Indo-China Steam Navigation Co. Ltd. Vs.
Jasjit Singh, Additional Collector of Customs & Ors  INSC 26 (3
03/02/1964 SINHA, BHUVNESHWAR P.(CJ) SINHA,
BHUVNESHWAR P.(CJ) WANCHOO, K.N.
GUPTA, K.C. DAS SHAH, J.C.
AYYANGAR, N. RAJAGOPALA
CITATION: 1964 AIR 1140 1964 SCR (6) 594
R 1964 SC1154 (37) R 1965 SC 40 (6) R 1965 SC
722 (11,38) R 1965 SC1595 (24,42) R 1971 SC 44 (32) D 1971 SC 870 (15) D 1979
SC1029 (10,23) D 1987 SC1629 (17) RF 1988 SC 603 (11,29) RF 1991 SC 818 (37) RF
1992 SC2219 (53,134)
Sea Customs-Prohibition of entry of certain
types of ships in India Section 52A When applicable-Whether mens rea
nacessary-Nature of liability under s. 167(12A)-Section 167(12A) and s.
183-Petition under Art. 136 when competentWhen is a body or authority a
Court-Whether the Central Board of Revenue or Central Government a Tribunal
136-Whether penalty of Rs. 25 lacs
excessive-Whether s. 52A ultra vires Arts. 14, 19 and 31(1) and hence invalidConstitution
of India, Art. 136-Sea Customs Act, 1878, ss.
52A, 167(12A), 183, 188, 190A and 191.
The appellant carries on the business of
carriage of goods and passengers by sea and owns a fleet of ships for that
purpose. One of its ships named Eastern Saga arrived at Calcutta and was
rummaged by the Calcutta Customs Officers.
In the sailors' accommodation, a hole
measuring 2 1/2 x 5 1/2 was found in the wall panelling behind the back batton
of a wooden seat which had been screwed to the wall. The hole was covered with
a piece of wood and over-painted. The hole opened into a space and in that
space, Customs Officers found 1,458 bars of gold valued at more than Rs. 23
Notices were duly served and after hearing
the parties, the Additional Collector of Customs came to the conclusion that
the vessel had rendered itself liable to confiscation under s. 167(12A) because
it had infringed the provisions of s. 52A. He ordered the confiscation of the
ship but gave the owners thereof an option to pay a fine of Rs. 25 lacs in lieu
of confiscation. The appellant went in appeal to the Central Board of Revenue
but that appeal was rejected. The appellant went in revision to the Central
Government but the revision petition was also dismissed. 'Me appellant then
came to this Court for special leave and obtained the same.
Dismissing the appeal Held: (i) The Customs
authorities. were right in holding that the facts proved in the case showed
that the "Eastern Saga" nor contravened the provisions of s. 52A when
it entered the port of Calcutta and hence had incurred the liability prescribed
by s. 167(12.A) of the Sea Customs Act.
(ii) The fine of Rs. 25 lacs was not
excessive. Illegal importation of gold had assumed the proportions of a major
problem facing the country and it was open to the Customs authorities to take
the view that the best way to check smuggling was to impose deterrent fines
whenever those offences were discovered and proved.
(iii) Section 52A was not ultra vires Arts.
14, 19 and 31(1) and hence was not unconstitutional or invalid. The appellant
was not only 595 a company but also a foreign company and as such was not
entitled to claim the benefits of Art. 19. The plea under Art. 31(1) as well as
under s. 14 could not be sustained for the simple reason that in supporting the
said two pleas, the appellant had inevitably to fall back upon the fundamental
right guaranteed by Art. 19(1)(f).
Before an appeal can be entertained under
Art. 136, two conditions have to be satisfied. The order impugned must be an
order of a judicial or quasi-judicial character and should not be purely an
administrative or executive order.
The said order should have been passed either
by a Court or Tribunal in the territory of India. It is difficult to lay down
any definite test to determine whether a body is a court/tribunal or not.
Sometimes, courts enquire whether that body or authority is clothed with the
trappings of a court, whether it can compel witnesses to appear before it and
administer oath to them, whether it was required to follow certain rules of
procedure, whether it was bound to comply with the rules of natural justice
whether it was expected to deal the matters before it fairly, justly and on
merits and not be subjective considerations and whether it was required to adopt
or quasi-judicial approach. If all or some of the important tests are satisfied
the proceedings can be characterised as judicial proceedings and the test of
"trappings" is satisfied. Likewise, if it appears that such a body or
authority has been constituted by the legislature and on it has been conferred
the inherent judicial power of the State, that is significant, if not a
decisive indication, that the said body or authority is a Tribunal.
The scheme of the Sea Customs Act, 1878, the
nature of the proceeding brought before the appellate and revisional
authorities, the extent of the claim involved, the nature of the penalties
imposed and the kind of enquiry which the Act contemplates, all indicate that
both the Central Board of Revenue and the Central Government, while acting as
appellate or revisional authorities, constitute Tribunals under Art. 136 of the
Constitution because they are invested with the judicial power of the State and
are required to act judicially.
In order to prove the offence of s. 52A
against a vessel, what is to be moved is that there has been a construction,
adaptation, alteration of fitting and the said construction, adaptation,
alteration or fitting had been made for the purpose of concealing goods. The
section prohibits absolutely the entry of vessels which show that there has
been construction, adaptation, alteration or fitting made in them for the
purpose of concealing goods in them. It is not necessary for the purpose of s.
52A to prove mens rea against the person responsible for the contravention of
52A. It is impossible to prove such mens rea
or guilty mind. The knowledge of the owners or even of the masters is entirely
Section 167(12A) and s. 183 have to be read
Though confiscation is a statutory corollary
of the contravention of s. 52A, s. 183 expressly requires the adjudicating
officer to give an option to the owners of the offending vessel to pay fine in
lieu of confiscation.
Confiscation is 596 no doubt authorised and
required by s. 167 (12A) but the statutory obligation makes it necessary for
the officer to give an option to the owner. The result is that the ultimate
penalty which can be imposed on the owners falls to be determined by the
adjudicating officer in his discretion.
Shewpujanrai Indrasanrai Ltd. v. Collector of
Customs  S.C.R. 821, F. N. Roy v. Collector of Customs, Calcutta, 
S.C.R. 1151, Leo Roy Frey v. Superintendent, District Jail, mritsar and Anr.,
 S.C.R. 822, Thomas Dana v. State of Punjab,  Supp. (4) S.C.R. 274,
Maqbool Hussain v. State of Bombay,  S.C.R. 730, Harinagar Sugar Mills
Ltd. v. Shyam Sundar Jhunjhunwala and Ors.,  2 S.C.R. 339, Shivji
Nathubhai v. Union of India,  2 S.C.R. 775, Jaswant Sugar Mills Ltd.,
Lakshmi Chand,  Supp. 1 S.C.R. 242,
Engineering Mazdoor Sabha v. Hind Cycles Ltd.  Supp. 1 S.C.R. 625, Ravula
Hariprasada Rao v. The State,  S.C.R. 322, Brend v. Wood, (1946) 110 J.P.
317 and Sherras v. De Rutzen, (1895) 9. referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 770 of 1962.
Appeal by special leave from order No. 1742
of 1960 of the Government of India Ministry of Finance (Department of Revenue)
dated December 17, 1960 in Custom Revision Application No. 1631 of 1959 and/or
from the order dated May 12, 1959 of the Central Board of Revenue in Customs
Appeal No. 151 of 1959 and Petition No. 138 of 1961 Petition under Art. 32 of
the Constitution of India for the enforcement of Fundamental Rights.
Sachin Chaudhury, B. Sen and S. N. Mukherjee,
for the appellant (in C.A. No. 770/62) and the petitioner (in petition No.
S. V. Gupte, Additional Solicitor-General, D.
R. Prem and R. H. Dhebar, for the respondents (in C.A. No. 770/62 and petition
No. 138 of 1961).
February 3, 1964. The Judgment of the Court
was delivered by GAJENDRAGADKAR C.J.-This appeal by special leave raises a
short question about the true scope and effect of section 52A of the Sea
Customs Act, 1878 (No. 8 of 1878) 597 (hereinafter called 'the Act'). The
appellant, the IndoChina Steam Navigation Co. Ltd., which carries on the
business of carriage of goods and passengers by sea, owns a fleet of ships, and
has been carrying on its business for over 80 years. One of the routes plied by
its ships is the Calcutta-Japan-Calcutta route. An order has been passed by the
Customs Authorities confiscating the appellant's motor vessel 'Eastern
Saga" under section 167(12A) of the Act, and giving the appellant the
option under s. 183 of paying a fine of Rs. 25 lakhs in lieu of confiscation.
The appellant contends that this order has been based upon a misconstruction of
the provisions of s. 52A.
The vessel "Eastern Saga" has 6,631
gross registered tons, and 4,441 net registered tons. It has an overall length
of 475-2-1/2" a breadth of 59-3" and a summer draft of 24-7".
lit carries a crew of 14 officers and 56
seamen. It appears that the vessel has 119 separate rooms, including 34 crews'
cabins, 8 passengers' cabins, a sailor's mess, a fireman's mess, a comprador's
office, a hospital, a boys' mess, a ship's office, an engineer's office, a
saloon, lounge, pantry, chart-room, radio officer's cabin, captain's cabin,,
wheel house, alleyways, and stairways. It is clear that the vessel is a well
equipped big vessel. It has also domestic;
refrigeration compartments which are lined by
insulated walls. All crew accommodation in the vessel has been insulated as
required by statutory regulations. Such insulation consists of a sheathing or
panelling of fire board or similar material tacked to wooden frames inserted
between the stiffeners jutting out from the steel bulkheads or walls of the said
vessel, in consequence of which hollow spaces are left between the panelling
and the walls of the vessel, The said panelling or sheathing formed a removable
feature or furnishing of the said vessel.
The 'Eastern Saga' arrived at Calcutta from
the Far East on October 29, 1957. In the course of its ordinary voyage, as a
cargo vessel carrying, a legitimate cargo of 24,815 packages of general
merchandise weighing 1,506 tons, it was rummaged by Calcutta Customs Officers
on the 30th and 31st October and on the 12th November, 1957 598 On search being
made of the vessel's domestic refrigeration compartments, a two-tier white
painted shelf was found fixed to the insulated wall of the handling room. The
screws which seemed like holding the shelf to the wall. in fact, did not do so
they had been hammered flat and could not be turned by a screw driver; the
shelf was held by some wooden plugs which had been hidden below a coat of
paint; below the shelf, there was a hole in the panelling closed with a plug;
this hole gave access to the insulation space
of the compartment; it was of the size 7"X4-1/2". Nothing was found
hidden in that space.
A cabin on the forecastle of the vessel was
then searched and two rectangular openings in the cabin wall panelling were
discovered behind a steel clothes locker which was screwed to the wall. One of
these was closed with a wooden cover. They measured 5"X 13" and
5" X 5" respectively.
Nothing was found hidden in either of these
two spaces. The cabin marked "Compradoree' was also searched, and when a
wooden bench which, was screwed to the wall panelling was removed, two
rectangular holes were found in the panelling behind the bench. These holes
which were covered with wooden plugs and overpainted, measured 5" X
4-1/2" and 8" X2-1/2". Nothing was found in these spaces either.
The cabin of No. 1 Fitter was then searched and two rectangular holes were
found in the visible part of the wall panelling which had been filled in and
overpainted; they were respectively 7-1/2"X 10-1/2" and 12" X 12"
in size. Nothing was found hidden in these spaces. That took the. searching
party to the sailors' accommodation where a hole measuring
2-1/2"X5-1/2" was found in the wall paneling behind the back batten
of a wooden seat which had been screwed to the wall.
This hole was covered with a piece of wood
and over painted.
The hole opened into a space and in that
space, the Customs Officers found a large quantity of gold in bars. Further
search in the sailors' accommodation led to the discovery of a hole in the wall
panelling behind a steel clothes locker which was closed with a wooden plug.
Nothing was found in it. That is how a search was made by the customs officers
on Eastern Saga and in one of the holes a large quantity of gold in bars was
599 On November 12, 1957, notices were served
on the owners' Agents at Calcutta, M/s. Jardine Henderson and Co. Ltd., and on
the master of the vessel, Captain Kiunear, respectively to show cause why the
vessel should not be confiscated under s. 167(12A) since it had contravened s.
52A of the Act and penal action should not be taken against the agents and the
master in that behalf. On the same day, a notice in similar terms was issued to
Kwok Cho, a member of the crew of the Eastern Saga who had come forward to
claim the gold which was discovered as a result of the search. On November 13,
1957, a further notice to show cause was served on the master in regard to
another hole which had been discovered after the issue, of the first notice.
The agents and the master thereupon sent
elaborate replies setting forth their pleas that, in law, no action could be
taken against them. The master pleaded that he had no knowledge of the presence
of gold or unauthorised holes in the ship and had taken all reasonable precautions
in accordance with the Company's instructions. He fully adopted the other pleas
made by the agents. The agents substantially relied on a report by M/s. Norman
Stewart and Co., Marine Surveyors, Naval Architects and Consulting Engineers,
and urged that unless special, extensive, timeconsuming and uneconomic detailed
searches were carried out, it was impossible to discover special hiding places
like the ones discovered on the search made by the customs authorities. They
also urged that they had no knowledge about the holes or about the gold which
was discovered from one of them. They referred to the statement made by Kwok
Cho and alleged that the said statement showed that gold could be smuggled by a
smuggler without the knowledge of the master and the owners of the ship. The
ship moves on Highseas from place to place, during the course of business, and
it was impossible that the master, though in the ship, would know anything
about the criminal activities of a smuggler carried on in nooks and corners of
the ship, and it was inconceivable that the owners of the ship would ever know
what was happening on the ship during its travel on the High-seas. They also
relied on the fact that they had taken all the precautions which could be taken
reasonably and had issued express and definite instructions 600 to their crew
against committing any offence like smuggling.
On receiving the replies sent by the agents,
the master and Kwok Cho, the Additional Collector of Customs heard the
appellant, and on November 23, 1957, he passed the impugned order. He held that
having carefully considered the written explanations tendered and oral
arguments urged before him, he was satisfied that the preventive measures taken
by the owners, the agents, and the master proved to be hopelessly inadequate
and ineffective. He accepted their. plea that they need not be regarded as
persons concerned in the illegal importation of gold into India within the
meaning of s. 167(8) of the Act. He also upheld their plea that the openings
found in the cabin of No. 1 Fitter did not attract the provisions of s.
167(12A). In regard to other matters, the explanations offered appeared to him
to be unsatisfactory and unacceptable. His conclusion, therefore, was that the
vessel had clearly rendered itself liable to confiscation under s. 167(12A)
because it had infringed the provisions of s. 52A. The quantity of gold found
on the vessel was approximately of the value of Rs. 23,79,490/80 nP. Rs. 109/24
nP. per tola, and he noticed the fact that this was the recovery made in one of
the several cavities found on the ship. He was, therefore, inclined to infer
several holes discovered in the vessel indicating the extent to which the
hiding places were used for contravening s.
52A. That is why he confiscated 1,358 gold
bars discovered as a result of the search absolutely under s. 167(8) read with
s. 23A of the Foreign Exchange Regulation Act. He also imposed a personal
penalty of Rs. 10,000 on the sailor Kwok Cho. In regard to the ship, he
directed that Eastern Saga be confiscated under s. 167(12A) and in lieu
thereof, he gave the owners of the ship an option to pay a fine of Rs.
25 lacs which he directed should be paid
within 30 days of the date of the despatch of the order, or such extended time
as may be allowed. In passing this order, the Additional Collector observed
that he had taken into consideration the fact that the agents had already
suffered some loss due to the vessel's detention at the port.
The appellant then preferred an appeal before
the Central Board of Revenue. The Board considered the matter and came to the
conclusion that none of the contentions 601 raised by the appellant was either
warranted or supported by the law as it stands. The Board expressed its
concurrence with the conclusions of the Additional Collector that the offence
under s. 52A of the Act had been proved, and the appellant was liable to be
dealt with under s. 167(12A) of the Act. In regard to the grievance made by the
appellant that the fine imposed by way of option was excessive, the Board
observed that having regard to the quantity and value of the smuggled gold and
other relevant facts, it was not inclined to make any change in the said order.
The penalty imposed on the master, said the Board, was also not so large as to
need any revision. It is not disputed that the value of the ship is very much
more than the amount of Rs. 25 lacs imposed by way of fine under s. 183. This
order was pronounced on May 12, 1959. The appellant's attempt to move the
Government of India in its revisional jurisdiction failed and its application
was dismissed on December 20, 1960. The appellant then moved this Court for
special leave and it is with the special leave granted by this Court that the
present appeal has come before us.
At the hearing of this appeal, the learned
Additional Solicitor-General has urged a preliminary objection. He contends
that none of the Customs Authorities which had dealt with the appellant's case
is a tribunal under Art.
136(1) of the Constitution, and so, the
appeal preferred by the appellant is incompetent. It is true that special leave
has been granted to the appellant by this Court, but there can be little doubt
that even in cases where special leave has been granted at the ex parte hearing
of the matter on the petition of the appellant for special leave, the
respondent can at the final hearing, raise a preliminary contention that
special leave should not have been granted, since the decision, judgment, or
order appealed against, has not been pronounced either by a Court or Tribunal
within the meaning of Art. 136(1). The Additional Solicitor-General argues that
neither the Customs Collector, nor the Central Board of Revenue, nor the
Central Government is a Tribunal, and so, special leave granted to the
appellant should be revoked on that ground.
It is settled by decisions of this Court that
the Customs Officer who initially acts under s. 167(12A) is not a Court 602 or
Tribunal, though it is also settled that in adjudicating upon the question as
to whether s. 52A has been contravened by any ship and by such contravention
the said ship has made itself liable to confiscation under s. 167(12A), the
Customs Officer has to act in a quasi-judicial manner. In Shewpujanrai
Indrasanarai Ltd. v. Collector of Customs and Others(1) this Court has held
that an order of confiscation or penalty passed under the Sea Customs Act is
not a mere administrative or executive act, but is really a quasijudicial act,
and, therefore, an application for a writ of certiorari lies in respect of such
order under Art. 226 of the Constitution. In expressing this conclusion, S. K.
Das J. who spoke for the Court, has referred to two earlier decisions where
this point had been considered and it was held that in holding his proceedings
under the Sea Customs Act, the Collector acts judicially, vide F. N. Roy v. Collector
of Customs, Calcutta, (2) and Lea Roy Frey v. The Superintendent, District
Jail, Amritsar and Anr.(3).
Similarly, in Thomas Dana v. State of
Punjab,(1) this Court has observed that the Collector and other Officers in the
hierarchy mentioned by the Sea Customs Act may have to act judicially in the
sense of having to consider evidence and hear arguments in an informal way;
even so, the Act does not contemplate that in doing so, the said authorities
are functioning as a Court.
In Maqbool Hussain v. The State of Bombay
etc.,(1) while dealing with the impact of the confiscation of goods under the
relevant provisions of s. 167 of the Act on the question as to the constitutionality
of a subsequent prosecution launched against a person whose goods had been
confiscated, this Court had occasion to consider the effect of the order of
confiscation in relation to the provisions of Art. 20 Of the Constitution, and
it was held that the proceeding before the Sea Customs Authorities under the
Act was not a prosecution and the order of confiscation was not a punishment
inflicted by a Court or Judicial Tribunal within the meaning of Art. 20(2), and
so, the impugned prose(1)  S.C.R. 821.
(2)  S.C.R. 1151.
(3)  S.C.R. 822.
(4)  Supp. (1) S.C.R. 274.
(5)  S.C.R. 730. at p. 742.
603 cution was not incompetent or invalid. It
would thus be seen that one of the points which this Court had to consider in
that case was whether the Collector who had passed the order of confiscation,
was a Judicial Tribunal within the meaning of Art. 20, and the answer rendered
by this Court was in the negative. It is true that in giving this answer this
Court has observed that the Customs Officers are not required to act judicially
on legal evidence tendered on oath and they are not authorised to administer
oath to any witness. The appeals, if any, lie before the Chief Customs
Authority which is the Central Board of Revenue and the power of revision is
given to the Central Government which certainly is not a judicial authority. It
would be noticed that the last observation is purely in the nature of an biter
observation because the status of the Central Board of Revenue or the Central
Government is dealing with the appeals or revision applications under section
190 and 191 of the Act did not fall to be considered in that case, was not
argued, and naturally has not been examined; and so, this observation cannot be
treated as a decision on the question which has been argued before us in the
present appeal. The result, therefore, is that it is no longer open to doubt
that the Customs Officer is not a Court or Tribunal, though in adjudicating
upon matters under s. 167 of the Act, he has to act in a judicial manner. It
may be conceded that neither the Central Board of Revenue, nor the Central
Government is a Court within the meaning of Art.
The question which then arises is, can the
Central Board of Revenue exercising its appellate power under s. 190 of the
Act, or the Central Government exercising its revisional jurisdiction under s.
191, be held to be a Tribunal under Art. 136? It is clear that before an appeal
can be entertained in this Court under Art. 136, two conditions have to be
satisfied; the order impugned must be an order of a judicial or quasi-judicial
character and should not be purely an administrative or executive order; and
the said order should have been passed either by a Court or a Tribunal in the
territory of India. It is difficult to lay down any definite or precise test
for determining the character of a body which is called upon to adjudicate upon
matters brought before it. Sometimes in deciding such a question, courts
enquire 604 whether the body or authority whose status or character is the
subject-matter of the enquiry, is clothed with the trappings of a court. Can it
compel witnesses to appear before it and administer oath to them, is it
required to follow certain rules of procedure, is it bound to comply with the
rules of natural justice, is it expected to deal with the matters before it
fairly, justly and on the merits and not be guided by subjective
considerations; in other words, is the approach which it is required to adopt
judicial or quasi-judicial approach? If all or some of the important tests in
that behalf are satisfied, the proceedings can be characterised as judicial
proceedings and the test of trappings may be said to be satisfied. But apart
from the test of trappings, another test of importance is whether the body or
authority had been constituted by the State and the State has conferred on it
its inherent judicial power. If it appears that such a body or authority has
been constituted by the legislature and on it has been conferred the State's
inherent judicial power, that would be a significant, if not a decisive,
indication that the said body or authority is a Tribunal. It is in the light of
these considerations that we have to examine the question as to whether the
Central Board of Revenue and the Central Government is a Tribunal or not under
Before doing so, however, we may refer to
some of the decisions which were cited at the Bar on this point. In M/s.
Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala and Others(1) the question
raised before this Court was whether the Central Government while exercising
its powers under section 111(3) of the Companies Act, 1956 (No. 1 of 1956) is a
Tribunal within the meaning of Art. 136, or not. In dealing with this question,
this Court first enquired whether, while exercising its powers under s. 111 of
the Companies Act, the Central Government was required to act judicially or
not. The scheme of s. 111 was then analysed and it was observed that in an
appeal preferred under s. 111, there was a lis or dispute between the contesting
parties relating to their civil rights, and the Central Government was invested
with the power to determine that dispute according to law. This dispute was in
regard to the claim made by a transferee of a Company's shares to have (1)
 2 S.C.R. 339.
6o5 his transfer registered in the Company's
register, and the view which this Court took was that when such a dispute goes
before the Central Government under s. 111, it has to consider and decide the
proposal and the objections in the light of the evidence, and not on grounds of
policy or expediency. That is why this Court came to the conclusion that the
Central Government was a Tribunal under Art. 136 of the Constitution.
In support of the view taken on this point,
this Court referred to an earlier decision in Shivji Nathubhai v. The Union of
India and Ors.,(1) where it was held that the Central Government exercising
power of review under r. 54 of the Mineral Concession Rules, 1949 against an
administrative order of the State Government granting a mining lease was
subject to the appellate jurisdiction of this Court, because the power to
review was judicial and not administrative.
Thus, these, two decisions show how the
character of the adjudication made by the Central Government either under s. 111(3)
of the Companies Act, or under r. 54 of the Mineral Concession Rules, 1949, was
determined by this Court. As illustrations of cases where the application of
the said tests leads to the conclusion that certain authorities cannot be held
to be tribunals, we may refer to the decisions of this Court in Jaswant Sugar
Mills Ltd., Meerut v. Lakshmi Chand and Ors.(2) and Engineering Mazdoor
Sabhaand Anr.v.Hind Cycles Ltd.(3). It is in the licht of these decisions that
we will proceed to consider whether the Central Board of Revenue and the
Central Government can be said to be a Tribunal under Art. 136 of the
In considering this matter, let us briefly
examine the procedure prescribed by the Act in relation to the adjudications
made under its provisions. Before we do so, however, we ought to refer to the
authorities that function under the Act. Section 3 of the Act refers inter
alia, to three authorities which function under it. The Chief Customs Authority
is the Central Board of Revenue constituted under the Central Board of Revenue
Act, 1924. The Chief Customs Officer is the Chief Executive Officer of
Sea-customs for any (1)  2 S. C.R. 775.
(2)  Supp. 1 S.C.R. 242.
(3)  Supp. 1 S.C.R. 625.
606 port to which the Act applies; and the
Customs Collector includes every officer of Customs for the 'time being in
separate charge of a custom-house, or duly authorised to perform all, or any
special duties of an officer so in charge. It is by reference to these three
categories of officers that the procedure prescribed by the Act has to be
considered. Chapter XVII of the Act deals with the procedure relating to
offences, appeals, etc. Section 169 confers on the Customs Officers power to
search on reasonable suspicion. Section 170A confers power on the Customs
Officer to screen or X-ray bodies of persons for detecting secreted goods.
Section 171 prescribes the powers of Customs Officer for boarding and searching
Section 171-A lays down the powers of
Officers of Customs to summon persons to give evidence and produce documents.
The power to summon a person to give evidence would include the power to
administer oath to him under s. 4 of Act 1 of 1873.
An enquiry held by the Officer of Customs
under s. 17 1 A is by sub-section (4) of s. 171-A deemed to be a judicial proceeding
within the meaning of sections 193 and 228 of the Indian Penal Code. Under s.
183, the officer adjudging the matter brought before him under s. 167 of the
Act is empowered to give an option to a person to pay a fine in lieu of
Having thus broadly referred to the
provisions relating to adjudication by the Customs Officer, we would now
examine the provisions in regard to appeals and revisions made by the Act.
Section 188 provides for an appeal against any decision or order passed by any
officer of Customs, and it requires that the said appeal must be filed within
three months from the date of the order or decision challenged.
This appeal lies to the Chief Customs
Authority, or in such cases as the Central Government directs, to any Officer
of Customs not inferior in rank to a Customs Collector and empowered in that
behalf by name or in virtue of his office by the Central Government. The
section further provides that the appellate authority may make such enquiry and
pass such order as it thinks fit, confirming, altering or annulling the
decision or order under appeal. The proviso to this section makes it clear that
no order passed in appeal can impose upon the person any greater confiscation,
penalty or 607 rate of duty than has been adjudged against him in the original
decision or order. The section adds that every order passed in appeal hall be
final, subject to the power of revision conferred by s. 191. It is thus clear
that the orders passed by the Officers of Customs are made appealable, and the
appellate authority is required to reconsider the matter, hold additional
enquiry if thought necessary and decide the contentions raised by the appellant
on the merits.
Section 189 refers to the requirement of the
deposit of duty demanded which has to be made by the appellant pending the
appeal, and it naturally provides that if as a result of the decision of the
appeal, the whole or any portion of the amount deposited is not leviable, the
Customs Collector shall return such amount or portion, as the case may be, to
the owner of such goods on demand by such owner.
Section 190 confers upon the Chief Customs
Authority the power to remit penalty or confiscation. Section 190A deals with
the revisional powers of the Chief Customs Authority and the Chief Customs
Officer; and s. 191 prescribes for the revisional powers of the Central
Government. Both the revisional powers specified by s. 190A and s. 191 can be
exercised either suo motu by the revisional authority, or on an application
made by an aggrieved party in that behalf.
That, briefly, is the scheme of appeals and
revisions contemplated by the Act. There is a regular hierarchy of authorities
beginning with the Customs Officer who deals with the problems of adjudication
initially and ending with the Central Government which is the final revisional
authority. We may also incidentally refer to Rule 49 of the Rules framed by the
Central Government in exercise of powers conferred on it by s. 9 (c) of the
Act. This Rule provides that every appeal presented to the Chief Customs
Authority under s. 188 and every application made to the GovernorGeneral-in-Council
under s. 191 shall be accompanied by a copy of the decision or order by which
the appellant or the applicant is aggrieved. The question which we are considering
at this stage is whether the appellate authority acting under s. 188 and the
revisional authorities acting under sections 190A and 191 can be said to be
tribunals within the meaning of Art. 136.
608 It is thus clear that after the order of
confiscation is made under s. 167(12A) and an option is given to the owner of
the offending ship under s. 183, the initial proceedings taken 'under the Act
come to an end and a stage is reached for making an appeal against the order of
confiscation or the imposition of fine. In the present appeal, we are concerned
with the subsequent stage of the proceedings, because what we have to decide on
the preliminary objection raised by the Additional Solicitor-General is the
status or character of the appellate authority or the Central Government which
exercises its revisional jurisdiction. In our opinion, having regard to the
scheme of the sections which we have just cited, there is no difficulty in
holding that the Central Board of Revenue which functions as an appellate
authority, and the Central Government which exercises revisional powers are
both Tribunals within the meaning of Art.
136 of the Constitution. A dispute is raised
either by way of appeal or revision by the party aggrieved by the order passed
by the Customs Officers, and that dispute has to be tried by the appellate or
the revisional authority in the light of the facts adduced in the proceedings
and according to law. All the proceedings under the Act, whether before the
Customs Officer, or whether in appeal or revision, have to be conducted in
accordance with the principles of natural justice and they are in that sense
judicial or quasijudicial proceedings. The fact that the status of the Customs
Officer who adjudicates under s. 167(12A) and s. 183 of the Act is not that of
a tribunal, does not make any difference when we reach the stage of appeal or
revision. A period of limitation is prescribed for the appeal, a procedure is
prescribed by Rule 49 that the appeal or revision must be accompanied by a copy
of the decision or order complained against, and the obvious scheme is that
both the appellate and the revisional authorities must consider the matter
judicially on the evidence and determine it in accordance with law. It is
obvious that heavy fines are imposed in these proceedings and the confiscation
orders passed may affect ships of very large value. By his appeal or revisional
application the ship-owner naturally contends that the order of confiscation is
improper or invalid and he sometimes urges that the fine imposed is
unreasonable and excessive. Where disputes of this character are raised before
the appellate or 609 the revisional authority, it would be difficult to accede
to the argument that the authority which deals with these disputes in its
appellate or revisional jurisdiction is not a tribunal under Art. 136. These
authorities are constituted by the legislature and they are empowered to deal
with the disputes brought before them by aggrieved persons. Thus.
the scheme of the Act, the nature of the
proceedings brought before the appellate and the revisional authorities. the
extent of the claim involved, the nature of the Denalties imposed and the kind
of enquiry which the Act contemplates, all indicate that both the appellate and
the revisional authorities acting under the relevant provisions of the Act
constitute Tribunals under Art. 136 of the Constitution, because they are
invested with the judicial power of the State, and are required to act
judicially. Therefore, we must over-rule the preliminary objection raised by
the Additional Solicitor General and proceed to deal with the appeal on the
That takes us to the principal question as to
the construction of s. 52A of the Act which has been elaborately argued before
us by Mr. Sachin Choudhury. Section 52A provides that no vessel constructed,
adapted, altered, or fitted for the purpose of concealing goods shall enter, or
be within the limits of any port in India, or the Indian customs waters. This
section is the only section included in Chapter VIA and it was inserted by Act
10 of 1957. The plain construction of this section appears to be that whenever
a ship answering the description contained in its first part enters or is
within the limits of any port in India, or the Indian customs waters, it
contravenes the prohibition prescribed by it. The prohibition is against the
construction, adaptation, alteration or fitting for the purpose of concealing
goods. What has to be proved against a vessel which is charged with having
contravened s. 52A is that there has been a construction, adaptation.
alteration or fitting, and that the said construction, adaptation, alteration
or fitting has been made for the purpose of concealing goods. Therefore, if an
alteration in a vessel made for the purpose of concealing goods is proved, the
contravention of s. 52A must be inferred. In other words, the section prohibits
absolutely the entry of vessels which show that there has been any 134-159
610 construction, adaptation, alteration or
filling made in them for the purpose of concealing goods.
Mr. Choudhury contends that the contravention
of s. 52A cannot be established unless the mens rea is proved against the
persons responsible for the alleged contravention. In that connection he has
relied on the fact that the section makes no difference between concealed goods
which are not contraband and those which are contraband. In other words, the
argument is that if an alteration is proved to have been made for the purpose
of concealing goods which are legitimately carried by the vessel, even so the
contravention would attract the provisions of s. 167(12A) of the Act.
That being so if the sweep of the prohibition
prescribed by s. 52A is so wide, it is necessary to import the requirement of
mens rea in determining its scope. He has also relied on the well recognised
principle of criminal jurisprudence that unless a statute creating an offence
and providing for its punishment clearly, or by necessary implication, rules
out mens rea as an essential part of the offence, no person should be found
guilty of the said offence unless his guilty mind is proved. There is no doubt
that in Ravula Hariprasada Rao v. The State(1), this Court speaking through
Fazl Ali J., has accepted the observations made by the Lord Chief Justice of
England in Brend v. Wood(1) that "it is of the utmost importance for the
protection of the liberty of the subject that a Court should always bear in
mind that unless the statute, either clearly or by necessary implication, rules
out mens rea as a constituent part of a crime, a defendant should not be found
guilty of an offence against the criminal law unless he has got a guilty
(vide also Sherras v. De Rutzen(3).
It may also be conceded that offences in
respect of which mens rea is not required to be established, are usually of a
comparatively minor character and sentences imposed against the offenders are,
therefore, not of a severe type; and in the present case, it cannot be disputed
that the confiscation of the ship may mean a serious loss to the owner (1)
 S.C.R. 322. (2) (1946) 110 J.P. 317, 318.
(3) (1895) 1 Q.B. 918, 921.
611 of the ship, or imposing a fine against
him by way of giving him option in lieu of the confiscation of his ship may
also involve the payment of a very large amount; and so, prima facie, there is
some force in Mr. Choudhary's argument that the element of mens rea should not be
excluded in considering the scope and effect of s. 52A of the Act.
On the other hand, the scheme of s. 167
supports the contention of the Additional Solicitor-General that if we read s.
52A along with s. 167(12A), it would be clear that the legislature intends, by
necessary implication, the exclusion of mens rea in dealing with the
contravention of s. 52A. Section 167(12A) provides that if a vessel
constructed, adapted, altered or fitted for the purpose of concealing goods
under s. 52A, enters or is within the limits of any port in India or within the
Indian Customs waters such vessel shall be liable to confiscation and the
master of such vessel shall be liable to a penalty not exceeding Rs. 1,000. It
would be noticed that in column 1, s. 167(12A) reproduces the material words of
s. 52A and does not add the words "knowingly or wilfully". It is
significant that the words "knowingly or wilfully" are used in
several other provisions contained in s. 167. Section 167(14) and s. 167 (61) use
the word "wilfully" in respect of the commission of the offences
Similarly s. 167(3) and s. 167(81) use the
word "knowingly" and s. 167(78) uses the word
"intentionally". Similarly, in s. 167(8), though the words
"knowingly or wilfully" are not used, we have the expression
"concerned in", and that may introduce considerations of mens rea.
Thus, where the legislature wanted to introduce the knowledge or intention
actuating the commission of the offence as an essential element of the offence,
it has used appropriate words to indicate that intention. The failure to use a
similar word in s. 167(12A) cannot, therefore, be regarded as accidental, but
must be held to be deliberate. In our opinion, there is some force in this
argument as well.
Besides, there can be no doubt that in
construing a section, it would be relevant for the Court to consider whether
the construction for which Mr. Choudhary contends would not make the provisions
of s. 52A read with s. 167 (12A) substantially nugatory. If it appears that the
adoption 612 of the said construction would substantially defeat the very
purpose and intention of the legislature in enacting the said section, that
would be a legitimate reason for rejecting the said construction. If the words
used in s.
52A are capable of only one construction and
no other, and that construction is the one suggested by Mr. Choudhary, the fact
that by adopting the said construction the section would be rendered nugatory,
would not be of any material significance. If, on the other hand, two
constructions are reasonably possible one of which leads to the anomaly just
indicated, while the other does not and helps the effectuation of the intention
of the legislature, it would be the duty of the Court to accept the latter
The intention of the legislature in providing
for the prohibition prescribed by s. 52A 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 wellknit
Organisation which, for motives of profit making, undertakes this activity.
That is why s. 52A makes an absolute prohibition against the entry of a vessel
which contains, inter alia any alteration made for the purpose of concealing
goods. Entry of contraband gold with the help of ships has thus become a
serious problem and is intended to be checked by this absolute prohibition. If
it was held that the knowledge of the owners of the offending vessel or of its
master should be proved before s. 52A is held to be contravened, in a majority
of cases, the offending vessels will escape punishment. It is not difficult to
imagine that mens rea or guilty mind could rarely be established against the owners
of vessels which are traveling on the High-seas and it may not be always easy
to prove the guilty knowledge even of the master of the ship. If the guilty
mind is made an essential constituent of the section, it would be very easy
both for the owners and the master of the ship to plead that the alleged
alteration, adaptation or fitting was made with613 out their knowledge and even
contrary to their instructions.
It is not difficult to realise in this
connection that it would be almost impossible for the customs authorities to
establish mens rea in the manner suggested by the appellant.
Section 52A refers to the construction for
the purpose of concealing goods, but it is obvious that no vessel would
ordinarily be constructed initially for the purpose of concealing goods. Like
the adaptation, alteration or fitting, the construction also would be made in
such a manner as would not be easily detected or discovered.
Therefore, it seems to us plain that if we
are to accept the construction suggested by Mr. Choudhary, mens rea would
rarely be proved against the owners of the vessel, or even its master and the
section, in substance, would remain a dead letter on the statute-book.
In this connection, it is necessary to bear
in mind that as the heading of the Chapter shows, what s. 52A aims at is the
entry of the vessels and that. in fact, is the manner deliberately adopted by
the legislature in prescribing the prohibition. It is the entry of the vessel
that is prohibited and the use of the negative form adopted by the legislature
in enacting s. 52A is intended to show that the prohibition is not concerned
with the owner of the vessel or the master. the prohibition is concerned with
the vessel itself and it provides that a vessel is prohibited from entering the
limits of any port in India or the Indian Customs Waters. or remaining there,
provided it answers the description mentioned in the first part of s. 52A.
The only safeguard which is legitimately
available to the vessel in resisting the charge that it has contravened s.
52A is provided by the requirement that the
alleged alteration, for instance, must be shown to have been initially made for
the purpose of concealing goods. If the alteration is shown to serve any
operational or functional purpose in the ship, that would clearly justify the
plea that it was not made for the purpose of concealing goods. It may be that
if the alleged alteration, adaptation or construction is proved to have been
initially made for a functional or operational purpose, and it is shown that
subsequently it has been used without the knowledge of the master or the owners
for the 614 illegal purpose, that may raise a triable issue as to whether the
alteration falls within the description of s.
52A; but where the alteration is not shown to
serve any functional or operational purpose and its very nature suggests that
it was intended to serve some secret purpose, it would be easy to draw the
inference that its purpose was to conceal goods. Therefore, in our opinion,
there is no doubt that the Customs Authorities were right in holding that the
mere fact that the owners of the vessel or the master were not shown to have
been privy to the alteration etc. or the concealment of gold bars recovered
from the offending ship would not take the case of appellant outside the
purview of s. 52A. The knowledge of the owners, or even of the master is, in
the context of s. 52A, entirely irrelevant. What is relevant is the proof of
the fact that the vessel answering the description prescribed by s. 52A entered
within the limits of Calcutta which is a port in India.
Mr. Choudhary further argued that the
alteration on which the case against the appellant is based in the present case
cannot be said to be an alteration contemplated by s. 52A, because it is not an
alteration of the vessel. He suggests that the construction, adaptation,
alteration or fitting must be of the vessel as a whole, or, at any rate, of any
part of the vessel which can be regarded as its integral or essential part; the
paneling wall in 'which the apertures were made, cannot be treated as a part of
the vessel, and so, the alteration in question cannot be said to attract s. 52A.
That, in substance, is another argument which has been pressed before us on
behalf of the appellant. In support of this argument, Mr. Choudhary referred us
to the certificate issued by Mr. B. Hill who is a Surveyor to Lloyd Register of
Shipping united with the British Corporation Register. In this certificate Mr.
Hill Purports to say that in his opinion the panelling and lining constitute no
part of the vessel & the expression "vessel" is understood for
the purpose of its being assigned the notation 100 Al or any other class
notation in the Register Book of Lloyds Register of Shipping or for the purpose
of the issue of a Loadline Certificate under the Merchant Shipping Acts and
that such panelling or lining is not required to be shown in the ship's
official 615 plans submitted to Lloyds Register of Shipping in connection with
the above purposes. He adds that such panelling is customarily installed in
British Vessels for the health and comfort of crew as a method of insulating
We are not prepared to accept Mr. Choudhary's
argument that there is any material on the record to show that the panelling is
not a part of the vessel. A vessel is defined by s. 3 (f) of the Act as
including anything made for the conveyance by water of human beings or
property; and there seems to be no reason to hold that the panelling is not its
integral part. Mr. Hill who has purported to give this certificate has not
given evidence in the present proceedings and the statements made by him in his
certificate have, therefore, not been tested. Besides, his opinion that the
panelling does not form part of the vessel as understood for the two purposes
mentioned by him in his certificate cannot assist us in determining whether it
can be held to be a part of the vessel under s. 52A. For whatever purpose
panelling may be constructed, once it is constructed it becomes a part of the
vessel and as such, any alteration made in the panelling would attract the
provisions of s. 52A. We must therefore. reject Mr. Cboudhary's argument that
even if an alteration is proved to have been made in the panels of the vessel,
s. 52A could not be applied. The contention which Mr. Choudhary faintly urged
before us, that the holes made in the panelling walls do not constitute an
alteration at all is, clearly ill founded, because the manner in which the
holes were made and the use which was obviously intended to be made of the said
holes, leave no doubt that they constitute alteration within the meaning of s.
52A. Thus, our conclusion is that the Customs Authorities were right in holding
that the facts proved in the case showed that the appellant's vessel Eastern
Saga contravened the provisions of s. 52A when it entered the port of Calcutta
and as such, incurred liability prescribed by s. 197(12A) of the Act.
What is the nature of the liability
prescribed by s. 167 (12A) is the next question which calls for an answer in
the present appeal. We have already seen that s. 167(12A) Provides that if a
vessel contravenes s. 52A, it shall be liable 616 to confiscation and the
master of such vessel shall be liable to a penalty not exceeding Rs. 1,000. Can
it be said that the penalty prescribed by s. 167(12A) may in any given case not
be imposed against the ship on the ground that the contravention proved against
it is of a very trivial character, or has been the result of an act on the part
of a criminal who acted on his own contrary to the instructions of the master
of the ship? The words used in the third column of cl. 12A are that "such
vessel shall be liable to confiscation". The context seems to require that
it is not open to the Customs Authority to refuse to confiscate the vessel on
the ground that there are any extenuating circumstances surrounding the
contravention of s. 52A in a given case and that it would be unfair to impose
the penalty of confiscation. Two penalties are prescribed, one is the
confiscation of the ship, and the other is a fine against the master. In regard
to the latter penalty, it is within the discretion of the Customs Authority to
decide what amount of penalty should be imposed; just as in the case of the
first penalty it is not open to it to say that it would not impose the penalty
of confiscation against the offending ship, so in the case of the second
penalty it is not open to it to say that it will not levy any penalty against
the master. In its discretion, it may impose a very small fine against the
master if it is satisfied that the master was innocent and despite his best
efforts, he could not prevent the contravention of s. 52A. If the two penalties
prescribed by clause 12A had been alternative, the position may have been
different; but they are independent penalties.
one is against the ship and the other is
against the master,. and so, there is no scope for contending that the Customs
Authority may refuse to impose one penalty and impose the other, or may refuse
to impose either of the two penalties. It must be regarded as an elementary
requirement of clause 12A that as soon as the offence referred to in column 1
of the said clause is proved, some penalty has to be imposed and cl. 12A
indicates that two penalties have to be imposed and not one, there being
discretion in regard to the penalty impassable against the master as regards
the amount of the said penalty. Therefore, we do not think it would be possible
to take the view that if there are extenuating circumstances attending the contravention
of s. 52A in a given case the 617 Customs Authority can refrain from
confiscating the vessel.
Confiscation of the vessel is the immediate
statutory consequence of the finding that an offence under clause 12A is
established, just as the imposition of some penalty against the master is
another statutory consequence of the same contravention. In fairness, we ought
to add that Mr.
Choudhary did not support the view which
appears to have been taken by Sinha J. in the case taken before him under Art.
226 by the Everett Orient Line Incorporated (vide W.P. No. 121/1959 and C.A.
No. 374/1961 which have been heard along with this appeal and will be dealt
It appears that in that case Sinha J., held
that there was discretion in the Customs Authority in the exercise of which it
may, in a proper case refuse to confiscate the offending vessel. In our
opinion, this view is not justified by the words of clause 12A of s. 167.
But the confiscation of the offending vessel
under clause 12A is not the end of the matter. In dealing with the offence
adjudicated under cl. 12A of s. 167, the Customs Officer has also to exercise
his jurisdiction under s. 183 of the Act. In fact, s. 167(12A) and s. 183 have
to be read together and the adjudication proceedings have to be dealt with in
the light of the provisions of the said two sections. Section 183 lays down
that whenever confiscation is authorised by this Act, the officer adjudicating
it shall give the owner of the goods an option to pay in lieu of confiscation
such fine as the officer thinks fit. It is thus clear that in dealing with
offences under s. 167(12A), an obligation is, imposed upon the Customs Officer
to give the owner of the goods an option to pay fine in lieu of confiscation.
It is not disputed, and rightly, that the word "goods" used in s. 183
includes vessels, and so, when the adjudicating officer was dealing with the
present case, it was his duty to indicate the fine which the owners of the ship
can, in their option, choose to pay. That is why the construction of clause 12A
of s. 167 which leaves no discretion in the adjudicating officer in the matter
of confiscating the ship, does not finally determine the matter. Though
confiscation is a statutory corollary of the contravention of s. 52A, the
legislature realised that confiscation of the vessel may cause unnecessary
hardship to the owners of the vessel and so a. 183 expressly 618 requires the
adjudicating officer to give an option to the owners of the offending vessel.
Confiscation is no doubt authorised and required by s. 167(12A), but the
statutory obligation makes it necessary for the officer to give an option to
the owners, and so, in substance, the ultimate penalty which may be imposed on
the owners does fall to be determined in the discretion of the said officer.
Section 1 8 3 confers discretion on the officer to determine what amount of
fine should be imposed in lieu of confiscation, and in doing so, he will
undoubtedly have to take into account an relevant and material circumstances,
including the extenuating factors on which the owners may rely. Thus, the
confiscation of the offending vessel which has been taken out of the domain of
the Customs Officer's discretion under clause 12A, is indirectly brought within
his discretion under s. 183. Indeed, the scheme of s. 183 shows that the only
penalty which in law, the officer can impose is one of confiscation. Having
done that, he gives an option to the owners of the vessel to pay a fine in lieu
of confiscation. There is little doubt that this scheme has been adopted,
because if the imposition of fine was made an alternative penalty, difficulties
would have arisen in the way of recovering the fine; and so, the legislature
has provided that the offending ship should be detained; if the offence is
proved, it should be confiscated and the owner of the vessel should be given an
option to get his vessel released by paying the fine, which may be imposed on
him under s. 183. The very fact that an option has to be given to the owner
shows that the fine imposed under s. 183 is not a matter of penalty imposed by
the officer as such, but is only an option given to the owner. Therefore, we
are satisfied that on a fair reading of s. 16-/ (12A) and s. 183 of the Act,
the course adopted by ,he Customs Authorities is not open to any challenge.
Mr. Choudhary then attempted to argue that on
the merits, the Central Board of Revenue was in error in holding that s. 52A
had been contravened by the appellant's vessel Eastern Saga. We have already
indicated in brief the findings recorded by the customs authorities. It is true
that the Additional Collector of Customs accepted the plea of the appellant
that the owners of the vessel were not concerned with the illegal importation
of gold into India within the 619 meaning of s. 167(8) of the Act; but he has
also found that the preventive measures taken by the owners, the agents and the
master for stopping smuggling on board their vessel proved hopelessly
inadequate and ineffective. He has also examined the nature of the alterations
made and he has concluded that the alterations were made for the purpose of
concealing goods. In fact, the presence of so many alterations on this vessel
itself would justify the conclusion that they were made for the illegal purpose
prohibited by s. 52A. But when gold bars 1,358 in numbers were actually recovered
from one of the holes made in the panelling wall, it is impossible to resist
the conclusion that the said alteration had been made for the purpose of
concealing the said gold. It is clear that the said alterations serve no
operational or functional purpose in the ship and the manner in which the said
alterations have been made unmistakably indicates the design for concealing
goods. If the goods intended to be concealed were not contraband, this
elaborate designing of the alteration would be wholly unnecessary.
Therefore, we see no substance in the
argument that the Customs Authorities were in error in finding that s. 52A had
been contravened in the present case. Besides, there is no doubt that the
question as to whether s. 52A had been contravened is substantially a question
of fact and this Court would not ordinarily reconsider the matter on evidence
with a view to decide whether the said finding is right or not.
Mr. Choudhary has then argued that the
imposition of a fine of Rs. 25 lacs is excessive and should be modified by us.
He suggests that if such a heavy fine is imposed against a vessel, it may
indirectly and eventually affect the trade of the country. Besides, he urges that
the fine appears to be so unreasonable that it may be characterised as
Incidentally, he has argued that in imposing
the fine, the Additional Collector of Customs took into consideration an
irrelevant fact inasmuch as he bore in mind the loss suffered by the appellant
during the period that the vessel was detained. There is no difficulty in
rejecting the last argument, because if the consideration in question was
irrelevant, it has operated in favour of the appellant and not against it. If that
consideration had not weighed in the mind of the Additional Collector, 620 he
would obviously have imposed a higher fine. Then, as to the extent of the fine,
we are not prepared to hold hat the fine is unreasonable or excessive. We have
already noticed the value of the gold illegally imported and we have seen the
presence of many suspicious alterations in, the panelling walls and other parts
of the vessel. It is not easy to detect the illegal importation of gold, and
so, if the Customs Authorities took the view that having regard to the value of
the gold imported, the presence of a large number of alterations and the value
of the ship, Rs. 25 lacs should be imposed as a fine, we cannot entertain the
argument that a case is made out for our interference under Art. 136 of the
Constitution. After all, the imposition of the fine merely gives an option to
the appellant to pay the fine and secure the release of the vessel. Since the
amount of the fine imposed is very much less than the value of the vessel, it is
in the interests of the appellant to get the vessel released. Besides, the
question as to the propriety of the fine imposed by the Additional Collector of
Customs has been examined by the appellate and the revisional authorities and
they have seen no reason to interfere with the amount of fine. In such a case,
the appellant cannot be heard to complain against the impugned order of fine in
an appeal under Art. 136, when no question or principle of law is involved.
In this connection, we may mention one consideration
which has weighed in our-mind. It is true that modern criminology does not
encourage the imposition of severe or savage sentences against criminals,
because the deterrent or, punitive aspect of punishment is no longer treated as
a valid consideration in the administration of criminal law.
But it must be remembered that ordinary
offences with which the normal criminal law of the country deals are committed
by persons either under the pressure of provoked and unbalanced emotions, or as
a result of adverse environments and circumstances, and so, while dealing with
these criminals who, in many cases, deserve a sympathetic treatment and in a
few cases, are more sinned against than sinners, criminal law treats punishment
more as a reformative or corrective than as a deterrent or punitive measure.
But it may not be appropriate to adopt the same approach in deal621 ing with
every offence committed by a vessel which contravenes s. 52A. Illegal
importation of gold has assumed the proportions of a major problem faced by the
country, and the manifold, clever and ingenious devices adopted in carrying out
these illegal operations tend to show that the organisation which is
responsible for them is inspired merely by cupidity because it conducts its
operations solely for the purpose of making profit, and so, it would be open to
the Customs Authorities to take the view that the best way to check the spread
of these illegal operations is to impose deterrent fines whenever these
offences are discovered and proved. Having regard to this aspect of the matter,
if the Customs Authorities took the view that the fine of Rs. 25 lakhs was
called for in the present case, we see no reason whatever to entertain the plea
made by Mr. Choudhary that the said fine should be reduced. The argument that
the impact of such heavy fines. may adversely affect the trade of the country,
seems to us to be wholly misconceived and ill-founded.
There is one more point which must be
mentioned before we part with this appeal. Mr. Choudhary attempted to argue
that if mens rea was not regarded as an essential element of v. 52A, the said
section would be ultra vires of Articles 14, 19 and 31(1) and as
such,unconstitutional and invalid.
We do not propose to consider the merits of
this argument, because the appellant is not only a company, but also a foreign
company, and as such, is not entitled to claim the benefits of Art. 19. It is
only citizens of India who have been guaranteed the right to freedom enshrined
in the said article. If that is so, the plea under Art. 31 (1) as well as under
Art. 14 cannot be sustained for the simple reason that in supporting the said
two pleas, inevitably the appellant has to fall back upon the fundamental right
guaranteed by Art. 19(1)(f). The whole argument is that the appellant is
deprived of its property by operation of the relevant provisions of the Act and
these provisions are invalid. All that Art. 31(1) provides is that no person
shall be deprived of his property save by authority of law.
As soon as this plea is raised, it is met by
the obvious answer that the appellant has been deprived of its property by
authority of the provisions 622 of the act and that would be the end of the
plea under Art.a 31 ( 1 ) unless the appellant is able to take the further step
of challenging the validity of the Act, and that necessarily imports Art.
19(1)(f). Similarly, when a plea is raised under Art. 14, we face the same
position. It may be that if s. 52A contravenes Art. 19(1)(f), a citizen of
India may contend that his vessel cannot be confiscated even if it has
contravened s. 52A, and in that sense, there would be inequality between the
citizen and the foreigner, but that inequality is the necessary consequence of
the basic fact that Art. 19 is confined to citizens of India, and so, the plea
that Art. 14 is contravened also must take in Art.
19 if it has to succeed. The plain truth is
that certain rights guaranteed to the citizens of India under Art. 19 are not
available to foreigners and pleas which may successfully be raised by the
citizens on the strength of the said rights guaranteed under Art. 19 would,
therefore, not be available to foreigners. That being so, we see no substance
in the argument that if s. 52A is construed against the appellant, it would be
invalid, and so, the appellant would be able to resist the confiscation of its
vessel under Art. 3 1 (1).
We ought to make it clear that we are
expressing no opinion on the validity of s. 52A under Art. 19 (1) (f) If the
said question were to arise for our decision in any case, we would have to
consider whether the provisions of s. 52A are not justified by Art. 19 (5).
That is a matter which is foreign to the enquiry in the present appeal.
The result is the appeal fails and is
dismissed with costs.
The appellant has also filed W.P. No. 138 of
1961 challenging the validity of the order passed by the Central Government in
the same matter. Since the appeal preferred by the appellant against the said
order is dismissed, the writ petition also fails and is dismissed. There would
be no order as to costs in the writ petition.
Appeal and petition dismissed.