The facts of the case is that the Government of India in the exercise of the powers conferred under Section 8 of the Foreign Exchange Regulations Act, 1947 issued a notification that gold including gold articles and others should not be brought into India or sent to India except with the general or special permission of the Reserve Bank of India.

The Reserve Bank of India on the same day issued a notification giving a general permission for bringing or sending any such gold provided it was on through transit to a place outside India. The Reserve Bank of India superseding its previous notification released a new notification placing further restrictions on the transit of such gold to a place outside the territory of India.

The Respondent left Zurich by a Swiss Air plane which touched Santa Cruz Air Port on the next day. The Customs Officers, on the basis of information, searched for the respondent and found him sitting in the plane. During the search of the Respondent, it was found that he had a jacket containing 28 compartments and in 19 of them, he was carrying gold slabs weighing approximately 34 kilos. It was also found that the Respondent was a passenger bound for Manila.

The Respondent was prosecuted under the Foreign Exchange Regulation Act, however, was later acquitted by the High Court. Against the decision of the High Court, the State filed an appeal in the Supreme Court to reinstate conviction.

Whether the respondent is guilty of bringing gold in India under Section 8(1) and Section 23(1-A) of the FERA which was published in the Gazette of India on 24th November 1962?

"The Court observed that “The intention of the legislature in providing for the prohibition prescribed by Section 52-A is, inter alia, to put an end to illegal smuggling which has the effect of disturbing very rudely the national economy of the country. It is well-known, for example, that smuggling of gold has become a serious problem in this country and operations of smuggling are conducted by operators who work on an international basis. The persons who actually carry out the physical part of smuggling gold by one means or another are generally no more than agents and presumably, behind them stands a well-knit organization which, for motives of profit making, undertakes this activity.”

The Supreme Court of India held that even though the man remained on the plane, he cannot be exempted from conviction on the plea of ignorance of the law and convicted him under the said Act.