Collector of Customs, Madras & Ors
Vs. D. Bhoormul [1974] INSC 78 (3 April 1974)
SARKARIA, RANJIT SINGH SARKARIA, RANJIT SINGH
BEG, M. HAMEEDULLAH
CITATION: 1974 AIR 859 1974 SCR (3) 833 1974
SCC (2) 544
CITATOR INFO:
RF 1975 SC2083 (6) E 1980 SC 793 (8)
ACT:
Sea Customs Act, 1878, Sec. 167(8)--Imports
and Exports Control Act, 1947--Sec 3(2)--Confiscation of goods--Goods acquired
from illegally imported stocks--Burden of proof, how discharged by the
Department--Indian--Evidence Act, Sec.
106--Conflicting and incredible--account by
alleged owner of facts (regarding importation and ownership) within his
personal knowledge--How far conduct of the alleged owner determinative of legal
inference regarding smuggled nature of goods.
HEADNOTE:
The preventive officers of the Customs Deptt.
recovered from the shop of one Baboothmull ten packages containing imported
goods, such. as. fountain pens, hair clippers, razor sets, etc. worth about Rs.
12,000/-. They were lying packed as if they had been freshly delivered or were
ready for despatch to a further destination. The respondent disclaimed not only
the ownership but all knowledge about the contents of the packages. He could
not give a satisfactory account as to how those packages came into his shop.
His first explanation was that some next door unknown broker had left the
packages outside his shop. He then :stated that they were owned by one
Bhoormul. The said Bhoormul despite repeated requests by the Deptt. did not
furnish any information regarding the source of the alleged acquisition of the
goods. He never appeared personally nor gave address or sufficient particulars
of the brokers Who had sold the goods to him. Despite two show-cause notices, Bhoormul
refused to disclose any further information. He did not furnish any evidence
of, his ownership or even juridical possession of the goods. The Collector of
Customs on consideration of the fact that the goods were admittedly foreign
goods incredible explanations by the respondent concluded that the goods were
acquired from the illegally acquired stocks and ordered the confiscation of the
goods u/s 167(8) of the Sea Customs Act. On a writ petition filed by the
respondent, the single Judge of the Madras High Court rejected the writ
petition but the Letters Patent Appeal was allowed by the Division Bench of the
High Court. The Division Bench held that the Customs Deptt. had not discharged,
its burden of proof .that the goods were smuggled goods.
Allowing the appeal,
HELD : (1) The propriety and legalityof the
Collector's order is to be judged in the light of the principles regarding the
burden of proof Legal proof is not necessarily perfect proof often it is
nothing more than a prudent man's estimate as to the probabilities of the case,
Since it is exceedingly difficult for the prosecution to prove the facts which
are especially within the knowledge of the accused, it is not obliged to prove
them as a part of its primary burden. On the principle underlings. 106 of the
Evidence Act, the, burden to establish the facts within special knowledge of a
person lies on him and if he fails to establish the facts within special
knowledge of a person lies on him and if he fails to establish or explain those
facts, an adverse inference of facts may arise against him.
which coupled with the presumptive evidence
adduced by the prosecution or the Department would rebut the initial
presumption of innocence in favour of that person, and in the result would
prove him guilty. The first part of the entry in the third column of clause 8
of s. 167 of the Sea Customs Act regarding the penalty of confiscation of the
goods casts less rigorous burden on the prosecution as the order operates in
rem and is enforced against the goods only [842 D; 841 D; E-F] (11) Although no
direct evidence of the illicit importation of goods was adduced by the
Department the fact that the goods were of foreign origin coupled with the
inference arising from the dubious conduct of Babhoothmull and Bhoormal could
reasonably lead to the conclusion drawn by the Collector that the goods were
smuggled goods.
834 Issardas Paulat Ram and ors. v. The Union
of India and ors., [1962] Supp. 1, S.C.R. 355 and M/S. Kanungo and Co. v.
Collector of Customs (Calcutta) A.I.R. 1972
S.C. 2136, relied upon.
Amba Lal v. Union of India, [1961] 1, S.C.R.
933, and Shambhu Nath Mehra v. State of Ajmer, [1956] S.C.R. 199,
distinguished.
Bletch v. Archer [1774] Cowp. 63 at p.65 and
R. Madhub Chander, [1874] 21. W.R. Cr. 13 at 19.
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 1142 of 1973. Appeal by special leave from the judgment and order dated the
12th March, 1973 of the Madras High Court at Madras in Writ Appeal No. 357 of
1969.
G. L. Sanghi and S. P. Nayar, for the
appellants.
K. S. Ramamurthy and B. R. Agarwala, for the
respondent.
The Judgment of the Court was delivered by:
SARKARIA, J. This appeal by special leave
arises out of the following facts :
On receiving information that some packages
containing smuggled goods had been left by a person in the premises of M/s. Sha
Rupaji Rikhabdas at 98, Narayana Mudali Lane, Madras-1 and that these packages
were about to be despatched to Bangalore for disposal, a posse of Preventive
Officers of the Customs House went to the said shop on June 4, 1962.
They found ten packages in that shop.
Baboothmull of M/s.Sha Rupaji Rikhabdas was present there. The officers
questioned Baboothmull about those packages. Baboothmull replied that he was
not the owner of those packages and that somebody next to his shop had left
them outside the premises and since that person had not returned for a
considerable time, he got them removed into the shop. Baboothmull was unable to
throw any light with regard to the owner or the contents of the packages.
After getting a consent letter from
Baboothmull, the officers opened the packages which contained these articles of
the total value of Rs. 12,255/-.
1. Parker Fountain Pens (19 made in Canada)28
Doz. Rs. 3,360 00
2. Master hair clippers made in Germany 5
Doz. Rs. 600.00
3. Oster Hair Clippers made in Germany3-1/2
Doz.Rs. 400.00
4. Venus pencils made in England 760 Doz.Rs.
2,250.00
5. K. 55 Out thread razors made in Germany68
Doz. Rs.4,080.00
6. Nylon buttons made in Japan 47 Gross.Rs.
705.00
7. Gillette Razor Blades made in England
1,000 PCs.Rs.120.00
8. 7 O'clock Razor sets made in England12
Doz.Rs. 730.00 ----------------------Rs. 12,255.00 835 The Officers seized
these goods under a mahazarnama.
On June 9, 1962, a letter was addressed by
the said Baboothmull to the Collector, Customs, informing that on that date,
the owner of the packages, one Mr. D. Bhoormull turned up to claim the goods;
that his other partner was absent at the time of the seizure of the goods who
knew about this affair and that he had subsequently learnt from this partner
that those goods belonged to D. Bhoormull who left instructions for their
storage in the shop.
Subsequently the name of this partner was
given as Indermul.
The Custom Officers attempted to find out and
contact this Indermul but without success.
Eight days after the seizure, a letter dated
June 12, 1962, was received by the Collector of Customs from one D.
Bhoormull (Poonawala, temporarily at 98,
Narayana Mudali Lane, Madras-1), claiming ownership of the goods. In this
letter it was stated that he had purchased these goods on June 3, 1962 in the
local market at Madras through brokers;
that he was packing the same till late in the
evening, and since he was forced to leave for Bangalore on the call of a friend
immediately, he instructed one of the staff of Sha Rupaji Rikhabdas to keep the
goods in their shop until his return. This letter of Bhoormull did not contain
the names or the particulars of the brokers from whom the goods were allegedly
purchased; nor did it refer to any bill, voucher or other document to support the
allegation of their having been purchased locally in the normal course of
business. On receipt of this letter, the Collector made an attempt to contact
Bhoormull for further investigation. Bhoormull, however, could not be contacted
as he had gone away to Poona which was said to be his normal place of activity.
Another letter, dated June 25, 1962, was
received by the Collector from Bhoormull urging for release of his goods at an
early date.
On July 3, 1962, a letter was received by the
Collector from M/s. Gagrat & Co., Solicitors, Bombay on behalf of
Bhoormull, requesting for disclosure of the grounds for the seizure of the
goods, and for supply of the copies of the Mahazarnama and other relevant
documents relating to the seizure. It was reiterated that the goods had been
bona fide purchased-by Bhoormull in the course of business, and as such, were
not liable to seizure or confiscation. This was followed by another letter
dated September 14, 1962 from M/s. Gagrat & Co., addressed to the Assistant
Collector of Customs wherein the request for supply of the necessary
information, was reiterated.
The importation of goods shown as items 1, 4
and 7 had been prohibited since December 1957 and of those at items 2, 3, 5, 6
and 8 since March 1960, save under a licence issued by the Import Trade Control
Authorities under s. 1 9 of the Sea Customs Act read with s. 3 (1 ) of the Imports
and Exports Control Act, 1947.
The Assistant Collector of Customs on October
26, 1962 issued a notice to Bhoormull through his solicitors, M/s.
Gagrat & Co., Bombay requiring him to
produce evidence of bona fide acquisition of the goods in question failing
which to show cause within a week as to why those goods valued at Rs. 12,255/be
not confiscated under S. 167(8) of the Sea Customs Act read with s. 3(2)
Imports and Exports Control Act, 836 1947. It was added that in case no reply
was received within the specified period the case would be decided exparte on
the basis of the facts already on record without further reference to him.
In reply, a letter, dated December 13, 1962,
was written by the Solicitors in which, it was inter alia stated that on June
4, 1962, at Madras, the goods, being items 2 and 4 to 8, were purchased by
their client from Broker Ram Lal for a total price of Rs. 10,675/-, and those
shown as items I and 3, from Broker Shanthi Lal for a sum of Rs. 4872/-, and
that these brokers had not issued any bills or receipts regarding those goods.
Any further particulars or addresses of the brokers were not disclosed.
On March 27, 1963, a revised show-cause
notice was sent under registered cover by the Collector of Customs to Bhoormull
through his solicitors requiring him to produce within a week the purchase
receipts, bills, vouchers, Customs auction-receipts, Central excise auction
receipts, licences or any other documents in his possession and to furnish the
names of the brokers in the market,their addresses etc. from whom the goods
were purchased by him, failing which to show cause against confiscation of the
goods.
The information called for was not supplied,
nor did Bhoormull appear personally before the Collector at any stage. However,
on his behalf the Solicitors wrote to the Collector, a letter, dated April 30,
1963, contending that the burden of proving that the seized goods had been
illegally imported into India lay on the Customs Department and the
non-production of the documents or non-furnishing of the information asked for
by the Collector could not justify an inference of illicit importation of the
goods. It was added that such goods had been imported as late as 1959/1960 as
personal baggages and had in fact been sold by the Customs Department at Madras
and elsewhere and as such were being freely bought and sold in the market.
A date was fixed by the Collector for
personal hearing of Bhoormull. But he did not personally appear. However, on
August 1, 1963, Shri J. R. Gagrat, of M/s Gagrat & Co.
appeared before the Collector with a
representative of Bhoormull, and contended that unless the Department had any
other indication, it would not be necessary for Bhoormull to establish
ownership of the goods; that there were no purchase vouchers; nor was he in a
position to produce the broker who was supposed to have left the goods near the
shop of Baboothmull.
While conceding that the burden of proving
the goods to be smuggled goods, was on the Department, the Collector held that
such burden prima facie stood discharged as the circumstances of this case
irresistibly led to the conclusion that the goods had been illicitly imported.
The main circumstances, taken into account by the Collector, in raising such an
inference, may be arranged as under :
(i) The import of such goods has been totally
prohibited since 1957 except in the case of hair clippers and Venus Pencils,
which were allowed on a highly restricted quotabasis till October 1959/March
1966, Policy period', 'when their import too was banned;" 837 (ii) The
highly suspicious circumstances of the seizure and the dubious conduct of the
parties in relation thereto (a) Th is large number of goods, all of foreign
origin, worth over Rs .12,000/-, were found fully packed and ready for
despatch. (b) Baboothmull from whose possession they were seized gave
conflicting and evasive explanations in regard thereto.
At the time of seizure on June 4, 1962, he
disclaimed all knowledge about the ownership and contents of those packages,
and said they were left outside the shop by a broker whom he, could not
identify. Some days later, he ,appeared in the arena (garb ?) of an anonymous
(fictitous ?) person, one Bhoormull'. (c), It was eight days after the seizure
that one Bhoormull by a letter claimed ownership of the goods, and Baboothmull,
also confirmed this. "This Bhoormull..the alleged owner of the goods has
never been seen Even at the personal hearing a representative from him came..
All the correspondence was exchanged with the firm of Solicitors, namely M/s.
Gagrat & Co. of Bombay". (d) Despite
repeated requisitions made and two showcause noticesgiven by the Collector, no
bill, voucher or other documentary evidence, whatever, regarding purchase of
the goods in the recognised markets of the country was produced. At first, even
the names of the seller were not disclosed. Later on M/s.
Gagrat & Co. cited two brokers whose
addresses were not furnished.
In view of the above circumstances the
Collector held that there "was no room for doubt that the goods were
acquired from illegally imported stocks He, therefore, ordered their
confiscation under s. 167(8) of the Sea Customs Act.
Against this order dated October 24, 1963,
Bhoormull carried an appeal under s. 131 of the Customs Act 1962 to the Central
Board of Revenue which dismissed the same on September 7, 1964, Aggrieved,
Bhoormull preferred a Revision Petition to the Central Government. It was
dismissed by the Secretary to the Government by an order, dated September 7,
1965.
Bhoormull then moved the High Court at Madras
by a writ petition under Art. 226 of the Constitution impugning the aforesaid
orders of the Collector,, the Board and the Central Government, contending that
the confiscation was illegal because the Customs Department on which the onus
of proving the unlawful' importation of the goods lay, had failed to adduce any
evidence whatever, to discharge that onus. The learned single, Judge who tried
the petition repelled this contention, holding that the circumstances, on
record established "every probability of the goods having been illicitly
imported into India," and dismissed the petition.
Against the order of the learned Single Judge
Bhoormull filed an appeal under Clause (15) of, the Letters Patent to the
Division Bench of the High Court which held that the onus on the Department to
prove that the goods had been smuggled, could not-in this case did not--shift
to Bhoormull and that the later's failure to appear personally or 838 prove
before the Collector how he had come by those goods, did not justify an
inference of their illicit importation, because a mere suspicion cannot be a
substitute for proof.
On the above reasoning, the Bench allowed the
appeal and quashed the Collector's order for confiscation of the goods.
Hence this appeal with special leave, by the
Department.
Before dealing with the contentions
canvassed, we would refer briefly to the relevant, statutory provisions.
Section 167(8) of the Sea Customs Act
provides for offences punishable to the extent mentioned in the 3rd column of
the Schedule appended to that section. Clause (8) of that Schedule provides
that if any goods the importation or exportation of which is for the time being
prohibited or restricted by order under Ch. IV of this Act be imported into or
exported from India contrary to such prohibition or restriction, then (i) such
goods "shall be liable to confiscation, and (ii) any person concerned in
any such offence shall be liable to a penalty not exceeding three times of the
value of the goods, or not ,exceeding 1000/rupees." Section 171-A
specifically empowers the Customs Officers employed in the prevention of
smuggling to summon any person whose attendance be considers necessary either
to give evidence or to produce a document or thing in an enquiry in connection
with the smuggling of any goods and such person shall be bound to state the
truth and produce that document or thing and would be liable to prosecution if
he made a false statement.
A reading of s. 167(8) and the related
provisions indicates that proceedings for confiscation of contraband goods are
proceedings in rem and the penalty of confiscation under the first part of the
entry in column (3) of clause (8) of the Schedule, is enforced against the
goods irrespective of whether the offender is known unknown. But, imposition of
the other kind of penalty, under the second part of the entry in column 3, is
one in personam; such a penalty can be levied only on the "person concerned"
in any offence described in column I of the Clause.
Goods found to be smuggled can, therefore, be
confiscated without proceeding against any person and without assertaining who
is their real owner or who was actually concerned in their illicit import.
Section 168 empowers an officer of the
Customs or antismuggling staff to seize any thing liable to confiscation.
Section 178(A) provides for burden of proof.
It says "(1) Where any goods to which the section applies are seized under
this Act in the reasonable belief that they are smuggled goods, the burden of
proving that. they are not smuggled goods shall be on the person from whose
possession the goods were seized;
(2) This section shall apply to gold, gold
manufactures, diamonds and other precious stones, cigarettes and cosmetics and
any other goods which the Central Government may, by notification in the
Official Gazette, specify in this behalf, 839 (3) Every notification issued
under subsection (2) shall be laid before both Houses of Parliament as soon as
may be after it is issued." Large scale smuggling of gold or other goods
into India may pose a threat to the economic and fiscal interests and policies
of the State. Such illicit trade is often carried on by organized international
smugglers in the secrecy of the underworld. The more it is organized, the less
are the chances of its detection, and greater the difficulty of proving the
offences relating thereto. Laws have therefore been enacted in most countries,
which mark a partial or wholesale departure in matters relating to smuggling,
from the general principle of penal law, viz., that it is for the State or its
Department to prove the offence against the accused or the defendant. Thus in
England, S. 290(2) of the Customs and Excise Act, 1952 provides that where in
any proceeding relating to Customs or Excise any question arises as to the
place from which any goods have been brought or as to whether or not any duty
has been paid or any goods have been lawfully imported etc., then the burden of
proof shall lie upon the other party to the proceeding. In India, Parliament
inserted s. 178-A by the Amending Act 10 of 1957, but it did not, in its
wisdom, go as far as s. 290(2) of the English Act. Section 178-A in terms
applies to "gold, gold manufacture, diamands and. other precious stones,
cigarettes and cosmetics". With regard to these specified goods if seized
under this Act in the reasonable belief that they are smuggled goods, the
burden of proof that they are not such goods shall be on the person from whose
possession, they are seized. But with regard to any other goods, the rule in
sub-section (1) of Section 178-A would not apply unless the Central Government
had specifically applied the same by notification in the Official Gazette. It
is common ground that at the material time, no such notification applying the
section to the categories of the goods in question had been issued. In respect
of such goods the provisions of the Evidence Act and the Code, of Criminal
Procedure, do not, in terms, govern the onus of proof in proceeding under s.
167(8) of the Act. In conducting these penal
proceedings, therefore, the Collector of Customs is to be guided by the basic
canons of criminal jurisprudence and natural justice.
With the above prefactory remarks, we now advert
to the contentions canvassed before us.
Mr. Sanghi, learned Counsel for the
appellants, has advanced these arguments (a) Bhoormull had no locus standi to
invoke the extraordinary jurisdiction of the High Court under Article 226 of
the Constitution because there was not even prima facie evidence to show that
at the time of seizure, he was in ownership or juridical possession of the
goods;
(b) The onus of proving the goods to be
smuggled goods that initially lay on the Department, stood sufficiently discharged
by the inevitable inference arising out of the totality of the circumstances in
this case, which were appraised by 840 the Collector in the light of
the.conduct of Baboothmull and Bhoormull, who, gave conflicting and incredible
explanations as to how they had come by these goods; (c) The source from which
and the circumstances in which Bhoormull or Baboothmull acquired these goods,
were, facts especially within their knowledge and on the principle underlying
s.
106, Evidence Act, these facts had to be
proved by them. They deliberately failed to disclose those facts or to give the
necessary particulars of the persons from whom the goods were allegedly
purchased, although such information was repeatedly requisitioned from
Bhoormull by the Collector, and they were duty bound under s. 171-A disclose
it. This contumacious conduct of Baboothmull and Bhoormull strongly pointed
towards the conclusion that the goods were smuggled stocks, and in that sense,
the inference arising from the circumstances had shifted the onus on the
Bhooormull to prove to the contrary. (In this connection, reliance has been
placed upon Issardas Daulat Ram and ors.v. The Union of India and ors.(1) and
M/s.Kanungo and Co. v. Collector of Customs (Calcutta) (2); (d) The Order of the
Collector did not suffer from any apparent error or defect of jurisdiction. His
order was based on an appraisement of the circumstantial evidence before him
and was consistent with the rules of natural justice. He had given the fullest
opportunity, to the Respondent to put forth his case and had issued two showcause
notices to him through his Solicitors.
The Division Bench of the High Court
exercising jurisdiction under Art. 226 was not competent to go into the
question of the adequacy of that evidence, and act as if it was a court of
appeal.
Mr. Ramamurthi, learned Counsel for the
Respondent, contends in. reply, that all proceedings were conducted by the
Collector on the assumption that Bhoormull was the claiment or the supposed
owner of the goods,;, that at no stage, before the High Court an, objection was
taken that he had no, locus standi to maintain the writ petition, because he
had no interest in the confiscated goods and consequently, this objection
should not be entertained for the first time in this Court. Learned Counsel
further submits that proceedings of confiscation being penal in nature, the
burden was on the Department to show by cogent and convincing evidence that the
goods had been illicitly imported into India and that no part of this burden
could be shifted to the person claiming the goods. It is emphasised that in the
present case, no evidence whatever was produced by the Department to show that
the goods in question we smuggled goods. The Collector's order-proceeds are the
argument-calling upon Bhoormull to prove that he had purchased these goods in
the normal course of business was contrary to the law laid down by this Court
in Amba Lal v.Union of India(3). Reference has also been made to several
decisions of the High Courts, but most of (1) [1962] Supp. 1, SCR 355.
(2) AIR 1972 SC 2136.
(3) [1961] 1, S.C.R. 933.
841 them turn on their own facts and do not
elucidate the principle beyond what was laid down in Amba Lal's case (supra) It
cannot be disputed that in, proceeding for imposing penalties. under Clause (8)
of S.167 to which s. 178-A-does not apply, the, burden of proving that the
goods are smuggled goods, is on the Department. This is a fundamental rule
relating to proof in all criminal or quasi-criminal proceedings, where there is
no statutory provision to. the contrary. But in appreciating its scope And the
nature of the onus. cast by it, we must pay due regard to other kindred
principles, no less fundamental, of universal application. One of them is that
the prosecution or the Department is not required to prove its case with mathematical
precision to a demonstrable degree; for, in all human affairs. absolute
certainty is a myth, and-as Prof.
Brett felicitously puts it all exactness is a
fake" El Dorado of absolute proof being unattainable, the law accepts for
it, probability as a working substitute in this work-a day world. The law does
not require the prosecution to prove the impossible. All that it requires is
the establishment of' such a degree of probability that a prudent man may, on
its basis, believe in the existence of the fact in issue. Thus, legal proof is
not necessarily perfect proof.; often it is nothing more than a prudent man's
estimate as to the probabilities of the case.
The other; cardinal principle having an important
bearing on the incidence of burden of proof is that sufficiency and weight I of
the evidence is to be considered-to use the words of Lord Mansfield in Batch v.
Archer(1) "according to the proof which it was in the power of one side to
prove, and in the power of the other to have contradicted". Since it is
exceedingly difficult, if not absolutely impossible, for the prosecution to
prove facts which are especially within the knowledge of the opponent or the
accused, it is not obliged to prove them as parts of its primary burden.
Smuggling is clandestine conveying of goods
to avoid legal duties.Secrecy and stealth being its covering guards, it is
impossible for the Preventive Department to unravel every link of the process.
Many facts relating to this illicit business remain in the special or peculiar
knowledge of the person concerned in it. On the principle underlyings. 106,
Evidence Act, the burden to establish those facts is cast on, the person
concerned; and if he fails to establish or explain those facts, an adverse
inference of facts may arise against him, which coupled with the presumptive
evidence adduced by the prosecution or: the Department would rebut the initial
presumption of innocence in favour of that person, and in the result prove him guilty.
As pointed out by Best in 'Law of Evidence', (12th Edn. Article 320, page
291),. the ".Presumption of innocence is, no doubt, presumption juris, but
every day's practice shows that it may be successfully encountered by the
presumption of guilt arising from the recent (unexplained) possession of stolen
property", though the latter is only a presumption of factThus the burden
on the prosecution or the Department may be considerably lightened even by such
presumption of fact arising in their(1) (1774) 1, Cowp. 63 at p. 65.
842 favour. However, this does not mean that
the special or peculiar knowledge of the person proceeded against will relieve
the prosecution or the Department altogether of the burden of producing some
evidence in respect of that fact in issue. It will only alleviate that burden
to discharge which very slight evidence may suffice.
Another point to be noted is that the
incidence, extent and nature of the burden of proof for proceedings for
confiscation under the first part of the entry in the 3rd column of Clause (8)
of s. 167, may not be the same as in proceedings when the imposition of the
other kind of penalty under the second part of the entry is contemplated. We
have already alluded to this aspect of the matter. It will be sufficient to
'reiterate that the penalty of confiscation is a penalty in rem which is
enforced against the goods and the second kind of penalty is one in person am
which is enforced against the person concerned in the smuggling of the goods.
In the case of the former, therefore, it is
not necessary for the Customs authorities to prove that any particular person
is concerned with their illicit importation or exportation. It is enough if the
Department furnishes prima facie proof of the goods being smuggled stocks. In
the case of the latter penalty, the Department has to prove further that the
person proceeded against was concerned in the smuggling.
The, propriety and legality of the
Collector's impugned order had ;to be judged in the light of the above
principles.
It is not correct to say that this is a case
of no evidence.
While it ,is true that no direct evidence of
the illicit importation of the goods was adduced by the Department, it had made
available to the Collector several circumstances of a determinative character
which coupled with the inference arising from the dubious conduct of
Baboothmull. and Bhoormull, could reasonably lead to the conclusion drawn by
the Collector, that they were smuggled goods. These circumstances have been set
out by us earlier in this judgment. We may recapitulate only the most salient
among them.
The importation of such goods into India had
been banned several years, earlier, i.e. of some of them in 1957 and of others
in 1960. These goods, without exception, were all of foreign origin. They were
of large value of over Rs.
12,000/-. They were all lying packed as if
they had been freshly delivered, or were ready for despatch to a further
destination. They were not lying exhibited for sale in the showcases of the
shop. Baboothmull from whose apparent custody or physical possession, they were
seized disclaimed not only their ownership but also all knowledge about the
contents of the packages. He could not give a satisfactory account as to how
those packages came into his shop. 'At first, he said that some next-door
unknown broker had left them outside his shop. Some days later, he came out
with another version viz., that one Bhoormull had left them there. Eight ,days
after, one mysterious person who gave out his name as Bhoormull, laid claim to
these goods.
Despite repeated requisitions, Bhoormull did
not furnish any information regarding the source of the alleged acquisition of
the goods. He never appeared personally before the Collector. He remained
behind the scenes. He did not give addresses 843 or sufficient particulars of
the brokers who had allegedly sold the goods to him on the 3rd June. Whatever
cryptic information was given by him, was also conflicting. Despite two
show-cause notices, Bhoormull intransigently refused to disclose any further
information. Apart from making a bare claim, he did not furnish evidence of his
ownership or even juridical possession of the goods. The totality of these
circumstances reinforced by the inferences arising from the conduct of
Baboothmull and Bhoormull could reasonably and judicially lead one to conclude
that these goods had been illicitly imported into Madras, a sea port.
Even if the Division Bench of the High Court
felt that this circumstantial evidence was not adequate enough to establish the
smuggled character of the goods, beyond doubt, then also, in our opinion, that
was not a good ground to justify interference, with the Collector's order in
the exercise of the writ jurisdiction under Art. 226 of the Constitution.
The function of weighing the evidence or
considering its sufficiency was the business of the Collector or the appellate
authority which was the final tribunal of fact.
"For weighing evidence and drawing
inferences from it", said Birch J. in R. Madhub Chander(1) "there can
be no canon.
Each case presents its own peculiarities and
in each common sense and shrewdness must be brought to bear upon the facts
elicited." It follows from this observation that so long as the
Collector's appreciation of the circumstantial evidence before him was not
illegal, perverse or devoid of common sense, or contrary to rules of natural
justice there would be no Warrant for disturbing his finding under Art. 226.
The collector's order was not of,this kind.
In the view that the initial 'onus of
proof.on the Department can be sufficiently discharged by circumstantial
evidence, we are supported by the decision of this Court,in Issardas Daulat
Ram's case (supra). There, on September 14, 1954, that is, long before the
insertion of s. 178-A in the Act, a quantity of gold to a.refinery, in.Bombay
was sent for the purpose of melting, The Customs authorities seized this gold
when it was being melted. The gold was found to be of foreign origin and had
been imported into India in contravention of the Foreign Exchange Regulations
Act, 1947.
The Collector of Customs confiscated it under
S. 167(8) of the'-Act. The legality of confiscation was challenged by a
petition under art. 226 of the Constitution before the High Court, on the
ground that there was no evidence before the Collector to show that the gold
had been imported into India after restrictions had been imposed in March 1947
on its importation. The High Court rejected this contention and dismissed the
petition. The same argument was advanced before this Court in appeal by special
leave. This Court also negatived this contention. While conceding that there
was no direct evidence that the gold had been smuggled after March 1947, it was
held that a finding to that effect could be reached by referring to "the
conduct of the appellant in connection with (a) the credibility of the story
about the purchase of this gold from three parties, (b) the price at which the
gold was stated to have been (1) (1874) 21, W.R. Cr. 13, at 19.
844 purchased which was less than the market
price and (c) the hurry ,exhibited in trying to get the gold melted at the
refinery.with a small bit of silver added,' so as reduce, the fineness of, the,
gold and thus approximate the resultant product to licit gold found in the
market." The rule in Issardas Daulat Ram's case was reiterated with
amplification in M/s. Kanungo & Co.'r case (supra).
Therein, the appellant was a firm carrying on
business, as dealer, importer and repairer of watches. On a search of the
firm's premises on October 17, 1959, the Customs authorities seized 390 watches
out of which 250 were confiscated on the ground that they had been illicitly
imported into India. The firm's petition under Article 226 of the Constitution
was. allowed by a learned single Judge of the High Court and the order of
confiscation was quashed on the ground that the customs authorities had failed
to prove illicit importation of the watches. On appeal, by the Department, the
Division Bench of the.High Court reversed the decision of the single Judge with
these observations "The watches were seized from the possession of the
respondent No. 1 (appellant) who had not obtained a licence or a customs
clearance permit for importation of the same. They were of foreign make and.
must have been,imported across the. customs frontier. The explanations offered
by the Responden t No. 1 regarding its coming, Into possession of, the same
between 1956 and 1957 were found. upon enquiries by the customs authorities, to
be false, the result of these enquiries were communicated to the Respondent No.
1 who was thereafter heard by the adjudicating officer.
Yet no attempt was made by the respondent No.1
to substantiate its claim regarding lawful importation of the watches.........
The customs authorities came to the conclusion that the said 280 watches. Were
illegally imported and thereupon made an order for confiscation of the same. It
is not for this Court, in exercise, of its jurisdiction under Art. 226 of the
Constitution to revise, set aside or quash this order, in the facts of this case."
In appeal on certificate, it was contended before this Court that there was no
evidence that these watches had not been illicitly imported 'into India and
that the impugned order wrongfully placed the burden on the appellants. Sikri
C.J., speaking for the. Court, repelled this contention thus "There is
also no force in the second point because we do not read the impugned order as
having wrongly placed the burden on the appellant. What the impugned order does
is that it refers to the evidence on the record which militates against the
version of the appellant and then states that the appellant had not been able
to meet the inferences arising there from. In our opinion, the High Court was
right in holding that the burden of proof had shifted on to the appellant after
the Customs Authorities had informed the appellant of the results of the
enquiries and investigations.
845 This also disposes of the first point. As
we have said, the burden was on the Customs Authorities which they discharged
by falsifying in many particulars the story put forward by the
appellant.............. It cannot be disputed that a false denial could be
relied on by the Customs Authorities for the purpose of coming to the
conclusion that the goods had been illegally imported." In the case before
us, the circumstantial evidence suggesting the inference that the goods were
illicitly imported into India, was similar and reasonably pointed towards the
conclusion drawn by the Collector. There was no violation of the rules of
natural justice. The Collector had given the fullest opportunity to Bhoormull
to establish the alleged acquisition of the goods in the normal course of
business. In doing so, he was not throwing the burden of proving what the
Department had to establish, on Bhoormull.
He was simply giving him a fair opportunity
of rebutting the first and the foremost presumption that arose out of the
tell-tale circumstances in which the goods were found, regarding their being
smuggled goods, by disclosing facts within his special knowledge.
Amba Lal's case (supra) strongly relied upon
by Mr.Ramamurthi, is clearly distinguishable on facts. There, Amba Lal was
originally a resident of Pakistan. He migrated into India on the partition of
the Indian Sub-continent before March 1948 when the customs barrier between
India and Pakistan was raised for the first time. The Department did not lead
any evidence, circumstantial or direct, that the goods seized from Amba Lal had
been illicitly imported.
Amba Lal gave plausible explanation that he
had brought those goods along with him in 1947, when there were no restrictions
on their importation. The Department however, tried to take advantage of
certain alleged discrepancies in the statements of Amba Lal which were recorded
in English.
Amba Lal did not know English. He was not
supplied with copies of those statements, nor allowed to inspect them.
This Court, therefore, held that the
Department was not entitled to rely on those discrepancies. Quoting from
Shambhu Nath Mehra v. State of Ajmer,(1) the Court said that s. 106. Evidence
Act "cannot be used to undermine the well established rule of law that,
save in a very exceptional class of cases, the burden is on the prosecution and
never ,sifts." It was added "If S. 106 of the Evidence Act is applied,
then, by analogy, the fundamental principles of criminal jurisdrudence must
equally be invoked".
If we may say so with great respect, it is
not proper to read into the above observations more than what the context and
the peculiar facts of that case demanded. While it is true that in criminal
trials to which the Evidence Act, in terms, applies, this section is not
intended to relieve the prosecution of the initial burden which lies on it to
prove (1) [1956] S.C.R. 199.
846 the positive, facts of its own case, it
can be said by way of generalisation that the effect of the material facts
being exclusively or especially within the knowledge of the accused, is that it
may proportionately with the gravity or the relative triviality of the issues
at stake, in some special type of cases, lighten the burden of proof resting on
the prosecution. For instance, once it is shown that the accused was travelling
without a ticket, a prima facie case against him is proved. If he once had such
a ticket and lost it, it will be for him to prove this fact within this special
knowledge. Similarly, if a person is proved to be in recent possession of
stolen goods, the prosecution will be deemed to have established the charge
that he was either the thief or had received those stolen goods knowing them to
be stolen. If his possession was innocent and lacked the requisite
incriminating knowledge, then it will be for him to explain or establish those
facts within his peculiar knowledge, failing which the prosecution will be
entitled to take advantage of the presumption of fact arising against him, in
discharging its burden of proof.
These fundamental principles, shorn of
technicalities, as we have discussed earlier, apply only in a broad and
pragmatic way to proceedings under s. 167(8) of the Act.
The broad effect of the application of the
basic principle underlying s. 106 Evidence Act to cases under s. 167(8) of the
Act, is that the Department would be deemed. to have discharged its burden if
it adduces only so much evidence, circumstantial or direct, as is sufficient to
raise a presumption in its favour with regard to the existence of the facts
sought to be proved. .Amba Lal's. case was a case of no evidence. The oily
circumstantial evidence viz., the conduct of Amba Lal in making conflicting statements,
could not be taken into account because he was never given ,an opportunity to
explain the alleged discrepancies. The status of Amba Lal viz. that he was an
immigrant from Pakistan and had come to India in 1947 before the customs
barrier was raisedbringing along with him the goods in question, had greatly
strengthened the initial presumption of innocence in his favour. Amba Lal's
'case thus stands on its own facts.
The present case is in line with the
decisions in Issardas Daulatram v. Union of India and. M/s. Kanungo & Co.
v.Collector of, Customs (supra).
For all the foregoing reasons, we are of the
opinion thatthe learned Judges of the High Court were in error. in reversing
the judgment of the learned. single Judge and in quashing the order ofthe Collector
of Customs. We, therefore, allow this appeal, set asidethe judgment under
appeal and dismiss the writ petition. in view ofthe law point involved, we
would leave the parties to bear-their own costs.
S.B.W.
Appeal allowed.
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