Labhchand Dhanpat Singh Jain Vs. The
State of Maharashtra  INSC 256 (3 December 1974)
BEG, M. HAMEEDULLAH BEG, M. HAMEEDULLAH
CITATION: 1975 AIR 182 1975 SCR (2) 907 1975
SCC (3) 385
CITATOR INFO :
C 1980 SC 593 (18,19) R 1980 SC 793 (8)
Customs Act, 1962, s. 108, 111, 123 and 135
Evidence Act (1 of 1872) S-106 and 114-Burden
of proof of innocent receipt of gold-Presumption against accused oil totality
of evidence, if properly drawn.
Code of Criminal Procedure (Act 5 of 1898) s.
342-No strict compliance with-Effect of.
The appellant was arrested because of his
suspicious conduct, and, when he was searched, 9 bars of gold with foreign
markings were found secreted in specially made concealed pockets of his
trousers. When he was produced be- fore the Additional Chief Inspector of
Customs he made a statement recorded under s.108, Customs Act, 1962, In that
statement he admitted the recovery of the bars, that he knew that he was
carrying gold and that he knew that the the transporting of the gold was an
offence, but stated that he was doing so on behalf of a 3rd party. He was
convicted for an offence under s.135)1)(b) of the Act and the conviction was
confirmed by the High Court.
In appeal to this Court, confirming the
HELD:(1) The offence under s. 135)1)(b) is
punishable if the offender acquires possession of or is in any way concerned in
carrying, removing, depositing. harbouring, keeping concealing. selling or
purchasing or in any other manner dealing with any goods which he knows or has
reason to believe are liable to confiscation under- s. 1 1 1. [909 C-D] In the
present case, the totality of facts proved was enough to raise a presumption
under s.114. Evidence Act, that the gold had been illegally imported into the
country so as to be covered by s.111(d). [911 D] (a) The clandestine and guilty
manner of transporting it shows that it wasrecently smuggled gold carried
contrary to law. [910 0-H] (b) The appellant's, admission that he know that the
carrying of gold was an offence shows that the, gold must have been recently
imported, or it any rate after 1948, when restrictions on the import of gold
were imposed. 1910 (c) The gold was being, carried from Bombay, a port of entry
for smuggled goods to Delhi, where there, is a market for gold. [910 G] (d) The
burden of proving an innocent receipt of gold lay on the appellant under s.
106, Evidence Act,. and- he had not discharged the burden. [911 A-B] Issardas
Daulat Ram & Ors. v. Union of India and Ors.,  Suppl (1) SCR 358
(2) Assuming that the ratio of Gian Chand v.
State of Punjab  Supp. 1 S.C.R. 364 applied to the instant case. the
result would only be that no presumption under s.
123 of Customs Act could be drawn against the
But neither the trial Court nor the High
Court had drawn any such presumption against the appellant. The inference
regarding the character of the gold recovered and the appellant's guilty
knowledge was drawn from circumstantial evidence. [910 C-D] (3) The general
form of questions put in the case do not strictly comply with the provisions of
s.342, Cr.P.C., but the appellant has not suffered any 908 injustice vitiating
his conviction. He indicated in his answers that he would give a written
explanation and his written statement dealt elaborately with all the
circumstances appearing in the evidence against him. [911 G- H] (4) In view of
his age and the fact that there was no previous conviction, the sentence of 3
months R.I. was reduced to the period already undergone, which was nearly 3 months,
as it was not desirable to send him back to jail for a few days. [912 A-B]
CRIMINAL APPELLATE JURISDICTION Criminal
Appeal No. 79 of 1971.
Appeal by Special Leave from the Judgment and
Order dated 16th January 1-971 of the Punjab and Haryana High Court in Criminal
Appeal No. 1168 of 1968.
Hardayal Hardey and Ashok Grover, for the
H. R. Khanna and M. N. Shroff, for the
The Judgment of the Court was delivered by
BEG, J.-The appellant aged 23 was arrested on 9-4-1967 by the Railway Police at
the Bombay Central Railway Station as he was hurriedly trying to get into a
second class compartment of the Frontier Mail bound for Delhi. It appears that
manner in which he was trying to enter the second class compartment and his
nervourness on being questioned by a Railway C.I.D. Police Officer, although
the appellant had a ticket on him, aroused suspicion so that the appellant was
detained. On a search of his person at the Police Station in the presence of
Panchas, nine bars of gold with foreign markings were found secreted in
especially made concealed pockets of his trousers. These were seized by the
Railway Police. After further questioning by the Police, the appellant was
summoned before Shri L. A. Digama, Addi- tional Chief Inspector of Customs,
Bombay, where his statement under section 108 of the-Customs Act 1962 was
recorded on 10-4-67. In that statement, the appellant admitted the recovery of
gold bars from his person and stated that he had agreed with one Pannalal to
carry them for delivery at Delhi for a sum of Rs. 100 to be paid to the
appellant.-He stated that, from what Pannalal had told him and also from the
weight of the bars, he knew that he was carrying gold. He stated that his
father was also with him, but, as nothing incriminating was recovered from the
father, he was allowed to go away. He also admitted that he knew that
transporting of Old like this was a criminal offence.
The appellant was prosecuted and convicted by
the Presidency Magistrate of Bombay under section 135(b) of the Customs' Act of
1962 (hereinafter referred to as 'the Act') and sentenced to three months
rigorous imprisonment. Charges under the Defence, of India Rules were also
preferred against him but he was acquitted of these. The High Court of Bombay;
after carefully re-examining the whole evidence in the case, had affirmed the
conviction and sentence of the appellant; but, the appellant bad obtained
special leave to appeal to this Court.
909 Learned Counsel for the appellant had
urged before us that the conviction of the appellant is vitiated on three
Firstly, it is urged that there was no
evidence whatsoever to hold that the gold seized from the person of the
appellant was "liable to confiscation" as contemplated by Section Ill
of the Act. It is contended that the only category in which the gold under
consideration could fall is Section 111(d) which describes it as of "any
goods which are imported or attempted to be- imported or are brought within the
Indian Customs waters for the purpose of being imported, contrary to any
prohibition imposed by or under this Act or any other law for the time being in
It was urged that, as restrictions on the
import of gold were only imposed in 1948, there should have been some evidence
to show when it was brought into India. Apart from other reasons given below,
we think that this argument overlooks that an offence under section. 135(1) (b)
is punishable if the offender "acquires possession of or is in any way
concerned in carrying removing, depositing, harboring, keeping, concealing,
selling or purchasing or in any other manner dealing with any goods which he
knows or has reason to believe are liable to confiscation under section
Secondly, it is contended that the High Court
had wrongly used section 123 of the Act so as to-wrongly place the burden of
proof on the appellant when this provision did not apply. This Section reads as
"(1) Where any goods to which this
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
(a) in a case where such seizure is made from
the possession of any person,. . . .
(i) on the person from whose possession the
goods were seized; and (ii) if any person, other than the person from whose
possession the goods were seized, claims to be the owner thereof, also on such
(b) in any other case, on the person, if any,
who claims to be the owner of the goods so seize&'.
(2) This section shall apply to gold, diamonds,
manufactures of gold or diamonds, watches, and any other class of goods which
the Central Government may by notification in the Official Gazette
The argument is that, in order to apply
section 123 of the Act, there must be a "seizure" of the goods by the
proper Customs Officer duly authorised as provided by section 110 of the Act.
Learned Counsel relied strongly on Gian Chand & Ors. v. The State of
Punjab,(1) where it. was held, under the corresponding provisions of (1) 
Supp. 1 S.C.R. 364.
910 Sea Customs Act, 1878, that the burden of
proof was shifted on to the accused only when the goods were "seized"
in the sense that they were taken out of the possession of an accused by the
"proper officer". That was also a case of "seizure" of
allegedly smuggled gold. There, the police had initially commenced proceedings
under Section 411 and 414 of the Indian Penal Code against the accused, but,
afterwards, the case was handed over to the Customs'.authorities. The initial
"seizure" being one by the, ordinary police, it was held to be not
one under the Act. In that case, this Court had set aside the order of the High
Court because it held that the statutory presumption could not be used to
But, it did not, for that reason, acquit the
accused. On the other hand, it sent back the case to the Trial Court for
decision after considering the evidence without the aid of the statutory
Even if we were to apply the ratio decidendi
of Gian Chand's case (supra) in the case before us, we find that the result
would only be that no presumption under section 123 of the Act could be used
against the appellant. We do not think that the High Court or the Magistrate
had used this presumption. We find that they had relied upon circumstantial
evidence in the case to infer the character of the gold recovered and the
accused's guilty knowledge.
This brings us back to the first and the main
contention on behalf of the appellant which was that there is no evidence to
support the conviction of the appellant under section 35(b) of the Act. We are
unable to accept this submission.
A reference to Issardas Daulat Ram & Ors.
V. Union of India & Ors.(1) is enough to show that the conduct of the
accused and the incredible version set up by him were enough to saddle the
accused with the necessary knowledge of the character of the goods found in his
possession. In the case before us, we have not only evidence of the suspicious
conduct of the appellant but his own admission that he knew that it was an
offence to carry the gold which he had been asked to transport for payment of
money to him. He had put forward an incredible story of having been entrusted
with so much gold by one Pannalal whose identity was not estab- lished- and
whose address was not revealed by the appellant.
According to the appellant, Pannalal had just
met him by chance. It is incredible that any person would entrust gold valued
at about Rs. 40,000, on which Rs. 17,000 was payable as duty alone, to a
youngster who was an utter stranger to him even if the carrier was to get Rs.
100 for the risky undertaking. It is significant that the appellant was found
carrying gold from Bombay, a port of entry for smuggled goods, to Delhi, where
there is a good market for gold. If it was not recently smuggled gold carried
contrary to law there was no need for the clandestine and guilty manner of
transporting it. We think that, in the circumstances of the case, an inference
could very well be made that the gold must have been recently imported into the
country, or, at any rate, after the' law passed in 1948 restricting its entry.
The appellant admitted, in his statement under Section 108 of the Act, that
transporting of these pieces of gold was an offence. If the gold had (1) 
Supp .(1) S.C.R. 358.
911 been legally imported before 1948 it
could not be an offence to carry it. The appellant had not proved who Pannalal,
the person who was alleged by him to have given him the gold to carry, was. Atleast,
the burden of proving an innocent receipt of gold lay upon the appellant under
Section 106 Evidence Act. The totality of facts proved was enough, in our
opinion, to raise a presumption under section 114 Evidence Act that the gold
had been illegally imported into the country so as to covered by Section 111(d)
of the Act.
The appellant had not offered any other
reasonable explanation of the manner in which it was being carried.- Thirdly,
it was urged that Section 342 of the Criminal Procedure Code had not been
complied with inasmuch as only two very general questions were asked by the
Trying Magistrate, followed by two others on one point. But, the seizure of
gold from his possession and the surrounding circumstances were, not put to
him. The first two questions and answers were :
"Q. 'Have you heard the evidence ? Ans.
Q. What have you to say in regard to the
evidence ? Ans. I am filing my written statement. I have nothing more to say.
I want to examine one witness from Chief
Reservation Inspector, Western Railway, Bombay Central".
The questions and answers which followed
afterwards were "Q. Have you heard and followed the Mint Report read out
and explained to you? Ans. Yes.
Q. What have you to say about the same ? Ans.
I have to say nothing. I want to add that I am producing the notice given by
the Customs dated 6-10-67" It is clear to us that the appellant was fully
aware of the nature of the allegations made against him. He had not merely
given a detailed explanation under section 108 of the Act, of the circumstances
in which he' said he was arrested with the gold bars, but, he had also filed an
elaborate written statement. He had indicated that this is the only form in
which he would give his explanation. It is true that the general form of questions
put does not strictly comply with the provisions of Section 342 Criminal
Procedure Code. But, we are unable to hold that the appellant suffered any
injustice for this reason. Indeed, he had not even raised such a question in
the Trial Court or before the High Court. If he had done so, the alleged defect
could have been easily cured. The objection seems to us to be most technical
and flimsy. The defect could not have possibly vitiated the conviction of the
912 Lastly, it is urged that the appellant
has already served nearly three months of the sentence and there is no previous
conviction recorded against him so that we should reduce his sentence to the
period already undergone. In view of the age of the appellant and the fact that
there is no previous conviction proved against him, we consider it to be
undesirable to send the appellant back to jail for a few days. We, therefore,
reduce the sentence to the period already undergone. Subject to this
modification, this appeal is dismissed. The appellant, who is on bail, need not
V.P.S. Appeal dismissed.