LENNART SCHUSSLER AND ANR. versus DIRECTOR OF ENFORCEMENT & ANR.

Citation: [1970] 2 S.C.R. 760 · Decided: 14-10-1969 · Supreme Court of India · Bench: S.M. SIKRI · Disposal: Dismissed

Cited by 1 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

LENNART SCHUSSLER AND ANR. 
v. 
DIRECTOR OF ENFORCEMENT & ANR. 
October 14, 1969 
[S. M. S!KRI, G. K. MITTER, K. S. HEGDE, A. N. RAY AND 
P. JAGANMOHAN REDDY, JJ.] 
Foreign Exchange Regulation Act (7 of 1947), ss. 4 and 21(1)-
lndian Penal Code; s. 120-B-ll/egal acquisition of foreign exchanKe and 
retention in foreign bank-Agreen1ent to do so whether an offence under 
s. 21(1) of Act 7 of 1941-Whether applicability of s. 
21(1) excludes 
applicability of s. 
120-B I.P.C.-Rete.•tion of foreign exchange not an 
offence at the ti1ne when agreement entered int~Subsequently made an 
offence-Acts in pursuance of agree1nent after creation of offence ·whether 
to be treated as acts in pursuance of conspiracy. 
The Rayala Corporation (P) Ltd. manufactured Halda typewriters in 
India v.ith materials imported from Sweden. 
Initially it made purchases 
through a firm known as A.B. Atvidabergs (later known as Facit A.B.). 
In 1963 the Rayala Corporation decided to import 
certain materials 
through another firm called the Associated Swedish Steels A.B., Sweden 
(ASSAB). Appellant No. 1 a Swedish nati"nal, was at the relevant time 
export manager of A.B. Atvidaberg:;; in 1966 he also became a director 
of Rayala Corporation. In November 1968 appellant no. 1 waa travelling 
by aircr~ft from Singapore to Karachi. The aircraft became grounded at 
Delhi. The Director of Enforcement, New Delhi, 
acting under the 
Foreign Exchange Regulation Act, 1947 took appellant no. 1 into custody 
and detained him. 
He was served with a notice of adjudication under the 
Act; the notice purported to be in continuation of one nlready given to 
Rayala Corporation under s. 23C of the Act. Appellant No. I challenged 
his detention by a petition under Art. 32 of the Constitution. 
In this Court 
a statement was made on behalf of the ·respondents that a complaint had 
already been filed against the appellants under s. 120-B of the Indian 
Penal Code read with certain sections elf the Foreign Exchange Regttlation 
Act. 
Jn the said complaint it was alleged that in 1963 when appellant 
no. 2 had gone to Sweden he told AppeJant no. I of the decision taken 
by the Rayala Corporation to buy certain materials from ASSAB. He fur-
ther informed Appellant no. 1 that arrangements 
had been made with 
ASSAB to over invoice to the goods by 40%, and that the said ex.cess 
over the true value would be kept in a bank in the personal account of 
appellant no. 2. Appellant no. 1 agreed to help Appellant no. 2 in open-
ing the said account and keeping it secret; he also agreed to keep a watch 
over the account and to bring copies of it whenever he visited India. This 
according to the complaint amounted to a conspiracy between Appellants 
nos. 1 and 2 within the meaning of s. 120-B of the Indian Penal Code for 
the purpose elf illegal acquisition of foreign e<change by appellant no. 2 
and retaining the same abroad in contravention of ss. 4(3), 5(1)(el and 
9 of the Foreign Exchange Regulation Act and 
Rule 
132-A of the 
Defence of India (Amendment) Rules, 1964. It was alleged that appel-
lant no. 1 actua11y sent to appellant no. 2 from time to time statements 
of the illegal account ooened in Sweden in pursuance of the cons.Piracy. 
It was further alleged that in November 1965 ~poellant no. 1 came to 
India and again agreed to continue heloing appellant no. 2 in operating 
the 'foreign account. The appellants filed petitions in the. Madras High 
A 
B 
c 
D 
E 
F 
G 
H 
B 
c 
D 
E 
p 
G 
H 
SCH\;SSLER V. DIR. E1'FORCEME~T (Reddy, J.) 
761 
Court asking it to quash the '1iri complaint. These petitions having been 
dismissed the appellants appealed to this Court. It was contended on be· 
.half of the appellant• : (i) that s·. 120-B of the I.P.C. did not apply to 
the caso because s. 21 (I) of the Foreign Exchange Regulation Act, cover· 
ed tho >amc grounds; (ii) ihat when the alleged agreement was made in 
1963 the objects of it were not illegal because they became so unly on the 
enactment of r. 132A of the Defence of India Rules in 1964 and the 
amendment of s. 4 of the Foreign Exchange Regulation Act in 1965. It 
was urged that whatever appellant 
no. 1. did or agreed to do after the 
passing of these Jaw. did not constitute any offence and therefore he could 
not be said to have taken part in a criminal conspiracy. 
HELD: 
Per Sikri. Ray and Reddy, JJ.-The appeals must be dis-
missed. 
( i) The combined effect of the several provisions of s. 21 does not 
sul'P."'t the 

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