Judgment

MATHEW, J.: - The respondents were tried before the Presidency Magistrate. 11th Court for having committed offences under Sections 4 (3), 20 (3) and 22 of the Foreign Exchange Regulation Act, 1947 (hereinafter called the Act ) read with Section 120-B of the Indian Penal Code and Section 23 of the Act. The Court discharged the respondents in view of the decision of the High Court of Calcutta in M/s. Serajuddin & Co. v. Union of India, Civil Rules Nos. 2183 (W), 2184 (W) of 1966 and cases Nos. 1998 and 1999 of 1963 decided on l6-6-1971 holding that S. 23 (1A) was violative of Article 14 of the Constitution. The appellant filed a revision petition against the order, before the High Court. The Court concurred with the decision of the trial Court and dismissed the revision. This appeal, by special leave, is against that order.

2. The question for consideration is whether Section 23 (1A) of the Act violates Article 14 of the Constitution.

3. Section 23 (1) as it originally stood in the Act provided that whoever contravenes any of the provisions of the Act or of any rule, direction or order made thereunder shall be punishable with imprisonment for a term which may extend to two years or with fine or with both and any Court trying any such contravention may, if it thinks fit and in addition to any sentence which it may impose for such contravention, direct that any currency, security, gold or silver or goods or other property in respect of which the contravention has taken place shall be confiscated. Section 23 was amended in 1950 and 1952. We are not concerned with those amendments. In 1957, the section was further amended by the Foreign Exchange Regulation (Amendment) Act., 1957 (Act No. 39 of l957).This amendment provided for departmental adjudication in respect of contravention of certain provisions of the Act. The section as amended read as under:

"23 (1) If any person contravenes the provisions of Section 4, Sec. 5 Section 9 or sub-section (2) of S. 12 or of any rule, direction or order made thereunder, he shall -

(a) be liable to such penalty not exceeding three times the value of the foreign exchange in respect of which the contravention has taken place, or five thousand rupees, whichever is more, as may be adjudged by the Director of Enforcement in the manner hereinafter provided, or

(b) upon conviction by a Court be punishable with imprisonment for a term which may extend to two years, or with fine or with both.

(1A) Whoever contravenes -

(a) any of the provisions of this Act or of any rule, direction or order made thereunder, other than those referred to in sub-section (1) of this section and Section 19 shall upon conviction by a court, be punishable with imprisonment for a term which may extend to two years. or with fine or with both.

(b) any direction or order made under Section 19 shall upon conviction by a Court, be punishable with fine which may extend to two thousand rupees."

4. By Section 23D it was provided that the Director of Enforcement shall for the purpose of adjudicating under clause (a) of sub-section (1) of Section 23 hold an inquiry after notice to the person proceeded against and impose a penalty, but if at any stage of the inquiry he is of opinion that having regard to the circumstances of the case, the penalty he is empowered to impose would not be adequate, he shall, instead of imposing a penalty, file a complaint in writing to the Court.

5. The argument of the respondents was that Section 23 provides for two different procedures for dealing with contravention of the provisions of the Act; that while Persons contravening the provisions of the Act specified in Section 23 (1) (a) have to be dealt with by the Director of Enforcement in the first instance and need face trial in criminal court only if he is of opinion that having regard to circumstances of the case the penalty he is empowered to impose would not be adequate, the persons contravening the other provisions of the Act are liable to be prosecuted