R. Arumugham v. R. Krishnaswamy by power Agent, Sankara Kavandar
1964-11-30
T.VENKATADRI
body1964
DigiLaw.ai
Judgment.- The Revision Petition has been filed against an order of dismissal of the suit filed by the petitioner, for recovery of a sum of Rs. 883-06 nP. The facts necessary for disposal of this petition are as follows: The petitioner advanced a sum of 574 dollars to the respondent herein in Malaya in the middle of June, 1957, and the latter executed a bond, Exhibit A-1, on 1st July, 1957, agreeing to pay the amount in India. As soon as the plaintiff-petitioner returned to India, he claimed the said amount. When the respondent refused to pay the amount, the petitioner filed the present suit. The respondent herein resisted the suit, on the ground that he never borrowed the money from the petitioner in Malaya, that he did not execute the bond, Exhibit-A-1, that the bond was a forged document and that the Court of the District Munsif had no jurisdiction to try the suit, as the respondent was a permanent resident of Malaya, He further pleaded that the suit was barred by limitation and also barred by the provisions of the Foreign Exchange Regulation Act. He also pleaded that the suit was opposed to public policy. On these pleadings, the parties went to trial before the learned District Munsif of Tiruturaipoondi. The learned District Munsif found that the suit document must be construed as a bond and that the suit filed on the basis of it was certainly maintainable. He also found that the bond Exhibit A-1 was executed by the respondent, that the District Munsif’s Court has jurisdiction to try the suit and that the Foreign Exchange Regulation Act (VII of 1947), did not bar the maintainability of the suit. In the end, he decreed the suit. But on appeal filed by the respondent herein to the District Court of East Thanjavur at Nagapattinam, the learned District Judge agreed with almost all the findings of the District Munsif, but he held that the suit was not maintainable, as the same was barred by the provisions of the Foreign Exchange Regulation Act. The District Judge, therefore, allowed the appeal and dismissed the suit of the petitioner herein. Against the dismissal of the suit, the plaintiff has filed this Revision Petition. Now, the only question for consideration is whether section 5 of the Foreign Exchange Regulation Act bars the maintainability of the suit.
The District Judge, therefore, allowed the appeal and dismissed the suit of the petitioner herein. Against the dismissal of the suit, the plaintiff has filed this Revision Petition. Now, the only question for consideration is whether section 5 of the Foreign Exchange Regulation Act bars the maintainability of the suit. There is an unreported decision of this Court in Abdul Harmed v. Mohamed Ismail1on the interpretation of section 5 of the Act. The facts in that case are almost similar to the facts in the instant case. There, the plaintiff entrusted to the defendant in IndoChina jewels and cash, with a request to deliver the same to his wife in Mavavaram. The defendant did not deliver the jewels and cash. The plaintiff, after coming to India, demanded the return of the jewels and cash. After mediation, the defendant executed a promissory note for a sum of Rs. 1,200, being the value of jewels and cash entrusted to him. The plaintiff filed a suit on that promissory note. The defendant contended that the suit was not maintainable under the provisions of the Foreign Exchange Regulation Act. Holding that the suit-promissory note could not be enforced, Krishnaswamy Nayudu, J., made the following observation: “The language of section 5 (1) (f) and (e) (i) is very plain and the learned Subordinate Judge has rightly held that this is a transaction which comes within the scope of the particular provision referred to in section 5 of Act VII of 1947. The transaction therefore against the provision of the statute must be considered as unlawful and in any event against public policy and therefore the suit pro-note cannot be enforced” . But, learned Counsel for the petitioner drew my attention to a subsequent decision of the Calcutta High Court in Rabindra N. Maitra v. L.I.C., of India1where the principle laid in section 5 of the Foreign Exchange Regulation Act came in for consideration. The learned Judge of the Calcutta High Court observed: “Foreign Exchange Regulation Act, 1947, has no application as no foreign exchange is involved in this case. Section 5 of the Act upon which much argument was made is only attracted when payment is made or intended to be made to a person or to his credit resident outside India.
The learned Judge of the Calcutta High Court observed: “Foreign Exchange Regulation Act, 1947, has no application as no foreign exchange is involved in this case. Section 5 of the Act upon which much argument was made is only attracted when payment is made or intended to be made to a person or to his credit resident outside India. Here the defendant is called upon by a permanent resident of India to pay him in India.” My attention was also drawn to section 21 of the Act. Under section 21, subsection (3) of that section, legal proceedings to recover an amount due under any legal obligation are not barred simply because they require things to be done which are contrary to the Act so that persons may not by deliberately not applying for permission under the Act avoid fulfilment of their contracts without penalty. The Act, therefore, does not prevent a person from taking legal proceedings in India to recover any sum due from another person who is in law bound to pay the same. The only restrictions are that no steps in execution of a judgment or order can be taken except to the extent permitted by the Central Government or the Reserve Bank of India. Learned Counsel for the petitioner also cited the decision in Gobindam v. M/s. Shamji &38; Co.2 . The Supreme Court has observed at page 1290 as follows: “ Sub-section (3) of section 21 allows legal proceedings to be brought to recover sum due as a debt, damages or otherwise, but no steps shall be taken to enforce the judgment, etc., except to the extent permitted by the Reserve Bank.” Following the principles laid down in these cases, I am of opinion that the petitioner-plaintiff will be entitled to a decree. The only restriction will be that he cannot execute the decree without obtaining the necessary permission from the concerned authorities mentioned in the Foreign Exchange Regulation Act, 1947. The Revision Petition is, therefore, allowed, but, there will be no order as to costs. V.S. ------ Petition allowed.