Judgment

JAGANMOHAN REDDY, J. (on behalf of Sikri and Ray, JJ, and himself): The Director of Enforcement, New Delhi, filed complaint on February 16, 1969 before the Chief Presidency Magistrate, Madras against Lennart Schussler, accused No. 1, and M. R,. Pratap, accused 2 Managing Director, the Rayala Corporation Ltd. hereinafter referred to as A.1 and A.2 respectively under Section 120-B I. P. C. and Section 4 (3), 5 (1) (a) and 9 of the Foreign Exchange Regulation Act (VII) of 1947 (hereinafter called the Act). Two Criminal Miscellaneous Petitions, one filed by A1 being No. 459 of 1969 and the other filed by A2 being No. 621 of 1969 for quashing the complaint were dismissed by the Madras High Court by a common judgment against which these two appeals by certificate have been filed.

2. The complaint which is in respect of the acquisition of 88913.09 Swiss Kronars in contravention of the Act states that on reliable information received by the Assistant Director of Enforcement, Madras that A2 was utilising his position as Managing Director of the Rayala Corporation Ltd. in acquiring foreign exchange illicitly, on December 20, 1966, a search was conducted of the premises of the said company in the presence of A2, Jaga Rao and the legal adviser of the company one Sita Ram. During the search certain documents were recovered and seized, one of which was a letter dated the 25th March, 1965 in Swedish language from the Associated Swedish Steels A. B. Sweden, know as ASSAB to A1 with the enclosures. The Rayala Corporation Private Ltd. was a concern manufacturing Halda typewriters for which purpose certain materials were being imported from Sweden. The firm with which initially the transactions were being entered into was known as A. B. Atvidabergs, later know as Facit AB, of which A1, a Swedish national, has been the export manager. It is alleged that in August 1963, A2 Jaga Rao and A1 met together at Stockholm and agreed to a plan regarding purchase of certain raw materials, namely, Steel alloy sheets directly from ASSAB instead of purchasing them from Atvidabergs. At that meeting A2 informed A1 that henceforth he would buy material on behalf of his company from ASSAB instead of M/s. Atvidabergs. A2 further informed A1 that the arrangement made between him and the ASSAB was to over-invoice the value of goods by 40 per cent of the true value and that he should be paid the difference of 40 per cent on account of the aforesaid over-invoicing by crediting it to his personal account, and that since under the laws of India this acquisition by him was unlawful and had to be kept secret, it should not be mentioned in the Official correspondence of Messrs. Rayala Corporation with the Swedish firm. He requested the first accused to help him in opening the account in Swenska Handles Banken, Sweden, in order not to transfer the money lying to his credit in Atvidabergs but also to have further deposits to his personal account from ASSAB on account of the difference between the actual value and the over-in-voiced value. A1 agreed to act as requested by A2. A2 made arrangement with ASSAB to intimate to A1 the various amounts credited to A2 s account and asked A1 to keep a watch over the correctness of the account and to further intimate to him the account position from time to time through unofficial channels and whenever A1 came to India. A1 is said to have agreed to comply with this request. Subsequently in November 1965 A1 came to India when he is said to have brought the incriminating letter dated the 25th March 1965 which was seized. He is said to have also agreed at that time with A2 to continue to help him to accumulate foreign exchange illegally in the same manner. In September 1966 also A1 arrived at Madras where he stayed for a month and at that time also he brought further details of the account. The gravamen of the charge is set out in paragraph 9 of the complaint as follows:- "Thus it is clear that A 1 and A 2 agreed to commit illegal act