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PETITIONER: BALUMAL JAMNADAS BATRA

       Vs.

RESPONDENT: STATE OF MAHARASHTRA

DATE OF JUDGMENT29/08/1975

BENCH: BEG, M. HAMEEDULLAH BENCH: BEG, M. HAMEEDULLAH BHAGWATI, P.N. SARKARIA, RANJIT SINGH

CITATION:  1975 AIR 2083            1976 SCR  (1) 539  1975 SCC  (4) 645  CITATOR INFO :  F          1980 SC 593  (20)  R          1980 SC 793  (8)

ACT:      Customs Act,  1962, Section 123 sub-section (1) and (2) -Seizure of  smuggled goods prior to notification under sub- section (2)  -Presumption under sub-section (1), if could be applied subsequent to notification to the goods seized.

HEADNOTE:      Section 123(1) of the Customs Act, 1962, provided that, where any  goods to  which this  section applies  are seized under this  Act in  the  reasonable  relief  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.      On 21-4-1967 Police officers of the Anti Corruption and Prohibition Bureau..  Greater Bombay,  acting on information received, had  searched room  no. 10  at 56,  Sheriff  Deoji Street Bombay. This room was divided by petitions into three parts. In the central portion the police found the appellant and three  other persons. This portion was again sub-divided with a  locked connecting  door fixed  in the passage to the sub-divided part.  This was  opened by one of the two Godrej lock keys  produced by  the appellant  from a side pocket of his trousers.  Eleven wooden  boxes covered  with jute cloth and secured  by iron   strips  were found  there. On opening them. six  of them  were found to contain cigarette lighters of "Imco  Triplex Junior"  brand "Made in Austria.". Each of the six  boxes were  tightly packed with 1 200 lighters. The remaining five  boxes contained  fifty sealed tins of flints for cigarette  lighters which  bore the  Following  writing: "Tego Lighter  Flints of  Superior Quality  Made in Germany" inscribed on  them. A panchnama was prepared before Panchas. A rent  receipt in  the name  of the appellant in respect of room No.  10, in this house, of which a portion was occupied by  the  appellant,  and  a  bill  for  the  consumption  of electricity  were  also  seized  from  the  custody  of  the appellant together  with  the  Godrej  locks  and  the  keys produced  by  the  appellant.  On  30th  October.  1968  the Assistant  Collector   of’  Central   Excise,   Marine   and

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Prevention Division. Bombay, filed a complaint alleging that the  appellant   had  committed  offences  punishable  under Section 135(a) and (b) of the Customs Act. The appellant had denied being  in possession  of the offending goods although he had  admitted the production of keys from his possession. The trying Presidency Magistrate convicted him under section 135(b)(ii) of the Customs Act. 1962 and sentenced him to six months rigorous  imprisonment and a fine of Rs. 2,000/-, and in default,  to three  months further rigorous imprisonment. The High  Court dismissed  his appeal.  This appeal has been preferred on  the basis of the special leave granted by this Court.      It was  contended  for  the  appellant  that:  (1)  the presumption contained in s.123(1) of the Act would not place the onus  of proving  innocent possession  of the  goods  in question upon  the appellant; and, (ii) the goods in respect of which  the appellant was prosecuted were not seized under the Act.      Rejecting the  contentions and  dismissing the  appeal. the court ^      HELD: (1)  Though lighters  and  flints  were  notified provided in Section 123(2), in the official Gazette of 26-8- 1967 the  provisions of Section 123(1) which only lay down a procedural rule, could be applied when the case came up for. trial before the Presidency Magistrate. He divided it on 15- 7-1969. The complaint itself’ was filed on 30-10-1968. It is immaterial that the appellant was round in possession of the goods on 21-4-1967. [542-B-C]      (ii) The very appearance of the goods and the manner in which they  were  packed  indicated  that  they  were  newly manufactured and  brought into  this country  very  recently from another  country. The  inscriptions on them and writing on the  boxes were  Parts of the state in which the goods in unopened boxes  were found from which inferences about their origin and recent import 540 could  arise.   The  appellant’s   conduct,  including   his untruthful  denial   of  their   h   possession,   indicated consciousness of  their smuggled  character  or  means  rea. There was  some evidence to enable the courts to come to the conclusion that  the goods  must  have  been  known  to  the appellant to  be smuggled  even if  he was  not party  to  a fraudulent evasion of duty. [543 B-D]      Gian Chand & ors. v. The State of Punjab, [1962] Suppl. l S.C.R.  364 Collector  of Customs,  Madras &  ors.  v.  D. Bhoormull A.I.R.  1974 S  C. 859  M/s, Kanungo  & Co. v. The Collector of  Customs, Calcutta  & ORS.  A.I. R.  1972  S.C. 2136, Issaradas Daulat Ram & ors v. The Union of India & ors [1962] Suppl.  1 S.C.R.  358, Gopal  Sheorey v. The State of Bombay [1959]  S.C.R. 919  and The  State of  Punjab v. Gian Chand & ors. Criminal Appeal No. 195 of 1962-decided by this court on 2-4-1968, referred to.

JUDGMENT:      CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 74 of 1971.      Appeal by  Special Leave  from the  Judgment and  order dated the  25th January  1972 of  the Bombay  High Court  in Criminal Appeal 1025 of 1959.      N.  H.  Hingoorani  and  Mrs.  K.  Hingoorani  for  the Appellant.      S. B. Wad and Al. N. Shroff for the Respondent.

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    The Judgment of the Court was delivered by V      BEG, J.-The  appellant before  us by  special leave  to appeal was  convicted  under  Section  135(b)  (ii)  of  the Customs Act,  1962 (hereinafter  referred to  as ’the Act’), and sentenced to six months rigorous imprisonment and a fine of Rs.  2,000/-, and,  in default,  to three  months further rigorous  imprisonment.  Goods  in  respect  of  which  this offence  was   found  to   have  been  committed  were  also confiscated.      On 21-4-1967,  Police Officers  of the  Anti Corruption and  Prohibition   Bureau,   Greater   Bombay,   acting   on information received,  had  searched  room  No.  10  at  56, Sheriff Deoji  Street, Bombay.  This room   was  divided  by partitions into  three parts.  In the  central  portion  the police found  the appellant  and three  other persons.  This portion was  again sub-divided with a locked connecting door fixed in  the passage  to the  sub-divided  part.  This  was opened by  one of  the two  Godrej lock keys produced by the appellant from  a side pocket of his trousers. Eleven wooden boxes covered  with jute  cloth and  secured by  iron strips were found there. On opening them, six of them were found to contain cigarette  lighters of  "Imco Triplex Junior’? brand "Made in Austria". Each of the six boxes were tightly packed with 1200 lighters. The remaining five boxes contained fifty sealed tins  of flints for cigarette lighters which bore the following writing:  "Tego Lighter Flints of Superior Quality Made  in  Germany".  On  the  wooden  boxes  containing  the lighters were  found written  "Dubai" and "Made in Austria". The five  boxes containing  flints had the words "Dubai" and "Made in  West Germany"  inscribed on  them. A panchnama was prepared before  Panchas. A  rent receipt in the name of the appellant in respect of room No. 10, in this house, of which a portion  was occupied by the appellant, and a bill for the consumption of electricity were also seized from the custody of the appellant together 541 with the Godrej lock and the keys produced by the appellant. Subsequently, the  seized articles  were made  over  to  the inspector  of   Central  Excise   and  Customs,  Marine  and Prevention Division, Bombay, on 24-4-1967, under Section 110 of the Customs Act.      The value  of 7200 cigarette lighters was stated as Rs. 14,400/- and  of 250 tins of flints as Rs. 15,000/- on which Customs duty  of Rs.  15,840/- and Rs. 10,500/- respectively was alleged  to be  payable. In  the complaint filed on 30th October, 1968, by the Assistant Collector of Central Excise, Marine and  Prevention Division,  Bombay, it is alleged that the cigarette  lighters and  flints were imported into India without an import licence and in contravention of provisions of Government  of India,  Ministry of  Commerce &  Industry, Import Control  order No.17/55  dated 7-12-1955 (as amended) issued under  Section 3(2)  of the Import & Export (Control) Act, 1947,  which was  to be  deemed to  be an  order passed under Section  11 of  the Act.  It was  submitted  that  the accused, having  been concerned  in a  fraudulent evasion of payment of  Rs. 26,340/-  as customs duty to the Government, had committed  offences punishable  under Section 135(a) and (b)  of  the  Act.  The  goods  were  also  as  a  necessary consequence, said to be liable to confiscation under Section 111 (d) of the Act.      The appellant  had denied  being in  possession of  the offending goods  although he  had admitted the production of keys from  his possession He alleged that the portion of the room from  which the  goods were  recovered  was  sublet  to

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Dwarumal and  Kishen who  had  kept  the  goods  there.  The appellant’s explanation  had been  disbelieved by the trying Magistrate as  well as  by the High Court. The production of the key  which, according  to the  prosecution evidence, the appellant had  at first  refused to produce, proved that the portion in  which the  boxes were  kept was  in  appellant’s exclusive possession  with all  that was contained in it. It is possible  that he  may have sub let other portions of the partitioned room to other persons, but there is no reason to doubt that  the appellant  was not only in possession of the bodies but  knew something about the incriminating nature of their contents.  Otherwise, why  should he,  at first,  have refused to  produce  the  key  he  had  ?  Furthermore,  the appellant had  not given  any evidence to show that his sub- tenants had  placed the  boxes there,  or that there was any reason why  he should allow them to use the portion reserved by him  for himself.  His case rested on his bare assertions in a  written statement.  Of course, no one had come forward to  state   or     allege  that  the  goods  found,  in  the circumstances  stated   above?  had  been  imported  without payment of  duty. The  only question  raised before  us  was whether the presumption contained in Section 123 of the Act, corresponding to  Section 128(A)  of the  Sea  Customs  Act, 1878. Or  any other provision of law would place the onus of proving  innocent   possession  of   these  goods  upon  the appellant. Section 123 of the Art reads as follows:           "123. Burden of proof in certain cases.           (1)  Where any goods to which this section applies                are seized  under this  Act in the reasonable                belief that 542                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, diamonds,                manufacturers of  gold or  diamonds, watches,                and  any  other  class  of  goods  which  the                Central Government may by notification in the                official Gazette specify".      lt is  true that  lighters and  flints were notified as provided in  Section 123(2) in the official Gazette of 26-8- 1967. Nevertheless,  as the  provisions of Section 123(1) of the Act  only lay  down a  procedural rule,  they  could  be applied  when   the  case  came  up  for  trial  before  the Presidency Magistrate  who actually decided it on 15-7-1969. Indeed, the  complaint itself was filed on 30-10-1968. It is immaterial that the appellant was found in possession of the goods on  21-4-1967 There  is, however, another objection to the applicability  of Section  123(1) of the Act. It is that it would  apply only  to goods  seized under  the Act. lt is contended that  the goods  in respect of which the appellant was prosecuted  were not  seized under the Act. Reliance was placed for  this contention  upon Gian  Chand &  ors. v. the State of Punjab (1)      Even if the goods with which we are concerned here were not seized  under the Act, as provided by Section 111 of the Act, it  is contended  on behalf  of the  State that Section 106,  read  with  Section  114  of  the  Evidence  Act,  was sufficient to  enable the  prosecution to  ask the  Court to presume that  the appellant  knew that  the goods  must have been smuggled  or imported  in contravention of the law. The appellant had  not produced  evidence to show that the goods were legally  brought into  India. Reliance  was  placed  on behalf of the prosecution on: Collector of Customs, Madras &

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ors. v. D. Bhoormal (2); M/s. Kanungo & Co. v. The Collector of Customs, Calcutta & Ors(3), Issardas Daulat Ram & ors. v. the Union  of India  & Ors.(4),  Anant Gopal  Sheorey v. The State of Bombay(5).      Learned Counsel  for the  appellant had  in  his  turn, relied upon  The State of Punjab v. Gian Chand & ors.(6). He contended that  it was  necessary  for  the  prosecution  to prove:  (1)  that,  the  goods  in  question  were  actually smuggled or  brought into  the country  without  payment  of customs duty  at a time when payment of such duty had become obligatory; and,  (2) that,  the appellant  was dealing with them knowing  them to  be smuggled  goods. It  was contended that mere  possession by the accused of such goods could not enable the  prosecution to apply Section 106 of the Evidence Act when  the appellant  could not know where the goods came from. It  was urged  that there  was no evidence which could enable the  appellant to  know where  the goods came from or when the  goods were  imported or that duty, if leviable was not P d on them. The admissibility and sufficiency of      (1) [1962] (Suppl.) 1 S.C.R. 364.       (2) A.I.R. 1974                                                    S.C. 859.      (3) A.I.R. 1972 S.C.R. 2136.      (4) [1962] Suppl. (1)                                                  S.C.R. 358.      (5) [1959] S.C.R. 919. (6) Criminal Appeal No. 195 of 1962 decided by this Court on 2-4-1968. 543 the inscriptions  on the  goods and  the writing on boxes in which they were found, for proving the place from where they came, or  when they  were  imported,  were  questioned.  The contention was,  that even  if the appellant is deemed to be in possession with full knowledge of what the goods actually were, the  Court could  not go further and assume them to be smuggled or  imported into  the country from another country of their  assumed origin  after a time when the restrictions on  their   import  had  been  imposed.  Unfortunately,  the appellant did  not admit the possession of the goods at all. If he  could have succeeded in explaining satisfactorily how he was  an innocent  receiver of  such goods without knowing that they  were illegally  imported or  smuggled he may have had a  chance of  getting the  benefit  of  doubt  The  very appearance of  the goods  and the  manner in which they were packed indicated  that  they  were  newly  manufactured  and brought  into   this  country  very  recently  from  another country. The  inscriptions or  them and writing on the boxes were parts of the state in which the goods in unopened boxes were found  from which  inferences about  their  origin  and recent  import   could  arise.   The  appellant’s   conduct, including  his   untruthful  denial   of  their  possession, indicated consciousness of their smuggled character or means rea. In  any case,  there was  some evidence  to enable  the Courts to  come to  the conclusion  that the goods must have been known  to the  appellant to  be smuggled even if he was not a  party to  a fraudulent evasion of duty. Consequently, the  appellant   had  been   convicted  only  under  Section 135(1)(ii) of  the Act. We do not find sufficient reasons to interfere with this finding of fact or the sentence imposed. It  would   also  follow   that  the   goods  were   rightly confiscated.      Accordingly, this appeal is dismissed. V.M.K.                                     Appeal dismissed. 544