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Criminal Acquittal Appeals Nos. 194, 195 and 196 of 1963, decided on 3rd May 1966.

, Ss. 12 & 23-Export of consignment out of Pakistan-Condition precedent to repatriation of sale proceeds-Actual sale of goods in foreign country.

Kalipada Saha and another v. The State P L D 1959 Dacca 723 and Kalipada Shaha and another v. The State P L D 1959 S-C (Pak.) 322 distinguished.

Rameswarlal Agarwalla v. The State P L D 1959 Dacca 701 ref.

, S. 423-Appeal against acquittal-Defence taken by accused at trial, a pure question of fact and trial Court accepting same after hearing witnesses and examining documents produced by accused-High Court would be reluctant in acquittal appeal to differ from trial Court's view.

, Ss. 22 & 23-Accused making declaration that he was exporting a con signment of fish-meal to Singapore and undertaking to repatriate sale proceeds-Consignment of 80 bags later found to contain certain quantity of opium (6 bags) besides fish-meal (74 bags) Such declaration, held, cannot fall within purview of S. 11.

Muhammad Hayat Junejo for Appellant.

Rustom Kaiqobad and Muhammad Ibrahim Abbasi for Respondents.

Date of hearing: 3rd May 1966.

. -These are three Criminal Acquitta Appeals filed on behalf of the State Bank of Pakistan, Karachi against three sets of respondents the first two being in respect off an offence under section 12 (1) read with section 23 of the F.E.R. Act and the third under section 10, section 22 and section 12(l) read with section 23, F.E.R. Act. Although, the facts in each of these three matters are distinct yet inasmuch as the same points of law arise for consideration in each of these matters with the exception of one small additional point in the third appeal, these three appeals may with facility be dealt with and disposed of by this one judgment.

2. In Criminal Acquittal Appeal No. 194/63 the respondent is one Ismail Usman and the allegation against him is that on 29-9-1959 he exported a quantity of fresh fruits valued at Rs. 7,246.7 to Dubai and again on 6-5-1960 he exported sofa sets valued at Rs. 6,222 and Cement Tiles valued at Rs. 23,831 also to Dubai. He had undertaken to bring back the sale proceeds of these goods through the Eastern Bank Ltd. within four months of the date of export but failed to do so .In respect of fresh fruits only a sum of Rs. 1,111.71 was repatriated on 21-4-1962 and in respect of Sofa Sets a sum of Rs. 6,154.78 was brought back to Pakistan on 16-3-1962. With regard to the Cement Tiles no part of the sale proceeds had been repatriated to Pakistan. It was the case of the respondent as disclosed in his written statement that the consignment of fresh fruits reached Dubai in a completely rotten condition so that the consignee refused to accept this consignment and the goods were ultimately sold for whatever price the consignor could get and thus Rs. 1,111.71 were deposited with the State Bank. With regard to the Sofa Sets the respondent admitted that as no purchaser could be secured they were sold at a loss and the amount of Rs. 6,154.78 recovered from this sale were deposited with the State Bank. In regard to the Cement Tiles the respondent submitted that the first consignment never reached Dubai and in the second consignment as the colour of the tiles demanded differed from those supplied to the consignee no sale was effected at all. The respondent examined two witnesses in support of his defence. He also produced a copy of a letter addressed to him by his Bankers the Eastern Bank Ltd. stating that the quantity of fresh fruit had been completely spoilt and hence the consignee had refused to take delivery thereof. He also produced a copy of a letter addressed by him to the Deputy Superintendent of Police, Special Police Establishment, State Bank Branch, Karachi, requesting that as the fresh fruit had arrived at Dubai in a perished condition and the Sofa Sets and tiles could also not be sold, three months more time may be allowed to him within which to dispose of these articles, if necessary, at reduced prices.

3. In Criminal Acquittal Appeal No. 195/63 the respondents are Mustafa Karim and Abdul Sattar Partners in the firm known as Messrs Mustafa Sattar & Co. It was alleged against them that their firm had exported three consignments of cotton Waste and Leckarine to Basra in September and October 1959 valued at Rs. 8,539-15-0, Its. 5,210-15-3 and Rs. 5,910-15-3 respectively. The respondent's Firm had also undertaken with the State Bank Authorities to repatriate the sale-proceeds of these three consign ments through their Bankers, namely, the Netherlands Trading Society, Karachi, within four months from the date of export. They had failed to do so thereby violating the provisions of section 12(l) punishable under section 23, F. E. R. Act. In their statements under section 342, Cr. P. C. the two respondents of accused admitted the prosecution case but pleaded that on account is of the Revolution that had occurred that year in Iraq resulting u in the abolition of the Monarchy, the goods could not be sold having deteriorated to such an extent that no sale could be effected. In support of their defence the respondents produced along with their statements under section 342, Cr. P. C. five letters Exh. 6/1-4 and Exh. 11, three of these beings copies of letters addressed by them to their Constituent at Basra and the remaining two being original letters received by them from their Consti tuent Messrs Haji Jooma Arbi & Co. at Basra, repeating that on account of the circumstances beyond their control, namely, the political upheaval in the State of Iraq these goods could not be sold.

4. In Criminal Acquittal Appeal No. 196/63 the respondent is one R. B. Birdie Proprietor of Rustom Trading Co. Karachi, and the allegation against him as set out in the complaint under section 10 and sections 12 (1), 22 read with section 23, F. E. R. Act, were that he had exported a quantity of fish-meal valued at Pounds 180 to Singapore on 8-4-1961 having undertaken to repatriate the sale-proceeds through his Bankers, namely the Central Bank of India Ltd. within a period of four months from the date of export. It was further alleged against him that he had made a statement declaring that the consignment contained fish only whereas it was found to contain 40 pounds of opium and that he had thus contravened the provisions of section 22, F. E. R. Act. On account of his export of a contraband article, namely, opium. the entire consignment of fish-meal was confiscated by the Singapore Customs with the result that the respondent lost the right to receive the foreign exchange representing the value of this consignment. The respondent submitted a lengthy-written statement denying all knowledge on his part that the 80 bags of fish-meal exported by him to Singapore contained any narcotic or contraband opium. He happened to be in Singapore exploring the market for fish-meal there when this consignment arrived and was summoned by the Customs Authorities there and learnt to his great surprise that 6 out of the 80 bags contained raw opium. In order to escape lightly he was advised to plead guilty which he did and was let off on payment of a fine. He examined in defence Shaikh Fazal Ahmed then Superintendent Excise and Taxation, Karachi, who deposed that he had investigated into this case on receiving a confidential report from the Singapore Customs and his enquiries revealed that the respondent Birdie was entirely innocent and had no knowledge that opium was mixed in this fish-meal.

5. Now, dealing with the first point of law that arises for consideration in these three appeals, we would advert to the argument of Mr. Muhammad Hayat Junejo the learned advocate appearing on behalf of the appellants that the provisions of section 12 (1) of the F.E.R. Act, 1947 impose an absolute liability upon a declarant grated permission to export goods from Pakistan to comply with the terms of his declaration and in accordance therewith to bring back into Pakistan an amount representing the full export value of the goods within the period prescribed therein, Mr. Hayat contended that the respondents in these three cases having obtained permission from the Authorities concerned to export the goods in question on the strength of an undertaking given by them to bring back into Pakistan the sale proceeds thereof within a period of four months from the date of export, they are obsolutely bound by the terms of this undertaking and are under an obligation to bring back into Pakistan the full export value of these goods regardless of whether such foreign exchange has or has not been earned through the sale of the goods. In support of this contention Mr. Hayat relied upon a case reported in P L D 1959 Dacca 723 which judgment was upheld by their Lordships of the Supreme Court in P L D 1959 S C (Pak.) 322.

6. We have examined this first contention of the learned advocate appearing on behalf of the appellants and we observe that a condition precedent to the repatriation of the sale-proceeds of any consignment exported under the provisions of section 12, F. E. R. Act, is the actual sale of the goods in question. Admittedly, A there can be no sale proceeds without there first being a sale. The declaration given by an exporter acting under the provisions of section 12 whereby he gets permission to export is merely that-

"the amount representing the full export value of the goods has been, or will within the prescribed period be, paid to the prescribed manner."

But, before such payment can be made the full export value of the goods in question or their sale proceeds outside Pakistan must first be realised and obtained by the exporter and unless and until E this has happened there is no export value or sale proceeds for him to repatriate or pay back in the prescribed manner. In the case relied upon by Mr. Hayat Junejo mentioned above both the Dacca High Court as well as their Lordships of the Supreme Court of Pakistan have accepted the validity of this position and we observe that in this reported case the full export value or sale proceeds of the exported goods had been realised and obtained by the exporter. We may in this connection refer to another case of the Dacca High Court reported in P L D 1959 Dacca 701 where Hamoodur Rahman, J. of the Dacca High Court, as he then was, pointed out in his judgment that-

"Section 12 of the Foreign Exchange Regulation Act, 1947 provides that no export shall be made of any goods from Pakistan either directly or indirectly unless a declaration supported by such evidence as may be pres cribed is furnished by the exporter to the prescribed authority and that the amount representing the full export value of the goods has been or will within the prescribed period be paid in the prescribed manner. The offence, there fore, does not consist in the exporting of the goods but in the non-repatriation into Pakistan of the foreign exchange earned by the export of goods,"

This quotation serves to emphasise the fact that the foreign exchange must be earned through the export of goods before it can be repatriated and, therefore, unless and until it is so earned, there is nothing to repatriate. This is also the view of the trial judge Mr. Kadir Nawaz Awan then Sessions Judge and Foreign Exchange Tribunal, Karachi, as expressed by him in his three judg ments in these three appeals in the words--

"Section 12/23 does not punish a person if the goods exported by him are not sold."

7. It was next- contended by the learned Advocate appearing on behalf of the appellants that a duty is cast upon the respondents in these cases to prove the truth of the defence taken by them and, therefore, to establish by unimpeachable evidence that the goods for which they had obtained permission to export were in actual fact not sold after such export had been made to a foreign country. It was urged by the learned Advocate that in each of these three cases the respondents had not led adequate evidence to establish the truth of the defence taken by them. In particular, the learned advdcate emphasised Criminal Acquittal Appeal No. 195/63 wherein the respondents Mustafa Karim and Abdul Sattar along with their statements under section 342, Cr. P. C. produced copies of five letters Exhs. 6/1-4 and Exh. 11 which had not been proved in accordance with the provisions of the Evidence Act. We pointed out to the learned advocate that this question of proof of the defence taken by the three respondents at their trial is a pure question of fact and that the trial Court, having accepted this defence after hearing the defence witnesses and seeing the documents relied upon by the accused, we would be reluctant in -an Acquittal Appeal to differ from the view taken by the trial Court which was in the advantageous position of seeing the parties and the witnesses and the documents produced and relied upon by them. Further, with regard to the specific case of Mustafa Karim and Abdul Sattar in Criminal Acquittal Appeal No. 195/63, it would be a simple matter for us to direct that additional evidence under section 428, Cr. P. C, be taken thereby furnishing the two respondents with an opportunity of satisfactorily proving their own letters. But, we felt that there was no point in sending the case back for this very minor purpose and that we could as well if we should at all entertain in our minds any, doubt as to the genuineness of these letters, grant them the benefit of that doubt.

8. Finally, it was contended by Mr. Hayat that the respondent R. B. Birdie in Criminal Acquittal Appeal No, 196/63 had made a false declaration for which he was clearly liable under sections 22/23 of the F.E.R. Act. It is the case for the pro secution as set out in Para. 7 of the complaint- filed against Birdie that-

-------------------------------------------

"the accused made mis-statement and wrong declaration on the G. R. P. 1. Form that the consignment contained fish only whereas it contained raw opium also and thus hg contravened the provision of section 22, F. E. R. Act."

Now section 22 is in these words:

"No person shall, when complying with any order or direction under section 19 or when making any application or declaration to any authority or person for any purpose under this Act, give any Information or make any statement which he knows or has reasonable cause to believe to be false, or not, true, in any material particular."

Admittedly, it 1s the latter part of this section that would apply to this case and even when considering this part we come across the all important words-"FOR ANY PURPOSE UNDER THIS ACT". In other words, the application or declaration to any authority that is being made must be "FOR ANY PURPOSE UNDER THIS ACT". Now, no applicant can make any applica tion or declaration for the export of contraband goods because he will thereby be immediately exposing himself tog prosecution under the relevant Act according as the contraband article is a narcotic or gold or any such other contraband article. Hence, the declara tion of Mr. Birdie in this case can under no circumstances bring him within the purview of section 22 of the F.E.R. Act. Besides Mr. Birdie made a declaration that he was exporting fish-meal and from the 80 bags 74 contained only fish-meal. Thus, Mr. Birdie had complied with the language of his declaration. If it should be that in addition to fish-meal Mr. Birdie had also export opium, then he can certainly be dealt with under the Opium Act or the Abkari Act but his declaration can never fall within the purview of section 22 of the F.E.R. Act. It would be a different matter if an exporter undertaking to export Article 'A' say coarse cloth should be found to have exported an entire quantity of Article B' say fine cloth: but, this is not the case here.

9. At the end of the arguments In this matter we arrived at the conclusive that there is no force in these three Criminal Acquittal Appeals and that they should be dismissed. We there and then in Court announced a short order to this effect. This judgment contains the reasons for that short order,

Appeal dismissed.

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