M.G. WAGH & ORS. versus JAY ENGINEERING WORKS LTD.

M.G. WAGH & ORS. versus JAY ENGINEERING WORKS LTD.

Section 12(2) of the Foreign Exchange Regulation Act, 1947, applies to sale proceeds of goods exported both 'for sale' and 'on sale' after a completed transaction and is not restricted only to exports for sale. The expression 'no person entitled to sell or procure the sale of the said goods' identifies the accountable persons and does not exclude completed sales from its scope. Section 10 does not apply to foreign exchange earnings related to export of goods; section 12 is the applicable and complete provision.

Parties
Appellant: M.G. Wagh & Ors.; Respondent: Jay Engineering Works Ltd.
Jurisdiction
India
Judgment Date
13 January 1987
Procedural Posture
Civil Appeal / Appeal From Calcutta High Court Judgment
Outcome
Appeal allowed, High Court order set aside, Writ Petition dismissed
Legal Topics
Interpretation of Section 12(2) of FERA 1947, Repatriation of Export Earnings, Jurisdictional Issues Under FERA
Foreign Exchange Regulation Interpretation of Section 12(2) of FERA 1947 Repatriation of Export Earnings Jurisdictional Issues Under FERA

Case Brief

Summary, issues, holding and outcome

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Parties

M.G. Wagh & Ors.

Appellant

Jay Engineering Works Ltd.

Respondent

Procedural Posture

Civil Appeal / Appeal From Calcutta High Court Judgment

Legal Issues

  1. 1 Whether section 12(2) of the Foreign Exchange Regulation Act, 1947, applies only to sale proceeds of goods exported 'for sale' or also to proceeds of goods exported 'on sale' after a completed transaction
  2. 2 Scope and interpretation of the expression 'no person entitled to sell or procure the sale of the said goods'
  3. 3 Whether section 10 applies to export earnings from completed sales

Ratio Decidendi

Section 12(2) of the Foreign Exchange Regulation Act, 1947, applies to sale proceeds of goods exported both 'for sale' and 'on sale' after a completed transaction and is not restricted only to exports for sale. The expression 'no person entitled to sell or procure the sale of the said goods' identifies the accountable persons and does not exclude completed sales from its scope. Section 10 does not apply to foreign exchange earnings related to export of goods; section 12 is the applicable and complete provision.

Court Disposition

Appeal allowed, High Court order set aside, Writ Petition dismissed

Orders

  • Competent authority to proceed afresh on show cause notices under section 12(2) FERA, giving opportunity to Respondent-Company for hearing and passing orders according to law
  • Liberty granted to parties to raise all factual and legal contentions except the applicability of section 12(2)