M R PRATAP Vs. DIRECTOR OF ENFORCEMENT

JUDGEMENT

(1.) THESE two petitions have been filed to quash the proceedings in C. C. No. 8736 of 1968 on the file of the Chief Presidency Magistrate, Edmore, Madras, under Section 561-A, Criminal P. C. on the ground that the complaint against the petitioners for the alleged offence mentioned therein is untenable.

(2.) THE Director of Enforcement filed a complaint against the Royal Corporation Private Ltd. , the petitioner in Crl. M. P. 980 of 1968 and Sri M. R. Prate, Managing Director of the said concern, the petitioner in Crl. M. P. No. 978 of 1968, alleging that they had committed offences punishable under Section 23 (1) (b) read with Sections 4 (8), 4 (1) 9 and 5 (1) (e) of the Foreign Exchange Regulations Act (hereinafter called the 'act') and Rule 132-A (2) of the Defence of India Bales. The complaint was taken on file by the Chief Presidency Magistrate, Madras, against the two petitioners and process was issued to them to appear before the Court.

(3.) THE brief facts of the prosecution as disclosed in the complaint are these : The Rayala Corporation Private Ltd. , is carrying on business at No. 25 A, Mount Road. Madras in the manufacture of Halda typewriters out of materials imported from firms abroad, among which one is Associated Swedish Steels AB, Stockholm, Sweden. The materials were imported directly from 1963 onwards. Sri Pratap is the Managing Director of the company and is in charge and responsible to the company for the conduct of the business of the company. On certain information received by the Assistant Director of Enforcement, Madras, that Sri Pratap, the Managing Director of Rayala Corporation Private Ltd. , has been acquiring foreign exchange illicitly by arranging imports of raw materials at over invoiced prices and the foreign exchange proceeds retained abroad by him in a Swedish Bank, they searched the office premises and seized certain documents and the investigation disclosed that the Bayala Corporation Private Ltd. , which was permitted to acquire foreign exchange for the import of raw materisls from abroad had utilised the foreign exchange for a purpose other than the one for which it was granted and that the Managing Director Sri Pratap had acquired without the previous or the general permission of the Reserve Bank of India surreptitiously to the extent of 88,913. 09 years, between 21-12-1968 and 5-1-1965 and had failed to offer them for sale in the Reserve Bank of India or to an authorised dealer within one month from the date of such acquisition.