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C. K. Daphtary, Solicitor-General of India, Porus A. Mehta and R. H. Dhebar, for the respondent. 1957. February 12. The Judgment of the Court was delivered by BHAGWATI J.-This appeal with special leave under Art. 136 of the Constitution raises the question whether the High Denomination Bank Notes (Demonetisation) Ordinance, 1946 (Ordinance No. III of 1946) promulgated by the Governor- General of India on January 12, 1946, was in operation on July 11, 1953, when the offence under s. 7 read with s. 4 thereof was committed by the appellant herein. The appellant who was the accused No. 1 before the Additional Chief Presidency Magistrate's Court, Bombay, was charged along with the accused Nos. 2, 3, 5 and 6 with having on or about July II, 1953, transferred by sale 10 High Denomination Bank Notes of the Denomination of Rs. 1,000 each to one Velji Lakhamshi Joshi for Rs. 1,800 at the rate of Rs. 180 per note and thus contravened the provisions of s. 4 of the Ordinance and committed an offence punishable under s. 7 of the Ordinance read with s. 109 of the Indian Penal Code.

The appellant took an appeal to the High Court of Judicature of 1955. The State of Bombay, the respondent herein, also filed an application for enhancement of the sentence, being Criminal Revision Application No. 435 of 1955. The co- accused of the appellant had also filed appeals against their convictions and sentences of fine imposed upon them and all these appeals and the application of the respondent were heard together by a Division, Bench of the High Court. The High Court agreed with the learned Presidency Magistrate in regard to the finding of fact and held that the appellant had in fact transferred by sale 10 High Denomination Bank Notes of Rs. 1,000 each to the possession of Velji Lakhamshi and his act fell within the prohibition enacted in s. 4 of the Ordinance. The High Court also overruled the contentions which were urged before it in regard to the Ordinance having lapsed and ceased to be in operation before July 11, 1953, the date on which the offence was alleged to have been committed. It accordingly confirmed the conviction recorded against the appellant by the learned Additional Chief Presidency Magistrate. In regard to the sentence the High Court saw no ground for enhancing the same and confirmed the sentence of fine of Rs. 8,000 and in default six months' rigorous imprisonment which had been awarded by the learned Presidency Magistrate to the appellant.

This position was recognized in the Adaptation of Laws Order, 1950, issued under -the Constitution Of India. In the Second Schedule to the said Order were contained several Central Ordinances enacted between 1940 and 1946 including the High Denomination Bank Notes (Demonetisation) Ordinance, 1946 (Ordinance No. III of 1946) where in s.. II thereof the words " Part A States and Part C States " were to be sub- stituted for "the provinces". It is not necessary to refer to the other Ordinances appearing in this compilation but suffice it to say that in respect of all the Ordinances which were thus promulgated by the Governor-General in exercise of the power conferred upon him under s. 72 of the 9th Sch. of the Government of India Act, 1935, the continuance thereof even after April 1, 1946, was predicated and the adaptations prescribed in the Adaptation of Laws Order, 1950, issued under the Constitution of India were made applicable thereto.

Section 26A provides:-

,, Notwithstanding anything contained in section 26, no bank note of the denominational value of five hundred rupees, one thousand rupees or ten thousand rupees issued before the 13th day of January, 1946, shall be legal tender in payment or on account for the -amount expressed therein. The law in the State of Jammu and Kashmir with regard to these High Denomination Bank Notes issued before January 13, 1946, was thus brought into line with the law as it obtained in the rest of India. This would certainly have not been done but for the acceptance of the position that the Ordinance in question continued in operation even after April 1, 1946, and was in operation right throughout even after April 1, 1946.