Lala Gurusharan Lall vs Registrar of Joint Stock Companies

Debabrata Mookerjee, J.—These are two applications for quashing two proceedings pending against the Petitioners in the court of the Chief Presidency Magistrate, Calcutta, u/s 13 of the Capital Issues (Continuance of Control) Act, 1947 (Act XXIX of 1947).

The Capital Issues (Continuance of Control) Act, 1947, was preceded by an Ordinance (being Ordinance v. of 1947) issued u/s 72 of the Ninth Schedule to the Government of India Act, 1935. This Ordinance incorporated the provisions of Rule 94A of the Defence of India Rules. On May 17, 1943, a new Rule 94A entitled Control of Capital Issues was introduced in the Defence of India Rules. There were several amendments to that Rule during the year 1943 and thereafter and on June 9, 1944, the Rule as so amended read as follows:

Rule 94A. (2)(a) No company, whether incorporated in British India or not, shall except with the consent of the Central Government-

(i) make an issue of capital in British India;

(ii) make in British India any public offer of securities for sale;

(iii) renew or postpone the date of maturity or repayment of any security maturing for payment in British India.

(b) The Central Government may on application make an order according recognition to an issue of capital made or to be made outside British India by a company not incorporated in British India.

(3) The Central Government may qualify any consent or recognition accorded by it under Sub-rule (2) with such conditions whether for immediate or future fulfilment, as it may think fit to impose; and where a company acts in pursuance of such consent or recognition, it shall comply with the terms of any condition so imposed.

(4) No company incorporated in British India shall, except with the consent of the Central Government, make an issue of capital outside British India.

It is not necessary to set out the other provisions contained in Rule 94A for the limited purpose of these revision petitions.

Sub-rule (1) of Rule 94A defines for the purpose of the Rule, securities as stocks, bonds, debentures, etc.; and Clause (b) of Sub-rule (1) provides that a person shall be deemed to make an issue of capital, who issues any securities whether for cash or otherwise. The other sub-rules attached to Rule 94A prohibit inter alia sale or purchase or transfer in any other manner securities issued by a Company in respect of any issue of capital made after May 17, 1943, unless such issue has been made with the consent or recognition of the Central Government. Sub-rule (10) provides for punishment for contravention of the Rule up to a limit of five years'' imprisonment or with fine or with both.

Rule 94A was presumably made for the purpose of making necessary provisions by way of controlling the issue or disposal of, or dealing in securities.

The Rule some of the provisions of which I have set out above, was ultimately incorporated in Ordinance v. of 1947 called Capital Issues (Continuance of Control) Ordinance, 1947. It came into force on March 25, of that year. In this Ordinance the word "securities" has been defined as being the instruments issued or to be issued for the benefit of a company whether incorporated in British India or not and includes stocks, shares, debentures, etc. Section 3(1) of the Ordinance is in these words:

(1) No company incorporated in British India shall, except with the consent of the Central Government, make an issue of capital outside British India.

(2) No company whether incorporated in British India or not, shall except with the consent of the Central Government-

(a) make an issue of capital in British India ;

(b) make in British India any public offer of securities for sale ;

(c) renew or postpone the date of maturity or repayment of any security maturing for payment in British India.

(3) The Central Government may on application make an order according re-cognition to an issue of capital made or to be made outside British India by a company not incorporated in British India.

(4) The Central Government may qualify any consent or recognition accorded by it under Sub-section (2) or Sub-section (3) with such conditions, whether for immediate or future fulfilment, as it may think fit to impose; and where a company acts in pursuance of such consent or recognition, it shall comply with the terms of any condition so imposed.

Section 12 of the Ordinance provides:

(1) Whoever contravenes, or attempts to contravene, any of the provisions of this Ordinance or of any order made thereunder shall be punishable with imprisonment for a term which may extend to two years or with fine or with both.

(2) If the person committing an offence punishable under this section is a company or other body corporate, every director, manager, secretary or other officer thereof shall, unless he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent its commission, be deemed to be guilty of such offence.

Section 15 provides for continuance of existing orders and incorporates certain savings. They are in these terms:

All orders made under Rule 94A of the Defence of India Rules or under the said rule as continued in force by the Emergency Provisions (Continuance) Ordinance, 1946, and in force immediately before the Commencement of this Ordinance shall continue to be in force and be deemed to be orders made under the appropriate provisions of this Ordinance.

(2) The expiration of Rule 94A of the Defence of India Rules or of the said rule as continued in force by the Emergency Provisions (Continuance) Ordinance, 1946, shall not affect

(a) anything done thereunder,

(b) any right, privilege, obligation or liability, acquired or incurred under that rule or any order made thereunder,

(c) any penalty, forfeiture or punishment incurred in respect of any offence committed against that Rule, or

(d) any investigation, legal proceeding or remedy in respect of any such right privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid:

and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the said rule had not expired.

It is to be observed that on March 30, 1946, the Defence of India Second Amendment Ordinance (Ordinance XII of 1946) came into operation as a result of which Sub-section (4) of Section 1 of the Defence of India Act, 1939, was amended and this Ordinance provided that the expiry of the Act would not affect the previous operation of anything duly done or suffered under that Act or any Rule made thereunder or any order made under any such Rule. It further provided that any right, privilege, obligation or liability acquired, accrued or incurred under the Act or Rule would remain unaffected and that any investigation, legal proceeding or remedy might be instituted continued or enforced as if the Act, that is to say, the Defence of India Act had not expired.

Then came the emergency Provision Ordinance (Ordinance XX of 1946) which came into operation on October 1, of that year. This Ordinance provided that notwithstanding the expiry of the Defence of India Act, the provisions of such of the Defence of India Rules as were mentioned in the schedule to the Ordinance should continue in force and have effect subject to such modifications as might be indicated in the schedule itself. The schedule to the Ordinance mentioned Rule 94A-Control of Capital Issues-as being one of the provisions of Defence of India Rule which was to continue in force. It was further provided by the Ordinance that any order or other instrument made in pursuance of any of the provisions of the Rules and in force immediately before the expiry of the Defence of India Act would continue in force and Section 6 of the General Clauses Act would apply upon the expiry of any of the Defence of India Rules so continued by the provisions of this Ordinance as if that Rule were an enactment and had then been repealed by a Central Act. It is thus clear that Rule 94A to which reference is made in Section 15 of the Capital Issues (Continuance of Control) Ordinance continued in force after the Defence of India Act expired and by virtue of the operation of Ordinance XX of 1946, the provisions of Rule 94A were alive when they were incorporated in the Capital Issues (Continuance of Control) Ordinance, 1947.

This Ordinance v. of 1947 was replaced by an Act entitled the Capital Issues (Continuance of Control) Act, which received the assent of the Governor-General on April 18, 1947. The provisions of the Ordinance were in the main repeated in the Act with necessary adjustments. Section 16 of the Act provides as follows:

Section 16. (1) All orders made or deemed to be made under the provisions of the Capital Issues (Continuance of Control) Ordinance, 1947, and in force immediately before the commencement of this Act shall continue to be in force and to deemed to be orders made under the corresponding provisions of this Act.

(2) Section 6 of the General Clauses Act, 1897, shall apply upon the expiration of the said Ordinance as if it had been repealed by this Act.

Section 13 provides penalties for contravention of the Act in these words:

(1) Whoever contravenes, or attempts to contravene, any of the provisions of this Act or of any order made thereunder shall be punishable with imprisonment for a term which may extend to one year or with fine or with both.

Section 13(2) repeats the provisions as respects the liability of the Director, Manager, Secretary of a company which are to be found in the corresponding section of the Ordinance. The definitions of issue of capital and the provisions relating to the control over issues of capital as provided in the Ordinance were adhered to and repeated in the Act.

The Capital Issues (Continuance of Control) Act, 1947, having had originally a restricted life was continued by subsequent enactments in 1950 and 1952, the last amendment extending the Life of the Act till March, 1956.

It is thus clear from the citations above that a definite control has been established and continued over the issue of capital and no company incorporated in British India can make any issue of capital without the consent of the Central Government. The provisions as respects the power of the Central Government to qualify the consent or recognition accorded which had been introduced in the Ordinance were also repeated.

Turning to the facts of these two cases, it appears, that the accused Petitioners Lala Gurusharan Lall and Arjun Prosad were directors of Bengal Cotton Mills, Limited (now in liquidation). That company applied some time in April, 1944, to the Deputy Examiner of Capital Issues, Government of India, for sanction to the issue of new shares. The Examiner of Capital Issues accorded sanction for issue of two lacs of ordinary shares of Rs. 10 each, and 10,000. Preference shares of Rs. 100 each but under Rule 94A of the Defence of India Rules then in force, certain conditions were attached to the consent, namely, that the amounts realised by that issue in excess of Rs. 1,50,000 should be invested in Government of India securities and that the script should be deposited in a Bank and that such security should not be sold out without the previous sanction in writing of the Government of India. By orders, dated September 14, 1945, February 9, 1946 and January 20, 1947, the Examiner of Capital Issues allowed the Company to invest sums beyond Rs. 4,72,275. Pursuant to the condition attached to the sanction to the issue of capital, the Company invested a sum of Rs. 2,42,000 in Victory loans of the Government of India and deposited the script with the Central Bank of India with the approval of the Government of India on January 31, 1946. In October, 1947, the Company disposed of the securities of the value of Rs. 2,42,000 without obtaining the permission of the Central Government therefore. The Victory Bonds were placed to the credit of the Petitioner Lala Gurusharan Lall under instructions of the other Petitioner Arjun Prosad and the sale proceeds were received by the Petitioner Lala Gurusharan on October 29, 1947, and corresponding adjustments were made in the books of the Company on December 30, 1947. This, according to the prosecution, involved infringements of Section 13 of the Capital Issues Control Act, 1947, for which a complaint was filed on August 24, 1954, by the Registrar of Joint Stock Companies, West Bengal, under instructions of the Government of India. Out of this complaint Criminal Revision Case No. 163 of 1955 arises.

The Registrar of Joint Stock Companies, West Bengal, filed another complaint on February 1, 1955, charging these Petitioners with having contravened the provisions of Section 13 of the Capital Issues (Continuance of Control) Act, 1947, on the allegation that there was contravention of conditions of issue of capital made by the directors of the Bihar Spinning and Weaving Mills Limited which was under the managing agency of Messrs. Bhadani Brothers Limited of which the Petitioners Arjun Prosad and Lala Gurusharan Lall were also directors. The allegations is that on November 21, 1944, the Company obtained a sanction from the Government of India for the issue of capital to the extent of Rs. 15,00,000; one of the conditions imposed under the sanction was that all amounts raised by that issue in excess of Rs. 1,00,000 should be invested in any of the new Government of India Securities and that the script therefore should be kept in deposit with a Bank in the joint name of the Company and of the Secretary, Finance Department of the Government of India, in such manner that the securities should not be available for sale by the Company without the previous sanction in writing of the Central Government. On November 13, 1945, the Company obtained another sanction from the Government of India for the issue of capital to the extent of Rs. 12,50,000. The condition attached this time was similar and it was that all amounts raised by this issue in excess of Rs. 50,000 should be invested in one of the new Government of India Securities and that the script should be kept in deposit in a Bank in the joint names of the Company and the Secretary, Finance Department of the Government of India and that the script should not be available for sale by the Company without the previous sanction in writing of the Government of India. Certain further sums of money were released by the Government of India to the extent of Rs. 3,08,000 from the amount required to be invested as indicated above. Up to the period of December 31, 1947, the Company raised a total sum of Rs. 7,93,418-12-0, and according to the conditions of sanction granted, the Company should have invested a sum of Rs. 3,35,418-12-0 in Government of India loans, but the Company invested only Rs. 1,47,900. In October, 1947, sale of the Victory Bonds deposited with the Bank was effected without the previous sanction of the Government of India and it appeared that the amount was placed at the disposal of Lala Gurusharan Lall at Bombay under instructions of the Petitioner Arjun Prosad. In these circumstances, the two Petitioners have been charged u/s 13 of the Capital Issues (Continuance of Control) Act. Criminal Revision Case No. 556 of 1955 arises out of this case.

These two revision cases, therefore, relate to proceedings instituted for alleged contravention of the provisions of the Capital Issues (Continuance of Control) Act, and since they raise identical questions they are dealt with and disposed of together.

Mr. Sen appearing on behalf of the Petitioners has contended that the two prosecutions pending against his clients in the court of the Chief Presidency Magistrate at Calcutta are not maintainable. The contention raised has two branches: first, it has been argued that consents accorded to issue of capital are not orders. A consent or recognition as referred to in Rule 94A of the Defence of India Rules has not been preserved but only orders made under these Rules might have been preserved. The general argument on this head has been that the consent on the part of the authorities allowing a party to do a certain thing would involve an agreement between them. A violation of that agreement cannot possibly be the subject-matter of a prosecution under the Capital Issues (Continuation of Control) Act. It may be, Mr. Sen has argued, that orders that were made by the Central Government under Rule 94A of the Defence of India Rules are preserved; their continuance may, for the sake of argument, be accepted as having been secured by the several legislative enactments but the consents accorded in these two cases to the issue of capital cannot possibly furnish the basis of a prosecution even though the conditions attached to such consents suffered breach or were broken. In other words, consent is something entirely distinct from orders and the two are not to be confused in interpreting the different provisions of the Act. The other branch of Mr. Sen''s argument appears to be that the conditions imposed for the issue of share capital were imposed under powers derived from Rule 94A of the Defence of India Rules. Those conditions were no longer valid and subsisting in 1947, when the alleged infractions or breaches took place, inasmuch as the Defence of India Act and the Rules had ceased to have operation on September 30, 1946. The prosecution in these two cases it is argued, having been started against the Petitioners in the years 1954 and 1955 were wholly misconceived. If the offences had been committed during the life of the Defence of India Act or the Rules or even during the continuance of Ordinance XX of 1946, then the prosecutions could have been carried on under the saving clauses of the Capital Issues (Continuance of Control) Ordinance and Act 1947. In these circumstances, Mr. Sen has argued, that the prosecution of the Petitioners in these two cases is not maintainable in law. These two contentions, therefore, require examination.

With regard to the first branch of Mr. Sen''s argument, it is to be observed that the words consent and recognition are both used in Rule 94A of the Defence of India Rules. The same words are repeated in the Capital Issue Control Ordinance as also in the succeeding Act which followed the Ordinance. It has been argued that the contention that consents were never intended to be saved finds considerable support from the language used in the Ordinance or the Act itself. Reference is made to Section 12 of the Ordinance which says that contravention or attempted contravention of any of the provisions of the Ordinance or of an order made thereunder shall be punishable with imprisonment or fine. Mr. Sen has argued that Section 12 of the Ordinance is the section which provides the penalty and consequently, the intention has to be gathered by reference mainly to the provisions of this section. Similarly, the Act punishes contravention or attempted contravention of any of the provisions of the Act or of any order made under it. The argument is that the language of the section in the Ordinance as also in the Act providing for punishment for contravention makes it clear that their operation is prospective and it is only violation of provisions of the Ordinance and of the Act or orders made thereunder which is intended to be punished. Consents under Rule 94A are not orders and, therefore, it cannot be held, according to Mr. Sen, that they have been preserved by the Ordinance or the Act and breach of condition attached to consent given under the relevant provision of the Defence of India Rules cannot be held punishable u/s 13 of the Act.

Mr. Banerjee appearing on behalf of the State has argued that consent has to be communicated by an order and no consent can be given without an order being actually made therefore. He has called attention to different provisions of the Defence of India Act and the Rules from which he argues that there may be general orders or particular orders; Orders may be addressed to people generally or addressed to individuals and both kinds of orders, were included in the Defence of India Act or, more properly, in the Defence of India Rules. Section 2(2) of the Defence of India Act gives power to the authority concerned to make orders suited to different types of cases for which provision was considered necessary to be made during the emergency. One of those was a financial provision covered by item 22 of Section 2(2) of the Defence of India Act. Rule 5 of the Defence of India Rules provides for orders to be addressed to any person in pursuance of certain rules non-compliance with which was liable to be punished. Rule 14 in express terms provides for general or special orders. Under Rule 17(1)(a)(iia) a particular person may be directed by an order to do a certain thing. Rule 24A gives power to the authority concerned to make an order directing a person to furnish particulars of his movements. Rule 26 expressly provides that if the authority concerned is satisfied that certain orders have to be made with respect to any particular person with a view to preventing him from acting in a manner prejudicial to the defence of India, the authority may make an order directing such person to remove himself. Having regard to these provisions contained in the Defence of India Rules, Mr. Banerjee has argued that consent under Rule 94A accorded to the party concerned has to be conveyed by means of an order; consequently such order will be an order covered, by Rule 94A of the Defence of India Rules which were continued and ultimately incorporated in Ordinance v. of 1947 and then enacted in the Capital Issues (Continuance of Control) Act, 1947.

It is indeed true the word consent or recognition is used in Rule 94A of the Defence of India Rules and it has been retained in the Ordinance and the Act regulating the issue of capital. But does it mean that consent when given conditionally to the issue of capital will not entail punishment even on proof of breach or infraction of the condition attached to the issue of such consent? I agree that consent has to be communicated and that must be by means of an order. The mere fact that the word order was not used with reference to the giving of consent will not lift a breach of the condition imposed out of the mischief of punishment. As a matter of fact, in March, 1945, there was a further amendment of Rule 94A of the Defence of India Rules. Although we are not concerned with these amended Rules for the purpose of the present cases, nevertheless it is interesting to note that the authority concerned used the word order also in connection with the giving of consent or recognition. After Sub-rule (8) a new Rule was added and that was Rule 8A which says that any person authorised on behalf of the Central Government may for the purpose of inquiring into the correctness of any statement made in an application for consent or recognition to the issue of capital or of ascertaining whether or not the requirement of any condition attached to an order according such consent or recognition has been complied with, require any company or any officer of a company, which has made such application or obtained such order to submit to him such accounts, books or other documents as he may reasonably think necessary. Therefore in my view the mere fact that the word order was not used in the text of the Rule by which a conditional consent was accorded to the issue of capital by a company will not entitle the Petitioners to say that the company can commit a breach of the condition with impunity. I take this view even without the aid of the amendments just referred to, made in 1945 to Rule 94A of the Defence of India Rules.

Mr. Sen has collaterally argued that "consent" imports an agreement whereas an order implies the command of authority. It is in other words, according to him, an imperative which cannot be disobeyed. I do not quite appreciate this argument because one is accustomed to orders being conditional also. The orders of the appropriate authority may quite validly be conditionally issued. In one sense these sanctions when accorded were accorded upon conditions that certain things would have to be done, viz., the investment of certain sums of money beyond the stated amount in Government of India Securities and their deposit in a Bank and so on. So the sanction or the order giving the consent may be of a conditional type. Undoubtedly the consents given in the present case were not private communications. They conveyed the decision of the authorities concerned and a decision has to be embodied in an order. Therefore the mere fact that the word "order" is not used will not entitle the Petitioners to say that they can with impunity violate the conditions attached to the consents to the issue of capital.

The second branch of Mr. Sen''s argument is that these prosecutions are not maintainable in view of the fact that they were initiated some time in 1954 and 1955, i.e., long after the Defence of India Rules under which consents were accorded in these cases had lapsed. Mr. Sen''s objections are that since the conditions imposed on the issue of capital were imposed under powers derived from Rule 94A of the Defence of India Rules which were no longer valid and subsisting in the year 1947 when the alleged infractions took place, the present prosecutions are not maintainable. It has been argued that if these prosecution had been launched during the lifetime of even Ordinance XX of 1946, the position might have been different.

It is to be recalled that the Defence of India Act came into operation in 1939 under which various rules were framed. One of the rules concerned itself with the making of financial provisions. These financial provisions were made for the first time on May 17, 1943, when the Capital Issue Control Order was introduced in the Defence of India Rules as Rule 94A. Certain amendments were made to that Order from time to time and on June 9, 1944, the Rule with which we are concerned came into operation by a Defence Department notification No. 5-D.C.68/44. On March 30, 1946, the Defence of India Second Amendment Ordinance (being Ordinance No. XII of 1946) came into operation. We have already seen that the Ordinance amended Sub-section (4) of Section 1 of the Defence of India Act, 1939, and provided that the expiry of the Act would not affect any rule or order made thereunder or right, privilege or liability acquired, accrued or incurred under the Act or any rule made under the Act. It also provided that investigation, legal proceeding or remedy may be instituted and continued in force as if the Defence of India Act had not expired. On September 30, 1946, the Defence of India Act and the Rules came to an end but on October 1, 1946, the Emergency Provisions Continuance Ordinance XX of 1946 to which I have already referred continued Rule 94A of the Defence of India Rules in its entirety. This Ordinance provided that such of the Defence of India Rules as were mentioned in the Schedule to this Ordinance would continue in force and would have effect subject only to such modifications in the Rules as were indicated in the Schedule itself. Rule 94A was continued without any modifications. Then came on March 22, 1947, the Capital Issues (Continuance of Control) Ordinance, v. of 1947, which expressly provided by Section 15 that all orders made under Rule 94A of the Defence" of India. Rules or under the said rule as continued in force by the Emergency Provisions (Continuance) Ordinance, 1946 and in force immediately before the commencement of this Ordinance would continue in force and be deemed to be orders made under the appropriate provisions of this Ordinance. It was further provided that expiration of Rule 94A of the Defence of India Rules or of the said rule as continued in force by the Emergency Provisions (Continuance) Ordinance Would not affect as respects anything, done thereunder or any right, privilege, obligation or liability, acquired or incurred and any investigation, legal proceedings or remedy might be instituted continued or enforced as if the rule had not expired. This Ordinance was followed up by the Capital Issues (Continuance of Control) Act, 1947, which made Section 6 of the General Clauses Act, expressly applicable as Ordinance XX of 1946 had made a similar provision.

Keeping, therefore, these different enactments in view, it it impossible to say that there was a point of time when it could be said that there was a gap in the continuity of these provisions. The provisions of Rule 94A were continued throughout. There was no hiatus and consequently the mere fact that the prosecution was not launched during the continuance of the Defence of India Rules or even during the continuance of the Emergency Provisions Ordinance XX of 1946 would be a matter of no consequence. The expiration of the Defence of India Act or of the Rules or even of Ordinance XX of 1946 would not at all affect the validity of the provisions of the Capital Issues (Continuance of Control) Ordinance v. of 1947, which were repeated in the Act of 1947. Mr. Sen''s argument would have force, if there was a point of time when a break could be said to have occurred as between the lapse of one of these legislative provisions and the coming into operation of the next. As I have said, there was no gap, no vacuum created and in that view of the matter, I am unable to agree with Mr. Sen that the present prosecutions are not maintainable.

Reference was made in this connection to a decision of the Supreme Court in the case of State of U.P. v. Jagamander (1955) S.C.A. 539. That was a case where the accused was prosecuted u/s 120B of the Indian Penal Code read with Rules 81(4) and 121 of the Defence of India Rules. The prosecution was commenced on January 16, 1950. The contravention alleged in that case was in respect of the provisions of Section 2 of Non-Ferrous Metal Control Order, 1942. Objection was taken by the accused person to the maintainability of the prosecution which was commenced in January, 1950? The High Court of Uttar Pradesh held that the accused could not be validly prosecuted and discharged him from the proceedings on the ground that the Defence of India Act had died a natural death and along with it the Rules framed under it had expired. An appeal by special leave was taken to the Supreme Court by the State of Uttar Pradesh against the order of the High Court. Their Lordships of the Supreme Court held affirming the decision of the High Court that the prosecution could not possibly be permitted to continue inasmuch as the Defence of India Act had expired on September 30, 1946, and in the absence of a saving clause no prosecution for the infringement of the provisions could be commenced after the expiry of the life of the Act. The saving clause provided by the Defence of India (Second Amendment) Ordinance XII of 1946 was of ho avail since the Ordinance itself was repealed by the Repealing and Amending Act (II of 1948) which came into effect on January 5, 1948. As nothing was done in that case by way of prosecution of the Respondent for the alleged violation of the provisions of Section 2 of Non-Ferrous Metal Control Order, 1942, no proceedings could be commenced after January 5, 1948, for violation of the provisions of the Defence of India Act. Mr. Sen has argued relying upon this decision that the present prosecutions are untenable. The argument further is that Act II of 1948 has repealed the Defence of India (Second Amendment) Ordinance, 1946. In those circumstances, these prosecutions having been commenced only in 1954 and 1955, they cannot be continued under the law. From the resume of the different enactments with the relevant dates which I have given above, it is sufficiently clear that there was no point of time when it could be said that there was a hiatus. The provisions of Rule 94A of the Defence of India Rules were continued under Ordinance XX of 1946, and they were incorporated on March 22, 1947, in the Capital Issues (Continuance of Control) Ordinance. This Ordinance was issued Under the Government of India Act and had nothing to do with the powers under which the emergency provisions of Orders and Rules under the Defence of India Act had been introduced into the country. Ordinance v. came into force on March 22, 1947, and had been introduced in exercise of the powers conferred by Section 72 of the Ninth Schedule to the Government of India Act. It was left entirely unaffected by the Repealing and Amending Act II of 1948. It had nothing to do with the Defence of India Act or the Rules and the provisions which were embodied in the Ordinance were continued in the Act. Thus the different provisions of Ordinance v. of 1947 came to have a separate, independent existence and by reason of Section 15 of that Ordinance all orders made under Rule 94A or under that Rule as continued in force by the Emergency Provisions (Continuance) Ordinance, 1946 and in force immediately before the commencement of the Ordinance were to be deemed as orders made under the appropriate provisions of Ordinance v. of 1947 itself. Thus all, the provisions of Rule 94A are saved; orders originally made under Rule 94A and continued under the provisions of Ordinance XX of 1946 were accordingly saved. In this view of the matter it is quite clear that the facts of the present case do not attract the principle enunciated by their Lordships of the Supreme Court in the case cited above. It does not appear that the life of the Non-Ferrous Metal Control Order was in any sense extended or an independent provision made by which the provisions of that Control Order might be said to have been continued. I am, therefore, unable to agree with Mr. Sen that the decision of the Supreme Court to which he has referred is an authority for the preposition that these two prosecutions against the Petitioners are not maintainable.

There was a cognate contention raised by Mr. Sen which must be noticed. He has argued that the contraventions alleged against his clients took place in October, 1947. At that time the Act had already come into force. Mr. Sen has argued that neither in Section 12 of the Ordinance nor in the corresponding punishing section in the Act is the word "deemed" to be found. The argument is that Section 12 of the Ordinance and Section 13 of the Act are both prospective; that is to say, nobody can be convicted u/s 13 of the Act for contraventions which are deemed to be made under the provisions of the Capital Issues (Continuance of Control) Ordinance, 1947 or under the earlier legislative provisions. Mr. Sen has argued that despite the saving clause in Section 15 of the Ordinance or Section 16 of the Act which guarantees continuance of existing orders, etc., Section 13 of the Act cannot be pressed into service for the purpose of punishing a man who might be said to be guilty of contravention of orders made at a point of time prior to the commencement of that Ordinance. It is indeed difficult to appreciate this argument. Section 15 of the Ordinance expressly provides for continuance of existing orders relating to issue of capital. They are incorporated or integrated into the body of the Ordinance itself; they become a part and parcel of the provisions of the Ordinance just as the corresponding provisions in Section 16 of the Act are intended to achieve the same object with respect to orders made under the Ordinance. If Mr. Sen''s contention is right, then it becomes difficult to understand the purpose of introduction of these saving clauses. The mere absence of the word "deemed" from the provisions which prescribe punishment cannot possibly be a justification for thinking that although independent and express provisions were made both in the Ordinance and in the Act by which all existing orders were expressly saved nevertheless they were saved on paper and no real effect was intended to be given to such savings. As far as I can see all orders, i.e., consents with conditions attached to them accorded under Rule 94A of the Defence of India Rules are saved. They are saved for what? They were saved for all purposes including punishment for breach of those conditions attached to the consents. The mere non-mention of the word "deemed" from the flection prescribing penalty is no ground for thinking that nobody can be punished for infraction of orders that is, breach of conditions under Rule 94A of the Defence of India Rules although they are expressly saved by the provisions of both the Ordinance and the Act. I consider, therefore, that having regard to the plain language of the provisions contained in Section 15 of the Ordinance and Section 16 of the Act, all infractions of orders in the sense of breaches of conditions attached to consents accorded under Rule 94A can be punished u/s 13 of the Act. To hold otherwise would, in my view, be tantamount to holding that the orders although preserved are preserved for nothing. That is a position which certainly is not understandable. If orders are preserved they must be held preserved for all purposes. Their validity is kept up and any infraction of such orders, in my view, attracts punishment on proof of such infraction. I am not prepared to hold that the saving clauses of Section 15 of the Ordinance or Section 16 of the Act are otiose or are mere idle provisions. They have their meaning and significance and they must receive effect.

Mr. Sen has lastly argued that where rights of subjects are concerned and difficulties arise as regards the interpretations of a punishing section, one that favours the subjects has to be: accepted. This observation may have great force, if and when the court is called upon to construe an ambiguous provision of the law. But where the words used are perfectly plain, there is no scope for such argument. The question, as far as I can see, is not One of strict construction or of liberal construction, it is one of true construction. Section 15 of the Ordinance and Section 16 of the Act have to be read and interpreted as they are found. There can be no justification in my view to permit a search in such case for a possible intention of the legislature.

That intention is quite plain. There are no words of equivocation. The savings have been expressly incorporated and, therefore, they have to be plainly interpreted.

Mr. Sen drew attention to the provisions of Exports and Imports Control Act in this context and argued that the penalty clause in that Act contains the word "deemed" in striking contrast to the penalty clauses contained in the Ordinance and the Capital Issues (Continuance of Control) Act. Section 3 of the Exports and Imports Control Act provides that the Central Government may make provisions for prohibiting, restricting or controlling in all cases or in specified clauses of cases, the import, export, carriage, or bringing into any place goods of any specified description. All goods to which an order under Sub-section (1) of that Act applies shall be "deemed" to be goods of which import or export has been prohibited or restricted under the Sea Customs Act. The argument is that although the operation of the Sea Customs Act is expressly provided for in Sub-section (2) of Section 3 in the Exports and Imports Control Act, the word "deemed" is still used in Section 5 which provides punishment for infraction of that Act. I do not think that even if the word "deemed" was not there in Section 5 of the Exports and Imports Control Act, there would have been any difficulty at all in administering it. The word "deemed" in Sub-section (2) has already achieved the purpose and as far as I can see the word "deemed" repeated in Section 5 which merely punishes infraction of that Act is so repeated as a matter of abundant caution. It adds nothing to the meaning. The meaning has already been made clear in Sub-section (2) of Section 3. I am inclined to agree with Mr. Banerjee when he says that the Exports and Imports Control Act need not be looked upon as a piece of model legislation. In any event, it seems to me that the words used in the Capital Issues (Continuance of Control) Ordinance and repeated in the Act in the corresponding section by which savings are made sufficiently expressive. I consider all orders by which consents and conditions accorded and imposed under Rule 94A of the Defence of India Rules as extended by the Emergency Provisions Ordinance, 1946, have been continued in the Capital Issue Ordinance and the succeeding Act. They have had an unbroken chain of life and at last they were incorporated into the provisions of the Capital Issues (Continuance of Control) Ordinance. It was an Ordinance in the exercise of powers of the Governor-General given to him under Rule 72 of the Ninth Schedule to the Government of India Act and the provisions of that Ordinance were subsequently repeated in the Act with suitable amendments. In this view, I think the contentions raised by Mr. Sen must be negatived.

The result, therefore, is that these Rules are discharged. The proceedings must, therefore, continue before the learned Magistrate.

Let the records be sent down as early as possible.