JUDGMENT
B.N. Krishnan, J.
1. These ten appeals arise from the common order passed by the learned single judge (See Jacqueline Chandani v. Deputy Director, Enforcement Directorate [1992] 75 Comp Cas 228] in five writ petitions by which the notification issued by the Reserve Bank of India as per annexure “H” came to be quashed and the order passed by the Deputy Director, Enforcement Directorate. levying penalty of Rs. 26,500 on the petitioner was set aside and the Union of India as also the Deputy Director were prohibited from enforcing the provisions of sections 8(1), 14 and 19(1)(e) of the Foreign Exchange Regulation Act, 1973 (for short “the Act”), in so far as the petitioner is concerned. The Reserve Bank of India which was not a party before the learned single judge being aggrieved by that portion of the order by which its notification came to be quashed has preferred Writ Appeals Nos. 740 to 744 of 1991, with the leave of this court. The Union of India as also the Deputy Director, Enforcement Directorate, who were respondents in the writ petitions have preferred the second set of writ appeals in Writ Appeal Nos. 809 to 813 of 1991. As all these appeals arise H from the same order, they are being disposed of by this common judgment.
2. The case put forward by the writ petitioner is as hereunder :
She is a citizen of the United States of America by birth origin holding a U.S. passport. She was married to one Jagdish Chandani of Indian origin in 1967, when he was permanently residing in the U.S.A. He shifted his residence from the U.S.A. to India. After marriage, the petitioner was residing in the U.S.A. with her parents who were citizens of America by birth and origin and she had already been employed. Prior to her marriage, all her savings from her earnings had been deposited from time to time in the bank account maintained with Winters National Bank and Trust Company, Dayton Ohio, U.S.A., and she continued to operate the same even after her marriage. She continued to have her U.S.A. citizenship even after her marriage and she registered herself as a foreigner in this country under the Foreigners Act and her visa was being extended from time to time. On September 10, 1981, the Assistant Director, Enforcement Directorate, searched the residential premises of her husband at No. 385, Rajmahal Vilas Extension, Bangalore, and also the premises of System Manufacturing Limited, Peenya Industrial Area, Tumkur Road, Bangatore. At that time, the petitioner was not in India and she was staying with her parents at Dayton, Ohio, U.S.A. Certain documents including a diary of the petitioner were seized by the enforcement authorities and the cliiry reflected maintenance of accounts in her name and also in the names of her minor children with Winters Bank and Trust Company, U.S.A., and that the petitioner was also holding twelve shares of General Motors Stock, U.S.A. The statement of the husband of the petitioner was recorded and he stated that his wife, the petitioner, would be in a position to explain her accounts and thereafter a directive was issued on January 18, 1982, by the Assistant Director to furnish all the material particulars. On receipt of the same, the petitioner returned to India on January 25, 1982, and submitted the information called for. Her statement was also recorded and that was followed by six show-cause notices on August 30, 1982, imputing violation of certain provisions of the Foreign Exchange Regulation Act. She submitted her replies and by order dated December 27, 1982, despatched on February 15, 1983, the petitioner was held guilty of the charges and a total penalty of Rs. 26,500 was levied in respect of the five show-cause notices.
It was urged before the learned single judge that the Deputy Director, Enforcement Directorate, had rejected the explanation offered by the petitioner solely relying upon the notification issued by the Reserve Bank of India as per annexure “H” by which the petitioner who had been married to a person of Indian origin had been deemed to be a person of Indian origin and the provisions of the Act are not applicable to persons who are non-citizens of India either residing in India or outside India and the notification issued by the Reserve Bank of India is beyond its legislative competence and it is ultra vires the provisions of the Act.
3. The learned single Judge held that the petitioner who was not a citizen of India had come to India to stay with her temporarily and she did not fit into any of the clauses of section 2(p) of the Act and that the Act applied only to citizens of India and also to those citizens of India who are outside India and that the petitioner being a temporary resident of India was excluded from the operation of the Act. It was also held that the Explanation of annexure “H” was not only irreconcilable but would also render the definition of “person resident in India” under section 2(p) of the Act ineffective and what the definition of section 2(p) of the Act does not permit, is sought to be achieved indirectly, by sub-section (c) of annexure “H” and the notification could only explain the section, but it cannot go so far as to enlarge the provisions of the statute and, therefore, the notification in question was per se ultra vires the Act.
4. The facts that the petitioner is a U.S. citizen and that her husband is an Indian citizen staying in India and the visa for the petitioner is being extended from time right from 1967 are not disputed. Even according to the petitioner, her stay in India was from 1967 to 1982, with intermittent breaks as hereunder, during which period she stayed outside India.
1. From August 10, 1970, to December 25, 1970.
2. From December 17, 1974, to February 24, 1975.
3. From June 4, 1977, to August 7, 1977.
4. From January 4, 1979, to March 30, 1979.
5. From March 10, 1980, to May 4, 1980.
6. From August 22, 1981, to January 10, 1982.
5. The total period of stay of the petitioner in India during 1967 to 1982 is about thirteen years, whereas her stay outside India is about 17 1/2 months.
6. It was contended by the learned advocates for the appellants that the learned single judge was wholly in error in holding that the provisions of the Act are not applicable to non-citizens who are residing in India and further the learned judge was also not right in holding that the notification issued by the Reserve Bank or by the Union of India had in any way enlarged the scope of section 2(p) of the Act. It was also urged that the notifications are to be looked into only for purposes of finding out whether the persons who come within the purview of the Act have been given A general exemption and the learned judge was also not right In holding that the petitioner was only a temporary resident in India and had wrongly Imported the aspect of permanent residence as also domicile while interpreting section 2(p) of the Act. On the other hand, the learned advocate for the petitioner supported the order of the learned single judge as also the reasonings adopted therein.
7. Section 2(p) of the Act defines ‘person resident In India’. Sub-clauses (i), (ii) and (iv) refer to ‘citizens of India’ and sub-clause (iii) refers to a person who is “not a citizen of India”. We are in the present appeals concerned with a case of non-citizen and, therefore, we are more concerned with sub-clause (iii) of section 2(p). It reads as hereunder :
“2. (p) ‘person resident in India’ means. – ….
(iii) a person, not being a citizen of India, who has come to, or stays in, India, in either case –
(a) for or on taking up employment in India, or
(b) for carrying on in India a business or vocation in India, or
(c) for staying with his or her spouse, such spouse being a person resident in India, or
(d) for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period;”
8. Section 8 of the Act imposes certain restrictions on dealings in foreign exchange and sub-section (1) mandates that no person in India other than an authorised dealer and no person resident in India other than an authorised dealer shall outside India purchase or otherwise acquire, borrow, etc., any foreign exchange except with the previous general or special permission of the Reserve Bank. The other sub-sections impose other restrictions. Sub-section (1) of section 8 reads as hereunder :
“(1) Except with the previous general or special permission of the Reserve Bank, no person other than an authorised dealer shall in India, and no person resident in India other than an authorised dealer shall outside India, purchase or otherwise acquire or borrow from, or sell, or otherwise transfer or lend to or exchange with, any person not being an authorised dealer, any foreign exchange :
Provided that nothing in this sub-section shall apply to any purchase or sale of foreign currency effected in India between any person and a money-changer.”
9. Section 14 of the Act enables the Central Government to acquire foreign exchange and it enables the Central Government by notification in the Official Gazette, order every person in India and every person resident in India to comply with its directions as detailed in sub-clauses (a) and (b). The proviso to the said section enables the Central Government also to exempt any person or class of persons from the operation of the order made in the said notification. The said section reads as here-under :
“14. The Central Government may, by notification in the Official Gazette, order every person in, or resident in, India, –
(a) who owns or holds such foreign exchange as may be specified in the notification, to offer it, or cause it to be offered, for sale to the Reserve Bank on behalf of the Central Government or to such person, as the Reserve Bank may authorise for the purpose, at such price as the D Central Government may fix, being a price which is not less than the price calculated at the rate of exchange for the time being authorised by the Reserve Bank;
(b) who is entitled to assign any right to receive such foreign exchange as may be specified in the notification, to transfer that right to the Reserve Bank on behalf of the Central Government on payment of such consideration therefor as the Central Government may fix having regard to the rate for the time being authorised by the Reserve Bank in pursuance of sub-section (2) of section 8 for conversion into Indian currency of the foreign currency in which such foreign exchange is expressed :
Provided that the Central Government may, by the said notification or by a separate order, exempt any person or class of persons from the operation of the order made in the said notification :
Provided further that nothing in this section shall apply to any foreign exchange acquired by a person from an authorised dealer or from a money changer and retained by him with the permission of the Reserve Bank for any purpose.”
10. The Reserve Bank of India issued a notification under section 8 of the Act on January 1, 1974, and it generally exempted the maintenance and operation of an account expressed in foreign currency by foreign citizens in or resident in India but not permanently resident therein. By notification dated May 21, 1979, the Reserve Bank of India incorporated the Explanation for purpose of the notification to presume who should be deemed to be permanently resident in India and it is this Explanation introduced to the notification dated January 1, 1974, by the notification dated May 21, 1979, that has been attacked in the writ petitions and it is annexure ‘G’. Likewise, by the notification dated June 15, 1977, the Deputy Secretary to the Union of India granted certain exemption and by the notification dated May 21, 1979, an Explanation was added to the said notification. It is again this Explanation that has been attacked by the petitioner in these writ petitions.
11. The notifications issued by the Reserve Bank dated January 1, 1974, as amended by the notification dated May 21, 1979, read as hereunder :
“In pursuance of sub-section (1) of section 8 of the Foreign Exchange Regulation Act, 1973 (46 of 1973), and in supersession of its Notification No. E.R.A. 23147-R.B., dated July 8, 1947, the Reserve Bank is pleased to direct that the prohibition imposed by that sub-section shall not apply to the maintenance of and operations on an account, Expressed in a foreign currency, by foreign citizens in or resident in India but not permanently resident therein.
Explanation. – For the purpose of this notification, –
(a) a person of Indian origin shall be presumed to be a person permanently resident in India if he has come to and stays in India otherwise than for the performance of his duties under a contract of employment of a specified duration or for carrying out any other specific job or assignment, the duration of which does not extend beyond a period of three years;
(b) a person shall be deemed to be a person of Indian origin if he or either of his parents or any of his grandparents was born in undivided India, and the expression ‘undivided India” shall have the meaning assigned to it in section 2(h) of the Citizenship Act, 1955 (Act No. 57 of 1955).
(c) a wife of an Indian citizen or person of Indian origin shall be deemed to be a person of Indian origin, even though she is a foreign citizen of non-Indian origin.”
12. The notification issued by the Central Government under section 14 of the Act with its amendment reads as hereunder (see [1979] 49 Comp Cas, (St.) 207) :
“G.S.R. No. 745. In exercise of the powers conferred by section 14 of the Foreign Exchange Regulation Act, 1973 (46 of 1973), the Central Government hereby makes the following amendments in the notification of the Government of India, Ministry of Finance (Department of Economic Affairs) No. F. 113/EC 73 (G.S.R. No. 839) (See [1977] 47 Comp Cas (St.) 133), dated 15th June,] 1977, namely :-
In the said notification, the following Explanation shall be inserted at the end, namely :-
Explanation. – For the purpose of this notification :-
(a) if a person of Indian origin has come to, or stays in, India otherwise than for the performance of his duties under a contract of employment of a specified duration or for carrying out any other specific job or assignment, the duration of which does not extend beyond a period of three Years, he shall be deemed to be a person permanently resident in India;
(b) a person shall be deemed to be a person of Indian origin if he or either of his parents or any of his grandparents was born In undivided India, and the expression ‘undivided India’ shall have the meaning assigned to it in clause (h) of section 2 of the Citizenship Act, 1955 (57 of 1955);
(c) a wife of an Indian citizen or of a person of Indian origin shall be deemed to be a person of Indian origin even though she is a foreign citizen of non-Indian origin.’
13. As the learned single judge has held that the notifications are bad an his struck down the same and consequently held that the impugned order is had and for the two sets of appeals that is the only common feature we shall advert to that aspect in the first instance and then go to the aspect whether in spite of the notification being upheld whether the impugned order is still bad.
14. It was contended by the learned advocate for the appellants that, while finding out whether a person comes within the purview of section 2(p)(iii) of the Act, there is absolutely no scope for any one to have any notion of permanent residence or domicile and further at the stage of finding out whether a non-citizen comes within the purview of the said section or not, there is absolutely no scope also to make use of the notifications issued by the Reserve Bank or the Union of India under sections 8 and 14 of the Act. It was urged that only if a person fits into section 2(p)(iii), then it has to be further found out whether he has the benefit of the exemption granted by the Reserve Bank or the Union of India. In other words, it was stated that only if a person who is not a citizen of India fits into any of the particular categories detailed from (a) to (d) of section 2(p)(iii) of the Act and thereby could be called “a person resident in India”, we should go to the further aspect whether such a person has been granted exemption by the Reserve Bank or the Union of India and it was also pointed out that under the exemption notification foreign citizens in India or resident in India are again classified into two “groups, viz., foreign citizens in or resident in India who are permanently resident therein and who are not permanently resident therein. Probably, the authorities issuing notification thought that it would be difficult to find out the yardstick by which one could be held to be permanently resident and who could not be held to be permanently resident and thought of issuing explanation. BY sub-clause (a) of the Explanation they have stated that a person of Indian origin who has come to stay in India otherwise than for the purpose of his duties, etc., should be presumed to be a person permanently resident in India. Again, as to what they meant by “a person of Indian origin” has been explained by sub-clauses (b) and (c) of the Explanation. It was pointed out that the deeming provisions in relation to a person of Indian origin incorporated by clauses (b) and (c) of the Explanation are meant for the purpose of only interpreting the word “person of Indian origin” occurring in sub-clause (a) of the Explanation and they are not expected to be made use of for any other purpose. It was urged that if that is borne in mind, then there would be no scope to hold that the Explanation in any way invades the other provisions of the Act or any other enactment.
15. The main grievance of the learned advocate for the writ petitioner appears to be that a person who could not have been deemed to be a person of Indian origin either in the popular or literal meaning of the same, or as defined under the Indian Citizenship Act, has been deemed to be a person of Indian origin by virtue of the fiction created by clause (c) of the Explanation and that is impermissible. If this legal fiction in respect of a lady who is a foreign citizen who has married an Indian citizen or a person of Indian origin were to be made use of for any other purpose other than understanding the import of the notifications issued by the Reserve Bank of India and the Union of India under sections 8 and 14 of the Act, then there would have been some substance in the contention of the learned advocate. But when the legal fiction has been incorporated only to understand the phrase “a person of Indian origin” used in sub-clause (a) of the Explanation and nothing further than that, there could hardly be any scope for anyone to ventilate any kind of grievance in respect of this legal fiction.
16. The learned advocate for the writ petitioner-respondent here invited our attention to the decision of the Patna High Court in Bata India Ltd. v. Assistant Collector of Central Excise [1978] ELT 211, to support his contention that by virtue of this even a person who would not come within the purview of section 2(p)(iii)(c) of the Act, would be roped into the ambit of the said section though otherwise he does not. It may be noticed that in that case, though under the provisions of the Central Excises and Salt Act, 1944, Bata India Ltd. could not be held to be a manufacturer liable to pay excise duty in respect of footwear produced by small manufacturers, by virtue of the Explanation provided in the notification issued under rule 8(1) of the Excise Rules, the said Bata India Limited was deemed to have manufactured the said footwear manufactured by the small manufacturer but affixed with the brand or trade name of Bata India Ltd. It is in that context that the Patna High Court held that by virtue of the notification the Central Government could impose any condition in respect of the manufacture, but it could not indirectly rope-in a non-manufacturer of those footwears and the notification issued in the said case was bad. This decision does not in any way assist the respondent in the present appeals for more than one reason. In the first instance, it may be pointed out that while incorporating the Explanation in the notification by which the deeming provision was introduced as, where a footwear, manufactured by a small manufacturer, is affixed with the brand or trade name of another manufacturer, or is purchased by another manufacturer, it shall be deemed to have been manufactured by or on behalf of such other manufacturer, nothing has been mentioned in the notification to the effect that the said Explanation was meant only for the purpose of that notification, whereas in the notification with which we are presently concerned, there is a specific mention as, “for purpose of this notification”. Therefore, on this ground itself the said decision has no application to the facts of the present case. Secondly, no argument appears to have been advanced in the said case that the deeming provision was only for the purpose of the notification to find out whether the small manufacturer was entitled to the exemption or not. Obviously, no such argument could have been advanced, because the Explanation had been incorporated in the said notification not for the purpose of that notification alone and, on the other hand, it was adding another category of persons to be deemed manufacturers though in fact that person or body was not engaged in the manufacture. Therefore, this decision has no application to the facts of the case.
17. It may be noticed that the notification purports to give general exemption from the operation of the prohibition by section 8(1) of the Act on foreign citizens in India and has no application in Indian citizens. The authorities could have even avoided the use of the words “person of Indian origin” and also the further deemed provisions incorporated in clauses (b) and (c) and could have used simpler language to indicate who had been exempted and who had not been exempted. They could have put it as a foreign citizen in or resident in India who is permanently resident therein is not exempted whereas, a foreign citizen in or resident in India who is not permanently resident therein is exempted. It could have also been further stated that if a person or either of his parents or grandparents who were born in undivided India or a lady who is a wife of an Indian citizen or a person of Indian origin though a non-citizen of Indian origin has come to stay in India for the performance of his or her duties under a contract of employment of a specified duration or for carrying out any specific job or assignment, the duration of which does not extend beyond a period of three years is not a person permanently resident in India. Otherwise, the said person should be taken as a person permanently resident in India. This appears to be the purport of the use of the phrase “person of Indian origin” in clause (a) as also the deeming provisions incorporated in clauses (b) and (c) of the Explanation.
18. Even apart from the abovesaid reasoning it may be noticed that an inclusive definition or a legal fiction is resorted to when either the farmers of any particular Act or Rules or notification want that the word used must be given some meaning other than its popular sense and thereby enlarge the meaning of the words or phrases occurring in the body of the statue, rules or notification. As has been pointed out in CIT v. Taj Mahal Hotel , if the definition of the word has not been given it must be construed in its popular sense, that is, that sense which people conversant with the subject-matter with which the statue, etc., is dealing would attribute to it. But, where it has been defined by the use of the word “includes” it should be taken that it has been used to enlarge the meaning of the word or phrase occurring in the body of the statue, etc., and when so used, those words and phrases must be construed as comprehending not only such sense as they signify according to their nature and merit but also those things which the interpretation declare’s that they shall include. In this decision, the expression “plant” used in section 10(5) of the Income-tax Act was held to include even sanitary fittings and Pipelines installed in a hotel, in Kishan Lal v. State of Rajasthan, , while referring to the contention that inclusion of sugar in the Schedule to the Rajasthan Agricultural Produce Marketing Act as an agricultural produce was arbitrary as it was not produced out of soil the basic ingredients of agricultural produce, the Supreme Court has pointed out the existence of legislative power to add or include and define a word even artificially to include any item Produced in the mill Or factory within the ambit of products from the soil and the submission made against inclusion of sugar was termed as fallacious. It may be noticed that as per section 8 Of the Indian Penal Code, 1860, which occurs in Chapter II pertaining to general Explanation, the pronoun “he” and its derivatives are used of any person whether male or female. Thus, it could be seen that though in the popular or dictionary sense the pronoun “he” is used only in respect of a male person, by virtue of this Explanation incorporated in the Indian Penal Code, 1860, the said pronoun would refer to a person whether male or female. Thus, the argument advanced that the deeming provision incorporated in respect of a wife of Indian citizen or person of Indian origin by clause (c) of the notification is opposed to other provisions of the Citizenship Act or the dictionary meaning cannot be countenanced because the authorities have the liberty to explain in what particular sense the particular word has been used in the Explanation though in the ordinary diction sense it may refer to altogether a different person.
19. When it has been specifically mentioned that the three different clauses incorporated by the Explanation to the notification are for the Purpose of the said notification, there is absolutely no scope to make use of the same while interpreting section 2(p)(iii)(c) of the Act. While referring to the construction of the Explanation incorporated in the C.P. and Berar Letting of Houses and Rent Control Order, the Supreme Court in M. K Salpekar v. Kumar Shamsunidar Chaudhari, AIR 1988 SC 1841, has pointed out that the Explanation incorporated in the said clause in relation to residential house operated within a narrow area and did not cover the entire field governed even by the main sub-clause and did not accept the contention advanced that by the addition of the Explanation even residential buildings have been excluded from the purview of the sub-clause. It was also pointed out that it was manifest that the Explanation operated within a very narrow area and did not cover the entire field governed by the main sub-clause and by the use of the expression shall be deemed a legal fiction had been made for the purpose of including a particular situation within the sweep of the sub-clauses.
20. It may be noticed that the fact that the Reserve Bank of India and the Union of India have the necessary powers under sections 8 and 14 of the Act to grant general or special exemption to any particular class of persons from the operation of the provisions of the said sections has not been disputed. It is also not disputed that while granting such exemption the authorities should bear in mind the object of the provisions of the Act. viz., conservation of foreign exchange resources and also proper utilisation thereof, in the Interest of economic development of the country. To achieve the said object the concerned authorities should find whether granting exemption to a foreign citizen who happens to be the wife of an Indian citizen or a person of Indian origin would subserve the object of the Act or not. It cannot be said that the authorities had to power to refuse to grant exemption to that class of foreign citizens. It may also be noticed that no argument was advanced on behalf of the petitioner that the classification made excluding a foreign citizen wife of an Indian citizen or person of Indian origin is in any way discriminatory or that it does not conform to any other provision of the Act or the Constitution of India. It that be so, then the argument advanced on behalf of the writ petitioner that the deeming provision incorporated by Explanation (c) to the notification is ultra vires cannot be accepted and has to be rejected. Then it is clear that there could have been absolutely no basis for quashing the amending notifications issued under sections 8 and 14 of the Act, respectively by the Reserve Bank of India and the Union of India as without any basis and the order of the learned single judge quashing the said notifications has to be set aside.
21. This leads us on to the next aspect, viz., whether the petitioner fits into the definition of “person resident in India” within the meaning of section 2(p)(iii)(c) of the Act. It was contended on behalf of the appellants that a non-citizen of India if she has come to or stays in India with her spouse who is a person resident in India, then even if such a stay is for a day she would come within the meaning of “person resident in India” as defined In this section, whereas it was contended on behalf of the petitioner that there must be animus minuend to bring her within the meaning of the said phrase.
22. A good deal of arguments were advanced on both the sides on the aspect as to what is the meaning of “residence” or “resident” as per the various dictionaries and also as to how the said words occurring in different statutes have been interpreted by various High Courts including the Supreme Court. It appears to us that making reference to the same is an unnecessary exercise in these appeals for interpreting section 2(p)(iii)(c) of the Act. It may in the first instance be noted that “person resident in India” has been defined in this section 2(p) as “means” and various categories mentioned in (i), (ii), (iii) and (iv) have been detailed. It is fairly well settled that the Legislature has power to define a word even artificially and when a word is defined to mean such and such, the definition is prima facie restrictive and exhaustive and only when the definition is declared to be exclusive of such and such it is prima facie extensive. Justice B. P. Singh in his book of Principles of Statutory Interpretation, fifth edition, at page 121, has referred to the said aspect. In Kishan Lal v. State of Rajasthan, , reference has been made to the legislative power to define a word even artificially. When there could be no dispute that the definition given to the phrase “person resident in India” in section 2(p) of the Act is restrictive and in none of clauses (i) to (iv) the word resident” or “residence” has been used and, on the other hand, the specific mention made is “stay”, it is not necessary to refer to the dictionary meaning of those words or as to how those words have been interpreted in various other statutes. With this idea of the definition given in sub-section 2(p), we may now proceed to find out whether in the case of non-citizen who comes within the purview of section 2(p)(iii)(c) of the Act stay in India for any particular period is a must or not. For easy reference, we may have an idea of the various sub-sections of section 2(p)(iii) of the Act. The said section reads as hereunder :
‘2. (p) “person resident in India” means, – …..
(iii) a person, not being a citizen of India, who has come to, or stays in, India, in either case –
(a) for or on taking up employment in India, or
(b) for carrying on in India a business or vocation in India, or
(c) for staying with his or her spouse, such spouse being a person resident in India, or
(d) for any other purpose, in such circumstances as would indicate his intention to stay in India for an uncertain period.’
23. If only sub-section (c) is to be taken note of, it reads as a person not being a citizen of India who has come to or stays in India in either case, for staying with his or her spouse, such spouse is a person resident in India. It may be noticed that Parliament in its wisdom only made use of the word “stay” and not used the word “residing” and if only this part of the section is to be taken note of without any reference to the earlier or later clauses in the said sub-section, the argument advanced on behalf of the appellants, that if a foreign citizen-wife comes to India even for the purpose of staying with her spouse even for a day, she would get the tag “person resident in India” as defined in this section. But it may be noticed that this sub-section is preceded by sub-clauses (a) and (b) and following by sub-section (d). The words used in sub-section (d) are significant. It embraces within its ambit any purpose in such circumstances as to indicate the intention of the person to stay in India for an uncertain period. It may also be noticed that Parliament has also used the word “other” before the ward “purpose” and it has to be seen whether sub-clauses (a), (b) and (c) of section 2(p)(iii) are specified instances indicating the intention of the person to stay in India for an uncertain period and not being satisfied by mentioning such specified instance, whether parliament has also thought of mentioning that any other purpose apart from the categories detailed earlier, where the intention to stay in India for an uncertain period is indicated would also bring such a person within the purview of section 2(p)(iii) of the Act. The learned advocates for the appellants contended that the clause “in such circumstances as would indicate his intention to stay in India for an uncertain period” used in sub-clause has absolutely no application whatsoever to the earlier sub-clauses. On the other hand, it was urged by the learned advocate for the respondent-petitioner that they would qualify the earlier sub-clauses also. It is in this context that we have to find out whether the principle of nastier a socs could have some kind of application to understand the significance of these clauses and in particular clause (c) adverted to above. The Supreme Court had occasion to refer to this principle in Rohit Pulp and Paper Mills Ltd. v. Collector of Central Excise, . The following passage in the decision of the Supreme Court in State of Bombay v. Hospital Mazdoor Sabha, , has been relied upon in this latest decision of the Supreme Court (at page 761) :
“This rule, according to Maxwell, means that, when two or more words which are susceptible of analogous meaning are coupled together they are understood to be used in their cognate sense. They take as it were their colour from each other, that is, the more general is restricted to a sense analogous to a less general.”
24. The Supreme Court has also observed with reference to this principle as hereunder in this latest decision (at page 761) :
“The principle of statutory interpretation by which a generic word receives a limine interpretation by reason of its context is well established. In the context with which we are concerned, we can legitimately draw upon the noscitur a sociis principle. This expression simply means that the meaning of a word is to be judged by the company it keeps.”
25. In Rainbow Steels Ltd. v. CST , the court had to understand the meaning of the word ‘old’ in the context of an entry in a taxing tariff which read thus :
“Old, discarded, unserviceable or obsolete machinery, stores or vehicles including waste products . . . .”
26. Though the tariff item started with the use of the wide word “old”, the court came to the conclusion, that “in order to fall within the expression ‘old machinery’ occurring in the entry, the machinery must be old machinery in the sense that it has become non-functional or non-usable”. In other words, not the mere age of the machinery, which would be relevant in the wider sense, but the condition of the machinery analogous to that indicated by the words following it, was considered relevant for the purposes of the statute.
27. But the notification excepts not one but a group of items. If the items mentioned in the group were totally dissimilar and it were impossible to see any common thread running through them again, it may be permissible to give the exception their widest latitude. But when four of them – undoubtedly, at least three of them – can be brought under an intelligible classification and it is also conceivable that the Government might well have thought that these small scale factories should not be eligible for the concession contemplated by the notification where they manufacture paper catering to industrial purposes, there is a purpose in the limitation prescribed and there is no reason why the rationally logical restriction should not be placed on the proviso based on this classification. In view, the only reasonable way of interpreting the proviso is by understanding the words “coated paper” in a narrower sense consistent with the other expressions used therein.
28. Though the contention urged by Sri K. Parasaran in the said appeal that the expression “coated paper (including waxed paper)” used in the proviso excluding operation of the exemption granted under the notification should be given restricted meaning in the context in which it appears in the proviso was termed as ingenious their Lordships accepted that contention and held that though the word “coated paper (including waxed paper)” could refer to that type of paper made use of both for industrial purpose and cultural purpose, it was held, having regard to the other categories mentioned in the said proviso, that a coated paper used in the second proviso referred only to coated paper used for industrial purpose and not to coated varieties of printing and writing paper and it was held that in respect of coated paper used for printing and writing, the appellant was held entitled to concessional rates.
29. If we have a look at the three categories of non-citizens detailed in sub-clauses (a), (b) and (c) of section 2(p)(iii) of the Act read in the background of the language used in sub-clause (d), it would be clear that all these categories of non-citizens could be brought under an intelligible classification, viz., the persons who have come with the intention to stay In India for an uncertain period and, therefore, to that extent these groups of persons are not totally dissimilar and one could see a common thread running through these categories of non-citizens mentioned in section 2(p)(iii) and, therefore, in the case of a non-citizen who has come to and stays In India for staying with his or her spouse, such spouse being a person resident in India, unless a contrary intention is made out in the facts and circumstances of the particular case, it must be taken as a particular category of non-citizens who have come to stay in India for an uncertain period. Therefore, it is needless to state that if in a given case, a person who is not a citizen of India has come to stay with his or her spouse only for a day or two, it cannot be said that he or she is a person resident in India within the meaning of section 2(p)(iii)(c) of the Act.
30. The other extreme argument advanced by the learned advocate for the writ petitioner that the stay of a non-citizen in India is always regulated by the visa issued in his favour and, therefore, his stay is always for a definite certain period and hence cannot be termed under any circumstance to be a person resident in India has to be only mentioned to be rejected. If that interpretation is accepted, under no circumstances a non-citizen could be construed as a person resident in India and the entire section 2(p)(iii) which refers to persons who are not citizens of India would be rendered otiose. It may also be noticed that in sub-section (d) what has been mentioned is, not that his stay should be for a definite certain period and the stress is, on the intention of the person to stay in India for an uncertain period. If, the intention of the person to stay in India is for an uncertain period, though by the visa that is issued in his favour his stay is permitted only for a certain period, it would be a case which falls within the purview of section 2(p)(iii) of the Act. A Division Bench decision of this court in Enforcement Directorate v. Father J. M. Stevens [1985] ILR Kar 1590; [1986) 60 Comp Cas 670 was also brought to our notice for interpretation of this clause occurring in section 2(p) of the Act. It appears that this decision is of no assistance to either of the parties in the present case for more than one reason. That was a case where the action was taken for contravention of the provisions of the Act for a period prior to the amendment of the notification issued by the Reserve Bank of India on May 21, 1979. Therefore, the appellate board in that case came to the conclusion that, that person was not a person domiciled in India and, therefore, the exemption in the notification applied to him in all its force and their Lordships agreed with this finding of the appellate board. It was also pointed out, no foundation had been laid in that case or facts brought on record to treat the foreign national proceeded against in that case as a person resident in India. Therefore, the decision rendered therein was purely on the basis that no sufficient foundation had been laid to hold that he was a person resident in India. It may be noticed that in section 2(p) of the Act, as it now exists and also the notifications of the Reserve Bank of India and the Union of India applicable to the facts of this case, the expression “not domiciled therein” does not occur anywhere and, therefore, the concurrence of their Lordship with the conclusion of the appellate board that the person proceeded against was not a person domiciled in India could have little impact on the question under consideration regarding interpretation of section 2(p)(iii)(c) of the Act. However, the decision of the Delhi High Court in K. N. Mehta v. Director of Enforcement (1985] ECC 286; [1985] 57 Comp Cas 820, 828 would support the view which we propose to take in these appeals. After referring to the definition given in section 2(p) of the Act, this is what His Lordship observed :
“The emphasis seems to be that those persons who are not citizens of India having come to India to reside for an uncertain period are to be considered ‘persons resident in India’.”
31. This supports our view that categories under sub-sections (a), (b) and (c) of section 2(p)(iii) of the Act are specified instances of non-citizens who have come to or stay in India which indicate his intention to stay in India for an uncertain period. Therefore, the contention urged on behalf of the appellants that clause (c) of section 2(p)(iii) of the Act has to be read in isolation and the fact that it is preceded by sub-clauses (a) and (b) and followed by sub-clause (d) is of no consequence, has to be rejected. On the other hand it has to be held that the persons who come under the category of sub-clauses (a), (b) and (c) are specified instances of persons who have come to stay in India for an uncertain period. Of course, the facts and circumstances of a particular case may take the person out of the purview of these clauses wherein the intention to stay in India for a certain period is explicit.
32. Some argument was also advanced, whether a non-citizen who comes within the purview of “person resident in India” would carry the said tag even when the non-citizen goes out of India and at one stage Sri Sundara Swamy, learned senior counsel for the Reserve Bank of India stated that such persons do not carry such tag when they go outside India whereas, Sri Shylendra Kumar, senior standing counsel for the Central Government contended that even when such a person goes outside India, he would carry such a tag and the learned advocate for the petitioner, Sri Chander Kumar contended that the person does not carry such a tag when he goes outside India. It appears the matter does not give scope for any kind of doubt in view of the Explanation given to the said section. It reads :
“A person, who has, by reason only of paragraphs (a), (b) or (d) of sub-clause (iii) been resident in India, shall, during any period in which he is outside India, deemed to be not resident in India.”
33. Therefore, the non-citizen who comes within the purview of sub-clause 2(p)(iii)(c) would continue to have the tag “person resident in India” even that person is outside India. But the person who under other categories do not carry that tag on account of this Explanation.
34. The learned single judge has held that as the notification issued by the Reserve Bank of India was ultra vires, it was not necessary for him to refer to the legality or otherwise of the penalisation. But in our considered view the notification issued by the Reserve Bank cannot be struck down and further despite the fact that the stay of non-citizen in India is always for a definite as per the terms of the visa granted to him that does not take the non-citizen out of the purview of section 2(p)(iii) of the Act.
35. It has to be seen, in the facts and circumstances of this case, whether the petitioner fits into the category of section 2(p)(iii)(c) of the Act and further whether it could be held that she falls under the category of persons who have been granted exemption under the notification issued by the Reserve Bank of India.
36. As already noticed at an earlier stage, during the period from 1967 of 1982, the stay of the petitioner in India was for about 13 years whereas her stay outside India was for about 17 1/2 months. It may be noticed that each time her stay outside India ranged from one month and twenty-six days to four months and nineteen days and her stay in India was very much longer in duration. We are given to understand that under no circumstance the visa could be extended for a period beyond three years continuously. No material has also been forthcoming an behalf of the petitioner to the effect that her stay in India was with the Intention to stay for any specified interval or period. It is not her case that her stay in India was for any particular purpose the duration of which was certain or that, therefore, it should be held that it is not a case of her intention to stay for an uncertain period. If that be so, and if in a period of about 15 years her stay in India is for about 13 years, it appears that the intention to stay in India for an uncertain period is writ large and in fact no serious argument could be advanced do behalf of the writ petitioner that the circumstances are indicative of exhibiting her intention to stay in India for a certain period and not an uncertain period All these circumstances drive us to the one and only conclusion that her Intention to stay in India must have been for an uncertain period and she must have gone outside India only for the purpose of getting a fresh visa each time she was unable to get an extension by staying in this country itself.
37. Therefore, even on the conclusion that we have arrived at in respect of various clauses of section 2(p)(iii) of the Act, it is clear that the petitioner squarely fits into the category specified in section 2(p)(iii)(c) of the Act and, hence, it has to be held that she is a person resident In India.
38. It was contended on behalf of the respondent by her learned counsel, Sri Chander Kumar, that in order to bring his client’s case within the prohibitions imposed by the various sections, In respect of which violation, penalties have been levied, it must be established that his client was in India at the time of the alleged violations and if those transactions have taken place when she was outside India, then she would not be within the prohibitions imposed by the various sections. As noticed at an earlier stage as per the Explanation to section 2(p) of the Act, it is only the persons who by reason only of sub-clauses (a), (b) or (d) of section 2(p)(iii) have been resident in India shall during any period he is outside India be deemed to be not resident in India. Therefore, it is clear but for this Explanation even persons coming under the purview of sub-clauses (a), (b) or (d) of section 2(p)(iii) of the Act would have been considered as “persons resident in India” even during the period in which they are outside India. But, again, the legal fiction incorporated by this Explanation deems them to be not resident in India during such period they are outside India. But, it may be noticed that this deeming provision introduced by the Explanation does not embrace within its ambit the person who comes within the purview of section 2(p)(iii)(c) of the Act. Therefore, it has to be held that the foreign citizen’s spouse who is held to be a person resident In India on account of sub-clause (c) cannot be deemed to be not resident in India when he or she is outside India. Therefore, such a person even though is outside India has to be considered as resident in India, in which event she would be subject to the prohibitions imposed by the various provisions of the Act in respect of the transactions carried outside India.
39. Having regard to our conclusions, there is no scope to hold that the petitioner gets the benefit of the exemption granted by the Reserve Bank. In fact no such argument was advanced on her behalf.
40. It may also be noticed, that except for the argument adverted to already, no other contention was urged on behalf of the writ petitioner to say that even though she does not get the benefit of the aforesaid Explanation, there is no scope to hold that she has committed violation of any of the provisions of the Act in respect of which penalty has been levied.
41. It was no doubt contended on behalf of the appellants that the petitioner had an alternate remedy to challenge the impugned order levying penalty on her and without exhausting that remedy she has approached this court and on that very ground the writ petition ought to have been dismissed. On the other hand, it was contended that as it was thought that the only efficacious remedy that was available to the respondent was to file the writ petition especially having regard to the fact that she was challenging the vires of the notification issued by the Reserve Bank of India, the writ petition was filed and her contention had also appealed to the learned single judge and, therefore, her writ petition should not be thrown out only on the ground that she had other efficacious remedy to agitate against the correctness of the order levying penalty. Under the peculiar facts and circumstances of this case and also having regard to the fact that the argument advanced on behalf of the petitioner that the notification issued by the Reserve Bank was ultra vires the Constitution, found favour with even the learned single judge and also having regard to the fact that even on the facts there is no scope for the writ petitioner to canvas an argument that under no circumstance could the authority have levied any penalty on her, it appears to us that only on the basis that the petitioner (respondent herein) had a more efficacious remedy by way of an appeal, and she ought not to have approached this court, the writ petition cannot be rejected.
42. Under the circumstances, it is clear that the finding of the single judge that the authority could not have levied any penalty on the writ petitioner cannot be accepted.
43. The learned advocates were also heard regarding the quantum of penalty levied. The learned senior standing counsel for the Central Government made it very clear that he is interested only in sustaining the levy of penalty and so far as the quantum of penalty is concerned he would leave it to the court. It was also urged on behalf of the writ petitioner that now the restrictions imposed in relation to the regulation of foreign exchange have been very much liberalised and in fact the impugned notifications have even been superseded and, therefore, this may not be a case to sustain the levy of penalty. It appears to us that the special circumstances could be taken note of for reducing the penalty but not set aside the penalty in entirety. It may also be noticed that it is not the case of the appellants that there was any kind of stealthy dealing by the writ petitioner with a view to deprive this country of any foreign exchange and even at the very initial stage she has made a clean breast of all the aspects of the case and it was not even indirectly hinted on behalf of the appellants that any dishonor intention is attributable to her. Having regard to all these aspects, it appears to us that, while sustaining the levy of penalty, the quantum of penalty should be reduced in each of the cases to a sum of Rs. 1,000. Thus, the penalty of Rs. 26,500 has to be reduced to Rs. 5.000. In the result, the following order is passed :
(i) The order of the learned single judge that the notifications issued by the Reserve Bank of India and the Union of India as per annexures “H” and “A” are ultra vires and are liable to be quashed, is set aside.
(ii) The order of the learned single judge setting aside the levy of penalty is set aside.
(iii) The levy of penalty made by the authority is sustained, but nevertheless the quantum is reduced to Rs. 1,000 in each case in all to Rs. 5,000.
(iv) The parties are directed to bear their own costs throughout.
The appeals are allowed only to the extent indicated above.
44. After the judgment was pronounced a request was made to grant leave to appeal to the Supreme Court. As our judgment is based on well established principles laid down by the Supreme Court we do not find this a fit case to grant leave. Hence refused.