Bhanabhai
Khalpabhai Vs. Collector of Customs [1994] INSC 164 (8 March 1994)
Singh
N.P. (J) Singh N.P. (J) Reddy, K. Jayachandra (J)
CITATION:
1994 SCC Supl. (2) 143 JT 1994 (2) 591 1994 SCALE (2)238
ACT:
HEAD NOTE:
The
Judgment of the Court was delivered by N.P. SINGH, J.- The appellant was
convicted by the Magistrate for an offence under Section 135(1)(a) of the
Customs Act (hereinafter referred to as the 'Act') and was sentenced to undergo
rigorous imprisonment for two years and to pay a fine of Rs 5000, in default of
payment thereof, to undergo rigorous imprisonment for further period of six
months. The appeal preferred on behalf of the appellant, before the Sessions
Judge, was transferred to the High Court, to be heard along with the appeal
filed on behalf of the State, against the order of acquittal, passed by the
Magistrate against other co-accused persons. The High Court, by the impugned
judgment, dismissed the appeal of the appellant.
2. It
is the case of the prosecution that on January 30, 1969, the patrolling officials found a
truck coming from the side of Moti Daman and proceeding towards Mohangam
Railway Crossing, without the headlights being on in a suspicious manner. On
inquiry, it was found that the said truck had unloaded some contraband articles
at some Wadi. Police and the officials of the Customs Department, found out that
goods had been unloaded at the Wadi of the appellant at Iklora. A search was
carried out in the said Wadi, and on digging the ground near a well 101 silver
ingots, weighing 3274.98 kgs., worth about Rs 18,08,850, were recovered. The
said silver ingots were neither covered under any transport voucher nor any of
the requirements contemplated under Chapter IV-B of the Act, were found to have
been complied with. The Customs officials had reasonable belief that the said
silver ingots had been stored at the Wadi of the appellant, for the purpose of
illegal export and as such liable for confiscation. Further investigation
disclosed that the said silver ingots had been brought by two motor trucks
bearing Nos. M.H.T. 2304 and M.R.T. 275 1. So far the truck No. M.H.T. 2304 was
concerned, which was spotted out first moving in a suspicious manner, was
carrying contraband silver ingots 20 in number. Several persons including the
drivers and owners of the trucks were made accused in connection with the said
recovery. The original accused 2 Shankarbhai Haribhai, brother-in-law of the
appellant, was at the time of seizure, present at the Wadi and was guarding the
said place. Later he absconded and could not be made available for trial.
146
3. By.
Notification No. C.S.R. 37, dated January 3, 1969, issued by the Government of
India, Ministry of Finance, in exercise of the powers conferred by the Act
'Silver Bullion and Coins' had been declared as 'specified goods'. By
Notification No. C.S.R. 38, dated January 3, 1969, issued in exercise of powers
conferred by the said Act, the area of 50 kilometres in width from the coast of
India, falling within the territories of the States of Gujarat, Maharashtra, Mysore
and Union Territory of Goa, Daman and Diu, had been declared as 'the specified
area'. There is no dispute that the Wadi of the appellant was within 50 kilometres
from the coast of India as such within the 'specified
area', and before the seizure were made on January 30, 1969, the silver ingots had been
notified as 'specified goods'.
4.
After the recovery aforesaid, the statement of the appellant had been recorded,
in accordance with Section 108 of the Act. During course of the statement, the
appellant admitted that the Wadi belonged to him and 101 silver bars had been
buried near a well in the said Wadi. He stated:
"Customs
personnel came at night at my Iklora Wadi and they took away 101 silver bars
which were buried near the well......
He
again repeated the same thing later in his statement by saying:
"On
date January 30/31, 1969 the Customs officials digged the land near the well in
the Wadi of my Iklora and found 101 silver bars......" He, however, stated
that he did not know how the silver bars came there. In the case of Veera Ibrahim
v. State of Maharashtra' it was examined, as to whether the statement of the
accused in that case recorded by the Customs Officer under Section 108 of the
Act before any complaint or first information had been lodged against him, can
be used against such accused when he was charged for having committed an
offence under Section 135(1)(a) of the Act. It was said that mere facts that at
the relevant time the person was arrested on suspicion of having committed an
offence under Section 124 of the Bombay Police Act and a panchnama had been
prepared seizing the goods, were immaterial when neither the case was
registered nor the FIR was recorded by the police. It was pointed out that when
the Customs Officer recorded the statement of the appellant, in that case he
was not formally accused of any offence and as such the statement recorded by
the Inspector of Customs was not hit by Article 20(3) of the Constitution. In
that connection, reference was made to the judgment of this Court in the case
of R. C Mehta v. State of W. B. 2 As such the statement made by the appellant
under Section 108 of the Act, can be used against him. The appellant stated in
clear and unambiguous words (i) that the Wadi belonged to him by saying twice
"my Iklora Wadi" (ii) Customs personnel came at night and took away
"101 silver bars, which were buried near the well". At the time of
trial, the appellant took a stand that the Wadi did not belong to him, it
belonged to his wife and as during the recovery of the silver ingots, he was
not present at the Wadi, no inference of guilt against him could be drawn.
5. On
behalf of the appellant, nothing has been brought to our notice to reject his
statement under Section 108 of the Act, saying that the said statement was not
voluntary or made under coercion. On behalf of the prosecution, witnesses have
been examined to prove as to how after digging the ground near 1 (1976) 2 SCC
302: AIR 1976 SC 1167 2 (1969) 2 SCR 461 : AIR 1970 SC 940 147 the well, 101
silver ingots were recovered. Witnesses have also stated that the Wadi, from
where recovery was made, belonged to the appellant. The statement of the
appellant made under Section 108 of the Act along with the evidence of the
witnesses, who have been examined to prove the recovery from the Wadi
aforesaid, establish that Wadi belonged to the appellant and 101 silver ingots
had been concealed under the ground, which were recovered after digging the
ground.
6. Now
the only question which is to be examined, is as to whether on basis of the
recovery, the appellant can be held to be guilty for an offence under Section
135(1)(a) of the Act? On behalf of the appellant, a stand was taken before this
Court that even if the prosecution case regarding recovery aforesaid is
accepted, the ingredients of Section 135(1)(a) have not been fulfilled, so as
to hold that the appellant committed an offence under that section. The
relevant part of Section 135(1)(a) is as follows:
"135.
Evasion of duty or prohibitions.- (1) Without prejudice to any action that may
be taken under this Act, if any person- (a) is in relation to any goods in any
way knowingly concerned in any fraudulent evasion or attempt at evasion of any
duty chargeable thereon or of any prohibition for the time being imposed under
this Act or any other law for the time being in force with respect to such
goods; or
7.
According to appellant, the prosecution has not established that the silver
ingots had been kept buried in connection with any fraudulent evasion or attempt
at evasion of any duty chargeable thereon.
In the
case of Asst. Collector of Customs v. Babu Miya Sheikh Imam3 it was pointed out
that Section 135(1)(a) has to be read in three parts: (SCC pp. 450, 451, para
4) "1. If any person is in relation to any goods in any way knowingly
concerned in any fraudulent evasion or attempt at evasion of any duty
chargeable thereon, he shall be punishable with imprisonment for a term which
may extend to three years or with fine or both.
2. If
any person is in relation to any goods in any way knowingly concerned in any
fraudulent evasion or attempt at evasion of any prohibition for the time being
imposed under the Customs Act, 1962 with respect to such goods, he shall be
punishable with imprisonment for a term which may extend to three years or with
fine or both.
3. If
any person is in relation to any goods in any way knowingly concerned in any
fraudulent evasion or attempt at evasion of any prohibition for the time being
imposed under any other law for the time being in force with respect of such
goods, he shall be punishable with imprisonment for a term which may extend to
three years or with fine or both."
8. As
such if any person is in relation to any goods in any way knowingly concerned
in any fraudulent evasion or attempt at evasion of any prohibition for the time
being imposed under the said Act with respect to such goods, even then he shall
be punishable with imprisonment as prescribed under the said section. In other
words, the person must be concerned in any fraudulent evasion or 3 (1983) 3 SCC
447 : AIR 1983 SC 974 148 attempt at evasion of any prohibition imposed under
the Act.
In the
instant case, the 'silver bullion' had been declared as specified goods and the
inland area of 50 kilometres in width from the coast of India including the
area in which the Wadi of the appellant was situated had been declared as
'specified area' under the provisions of the Act. Sub- section (1) of Section
II J, which had come in force, w.e.f. January 3, 1969, required every person
who owns, possesses, or has control, on the specified date, over any specified
goods, the market price of which exceeds fifteen thousand rupees, to deliver to
the proper officer, an intimation containing the particulars of the place where
such goods had been kept or had been stored within the specified area.
Sub-section
(2) of Section 11-J enjoins that every person who acquires, within the
specified area, after the specified date, any specified goods, the value
whereof exceeds fifteen thousand rupees, to deliver to the proper officer an
intimation containing the particulars of the place where such goods were
proposed to be kept or stored "before making such acquisition". In
other words sub-section (2) prescribes a bar on acquiring any specified goods within
the specified area unless before making such acquisition, he delivers to the
proper officer an intimation containing the particulars of the place where such
goods are proposed to be kept or stored, after such acquisition. Per se this
will amount to be prohibition in acquiring specified goods within the specified
area, the value whereof exceeds fifteen thousand rupees unless the conditions
for such acquisition are fulfilled with. There is no dispute in the present
case that the appellant, never before making acquisition, delivered to the
proper officer any intimation in respect of acquisition, of those silver ingots
and the place where such silver ingots were proposed to be kept or stored after
the acquisition. In this background, there should not be any difficulty in
holding that the appellant was concerned in fraudulent evasion or attempt at
evasion of the aforesaid prohibition under subsection (2) of Section 11-J in
relation to specified goods.
9. In
the facts and circumstances of the case, it can also be held that the appellant
was concerned with the specified goods in connection with 'fraudulent evasion
or attempt at evasion' of duty chargeable on the specified goods. It is well
known, that it is very difficult for the prosecution, to prove every link, in
respect of the commission of the offence under the Act by direct evidence. The
whole process of smuggling, for evading payment of custom duty consists of
different links. The links aid and abate each other, sometimes through a remote
control. That is why, Parliament has introduced Section 138-A in the Act.
Section 138-A says:
"138-A.
Presumption of culpable mental state.- (1) In any prosecution for an offence
under this Act which requires a culpable mental state on the part of the
accused, the court shall presume the existence of such mental state but it
shall be a defence for the accused to prove the fact that he had no such mental
state with respect to the act charged as an offence in that prosecution.
(2)For
the purposes of this section, a fact is said to be proved only when the court
believes it to exist beyond reasonable doubt and not merely when its existence
is established by a preponderance of probability." This section had come
in force before the trial commenced.
The
provision relates only to burden and nature of proof at the trial, as such it
was applicable in the present case.
In
view of the aforesaid section, a presumption has to be 149 drawn, in respect of
existence of the alleged mental state.
An
option has been given to the accused to prove by way of defence the fact, that
he did not have any such mental state with respect to the act charged which is
an offence. It can be said that the provision aforesaid is an exception to the
general criminal jurisprudence that onus never shifts on the accused and he has
only to raise a doubt in the mind of the court, in respect of the correctness
of the prosecution version. It is different from Sections 106 and 114 of the
Evidence Act. In view of Section 138-A, once a presumption is raised about a
culpable mental state on the part of the accused, that he had stored the silver
ingots, to export them outside the country evading payment of custom duties,
the accused has to prove as a defence that no such mental state with respect to
the act charged, did exist. No material has been produced on behalf of the
appellant to discharge this burden. He has not explained as to why 3274.98 kgs.
of silver ingots, worth rupees more than 18 lakhs had been concealed
underground near a well in his Wadi without any intimation being given to the
proper officer concerned, before acquisition of those silver ingots, as
required by sub-section (2) of Section 11-J.
10.
This Court in the case of State of Maharashtra v. Natwarlal Damodardas Soni4 in which the trial had been completed
before the introduction of Section 138-A in the Act, examined as to what is the
nature of proof required for establishing a charge for an offence under Section
135(1).
It was
said that the requisite guilty knowledge or mens rea under clause (a) or (b) of
Section 135(1), can be established by circumstantial evidence as well. Even
without applying Section 138-A of the Act, it was held that the burden of
proving an innocent receipt of gold lay upon the appellant under Section 106 of
the Evidence Act. The totality of facts proved, was enough to raise a
presumption under Section 114 of the Evidence Act, that the gold had been
illegally imported into the country. It was further said that provisions of
Section 135(1) had been designed to suppress smuggling, as such it has to be
construed in accordance with the Mischief Rule first enunciated in Heydon
case5.
11.
According to us, the prosecution has established that the appellant was
concerned in an attempt at evasion of duty under the provisions of the Act, as
such committed the offence under first part of Section 135(1)(a) of the Act.
He was
also concerned in evasion of the prohibition imposed by sub-section (2) of
Section 11 J of the Act, by not having delivered to the proper officer, an
intimation containing the particulars of the place, where the silver ingots, in
such a huge quantity were to be kept and stored, as such he committed the
offence even under the second part of Section 135(1)(a) of the Act. The very
fact that 3274.98 kgs. of silver ingots worth more than rupees 18 lakhs had
been kept buried near the well in the garden, leads to irresistible conclusion
that the said silver ingots had not been kept or stored in normal course of
business.
12. As
such there is no merit in this appeal and it is accordingly dismissed. The
trial court shall take all necessary steps to take the appellant in custody to
serve out the remaining period of sentence.
4
(1980) 4 SCC 669 5 (1584)3CoRep7a:76ER637 150
ORDER
1.
This appeal by special leave is against the judgment of the Kerala High Court
dated November 25, 1980 by which CRP No. 2034/80-E filed by the appellant was
dismissed by the High Court. The short question involved for decision is the
meaning and scope of Section 4-A of the Kerala Land Reforms Act, 1964 inserted
therein by the Amending Act 35 of 1969.
2. The
predecessor in-interest of respondents effected a mortgage with possession of
the disputed land on March 13, 1919 in favour of the predecessor in-interest of
the appellant. The mortgagee remained in possession except for the period between
January 29, 1940 to June 17, 1942 during which the lessee of the mortgagee was
in possession. The mortgagee's cultivating possession of the disputed land was,
therefore, disrupted between January 29, 1940 and June 17, 1942. The mortgagee,
the appellants herein, claim the right as a deemed tenant by virtue of Section
4-A of the Act, material part of which reads as under :
"4-A.
Certain mortgagees and lessees of mortgagees to be deemed tenants.- (1)
Notwithstanding anything to the contrary contained in any law or in any
contract, custom or usage, or in any judgment, decree or order of court, a
mortgagee with possession of land, other than land principally planted with
rubber, coffee, tea or cardamom, or the lessee of a mortgagee of such land
shall be deemed to be tenant if- (a) the mortgagee or lessee was holding the
land comprised in the mortgage for a continuous period of not less than fifty
years immediately preceding the commencement of the Kerala Land Reforms (Amendment)
Act, 1969; or (b) the mortgagee or lessee has constructed a building for his
own residence in the land comprised in the mortgage and he was occupying such
building for such purpose for a continuous period of not less than twenty years
immediately preceding such commencement:
Provided
that a mortgagee or lessee falling under this clause shall not be deemed to be
a tenant if he, or, where he is a member of a 151 family, such family was
holding any other land exceeding two acres in extent on the date of publication
of the Kerala Land Reforms (Amendment) Bill, 1968, in the Gazette; or (c) the
land comprised in the mortgage was waste land at the time of mortgage or land
to which the Madras Preservation of Private Forests Act, 1949, would have
applied if that Act has been in force at the time of mortgage, and (i) the
mortgagee or lessee was holding such land for a continuous period of not less
than thirty years immediately preceding the commencement of the Kerala Land
Reforms (Amendment) Act, 1969, and (ii) the mortgagee or lessee has effected
substantial improvements on such land before such commencement.
Explanation I.- For the purposes of this
sub-section, in computing the period of continuous possession or occupation by
a lessee, the period during which the mortgagee was in possession or
occupation, as the case may be, shall also be taken into account.
Explanation
II.- In computing
the period of fifty years referred to in clause (a) or the period of thirty
years referred to in clause (c), the period during which the
predecessor-in-interest or predecessors-in-interest of the mortgagee or lessee
was or were holding the property shall also be taken into account.
(emphasis
supplied)
3. The
High Court has taken the view that the appellant- mortgagees were not in
possession for a continuous period of not less than fifty years immediately
preceding the commencement of the Kerala Land Reforms (Amendment) Act, 1969
which came into force on January 1, 1970 and, therefore, the right of a deemed
tenant claimed under clause (a) of sub-section (1) of Section 4-A was not
available to the appellants. This view has been taken on the ground that there
was disruption in the continuous cultivating possession of the mortgagee for
the period between January
29, 1940 to June 17, 1942 when the disputed land was under
cultivation of the lessee.
4. The
learned counsel for the appellants contended that the period between January
29, 1940 and June 17, 1942 during which the lessee was in cultivating
possession of the disputed land must be treated as a part of the mortgagee-
appellants' continuous possession and if that be done, the appellants satisfy
the requirement of holding the land comprised in the mortgage for a continuous
period of not less than fifty years immediately preceding the commencement of
the Amendment Act of 1969. The High Court rejected this contention following
the view taken consistently by the Kerala High Court in several earlier
decisions wherein the possession of the lessee of the mortgagee was not treated
as the mortgagee's possession for this purpose. The question is whether the
view taken by the High Court calls for any interference.
5. As
we read clause (a) of sub-section (1) of Section 4- A, we do not find any
reason to differ from the view taken by the High Court. The object of the
provision is very clear. This provision was made for the purpose of recognising
the tenancy rights of the person in actual cultivating possession of the land
for a continuous period of not less than fifty years immediately preceding the
date of 152 commencement of the Amendment Act, the idea being to confer that
right on the actual tiller of the land. For this purpose no distinction has
been made in the provision between the mortgagee with possession of the land
who was himself cultivating the same or the lessee of such a mortgagee in
cultivating possession for the specified period. If the contentions of the
learned counsel for the appellants were to be accepted it may lead to
incongruous results in certain situations. In a case where the mortgage has
been subsisting for more than fifty years during which the lessee of the
mortgagee has been in cultivating possession for a continuous period of not
less than fifty years, the right of the lessee to be treated as the deemed
tenant would be defeated if the lessee's cultivating possession is to ensure to
the benefit of the mortgagee from whom the lessee holds possession under the
lease.
Obviously,
this would frustrate the object of such an enactment. The scheme of sub-section
(1) of Section 4-A indicates that throughout it is either the mortgagee or
lessee for whom the provision is made, depending on who between them satisfies
the prescribed condition.
Explanation
1 further negatives the contention that lessee's possession can be treated as
the mortgagee's possession while computing the period of continuous possession
of the mortgagee.
6. We
do not find anything in clause (a) or in the remaining part of subsection (1)
of Section 4-A to support the submission of the learned counsel for the
appellants.
Moreover,
the Kerala High Court has consistently taken this view ever since the provision
was enacted and obviously the people have so far arranged their affairs on that
basis.
This
is an additional reason for not disturbing the view taken by the High Court
which even otherwise commends to us as the correct view.
7.
Consequently, the appeal is dismissed. No costs.
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