The act of concealing currency notes in one's trousers and attempting to take them out of India without a permit constitutes an attempt to contravene the provisions of the Foreign Exchange Regulation Act.

Headnote:
FOREIGN EXCHANGE REGULATION ACT - SEARCH AND SEIZURE - COGNIZANCE OF OFFENCE - TAKING COGNIZANCE - INTERPRETATION - [S. 19 (3), 23 (3), 23B, 155 (2), (3), 169, 200, 202, 204]
Fact of the Case:

The appellant was caught at the airport with Indian currency notes concealed in his trousers. He was searched by Customs officials after he had signed the declaration form and answered in the negative when asked if he had any other articles to declare. The appellant claimed that he had voluntarily handed over the currency notes to the Customs Officers for safe custody as he had failed to get a permit from the Reserve Bank of India. The Magistrate acquitted the appellant, but the High Court convicted him of an offence under S. 8 (2) of the Foreign Exchange Regulation Act read with S. 19 of the Sea Customs Act.
Finding of the Court:

The Supreme Court held that the appellant's act of concealing the currency notes in his trousers and attempting to take them out of India without a permit constituted an attempt to contravene the provisions of the Foreign Exchange Regulation Act. The Court also held that the Additional District Magistrate had not taken cognizance of the offence until 2-2-1953, when the complaint was filed with the requisite authority of the Reserve Bank. Therefore, the proceedings before the Additional District Magistrate and the trying Magistrate were with jurisdiction and the trial of the appellant was legal.
Issues: 1. Whether the appellant's act of concealing the currency notes in his trousers and attempting to take them out of India without a permit constituted an attempt to contravene the provisions of the Foreign Exchange Regulation Act? 2. Whether the Additional District Magistrate had taken cognizance of the offence before the complaint was filed with the requisite authority of the Reserve Bank?
Ratio Decidendi: 1. The Court held that the appellant's act of concealing the currency notes in his trousers and attempting to take them out of India without a permit constituted an attempt to contravene the provisions of the Foreign Exchange Regulation Act because: - The appellant had entered the customs enclosure and had signed the declaration form. - He had been questioned as to whether he had any other article than those mentioned in the declaration form which he wished to declare and he had answered in the negative. - On his personal search he dropped his trousers on the ground. - He was asked to pick up his trousers and wear them again. - On search of the trousers Rs. 25,000 in currency notes were found concealed in the inner pockets. - The appellant had his ticket to proceed to Hong Kong by a plane which was due to leave. Dum Dum Airport at 8-30 a. m. and the customs formalities were done in connection with that flight. 2. The Court held that the Additional District Magistrate had not taken cognizance of the offence before the complaint was filed with the requisite authority of the Reserve Bank because: - The Additional District Magistrate had issued a search warrant and a warrant of arrest on 16-9-1952, but these orders were made in the context of the investigation of the case and did not indicate that the Magistrate had applied his mind to the case with a view to issuing a process against the appellant. - The Additional District Magistrate had allowed the police time till 19-11-l952, for completing the investigation, which indicated that he was still regarding the matter as one under investigation. - The Additional District Magistrate had taken cognizance of the offence on 2-2-1953, when the complaint was filed with the requisite authority of the Reserve Bank.
Final Decision: The appeal was dismissed.

Judgement

S. J. IMAM J. : This is an appeal on a certificate granted by the Calcutta High Court. Two points had been urged before the Bench of the High Court which granted the certificate. The first was that the search conducted by the Customs officials which had resulted in the detection of the currency notes on the person of the appellant had not been a legal search and consequently no proceedings could be based on the purported detection made. This point was rejected by the Bench. The second point urged on behalf of the appellant was that on 16-9-1952, when the Magistrate issued the warrant of arrest against the appellant he could not have done so without having previously taken cognizance of the offence. Since, however, the authorisation required under S. 23 (3) of the Foreign Exchange Regulation Act (VII of 1947) was not obtained till the 27th of January, 1953, the cognizance taken by the Magistrate on 16-9-1952, was without jurisdiction. If the initiation of the proceedings was with- out jurisdiction, the conviction could not stand. The High Court thought that the contention of the appellant raised a question of law and granted the requisite certificate for appeal to this Court.

2. The prosecution case was that on 7-9-1952, the appellant went to Dum Dum Aerodrome with a view to boarding a plane for Hong Kong. The plane was due to leave the airport at 8.30 a. m. The appellant had to go through the customs formalities before he could board the plane. On an enquiry by the Customs Officers as to whether he had any other articles besides what he had declared in the declaration form, the appellant answered in the negative. His baggage was then examined but no objectionable article was detected therein. The Customs Officers however, noticed a pouch of somewhat unusual size which aroused their suspicion. Thereafter, the appellant was subjected to personal search, When they were about to search his person he let drop his trousers. The appellant was requested to lift up the trousers and wear them again which he did. On the search of the trousers a sum of Rs. 25,000 in Indian currency notes was discovered in two secret pockets. They were concealed from below the surface & opened from the inside. On 11-9-1952, the Reserve Bank of India authorized Inspector S. B. Mitra of the Special Police Establishment, Calcutta to make a representation to the Additional District Magistrate, 24 Parganas (hereinafter referred to as the Additional District Magistrate) for permission to proceed against the appellant as required, under S. 19 (3) of the Foreign Exchange Regulation Act, 1947. Mitra thereupon applied to the Additional District Magistrate on 16-9-1952, for a search warrant to be issued which was allowed, Mitra on the same date also applied to the same Magistrate that a warrant of arrest might be issued against the appellant. This was also allowed and a warrant of arrest was issued by the Additional District Magistrate and petitioner was thereafter arrested and released on bail with a direction to appear before the Additional District Magistrate on September 9. On September 19 he was released on bail by the Additional District Magistrate in the sum of Rs. 50,000 with 10 sureties of Rs. 5,000 each, On November 19, the Appellant asked for exemption from attending the court on the successive dates fixed for the case but the application was refused. On 27-1-1953, the Reserve Bank of India authorized Mitra to file a complaint against the appellant. On 2-2-1953, a complaint was filed against the appellant charging him with an offence under S. 8 (2) of the Foreign Exchange Regulation Act read with S. 19 of the Sea Customs Act and Notification No. FERA 105/55 RB dated 27-2-1951.

3. Thereafter, the appellant was tried by another Magistrate, Mr. Sinha, who acquitted him under S. 258 of the Code of Criminal Procedure. The currency notes which had been seized by the Customs Officials were directed to be released. Against the appellant s acquittal the St

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