{"id":180799,"date":"1987-01-13T00:00:00","date_gmt":"1987-01-12T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/m-g-wagh-ors-vs-jay-engineering-works-ltd-on-13-january-1987"},"modified":"2015-09-29T12:53:54","modified_gmt":"2015-09-29T07:23:54","slug":"m-g-wagh-ors-vs-jay-engineering-works-ltd-on-13-january-1987","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/m-g-wagh-ors-vs-jay-engineering-works-ltd-on-13-january-1987","title":{"rendered":"M.G. Wagh & Ors vs Jay Engineering Works Ltd on 13 January, 1987"},"content":{"rendered":"
Supreme Court of India<\/div>\n
M.G. Wagh & Ors vs Jay Engineering Works Ltd on 13 January, 1987<\/div>\n
Equivalent citations: 1987 AIR 670, \t\t 1987 SCR (1) 798<\/div>\n
Author: M Thakkar<\/div>\n
Bench: Thakkar, M.P. (J)<\/div>\n
           PETITIONER:\nM.G. WAGH & ORS.\n\n\tVs.\n\nRESPONDENT:\nJAY ENGINEERING WORKS LTD.\n\nDATE OF JUDGMENT13\/01\/1987\n\nBENCH:\nTHAKKAR, M.P. (J)\nBENCH:\nTHAKKAR, M.P. (J)\nSINGH, K.N. (J)\n\nCITATION:\n 1987 AIR  670\t\t  1987 SCR  (1) 798\n 1987 SCC  (1) 542\t  JT 1987 (1)\t135\n 1987 SCALE  (1)53\n\n\nACT:\n    Foreign Exchange Regulation Act of 1947, sections 10 and\n12  (2)--Scope and Interpretation of--Whether section  12(2)\ndesigned to prevent wholesale or partial evasion of repatri-\nation  of  earnings from export of goods  covers  only\tsale\nproceeds of goods exported 'for sale' or to sale proceeds of\ngoods  exported\t 'on sale'in the context of  sale  completed\nbefore export--Words and phrases--Meaning of the  expression\n'No  person  entitled  to self or procure the  sale  of\t the\ngoods.'\n\n\n\nHEADNOTE:\n    Section  12(2) of the Foreign Exchange  Regulation\tAct,\n1947  which  is\t designed to prevent  wholesale\t or  partial\nevasion of repatriation of earnings from export of goods  is\nto the effect that 'where any expert of goods has been\tmade\nto  which a notification under sub-section (1)\tapplies,  no\nperson\tentitled  to sell, or procure the sale of  the\tsaid\ngoods  shall,  except  with the permission  of\tthe  Reserve\nBank  .........\t \". In R. Venkata Subbu & Ors. v. The Direc-\ntorate of Enforcement, Enforcement Directorate, New Delhi  &\nAnr.,  ILR Vol 3 Mad 1968 p. 18, the Madras High Court\theld\nthat  section 12(2) covers not only sale proceeds  of  goods\nexported  \"for\tsale\" but also \"on sale\" in the\t context  of\nsales completed before export, while the Calcutta High Court\nin  the judgment under appeal held that it covers sale\tpro-\nceeds  of  goods exported \"for sale\" only. In  view  of\t the\nconflict of the opinions, the present appeal is by  certifi-\ncate.\n    Allowing  the  appeal and remitting the matters  to\t the\nCompetent Authority, the Court,\n    HELD: 1.1 The expression 'no person entitled to sell  or\nprocure\t the sale of the said goods' cannot be\tso  narrowly\nconstrued  (as\treferable to goods which have  already\tbeen\nexported),  so\tas to govern the scope of section  12(2)  in\nsuch a truncated manner which renders it virtually  impotent\nin  so\tfar as transactions of 'exports on  sale'  are\tcon-\ncerned.\t Too much is being read into too little for no\tmore\nlaudable  a  purpose  than to paralyze\tthe  provision.\t The\nexpression does not necessarily induce one to the conclusion\nthat the legislature wanted to prevent abuse in the  context\nof 'export for sale' only. The expression is mean-\n982\ningful,\t relevant, and can co-exist in the context of  abuse\narising\t from 'exports on sale' from completed\ttransactions\nas well. [985H;986B]\n    1.2 The said expression has been employed by the  Legis-\nlature merely in order to indentify the accountable  persons\nand is merely descriptive in that sense. The said expression\ndoes  not restrict the operation of the Act to\tthe  persons\nwho  have not yet sold the goods. One would have to  take  a\nquantum\t jump in order to conclude that persons referred  to\nin  section 12(2) are the persons who have not yet sold\t the\ngoods  but are entitled to sell the goods in  future  merely\nbecause the expression 'entitled to sell' has been employed.\nThe persons who have exported the goods to a foreign  buyer,\nare not sought to be excluded from the operation of  section\n12(2).\tClause\t(a) in terms adverts to the  sale  of  goods\nbeing  delayed. Clause (b) of section 12(2) adverts to\tpay-\nment for the goods, otherwise than in the prescribed manner,\nand also envisions a case where the payment does not  repre-\nsent the full amount payable by the foreign buyer in respect\nof  the goods. Clauses (a) and (b) are compatible both\twith\ntransactions  of export on sale as also to  transactions  of\nexport\tfor sale. They are compatible with all\ttransactions\npertaining  to both types of sales. There is no\t warrant  to\nassume\tthat the Legislature has not made any  provision  in\norder  to ensure that the full amount of the sale  price  is\nrepatriated  and  foreign exchange earned therefrom  is\t not\nlost to the Nation regardless of whether it is in respect of\n'export on sale' or 'export for sale'. [986F. 987A-C]\n    1.3\t The avowed and the evident object of section 12  is\nto  ensure  that the Nation does not lose  foreign  exchange\nwhich  is very much essential for the economic\tsurvival  of\nthe Nation. The exporter cannot be allowed to syphon away  a\npart of the foreign exchange or to deprive the Nation of the\nforeign exchange earned by the exports. Such is the philoso-\nphy  of\t section 12. To take the view  that  the  legitimate\nNational  interest in the sphere of preservation of  foreign\nexchange  has relevance only in the context of\ttransactions\nof  exports  for sales and that\t the  Legislature  exhibited\ntotal  unconcern  for  the foreign exchange  earned  in\t the\ncontext\t of transactions of completed sales  or\t consignment\nsales, is to attribute to the Legislature irrationality. And\nto  impute to the Legislature that it did not know  its\t job\ninasmuch as it has tackled the problem only partially  with-\nout  any  rational basis for excluding the  transactions  of\ncompleted  sales from the purview of the  legislation  which\nwould  substantially  erode  or defeat the  purpose  of\t the\nlegislation.  When it is equally possible to take  the\tview\nwhich would be conducive to the conclusion that there is  no\nlacuna in the legislation, it would be unreasonable to\ttake\nthe view that the Legislature has left a lacuna eitber by\n983\nnegligence  or\tby lack of foresight or because it  did\t not\nknow its job. [987B-F]\n    2.1 Section 10 has no application in respect of  foreign\nexchange earnings related to export of goods. Section 10  Is\ndesigned  primarily to impose an obligation on\tpersons\t who\nhave  a right to receive any foreign exchange from a  person\nresident outside India. This section has nothing to do\twith\nthe  foreign exchange earned by export of goods. The  entire\nmatter\tpertaining  to payments for exported goods  and\t the\nforeign\t exchange earnings arising therefrom has been  dealt\nwith  in  section  12 which is a complete  Code\t in  itself.\nSection 12 has been very carefully designed. Every  possible\nsituation has been conceived of and appropriate prophylactic\nmeasures to ensure the preservation of foreign exchange\t and\nprevention  of syphoning off the foreign exchange, which  is\nvery much essential to the economic life of the Nation\thave\nbeen  embedded\ttherein. The entire subject of\tforeign\t ex-\nchange\tearnings relatable to export of goods has been\tspe-\ncifically  and specially dealt with in section 12. It  would\ntherefore  be  futile to search for an alibi in\t section  10\nmerely in order to support the plea that section 12 does not\ntake within its fold the foreign exchange earnings relatable\nto transactions of completed sales. [988A-E]\n    2.2\t On a plain reading of section 10, the\tmatter\tper-\ntaining\t to  the foreign exchange earned by exports  in\t the\ncontext of completed sales will not directly fall within the\nambit of it. It will have to be strained beyond the point of\nendurance in order to accommodate this aspect. Section 10 is\nakin to a complementary provision which deals with preserva-\ntion  of foreign exchange which does not fall within a\tspe-\ncific provision like section 12. What is more, if  completed\ntransactions  are excluded from section 12, the\t purpose  of\nthe legislation will not be served, because sub-section\t (6)\nof  section 12 which has been designed to ensure  compliance\nwith the provisions made in section 12(1) to section 12\t (5)\ncannot\tbe availed of. In that event, in regard to the\tper-\nsons  who  syphon  off foreign exchange earned\tout  of\t the\ntransactions in the context of a completed sale or export on\nsale  they cannot be dealt with under section 12(6)  and  no\nsanction  to  ensure compliance will be available.  The\t Act\nwill  be thus rendered toothless to ensure  compliance\twith\nevasion in the context of a completed sale. There is accord-\ningly  no compulsions of law, logic, or philosophy to  adopt\nsuch a view. [988F; 9B?A-B]\n     R. Venkata Subba & Ors. v. The Director of Enforcement,\nEnforcement  Directorate, New Delhi & Anr., ILR Vol. 3\tMad.\n1968 P. 18, approved.\n984\n\n\n\nJUDGMENT:\n<\/pre>\n
    CIVIL  APPELLATE  JURISDICTION: Civil Appeal No  797  of
\n1976.\n<\/p>\n
    From  the  Judgment\t and Order dated  14.7.1972  of\t the
\nCalcutta High Court in Appeal No. 59 of 1971
\n    V.C.  Mahajan, Mrs. Subhadra and C.V. Subba Rao for\t the
\nAppellants.\n<\/p>\n
    Harish N. Salve, Ravinder Narain, P.K. Ram, D.N.  Mishra
\nand K. Sukumaran for the Respondent.\n<\/p>\n
The Judgment of the Court was delivered by
\n    THAKKAR,  J. Whether Section 12(2)1 of Foreign  Exchange
\nRegulation  Act of 1947 (Act) designed to prevent  wholesale
\nor  partial evasion of repatriation of earnings from  export
\nof  goods covers only sale proceeds of goods  exported\t“for
\nsale*’ as held by the High Court of Calcutta by the judgment
\nunder  appeal,\tor to sale proceeds of\tgoods  exported\t “on
\nsale” in the context of-sales completed before export  also,
\nas  held by the Madras High Court2 and as contended  by\t the
\nappellants is the problem.\n<\/p>\n
  1. “12(2) Where any export of goods has been made to which
\na  notification\t under sub-section (1)\tapplies,  no  person
\nentitled  to  sell, or procure the sale of  the\t said  goods
\nshall, except with the permission of the Reserve Bank, do or
\nrefrain\t from doing anything or take or refrain from  taking
\nany action which has the effect of securing that–\n<\/p>\n
(a)  the sale of the goods is delayed to an extent which  is
\nunreasonable having regard to the ordinary course of  trade,
\nor\n<\/p>\n
(b)  payment  for the goods is made otherwise  than  in\t the
\nprescribed  manner  or does not represent  the\tfull  amount
\npayable\t by the foreign buyer in respect of the goods,\tsub-
\nject  to  such deductions if any, as may be allowed  by\t the
\nReserve Bank, or is delayed to such extent as aforesaid.
\nProvided that no proceedings in respect of any contravention
\nof  this  sub-section shall be instituted  unless  the\tpre-
\nscribed period has expired and payment for the goods  repre-
\nsenting\t the full amount as aforesaid has not been  made  in
\nthe prescribed manner.”\n<\/p>\n
2. R. Venkatasubbu and Ors. v. The Director of\tEnforcement.
\nEnforcement  Directorate, New Delhi and Anr., ILR Vol.\t3MAD
\n1968 p.18.\n<\/p>\n
985<\/span><\/p>\n
    The\t learned  Single Judge of the  Calcutta\t High  Court
\ndismissed  a  Writ Petition instituted\tby  the\t Respondent-
\nCompany\t and refused to quash two show cause  notices  dated
\nNovember  5, 1966 issued under Section 12 (2) of the Act  as
\nit  stood at the material time on taking the view  canvassed
\nby  the appellants in this appeal. A Division Bench  of\t the
\nHigh  Court  however  allowed the appeal  preferred  by\t the
\nRespondent-Company, reversed the order of the learned Single
\nJudge  dismissing  the Writ Petition, and issued a  Writ  of
\nMandamus commanding the competent authorities under the\t Act
\n(appellants  herein)  to forbear from giving effect  to\t the
\nsaid  notices and from commencing any  proceedings  pursuant
\nthereto.  The competent authorities under the Act  have\t ap-
\nproached  this Court by way of the present appeal by a\tcer-
\ntificate  under\t Article 133 (1)(a) of the  Constitution  of
\nIndia.\tThe hub of the argument addressed by the  respondent
\ncompany,  which found favour with the Calcutta\tHigh  Court,
\nbut failed to impress the Madras High Court, is the  expres-
\nsion “no person entitled to sell or procure the sale of\t the
\nsaid  good” employed by the legislature in the opening\tpart
\nof  Section 12(2) of the Act, which to the  material  extent
\ndeserves to be quoted:-\n<\/p>\n
“12(2)\tWhere any export of goods has’been made to  which  a
\nnotification under sub-section (1) applies, no person  enti-
\ntled  to sell, or procure the sale of the said goods  shall,
\nexcept\twith the permission of the Reserve Bank, do  or\t re-
\nfrain from doing anything or take or refrain from taking any
\naction which has the effect of securing that  ….”
\nThe argument runs thus:\n<\/p>\n
Section 12 (2) of the Foreign Exchange Regulations Act 1942,
\non  its\t plain\tterms, applies only  to\t “persons”  who\t are
\n“entitled  to sell or procure the sale of the  said  goods.”
\nThe  word “entitled” governs the word “sell” as well as\t the
\nexpression  “procure the sale of”. Further, both  these\t ex-
\npressions  are used with respect to the “said  goods”–which
\nmeans  the goods which have already been exported. It is  in
\nthese premises submitted that Section 12(2) applies only  to
\nsuch persons who are entitled to sell or procure the sale of
\ngoods which have already been exported.\n<\/p>\n
    We are not impressed by this submission that the  afore-
\nsaid expression can be so narrowly construed so as to govern
\nthe scope of Section 12 (2) in such a truncated manner which
\nrenders it virtually
\n986<\/span>
\nimpotent in so far as transactions of “exports on sale”\t are
\nconcerned.  Too\t much is being read into too little  for  no
\nmore  laudable a purpose than to paralyze the provision.  It
\nappears\t to  us that this expression  does  not\t necessarily
\ninduce one to the conclusion that the legislature wanted  to
\nprevent abuse in the context of exports for sale’ only.\t The
\nexpression is meaningful, relevant, and can co-exist in\t the
\ncontext\t of abuse arising from ‘exports on sale’  from\tcom-
\npleted\ttransactions  as  well. The  expression\t “no  person
\nentitled to sell, or procure the sale of the said goods”  is
\nmerely\tdescriptive of the person who is  accountable  under
\nthe  said  provisions as has been held by  the\tMadras\tHigh
\nCourt in R. Venkata Subbu’s case, I.L.R. Vol. 3 Madras\t1968
\nPage 18, which has made a correct meaningful, and purposeful
\napproach  with\twhich  we unhesitatingly  agree.  The  whole
\npurpose is to ‘identify’ the accountable persons to  prevent
\nmalpractises  and ensure compliance. It is conceivable\tthat
\nthe  exports  might be made in the name of  or\tthrough\t the
\nagency\tof a person other than the ‘owner of goods’  or\t the
\nperson entitled to sell the goods arising out of an  ‘export
\non  sale. In our view, Anantaraman, C J, who spoke  for\t the
\nMadras High Court in Venkatasubbu’s  case (supra) was  right
\nin  taking  the view that the words “no person\tentitled  to
\nsell or procure the sale of the goods” are descriptive words
\nwhich  refer to the person in the capacity of the seller  of
\nthe goods or the person entitled to procure the sale of\t the
\ngoods  after the export of the goods has been made and\tthat
\nthis  expression does not necessarily imply that the  export
\nmust  be to a nominee of the consignor at the other  end  in
\npursuance  to  a contemplated transaction of  sale.  We\t are
\ntherefore unable to accede to the submission urged on behalf
\nof  the Respondent Company (original Writ  Petitioner)\tthat
\nSection 12 (2) can apply only to such persons who are  enti-
\ntled to sell or procure the sale of goods which have already
\nbeen exported for sale and not to the exports made in pursu-
\nance to sales which have already been effected to a  foreign
\nbuyer  before the exports. In our opinion, the said  expres-
\nsion has been employed by the Legislature merely in order to
\nidentify  the accountable persons and is merely\t descriptive
\nin  that  sense. The said expression does not  restrict\t the
\noperation  of the Act to the persons who have not  yet\tsold
\nthe goods. One would have to take a quantum jump in order to
\nconclude that persons referred to in Section 12 (2) are\t the
\npersons who have not yet sold the goods but are entitled  to
\nsell  the  goods  in future merely  because  the  expression
\n‘entitled  to sell’ has been employed. The persons who\thave
\nexported the goods to a foreign buyer, in our view, are\t not
\nsought to be excluded from the operation of section 12\t(2).
\nThis  conclusion  is reinforced if clauses (a)\tand  (b)  of
\nSection\t 12(2) are taken into account. Clause (a)  in  terms
\nadverts\t to the sale of goods being delayed. Clause  (b)  of
\nSection\t 12(2) adverts to payment for the  goods,  otherwise
\nthan in the
\n987<\/span>
\nprescribed  manner,  and  also envisions a  case  where\t the
\npayment\t does not represent the full amount payable  by\t the
\nforeign\t buyer in respect of the goods. Clauses (a) and\t (b)
\nare  compatible both with transactions of export on sale  as
\nalso to transactions of export for sale. They are compatible
\nwith  all  transactions pertaining to both types  of  sales.
\nThere  is no warrant to assume that the Legislature has\t not
\nmade  any provision in order to ensure that the full  amount
\nof the sale price is repatriated and foreign exchange earned
\ntherefrom is not lost to the Nation regardless of whether it
\nis  in respect of export on sale’ or ‘export for sale’.\t The
\navowed\tand  the evident object of Section 12 is  to  ensure
\nthat that the Nation does not lose foreign exchange which is
\nvery much essential for the economic survival of the Nation.
\nThe exporter cannot be allowed to syphon away a part of\t the
\nforeign\t exchange  or to deprive the Nation of\tthe  foreign
\nexchange  earned by the exports. Such is the  philosophy  of
\nSec.  12.  To  take the view that  the\tlegitimate  National
\ninterest  in the sphere of preservation of foreign  exchange
\nhas relevance only in the context of transactions of exports
\nfor sales and that the Legislature exhibited total unconcern
\nfor  the foreign exchange earned in the context of  transac-
\ntions  of  completed sales or consignment sales, is  to\t at-
\ntribute\t to the Legislature irrationality. And to impute  to
\nthe Legislature that it did not know its job inasmuch as  it
\nhas tackled the problem only partially without any  rational
\nbasis for excluding the transactions of completed sales from
\nthe  purview  of the legislation which\twould  substantially
\nerode  or defeat the purpose of the legislation. When it  is
\nequally\t possible to take the view which would be  conducive
\nto  the conclusion that there is no lacuna in  the  legisla-
\ntion,  it  would be unreasonable to take the view  that\t the
\nLegislature  has  left a lacuna either by negligence  or  by
\nlack  of  foresight or because it did not know its  job.  In
\norder to escape from the clutches of this answer less  argu-
\nment  learned counsel for the Respondent  Company  contended
\nthat in so far as completed sales are concerned, they  would
\nbe  governed  by Section 10 1and that  the  lacuna  argument
\nwould\n<\/p>\n
1. “10. Duty of persons entitled to receive foreign exchange
\netc.–(1)  No person who has a fight to receive any  foreign
\nexchange or to receive from a person resident outside  India
\na  payment in rupees shall, except with the general or\tspe-
\ncial  permission  of the Reserve Bank, do  or  refrain\tfrom
\ndoing  anything\t or take or refrain from taking\t any  action
\nwhich has the effect of securing-\n<\/p>\n
(a)  that  the receipt by him of the whole or part  of\tthat
\nforeign exchange or payment is delayed, or,\n<\/p>\n
(b) that the foreign exchange or payment ceases in whole  or
\nin  part  to be receivable by him.\n<\/p>\n
  (2) Where a person has failed to comply with the  require-
\nments of sub-section(1) in relation to any foreign  exchange
\nor payment in rupees, the Reserve Bank may give to him\tsuch
\ndirections  as\tappear to be expedient for  the\t purpose  of
\nsecuring  the receipt of the foreign exchange or payment  as
\nthe case may be.”\n<\/p>\n
988<\/span><\/p>\n
accordingly  lose significance. It is our firm opinion\tthat
\nSec.  10 has no application in respect of  foreign  exchange
\nearnings related to export of goods. Section 10 is  designed
\nprimarily  to  impose an obligation on persons\twho  have  a
\nright to receive any foreign exchange from a person resident
\noutside\t India.\t This  section has nothing to  do  with\t the
\nforeign\t exchange  earned  by export of\t goods.\t The  entire
\nmatter\tpertaining  to payments for exported goods  and\t the
\nforeign\t exchange earnings arising therefrom in our  consid-
\nered  opinion, has been dealt with in Section 12 which is  a
\ncomplete Code in itself. It would be an irrational  approach
\nto  make to hold that while Section 12 deals  with  payments
\nfor  exported  goods and foreign exchange  earnings  arising
\ntherefrom  in all situations, it excludes from\tits  purview
\none particular situation namely that arising in the  context
\nof failure to repatriate the sale proceeds of goods exported
\npursuant  to  a\t completed transaction\tof  sale.  Evidently
\nSection 12 has been very carefully designed. Every  possible
\nsituation has been conceived of and appropriate prophylactic
\nmeasures to ensure the preservation of foreign exchange\t and
\nprevention  of syphoning off the foreign exchange, which  is
\nvery much essential to the economic life of the Nation, have
\nbeen embeded therein. The entire subject of foreign exchange
\nearnings relatable to export of goods has been\tspecifically
\nand  specially dealt with in Section 12. It would  therefore
\nbe  futile  to search for an alibi in Section 10  merely  in
\norder  to  support the plea that Section 12  does  not\ttake
\nwithin\tits fold the foreign exchange earnings relatable  to
\ntransactions of completed sales. Pray what is the reason  or
\nthe  purpose for doing so? Why take care to deal with  ‘all’
\nmatters\t pertaining to export of goods and foreign  exchange
\nearnings  therefrom in Section 12, but even so exclude\tfor-
\neign exchange earnings arising out of completed\t transaction
\nof  sale from its scope and ambit? When there is a  specific
\nprovision which can reasonably be interpreted to cover\tthis
\naspect\tof  foreign exchange earnings also, be\tembodied  in
\nSection\t 12,  which appears to us to be a complete  Code  in
\nitself.\t why  leave this important vital matter of  no\tless
\nimportance to be dealt with by section 10 which\t essentially
\ndeals with foreign exchange receivable from individuals\t and
\nhas  nothing to do with export of goods? On a plain  reading
\nof Section 10, the matter pertaining to the foreign exchange
\nearned by exports in the context of completed sales will not
\ndirectly  fail\twithin the ambit of it. It will have  to  be
\nstrained beyond the point of endurance in order to  accommo-
\ndate  this  aspect. Section 10 is akin\tto  a  complementary
\nprovision which deals with preservation of foreign  exchange
\nwhich does not fall within a specific provision like Section\n<\/p>\n
12.  What  is more, if completed transactions  are  excluded
\nfrom Section 12, the purpose of the legislation
\n989<\/span>
\nwill  not be served, because sub-section (6) of Section\t 121
\nwhich has been designed to ensure compliance with the provi-
\nsions  made  in Section 12 (1) to Section  12(5)  cannot  be
\navailed\t of.  In that event, in regard to  the\tpersons\t who
\nsyphon\toff foreign exchange earned out of the\ttransactions
\nin  the context of a completed sale or export on  sale\tthey
\ncannot be dealt with under Section 12 (6) and no sanction to
\nensure\tcompliance will be available. The Act will  be\tthus
\nrendered toothless to ensure compliance with evasion in\t the
\ncontext of a completed sale. There is accordingly no compul-
\nsion of law, logic, or philosophy, to adopt such a view.
\n    We accordingly allow this appeal and set aside the order
\nof  the High Court quashing the show cause notices  impugned
\nin  the Writ Petition by the original Writ  Petitioner.\t The
\nmatter\twill  now  go back to the  competent  authority\t for
\nproceeding  in accordance with law. The competent  authority
\nwill  extend the time for showing cause to  the\t Respondent-
\nCompany\t and  after affording a\t reasonable  opportunity  of
\nhearing,  proceed to pass appropriate orders  in  accordance
\nwith  law as may be called for by the relevant\trecords\t and
\nthe  material and such materials as may have been  produced,
\nbefore\thim in the light of the cause shown by the  Respond-
\nent-Company on merits in response to the show cause  notice.
\nIt will be open to the competent authority to pass appropri-
\nate  order  uninhibited by any observations which  may\thave
\nbeen made by the High Court touching the facts or merits  of
\nthe  case or in regard to the incidental matters.  We  issue
\nthis direction having regard to the fact that it was in\t the
\nfirst instance for the competent authority to form an  opin-
\nion  on merits on the basis of the relevant material  in  so
\nfar  as\t the factual aspect was concerned.  Since  the\tHigh
\nCourt  was  quashing the notice on  a  jurisdictional  issue
\nthere  was no occasion for making any  observation  touching
\nthe facts of the case or the merits of the other contentions
\nincidental  thereto. We also wish to make it clear that\t the
\nquestion  regarding the validity or otherwise of  the  views
\nexpressed  by the High Court in regard to points other\tthan
\nthe  aforesaid point regarding the applicability of  Section
\n12(2) have been kept open for decision in future as and when
\nan occasion arises.\n<\/p>\n
12(6)  “For  the  purpose of ensuring  compliance  with\t the
\nprovisions of this section and any orders or directions made
\nthereunder,  the Reserve Bank may require any person  making
\nany  export of goods to which a notification under  sub-sec-
\ntion (1) applies to exhibit contracts with his foreign buyer
\nor  other evidence to show that the full amount\t payable  by
\nthe  said  buyer in respect of the goods has been,  or\twill
\nwithin\tthe  prescribed period be, paid\t in  the  prescribed
\nmanner.”\n<\/p>\n
990<\/span><\/p>\n
We  should not be understood as having pronounced  on  these
\nmatters one way or the other.\n<\/p>\n
    We,\t therefore, allow this appeal, set aside  the  order
\npassed\tby  the\t High Court and dismiss\t the  Writ  Petition
\ninstituted  by the Respondents, with liberty to the  parties
\nto  raise all contentions on facts and law barring the\tcon-
\ntention\t that Section 12(2) of the Act is not attracted.  No
\norder as to costs.\n<\/p>\n
Appeal allowed.\n<\/p>\n
991<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India M.G. Wagh & Ors vs Jay Engineering Works Ltd on 13 January, 1987 Equivalent citations: 1987 AIR 670, 1987 SCR (1) 798 Author: M Thakkar Bench: Thakkar, M.P. (J) PETITIONER: M.G. WAGH & ORS. Vs. RESPONDENT: JAY ENGINEERING WORKS LTD. DATE OF JUDGMENT13\/01\/1987 BENCH: THAKKAR, M.P. (J) BENCH: THAKKAR, M.P. (J) […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-180799","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nM.G. 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