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Criminal Appeal No. 490 of 1964, decided on 2nd Ft ruary 1967

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---Ss. 12(1) 23-Nature and constituents of offence envisaged by, S. 12__ Mere /failure to bring sale proceed, of consignments to Pakistan within prescribed period---Does not amount to an offence---Nothing on record to show that accused "had done or refrained from doing any act with intent to secure delay in sale of goods or in repatria tion of sale proceeds" - Conviction and sentence set aside.

M. A. Jabbar Choudhury v. The State P L D 1964 Dacca 20 and Kalipada Shaha v. The

State P L D 1959 S C 322 ref.

A. R. Kazi for Appellant.

Hassan Inamullah for the State.

Dates of hearing: 25th and 27th January 1967.

This appeal has bean filed on behalf of appellant Abdul Rashid Mir against his conviction by the Foreign Exchange Tribunal, Karachi, for an offence under section 12 (1) R/ W section 23 of the F. E. R. Act and the sentence of Rs. 35,000, or in default 6 months R. 1. imposed upan him. I observe from the order sheet that at the time of admitting this appeal to a regular hearing in this Court my learned brother Khamisani, J. issued notice to the appellant to show cause why the sentence passed on him should not be enhanced. But the office has taken no note of this order in the sense that this notice, though served upon the appellant and replied to by him, has not been numbered or shown separately as a criminal reference.

2. The brief facts giving rise to this matter are that the appellant, proprietor of Messrs Kenyan Carpet Industries, Karachi exported two consignments of woollen carpets and rugs under G. R. P. forms 201635 Exh. 1/A and 275549 Exh. 1/B to Messrs A. K. Abdul Ghaffar & Sons of Nairobi, a firm owned by his brother in the months of January and March 1960 respectively. The appellant failed to bring back the sale proceeds to Pakistan and although notices were served on him on behalf of the State Bank of Pakistan, the bulk of the money excepting a small sum of Rs. 2666-10-8 brought into Pakistan on 2Q-4-60, was not repatriated so that on 4-5-62 Mr. Qamrul Islam Siddiki, Assistant Controller State Bank of Pakistan, Karachi, P. W. 4 filed a complaint against the appellant under section 12 (1)/23 F. E. R. Act V1I of 1947. This complaint was heard, evidence was led and in the result the appellant was convicted as mentioned above on 15-12-64. The present appeal has been preferred against that conviction and during the pendency of this appeal in this Court the balance of the sale proceeds amounting to Rs. 31,949, was received in Pakistan vide a certificate of the National and Grindlays Bank Ltd., McLeod Road Branch, dated 3-11-65.

3. 1 have heard Mr. Abdul Rasul Kazi on behalf of the appellant and Mr, Hassan inamullah appearing on behalf of the State.

4. The main contention of the learned defence counsel Mr. A. R. Kazi is that the appellant had no intention not to bring back the sale proceeds of these carpets into Pakistan and that he has neither done or refrained from doing any act with intent to secure that either sale of the goods is delayed or that the repatriation of the sale proceeds is delayed. The learned defence counsel also pointed out that the points for determination, as drawn by the trial Court and contained in its judgment, are not strictly accurate in so far as the gravamen of the charge or accusation has not been correctly stated or brought out. Accord ing to Mr. Kazi the crux of the offence is in doing or refraining from doing any act with intent to secure that either the sale of goods is delayed or that the repatriation of the sale proceeds to Pakistan is delayed. The learned trial Judge instead of laying emphasis on this aspect of the matter has merely contended himself by raising the question as to whether the appellant failed to bring the said sale proceeds to Pakistan within the prescribed period of four months from the date of their export. The learned defence counsel in support of his contention has taken me through the evidence of the prosecution witnesses examined in this case, the one defence witness, the examination of the appellant under section 342, Cr. P. C. and his written statement together with the documents and the correspondence produced by him therewith. On the other hand, Mr. Hassan Inamullah appearing on behalf of the State has contended that these goods had been sold by the consignee in Nairobi as would appear from the telegram sent by him to the appellant at Karachi on 25-4-60 stating that "regret delay awaiting usumbura transference which is delayed for permission, definitely sending Thursday. Hamid." The learned State counsel also invited my attention to the correspondence exchanged between the State Bank of Pakistan and the appellant in which the appellant was called upon to produce the proof of the insolvency of the firm of consignee in Nairobi but instead was only able to produce a letter from the Nairobi Chamber of Commerce certifying that the said firm has never been a member of this Chamber. He also drew my attention to a letter dated 12-7-62 from the Official Receiver Crown Law Office Nairobi stating that no petition in bankruptcy bad been filed eon behalf of the firth Messrs A. K. Abdul Ghaffar & Sons, and that the two partners had left Kenya some two years previously. It was also urged that the appellant on the expiry of four months bad not applied to the State bank for extension of time and that the appellant a consignor from Karachi had entered into a conspiracy with his brother Hamid proprietor of the firm of A. K. Abdul Ghaffar & Sons, Nairobi, to dispose of the goods in question there and to pocket the sale proceed.

5. Sitting in appeal, as I am, over the judgment of the Foreign Exchange Tribunal, the very first point that has attracted my attention is the nature of the precise offence envisaged by section 12 of the F. E. R. Act 1947. A perusal of the terms of this section makes it abundantly clear that the Tribunal has erred in thinking that mere failure to bring the sale proceeds of the consignments to Pakistan within the prescribed period of four months from the date of their export amounts to an offence. To me it is manifest that the offence consists in doing or refraining 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) that the payment for the goods is not made in the prescribed manner or does not represent the full amount payable by the foreign buyer, or is delayed to such an extent as aforesaid.

The sole question of importance for determination - in this appeal is whether the appellant can be said to have committed this offence as explained above. It is admitted that the two consignments Exhs. 1/A and 1/B, the first for Rs. 19,240, and the second for Rs. 13927 were despatched from Karachi to Nairobi. on 16-1-60 and 8-3-60 respectively. On 29-4-60 a part of the sale proceeds amounting to Rs. 2,666-10-8 was received in Pakistan. .This payment would appear to have reference to the telegram sent by the appellant's brother Hamid to the appellant on 25-4-60 stating that the amount would definitely be sent on Thursday (28-4-60). This amount was received in Pakistan the following day 29-4-60. for the rest it appears that the appellant's brother Hamid carrying on business in the name of Messrs A. K. Abdul Ghaffar & Sons at Nairobi encountered losses there necessitating removing himself from Nairobi to the Belgian Congo. The letter Exh. 2/A dated 19-7 60 addressed by Messrs Macdougall & Woollen a firm of Solicitors in Nairobi to the Bokhara Palace Elphinstone Street, Karachi clearly discloses that Messrs A. K. Abdul Ghaffar & Sons had closed down their business and that the assets belonging to the said business bad been seized by the secured creditors. Moreover, the letter dated-20-1.63 addressed by Hamid Mir from Belgian Congo to his brother. the appellant in Karachi also shows that on account of the political disturbances in the Belgian Congo in the year 1961 these very goods which had been taken over from Nairobi to the Belgian Congo for sale could not be disposed of by then. But whatever may have been the activities on the part of Hamid Mir in Africa, There is nothing on this record to snow that the appellant had done or refrained from doing any act with intent to secure a delay in the sale of the goods or in the repatriation of the sale proceeds.

6. Mr. Kazi the learned Advocate appearing on behalf of the appellant has placed before me the case of M. A. Jabbar Choudhry v. The State (PD 1964 Dacca 20) where on almost similar facts it was held that the delay in repatriation was not intentional and hence no offence committed under section 23 of the F. E. R. Act, 1947. In that case, too, as in this case, the amount of the sale proceeds was received back in Pakistan during the pendency of the appeal fn the High Court, and the learned Judge mentioned in his judgment that Mr. Roohul Islam the learned Advocate on behalf of the State Bank of Pakistan had instructions not to oppose the appeal, as the sale proceeds had been received back during the pendency of the appeal. The learned defence Advocate also invited my attention to a judgment of our Supreme Court in case of Kalipada Shaha v. The State (P L D 1959 S C 322) in which Cornelius, J., as he then was, explains:

"Subsection (2) prohibits actions by the person in question, i.e., the exporter, which might have the effect of delaying the sale to an extent which is unreasonable having regard to the ordinary Course of trade, or obtaining payment for the goods otherwise than in the prescribed manner, or otherwise than in full."

7. The total amount of sale proceeds in this case on the two consignments Exhs. 1/A and 1/B amount to Rs. 33,167. The total amount so far repatriated amounts to Rs. 31,949, including the sum of Rs. 2,666, received on 29-4-60. Thus there is a shortage of Rs. 1,318, but by reason of the provisions of para. 267 (vi) of Chapter XX at page 112 of the Exchange Control Manual, third edition, 196.5, a commission of 5;e on the total price is allowed to the exporter and this commission would work out to Rs. 1,663, which is more than the shortage of Rs. 1,318.

8. In the result, I have reached the conclusion that the appellant has wrongly been convicted in this matter and therefore allowing his appeal I set aside his conviction and sentence, and direct that he be acquitted. The notice for enhancement also stands discharged.

Appeal allowed.

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