Hasan and Mr. I.H. Zaidi, learned counsel on behalf of the State Bank of Pakistan and Mr. Nadeem Azhar Siddiqui, learned D.A.-G. On Court notice.
14. ' One of the grievances of all the learned counsel appearing for the petitioners was that insertion of section 23B in the FER Act under the Finance Act of 1987 was un-Constitutional being violative of Articles 70 and 73(3) of the Constitution of the Islamic Republic of A Pakistan, 1973. Their contention was that an amendment in the ordinary law cannot be made through a money bill which does not go through the procedure of being passed by the Parliament and thereafter by the Senate before it is presented to the President of Pakistan for his assent. It may be stated here that in the case of Hoosen Dawood & Co. v. Government of Pakistan, Civil Petition No,138-K of 1992, petitioner's counsel advanced a similar plea before, the Supreme Court of Pakistan asserting that the inclusion of section 31-A in the Customs Act, 1969, through section 5 of the Finance Act of 1988 (Act VI of 1988), which was a money bill, was ultra vires the Constitution. The Honourable Supreme Court of Pakistan in its judgment dated 8-11-1992 repelled the contention and held that the aforesaid amendment in the Customs Act was in accordance with the provisions of the Constitution. The argument of the learned counsel for the petitioners challenging the validity of section 23-B is accordingly rejected.
15. Consequently, it is held all proceedings conducted by the officers of SBP for violation of section 12(1), FER Act by the petitioner were within the jurisdiction of the officers appointed/designated by SBP under section 23B, FER Act and the penalties awarded by them are valid and in accordance with law.
16. ' The other argument advanced by the petitioners' counsel was that section 12(1), FER Act only casts a duty on the exporter to give an undertaking to repatriate the sale proceeds of the exported goods within the time prescribed by law which obligation the petitioners fulfilled by executing the undertaking on Form "E" and if the aforesaid amount was not brought in the country within the prescribed time, no violation of any law was committed and consequent j the show-cause notice and ultimately the penalty imposed for not bringing in the sale proceeds wa s against the provisions of the FER Act and without jurisdiction. To appreciate the arguments of the petitioners it would be appropriate to reproduce here the provisions of section 12, FER Act and section 23-B which were inserted in the FER Act by Amendment in 1987. Section 12, FER Act reads as follows:-- "12. Payment for exported goods ---(1) The Central Government may, by notification in the Official Gazette, prohibit the export of any goods or class of goods specified in the notification from Pakistan directly to any place so specified unless a declaration supported by such evidence as may be prescribed or so specified, is furnished by the exporter to be prescribed authority that the amount representing the full export value of the goods has been, or will within the prescribed period, be paid in the prescribed manner.
(2) Where any export of goods has been made to which a notification under subsection (1) applies, no person entitled to sell, or procure the sale of, the said goods shall, except with the permission of the State Bank, do or refrain from doing any act with intent to secure that-
(a) the sale of the goods is delayed to an extent which is unreasonable having regard to the ordinary course of trade; or
(b) payment for the goods is made otherwise than in the pre. Cribed manner or does not represent the full payn.Ent payable by the foreign buyer in respect of the goods, subject, to such deductions, if any, as may be allowed by the State Bank or is delayed to such extent as aforesaid: ' Provided that no proceedings in respect of any contravention of this subsection shall be instituted unless, the prescribed period has expired and payment of the goods representing the full amount as aforesaid has not been made in the prescribed manner.
17. (6)
18. ' Section 23B defining specific contraventions and a new procedure for their adjudication added by virtue of Finance Act, 1987, reads as follows:-- "23B. Authorisation of Adjudicating Officers and their powers, etc.---(1) The Federal Government may, by notification in the official Gazette, authorize in relation to any area specified in the notification any officer of the State Bank to act as the Director of Adjudication, an Additional Director of Adjudication, a Senior Deputy Director of Adjudication, a Deputy Director of Adjudication and an Assistant Director of Adjudication (in this Act referred to as the Adjudicating Officer).
(2) ...........................................
(3) ...........................................
19. (4)Save as provided in subsections (5) and (6), if any person contravenes or attempts to contravene or abets the contravention of the provisions of subsections (2), (3) and (5) of section 3, subsection (3) of section 4, section 10, subsection (1) of section 12 or subsection (3) of section 20 or any rule, direction or order made thereunder, he shall be liable to such penalty not exceeding five times the amount or value involved in such contravention or five thousand rupees, whichever is more, as may be adjudged by the Director or Additional Director of Adjudication or any other Adjudicating Officer having jurisdiction under subsection (8) to take cognizance of such contravention, and, if he persists in such contravention, or where the contravention or default is continuing one, to a further penalty which may extend to two thousand rupees for every day during which the offence or, as the case may be, the contravention or default continues.'
(9) For the purpose of determining whether a person has contravened any of the provisions of subsections (4), (5) or (6), the Adjudicating Officer shall hold an enquiry in the manner prescribed, if any, after giving such person a reasonable opportunity for making a representation in the matter and if, on such inquiry, he is satisfied that the person has committed any contravention, he may impose the penalty provided for in this section."
20. ' From a reading of section 23B(4), FER Act it is crystal clear that if any person contravenes, attempts to contravene or abets the contravention of any of the specified provisions of FER Act or of any rule, direction or order made therender he shall be liable to penalty stated therein. The wordings of section 23 which are couched in general terms makes the contravention of any provision of FER Act a penal offence punishable with imprisonment while those of section 23B are very specific in nature and make the contravention of certain specified provisions of FER Act subject to payment of penalty. The two punishments are different and distinct. By insertion of section 23B in the FER Act, the Legislature has clearly stated that if any person contravenes or attempts to contravene or abets the contravention, inter alia, of the provisions of subsection (1) of section 12 or ... Any rule, direction or order made thereunder, he shall be liable to such penalty not exceeding five times the amount or value involved in such contravention or five thousand rupees whichever is more, as may be adjudged by the Director or Additional Director of Adjudication or any other Adjudicating Officer having jurisdiction to take cognizance of such contravention. In the past if any person contravened the provisions of FER Act he was prosecuted under section 23 of the Act by the Sessions Judge but after the insertion of section 23B in the FER Act, a person who contravened the provisions of subsection (1) of section 12 became liable to be prosecuted under section 23B(4), FER Act by an Adjudicating Officer which entails penalty up to five times the amount or value involved in the contravention in accordance with the procedure provided in the said section which was not the case prior to the amendment by Finance Act, 1987. It is an admitted position that the petitioners gave an undertaking to repatriate the sale proceeds within the prescribed time as required by section 12(1), FER Act and by not bringing in the sale proceeds within the prescribed time patently contravened the provisions of section 12(1) which is liable to punishment as provided therein. The petitioners could and should have approached the Pakistan Embassy/Trade Mission, Foreign Chamber of Commerce for recovery of the sale proceeds or commenced legal proceedings for recovery of the same against the buyer in the country of export.
21. If the petitioners were unable to realize the export proceeds, they should have proved in the proceedings that it was beyond their control by bringing on record evidence that they took all the steps referred to above for recovery of the sale proceeds of the report. The petitioners did not do so and therefore, made themselves liable to be prosecuted and penalized under section 23B, FER Act.
22. The case of State Bank of Pakistan v. S.K. Mahboob-ur-Rehman and others 1971 SCM R 642 and the case of State Bank of Pakistan v. Abdus Sattar 1968 SCM R 283 relied upon by the petitioners are irrelevant as section 23B, FER Act was not on the statute book at the time these judgments were delivered.
23. ' Mr. Akhtar also contended that to find the petitioners guilty of violation of section 12(1), SBP was required under section 24(2), FER Act to prove that there was complicity between the petitioners and the consignee/importer of the exported goods which SBP failed to do and therefore, the impugned order was contrary to law and the penalty imposed pursuant thereto was liable to be set aside. The relevant provision of section 24(2), FER Act reads as follows:-- "24. Burden of proof in certain cases.--- (1) ......
(2) If in a case in which the proof of complicity of a person resident in Pakistan with a person outside Pakistan is essential to prove an offence under this Act then after proof of the circumstances otherwise sufficient to establish the commission of the offence, it shall be presumed that there was such complicity, and the burden of proving that there was no such complicity shall be on the person accused of the offence.
24. (3)
25. ' The petitioners as required by section 12(1) gave an undertaking on Form "E" that they shall deliver to the bank to whom the said form was submitted, the Foreign Exchange proceeds of the goods exported within four months from the date of the shipment/despatch. It was a simple and straightforward promise made by the petitioners to do a certain act i,e, to deliver the value of the exported goods in Foreign Exchange to the Bank. The fulfilment of the promise of delivery of Foreign Exchange is a unilateral act. To prove the contravention of the undertaking, it is not necessary for SBP to prove any complicity of the petitioners with any other person. The failure to fulfil the undertaking, which is not denied, by itself is a clear cut proof of the contravention of the promise.
26. The provisions of section 24(2), FER Act are not applicable to the circumstances of this case. The argument advanced by the learned counsel is misconceived and is accordingly rejected.
27. ' In view of the above discussion, we have no doubt in our minds that the petitioners contravened the provisions of section 12(1), FER Act and were rightly proceeded against the penalized under section 23B, FER Act, 1947. After going through the record of the cases and in view of the clear provisions of the law, we are of the opinion that the Constitutional petitions filed and the pleas taken therein by the petitioners are mala fide; consequently. All the petitions are dismissed with costs.
28. ' It may be clarified that this judgment shall be applicable to the Directors of the Companies and to the partners of the firms respectively as mentioned in the impugned orders as in some cases the petitions have been filed in the names of limited companies/firms instead of individuals concerned.