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PETITIONER: DEVCHAND KALYAN TANDEL ETC.

       Vs.

RESPONDENT: STATE OF GUJARAT & ANR. ETC.

DATE OF JUDGMENT:       08/08/1996

BENCH: G.B. PATTANAIK (J) BENCH: G.B. PATTANAIK (J) RAMASWAMY, K.

CITATION:  JT 1996 (7)   256        1996 SCALE  (5)658

ACT:

HEADNOTE:

JUDGMENT:                 THE 8TH DAY OF AUGUST, 1996 Present:           Hon’ble Mr.Justice K.Ramaswamy           Hon’ble Mr.Justice G.B.Pattanaik K.Madhava Reddy, Sr.Adv. Ms.Lata Krishnamurthy, Adv. with him for the appellant. K.T.S.Tulsi, Additional Solicitor Generel, V.K.Verma, Y.P Mahajan, Vikas Pahwa, and B.N.Babu Chava, Advs. with him for the Respondents.                       J U D G M E N T The following Judgment of the Court was delivered. Devchand Kalyan Tandel V. State of Gujarat & Anr.                             WITH             CRIMINAL APPEAL NOS. 813-14 OF 1996       (Arising out of SLP (Criminal) Nos..2530-31/92) Jayantilal Govindi Ghotda V. Superintendent of Customs (Legal) & Anr.                       J U D G M E N T PATTNNAIK. J.      Leave granted.      Both these  appeals arise  out of  the same judgment of the Additional  Chief Judicial  Magistrate, Valsad dated 7th of May,  1982 in  Criminal Case No. 60 of 1980 and therefore heard together  and are  being disposed  of by  this  common judgment.      On the  basis of  a  complaint  filed  by  the  customs authorities both  these appellants  stood charged  of having committed the  offences  under  Section.  135(l)(a)  of  the Customs Act  (hereinafter referred  to as  the Act’)  on the allegation that on the date of occurrence they were found to be carrying  silver without any transport voucher within the specified area  which is duly notified under Section 11-K of

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the Act.  The appellants denied their complicity and pleaded not guilty. The learned Additional Chief Judicial Magistrate convicted the  appellants under  Section 135  of the Act and sentenced them  to undergo  six months rigorous imprisonment and to  pay a  fine of  Rs. 4,000/-,  in default, to undergo further rigorous  imprisonment of  three months. Against the aforesaid conviction  and sentence of the learned Additional Chief Judicial  Magistrate the  appellants preferred appeals to the court of Sessions and the State also preferred appeal for enhancement  of sentence  in the High Court. The customs authorities  who  were  the  complainant  also  invoked  the revisional jurisdiction of the High Court being aggrieved by the inadequacy  of the  sentence.  After  admission  of  the State’s appeal  in the  High Court,  the appeal preferred by the accused-  appellants were  ordered to be transferred and accordingly all the appeals and revision were heard together and were  disposed of  by common  judgment. The  High  Court dismissed the  appeal filed by the accused - appellants were ordered to  be transferred  and accordingly  all the appeals and revision  were heard  together and  were disposed  of by common judgment.  The High Court dismissed the appeals filed by the accused-appellants and allowed the State’s appeal and enhanced the  sentence of rigorous imprisonment to two years and fine of Rs. 4,000/- so far as accused No. 2 is concerned and enhanced  the sentence  of rigorous imprisonment for two years and  fine of  Rs.  40,000/-  and  in  default  further rigorous imprisonment for three months so far as accused No. 3 is concerned. Thus the present appeals by special leave.      The prosecution  case in  nutshell is  that the customs authorities had  received secret  information  that  certain contraband good  were likely  to pass  through the  National Highway No. 8. The authorities, therefore, kept watch during the early  hours of  5th  August,  1973  around  the  Bhilad Customs Check  Post. At  about 8.30  a.m. a fiat car bearing R.T.O. Registration  No. GJN  5953 came  from Vapi  side and proceeded towards  Bombay side.  The car  was intercepted by the vigilance  squad of  the Customs  department but nothing objectionable was  found therefrom.  The vehicle was allowed to pass.  The appellant  - Devchand  Kalyan Tandel,  who was accused no.  2, was  one of  the occupants  in the said fiat car. The  customs authorities thereafter suspected some foul play and  then divided  themselves in  two groups, one group was sent  on the  way to  Umbergaon and  the other group was sent on  the way to Sarigam. The further prosecution case is that while  the second group was on its vigil, an ambassador car was  found coming  from Sanjan.  When  the  vehicle  was signaled to  stop.  it  ignored  the  signal  and  proceeded straight towards  Bhilad railway  station and  from there it took turn  towards the  underground  bridge.  The  vigilance party chased  the said  car and when they found that the car is about  to reach the National Highway, they took resort to firing and  on hearing the sound of firing, the car stopped. The said  ambassador  car  bore  RTO  Registration  No.  MRH 5042.The car was brought to the customs office at Bulsar and in presence  of two  witnesses a  search was  conducted.  On search. ten  silver ingots  worth more  than  Rs.  1,90,000, weighing 293.300  kilograms were  recovered  from  a  secret cabinet in the hind portion of the car. Appellant - Devchand and the  other  accused  who  is  not  an  appellant  namely Ishwarbhai Gopalbhai Tandel were found to be in the car made their  statements  under  Section  108  of  the  Act.  After completion of  investigation a  complaint was  filed in  the Court  of  learned  Additional  thief  Judicial  Magistrate. Valsad which was registered as Criminal Case No. 60 of 1980. The accused  - appellants stood charged under Section 135(1)

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of the  Act. The  accused persons  pleaded not guilty of the charge and were accordingly tried, After the prosecution led evidence to  establish the  charge  against  the  accused  - appellants. The  witnesses were  cross  -  examined  by  the accused persons.  The statements of the accused persons were also recorded  under Section  313 of the Cr.P.C. and accused No. 2  appellant -  Devchand  also  examined  witnesses,  in defence. The  plea of  appellant - Devchand is that while he was proceeding  in the  fiat car  after crossing the customs check post,  the car  had a  break down and he was therefore looking for  a lift,  so that,  he can get a mechanic and at that point  of time  an ambassador  car was found coming, he therefore, raised his hand requiring the car to stop and the accused no, 1 who was driving the ambassador car stopped the same and gave lift and accordingly he did not know about the alleged  transportation  of  silver  ingots  in  the  secret chamber of the ambassador car. Accused No. 3 though admitted to have  purchased the  silver ingots  from one  Pratapsingh Dhorda of  Pratap and  Company but  he took the plea that he had sold  the same  to his  brothers and therefore he has no role in  the transportation  of the  silver  ingots  by  the offending ambassador  car. The  learned trying Magistrate on consideration of  oral and  documentary evidence  led before him discarded  the plea  of the  accused persons and came to hold that  the prosecution  has been  able to  establish the charge beyond reasonable doubt, accordingly he convicted the accused -  appellants and  sentenced them as already stated. The High  Court reconsidered  the entire evidence and by the impugned judgment  affirmed the conviction passed by learned trying Magistrate  and  enhanced  the  sentence  as  already stated. Both the trying Magistrate as well as the High Court not only relied upon the evidence led by the prosecution but also relied upon the statutory presumption under Section 138 A of  the Act  and held that the accused failed to discharge the burden which lay on them.      Mr. K.  Madhava Reddy, learned senior counsel appearing for the  appellants  raised  the  following  contentions  in assailing the conviction and sentence : 1)   On the  facts and circumstances of the case the learned trying Magistrate  as  well  as  the  High  Court  committed serious error  in  disbelieving  the  plea  of  appellant  - Devchand that  his fiat  car had  a break  down and  he- has taken lift  in the ambassador car and he had no knowledge of silver ingots being transported in the ambassador car. 2)   The two  courts below  committed gross  error of law in raising the presumption available under Section 138-A of the Act. No  presumption can  be raised  unless the  prosecution establishes minimum  ingredients of  offence  under  Section 135(1), consequently  the judgments  of the courts below are wholly unsustainable in law. 3)   In any  view of  the matter, appellant  Devchand having already been  in custody for about 15 months and appellant - Jayantilal being  in custody  for about  18 months  and  the occurrence in   question being of the year 1980, it will not be just  and proper  to order  for surrender  to  serve  the balance period  of sentence  and therefore the courts should sentence to the period already undergone.      Mr. K.T.S.  Tulsi, learned Additional Solicitor General on the  other hand  contended that  finding it  difficult to check the  large scale smuggling as well as violation of the provisions of  the  Foreign  Exchange  Regulation  Act,  the Parliament introduced Section 138A of the Customs Act by Act 36 of  1973. While  construing the provisions of the Act the court should  bear in  mind the  legislative intent  of  the provision and  in cases  of economic offences the provisions

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should be  construed strictly.  It is further contended that the  facts   and  circumstances  as  found  the  High  Court irresistibly point towards the guilt of the accused and this Court should not interfere with the conviction and sentences passed by  the High  Court. It  is further urged that in any view of  the matter  it would  not be  appropriate for  this Court to reappreciate the evidence on record.      Before examining  the rival  contentions at  the Bar it would be  appropriate to  notice certain undisputed facts as well as  the findings  arrived at  by the  High  Court.  The undisputed facts  are that the Central Government had issued the Notification  under Section  11 K of the Act prohibiting transport  of   silver  within  the  specified  area  unless accompanied by  transport voucher  and the  place  where the ambassador car  was stopped and silver ingots recovered from the said  ambassador car  was  within  the  specified  area. Appellant -  Devchand   was one of the occupants of the said car. Said   appellant  - Devchand earlier had passed through the  customs   check  post  in  the  fiat  car  and  shortly thereafter when  the ambassador  car was  intercepted he was found  accompanying  therein.  Apart  from  the    aforesaid undisputed facts  the High Court on appreciation of evidence further found  that the version of accused Devchand that the fiat car  had a break down near Sanjan looks more fictitious than real  and this  version had  rightly been  rejected  by learned trying  Magistrate. The  High  Court  also  did  not accept the  defence of  accused Devchand that he took a lift in the  ambassador car which was being driven by accused No. 1 in view of the inherent contradiction in the version given by both  the accused persons. So far as appellant Jayantilal is concerned  the High  Court recorded  the finding that the evidence on record has clearly established his link with the 10 silver ingots recovered from the ambassador car as he was the  last  purchaser  therefore  and  the  Prohibited  goods recovered from  the ambassador  car on  the 5th  of  August, 1973  belonged   to  the  accused  no.  3,  which  has  been established  at   the  trial.   We  would  now  examine  the contentions raised   by Mr. S. Madhava Reddy, learned senior counsel for   the appellants. So far as the first contention of   Mr. Reddy the learned senior counsel for the appellants is concerned,  the same  is  in  realm  of  appreciation  of evidence and  the two  courts below have already appreciated the evidence on record and have rejected the defence plea of Devchand that his fiat car broke down and so he was taking a lift in  the ambassador  car and  as such  not aware  of the transportation of silver ingots therein. We have scrutinized the judgments  of the  learned trying  Magistrate as well as the High Court and we find no infirmity in either of them in the matter  of appreciation  of  evidence.  We  are  of  the considered  opinion  that  the  said  plea  of  appellant  - Devchand has  rightly been  rejected. In  our view there has neither been any perversity in the matter of appreciation of evidence nor  any  important  piece  of  evidence  has  been ignored by  the courts  below. It  is well settled that this Court usually  does not  reappreciate the  evidence  and  no justifiable  reasons   have  been   advanced  for  taking  a different path. Accordingly, the first contention of Mr. K. Madhava Reddy must be rejected.      So far  as second contention of Mr. K. Madhava Reddy is concerned  it   depends  upon   an  interpretation   of  the provisions  of   Section  138-A   of  the  Act.  For  better appreciation  of   the  point  in  issue  Section  138-A  is extracted hereinbelow in extenso:      138-A.  Presumption   of   culpable      mental   state   -   (1)   In   any

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    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.      Explanation  -   In  this  section,      "culpable  mental  state"  includes      intention, motive,  knowledge of  a      fact and  belief in,  or reason  to      believe, a fact.      (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.      Mr. K.  Madhava Reddy urged that before the presumption under section  138-A(1) is  attracted the  prosecution  must establish the  basic ingredients  of the  offence for  which charge has  been  framed  and  in  the  case  in  hand,  the necessary ingredients  of section  135(1)(a) must  be proved and then  only the  presumption under  section 138-A  can be attracted. According to Mr. Reddy this is apparent from sub- section (2)  of section  138-A of  the Act. On a scrutiny of provisions of the Act particularly Section 138-A thereof and the object  for which  the aforesaid  provision was inserted into the  statute by  Act No. 36 of 1973 it is difficult for us to  accept the  contention of Mr. K. Madhava Reddy. It is no doubt  true  that  in  a  charge  for  violation  of  the provisions of  Section 135(1)(a)  it  is  required  for  the prosecution to  establish that the accused have fraudulently evaded or  attempted evasion  of any  duty chargeable on the goods or  that violated  the prohibition  imposed under. The Act  in  respect  of  the  goods.  But  if  the  prosecution establishes the  aforesaid facts  then there is no necessity of attracting  the statutory  presumption under section 138A and without  such presumption  an accused  can be  convicted under section 135(1)(a)- But the legislature having found it difficult to  establish the  necessary ingredients  of  such evasion of  duty or  prohibitions and  the economic offences having grown  in proportion beyond the control, came forward with the  presumption available  under section  138A of  the Act.  The  main  object  of  Section  138A  is  to  raise  a presumption as  to culpable  mental state on the part of the accused when  he is  prosecuted in  a court of law. In other words, if  a recovery  is  made  from  the  accused  of  any prohibited goods within the notified area then the statutory presumption would  arise that  he was knowingly concerned in the fraudulent  evasion or  attempted evasion  of  any  duty chargeable on  the goods  in question. In the case Bhanabhai Khalpabhai vs.  Collector of  Customs and another, 1994 Supp (2) SCC  143, this  Court has  held that  in view of Section 138-A a  presumption has to be 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.  The question, therefore, arises as to whether in  the proved  facts and  circumstances the  courts below were  justified in  taking recourse  to the  statutory

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presumption under  section 138A  of the Act. The answer must be in the affirmative. The fact that accused was found to be inside  the  vehicle  from  which  the  silver  ingots  were recovered; the  fact that  the vehicle  did  not  stop  even though customs  authorities signaled  for stopping; the fact that the  two courts below disbelieved the plea of accused - Devchand about  the break  down of  his fiat  car and  he is taking a innocent lift by the ambassador car from the secret pocket of  which the  silver ingots were recovered; and that the place  from where the recovery was made is undoubtedly a place within the notified area under Section ll K of the Act and further  that there was no transport voucher as required under section  11K of  the Act, unhesitatingly point towards the complicity  of the  accused - Devchand in the commission of offence  under section  135(1) and  the presumption under section 138-A  having been rightly attracted. The burden lay on the accused appellant to establish that either he did not know about  the fact  of silver  ingots being transported in the vehicle  or that  he was  in no  way connected  with the same. But  the accused  - Devchand  has  utterly  failed  to discharge the  said burden.  In our  considered opinion  the conviction must  be held to be well founded and the sentence passed thereunder is wholly justified.      So far  as the third submission of Mr. K. Madhava Reddy is concerned  it is  no doubt  true that sufficient time has elapsed between  the date  of occurrence  and  the  date  of judgment and  further the  accused persons have served their sentences for  a major  part but yet we do not think that in such economic  offences the  courts should  take any lenient view in  the matter.  Smuggling has  become a  threat to the effective fulfillment  of the  objectives of  foreign  trade control. The  extent of  the leakage  of revenue  that takes place  through   the  process   of  tax  evasion  cannot  be estimated.  It   has  got   serious  deleterious  effect  on legitimate trade.  Taxation Enquiry Commission had suggested that stringent measures both legal and administrative should be adopted  to minimise  the scope  of  the  evil.  For  the purpose of  achieving the  desired objective Parliament came forward with  insertion of  Section 138-A  into the  statute book. Question  of taking  a lenient  view  of  the  matter, therefore, does  not arise. In view of large scale smuggling activities in  the border  area and  large scale  evasion of duty  the  country  has  faced  severe  economic  imbalance. Notwithstanding stringent  legislation having  been made  it has not  been possible  to eradicate  the evil. Any leniency therefore in  economic offences will send a wrong signal. In this view  of the  matter, we are- unable to accept the last contention of  Mr. K.  Madhava  Reddy,  the  learned  senior counsel for the appellants.      So far  as Jayantilal  is concerned the prosecution has been able  to establish  that the ten silver ingots hold the mark  of   Narandas  Manordas  and  accused  Jayantilal  had purchased the  said  silver  ingots  from  the  Refinery  of Narandas Manordas.  The accused  admitted the aforesaid fact and it  was proved  beyond reasonable doubt that he was last purchaser of  said silver  ingots. His plea that he convered the ingots  into pieces  and sold  the same  to his Brothers under Exhibits  18 to 72 has not been accepted either by the trying  Magistrate  or  by  the  High  Court.  On  elaborate discussion of  the evidence  on record  the two courts below have affirmed that accused no. 3 was the owner of the seized silver ingots which was meant for transportation and illegal export and  he was  involved in  committing the  offence  in question. No  convincing argument  has been  advanced on his behalf  to  interfere  with  the  findings  and  conclusions

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arrived at  by the  courts below  and consequently we do not find any case warranting interference by this Court has been made out.      In the  net result,  therefore, both  the  appeals  are dismissed. The  bail bonds  stand cancelled.  The appellants are directed  to surrender  forthwith to  serve the  balance period of sentence.