03 February 1964
Supreme Court


Case number: Appeal (civil) 770 of 1962






DATE OF JUDGMENT: 03/02/1964


CITATION:  1964 AIR 1140            1964 SCR  (6) 594  CITATOR INFO :  R          1964 SC1154  (37)  R          1965 SC  40  (6)  R          1965 SC 722  (11,38)  R          1965 SC1595  (24,42)  R          1971 SC  44  (32)  D          1971 SC 870  (15)  D          1979 SC1029  (10,23)  D          1987 SC1629  (17)  RF         1988 SC 603  (11,29)  RF         1991 SC 818  (37)  RF         1992 SC2219  (53,134)

ACT: Sea  Customs-Prohibition of entry of certain types of  ships in  India  Section  52A  When  applicable-Whether  mens  rea nacessary-Nature  of  liability  under  s.  167(12A)-Section 167(12A) and s. 183-Petition under Art. 136 when  competent- When  is  a body or authority a  Court-Whether  the  Central Board of Revenue or Central Government a Tribunal under Art. 136-Whether penalty of Rs. 25 lacs excessive-Whether s.  52A ultra  vires  Arts.  14, 19 and  31(1)  and  hence  invalid- Constitution  of India, Art. 136-Sea Customs Act, 1878,  ss. 52A, 167(12A), 183, 188, 190A and 191.

HEADNOTE: The  appellant carries on the business of carriage of  goods and  passengers  by sea and owns a fleet of ships  for  that purpose.   One  of its ships named Eastern Saga  arrived  at Calcutta and was rummaged by the Calcutta Customs  Officers. In  the sailors’ accommodation, a hole measuring 2 1/2  x  5 1/2  was found in the wall panelling behind the back  batton of  a wooden seat which had been screwed to the  wall.   The hole was covered with a piece of wood and over-painted.  The hole opened into a space and in that space, Customs Officers found  1,458 bars of gold valued at more than Rs.  23  lacs. Notices were duly served and after hearing the parties,  the Additional Collector of Customs came to the conclusion  that the vessel had rendered itself liable to confiscation  under s.  167(12A) because it had infringed the provisions  of  s.



52A.   He ordered the confiscation of the ship but gave  the owners  thereof  an option to pay a fine of Rs. 25  lacs  in lieu  of confiscation.  The appellant went in appeal to  the Central Board of Revenue but that appeal was rejected.   The appellant went in revision to the Central Government but the revision  petition was also dismissed.  ’Me  appellant  then came to this Court for special leave and obtained the  same. Dismissing the appeal Held:     (i) The Customs authorities. were right in holding that  the facts proved in the case showed that the  "Eastern Saga"  nor  contravened  the provisions of s.  52A  when  it entered  the  port of Calcutta and hence  had  incurred  the liability prescribed by s. 167(12.A) of the Sea Customs Act. (ii) The  fine  of Rs. 25 lacs was not  excessive.   Illegal importation  of gold had assumed the proportions of a  major problem  facing the country and it was open to  the  Customs authorities  to  take the view that the best  way  to  check smuggling  was  to  impose deterrent  fines  whenever  those offences were discovered and proved. (iii)     Section  52A was not ultra vires Arts. 14, 19  and 31(1)  and hence was not unconstitutional or  invalid.   The appellant was not only 595 a  company  but also a foreign company and as such  was  not entitled  to claim the benefits of Art. 19.  The plea  under Art. 31(1) as well as under s. 14 could not be sustained for the simple reason that in supporting the said two pleas, the appellant  had inevitably to fall back upon the  fundamental right guaranteed by Art. 19(1)(f). Before  an  appeal can be entertained under  Art.  136,  two conditions have to be satisfied.  The order impugned must be an  order  of  a judicial or  quasi-judicial  character  and should  not be purely an administrative or executive  order. The said order should have been passed either by a Court  or Tribunal in the territory of India.  It is difficult to  lay down  any  definite test to determine whether a  body  is  a court/tribunal  or not.  Sometimes, courts  enquire  whether that  body or authority is clothed with the trappings  of  a court,  whether it can compel witnesses to appear before  it and  administer  oath to them, whether it  was  required  to follow  certain rules of procedure, whether it was bound  to comply  with  the rules of natural justice  whether  it  was expected to deal the matters before it fairly, justly and on merits  and not be subjective considerations and whether  it was required to adopt or quasi-judicial approach.  If all or some  of the important tests are satisfied  the  proceedings can be characterised as judicial proceedings and the test of "trappings" is satisfied.  Likewise, if it appears that such a body or authority has been constituted by the  legislature and on it has been conferred the inherent judicial power  of the   State,  that  is  significant,  if  not   a   decisive indication, that the said body or authority is a Tribunal. The  scheme of the Sea Customs Act, 1878, the nature of  the proceeding  brought  before  the  appellate  and  revisional authorities, the extent of the claim involved, the nature of the penalties imposed and the kind of enquiry which the  Act contemplates,  all indicate that both the Central  Board  of Revenue   and  the  Central  Government,  while  acting   as appellate  or revisional authorities,  constitute  Tribunals under Art. 136 of the Constitution because they are invested with the judicial power of the State and are required to act judicially. In  order to prove the offence of s. 52A against  a  vessel, what  is to be moved is that there has been a  construction, adaptation, alteration of fitting and the said construction,



adaptation,  alteration  or fitting had been  made  for  the purpose   of  concealing  goods.   The   section   prohibits absolutely  the entry of vessels which show that  there  has been construction, adaptation, alteration or fitting made in them for the purpose of concealing goods in them.  It is not necessary  for  the  purpose of s. 52A  to  prove  mens  rea against  the person responsible for the contravention of  s. 52A.   It  is impossible to prove such mens  rea  or  guilty mind.  The knowledge of the owners or even of the masters is entirely irrelevant. Section  167(12A)  and  s. 183 have  to  be  read  together. Though   confiscation  is  a  statutory  corollary  of   the contravention  of  s.  52A, s. 183  expressly  requires  the adjudicating officer to give an option to the owners of  the offending  vessel  to  pay fine  in  lieu  of  confiscation. Confiscation is 596 no  doubt  authorised and required by s. 167 (12A)  but  the statutory  obligation makes it necessary for the officer  to give  an  option  to  the owner.  The  result  is  that  the ultimate penalty which can be imposed on the owners falls to be determined by the adjudicating officer in his discretion. Shewpujanrai Indrasanrai Ltd. v. Collector of Customs [1959] S.C.R.  821,  F. N. Roy v. Collector of  Customs,  Calcutta, [1957] S.C.R. 1151, Leo Roy Frey v. Superintendent, District Jail,   mritsar and Anr., [1958] S.C.R. 822, Thomas Dana  v. State  of  Punjab,  [1959] Supp.  (4)  S.C.R.  274,  Maqbool Hussain  v.  State of Bombay, [1953] S.C.R.  730,  Harinagar Sugar  Mills  Ltd. v. Shyam Sundar  Jhunjhunwala  and  Ors., [1962]  2  S.C.R. 339, Shivji Nathubhai v. Union  of  India, [1960]  2  S.C.R. 775, Jaswant Sugar Mills Ltd.,  Meerut  v. Lakshmi  Chand,  [1963]  Supp.  1  S.C.R.  242,  Engineering Mazdoor Sabha v. Hind Cycles Ltd. [1963] Supp. 1 S.C.R. 625, Ravula  Hariprasada  Rao v. The State,  [1951]  S.C.R.  322, Brend v. Wood, (1946) 110 J.P. 317 and Sherras v. De Rutzen, (1895) 9. referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 770 of 1962. Appeal  by special leave from order No. 1742 of 1960 of  the Government  of  India  Ministry of  Finance  (Department  of Revenue)   dated  December  17,  1960  in  Custom   Revision Application No. 1631 of 1959 and/or from the order dated May 12,  1959 of the Central Board of Revenue in Customs  Appeal No. 151 of 1959 and Petition No. 138 of 1961 Petition under Art. 32 of the Constitution of India for  the enforcement of Fundamental Rights. Sachin  Chaudhury,  B.  Sen and S.  N.  Mukherjee,  for  the appellant (in C.A. No. 770/62) and the petitioner (in  peti- tion No. 138/1961). S.   V. Gupte, Additional Solicitor-General, D. R. Prem  and R.  H. Dhebar, for the respondents (in C.A. No.  770/62  and petition No. 138 of 1961). February  3, 1964.  The Judgment of the Court was  delivered by GAJENDRAGADKAR  C.J.-This appeal by special leave  raises  a short  question about the true scope and effect  of  section 52A of the Sea Customs Act, 1878 (No. 8 of 1878) 597 (hereinafter  called ’the Act’).  The appellant,  the  Indo- China  Steam  Navigation  Co. Ltd.,  which  carries  on  the business of carriage of goods and passengers by sea, owns  a



fleet  of ships, and has been carrying on its  business  for over 80 years.  One of the routes plied by its ships is  the Calcutta-Japan-Calcutta route.  An order has been passed  by the  Customs Authorities confiscating the appellant’s  motor vessel ’Eastern Saga" under section 167(12A) of the Act, and giving  the  appellant the option under s. 183 of  paying  a fine of Rs. 25 lakhs in lieu of confiscation.  The appellant contends   that   this   order  has  been   based   upon   a misconstruction of the provisions of s. 52A. The  vessel "Eastern Saga" has 6,631 gross registered  tons, and 4,441 net registered tons.  It has an overall length  of 475-2-1/2"  a breadth of 59-3" and a summer draft of  24-7". lit carries a crew of 14 officers and 56 seamen.  It appears that the vessel has 119 separate rooms, including 34  crews’ cabins,  8 passengers’ cabins, a sailor’s mess, a  fireman’s mess,  a  comprador’s office, a hospital, a  boys’  mess,  a ship’s  office,  an  engineer’s office,  a  saloon,  lounge, pantry, chart-room, radio officer’s cabin, captain’s cabin,, wheel house, alleyways, and stairways.  It is clear that the vessel is a well equipped big vessel.  It has also domestic; refrigeration  compartments  which are  lined  by  insulated walls.   All crew accommodation in the vessel has  been  in- sulated as required by statutory regulations.  Such  insula- tion  consists of a sheathing or panelling of fire board  or similar  material tacked to wooden frames  inserted  between the stiffeners jutting out from the steel bulkheads or walls of  the said vessel, in consequence of which  hollow  spaces are left between the panelling and the walls of the  vessel, The  said panelling or sheathing formed a removable  feature or furnishing of the said vessel. The ’Eastern Saga’ arrived at Calcutta from the Far East  on October 29, 1957.  In the course of its ordinary voyage,  as a  cargo  vessel  carrying, a  legitimate  cargo  of  24,815 packages of general merchandise weighing 1,506 tons, it  was rummaged  by Calcutta Customs Officers on the 30th and  31st October and on the 12th November, 1957 598 On search being made of the vessel’s domestic  refrigeration compartments, a two-tier white painted shelf was found fixed to  the  insulated wall of the handling  room.   The  screws which  seemed like holding the shelf to the wall.  in  fact, did  not do so they had been hammered flat and could not  be turned by a screw driver; the shelf was held by some  wooden plugs which had been hidden below a coat of paint; below the shelf, there was a hole in the panelling closed with a plug; this  hole  gave  access  to the  insulation  space  of  the compartment;  it  was of the size  7"X4-1/2".   Nothing  was found hidden in that space. A  cabin on the forecastle of the vessel was  then  searched and  two  rectangular openings in the cabin  wall  panelling were  discovered  behind a steel clothes  locker  which  was screwed to the wall.  One of these was closed with a  wooden cover.   They  measured 5"X 13" and 5"  X  5"  respectively. Nothing was found hidden in either of these two spaces.  The cabin  marked  "Compradoree’ was also searched, and  when  a wooden  bench which, was screwed to the wall  panelling  was removed,  two rectangular holes were found in the  panelling behind  the  bench.   These holes which  were  covered  with wooden  plugs and overpainted, measured 5" X 4-1/2"  and  8" X2-1/2".   Nothing  was found in these spaces  either.   The cabin of No. 1 Fitter was then searched and two  rectangular holes  were found in the visible part of the wall  panelling which  had  been  filled  in  and  overpainted;  they   were respectively 7-1/2"X 10-1/2" and 12" X 12" in size.  Nothing was found hidden in these spaces.  That took the.  searching



party  to the sailors’ accommodation where a hole  measuring 2-1/2"X5-1/2" was found in the wall paneling behind the back batten of a wooden seat which had been screwed to the  wall. This hole was covered with a piece of wood and over painted. The hole opened into a space and in that space, the  Customs Officers  found a large quantity of gold in  bars.   Further search in the sailors’ accommodation led to the discovery of a  hole in the wall panelling behind a steel clothes  locker which  was closed with a wooden plug.  Nothing was found  in it.   That is how a search was made by the customs  officers on Eastern Saga and in one of the holes a large quantity  of gold in bars was discovered. 599 On  November  12, 1957, notices were served on  the  owners’ Agents  at Calcutta, M/s.  Jardine Henderson and  Co.  Ltd., and   on  the  master  of  the  vessel,   Captain   Kiunear, respectively to show cause why the vessel should not be con- fiscated  under s. 167(12A) since it had contravened s.  52A of the Act and penal action should not be taken against  the agents  and the master in that behalf.  On the same  day,  a notice in similar terms was issued to Kwok Cho, a member  of the  crew of the Eastern Saga who had come forward to  claim the gold which was discovered as a result of the search.  On November 13, 1957, a further notice to show cause was served on  the  master  in regard to another hole  which  had  been discovered after the issue, of the first notice. The  agents and the master thereupon sent elaborate  replies setting  forth their pleas that, in law, no action could  be taken  against  them.   The master pleaded that  he  had  no knowledge  of the presence of gold or unauthorised holes  in the  ship  and  had  taken  all  reasonable  precautions  in accordance  with  the  Company’s  instructions.   He   fully adopted  the  other pleas made by the  agents.   The  agents substantially relied on a report by M/s.  Norman Stewart and Co.,  Marine  Surveyors,  Naval  Architects  and  Consulting Engineers,  and urged that unless special, extensive,  time- consuming and uneconomic detailed searches were carried out, it was impossible to discover special hiding places like the ones   discovered  on  the  search  made  by   the   customs authorities.   They  also urged that they had  no  knowledge about the holes or about the gold which was discovered  from one  of them.  They referred to the statement made  by  Kwok Cho  and  alleged that the said statement showed  that  gold could be smuggled by a smuggler without the knowledge of the master and the owners of the ship.  The ship moves on  High- seas from place to place, during the course of business, and it was impossible that the master, though in the ship, would know  anything about the criminal activities of  a  smuggler carried  on  in nooks and corners of the ship,  and  it  was inconceivable  that the owners of the ship would  ever  know what  was  happening on the ship during its  travel  on  the High-seas.  They also relied on the fact that they had taken all the precautions which could be taken reasonably and  had issued express and definite instructions 600 to their crew against committing any offence like smuggling. On receiving the replies sent by the agents, the  master,and Kwok  Cho,  the Additional Collector of  Customs  heard  the appellant, and on November 23, 1957, he passed the  impugned order.  He held that having carefully considered the written explanations  tendered and oral arguments urged before  him, he  was satisfied that the preventive measures taken by  the owners,  the agents, and the master proved to be  hopelessly inadequate  and ineffective.  He accepted their.  plea  that they  need  not  be regarded as  persons  concerned  in  the



illegal importation of gold into India within the meaning of s.  167(8) of the Act.  He also upheld their plea  that  the openings found in the cabin of No. 1 Fitter did not  attract the provisions of s. 167(12A).  In regard to other  matters, the  explanations offered appeared to him to be  unsatisfac- tory and unacceptable.  His conclusion, therefore, was  that the   vessel   had  clearly  rendered   itself   liable   to confiscation under s. 167(12A) because it had infringed  the provisions  of  s. 52A.  The quantity of gold found  on  the vessel  was approximately of the value of  Rs.  23,79,490/80 nP.   Rs. 109/24 nP. per tola, and he noticed the fact  that this  was the recovery made in one of the  several  cavities found  on  the ship.  He was, therefore, inclined  to  infer several holes discovered in the vessel indicating the extent to  which  the hiding places were used for  contravening  s. 52A.  That is why he confiscated 1,358 gold bars  discovered as  a result of the search absolutely under s.  167(8)  read with s. 23A of the Foreign Exchange Regulation Act.  He also imposed a personal penalty of Rs. 10,000 on the sailor  Kwok Cho.   In regard to the ship, he directed that Eastern  Saga be  confiscated  under s. 167(12A) and in lieu  thereof,  he gave  the owners of the ship an option to pay a fine of  Rs. 25  lacs which he directed should be paid within 30 days  of the date of the despatch of the order, or such extended time as  may be allowed.  In passing this order,  the  Additional Collector observed that he had taken into consideration  the fact  that the agents had already suffered some loss due  to the vessel’s detention at the port. The  appellant then preferred an appeal before  the  Central Board of Revenue.  The Board considered the matter and  came to the conclusion that none of the contentions 601 raised by the appellant was either warranted or supported by the  law as it stands.  The Board expressed its  concurrence with  the conclusions of the Additional Collector  that  the offence  under  s. 52A of the Act had been proved,  and  the appellant  was liable to be dealt with under s. 167(12A)  of the  Act.  In regard to the grievance made by the  appellant that  the fine imposed by way of option was  excessive,  the Board observed that having regard to the quantity and  value of  the smuggled gold and other relevant facts, it  was  not inclined to make any change in the said order.  The  penalty imposed on the master, said the Board, was also not so large as to need any revision.  It is not disputed that the  value of the ship is very much more than the amount of Rs. 25 lacs imposed  by  way  of  fine under s.  183.   This  order  was pronounced on May 12, 1959.  The appellant’s attempt to move the  Government  of  India in  its  revisional  jurisdiction failed  and  its application was dismissed on  December  20, 1960.  The appellant then moved this Court for special leave and it is with the special leave granted by this Court  that the present appeal has come before us. At  the  hearing  of this  appeal,  the  learned  Additional Solicitor-General  has  urged a preliminary  objection.   He contends  that  none of the Customs  Authorities  which  had dealt  with  the appellant’s case is a tribunal  under  Art. 136(1) of the Constitution, and so, the appeal preferred by the  appellant  is  incompetent.  It is  true  that  special leave has been  granted to the appellant by this Court,  but there can be  little doubt that even in cases where  special leave has been granted at the ex parte hearing of the matter on the    petition  of the appellant for special leave,  the respondent     can at the final hearing, raise a preliminary contention that special leave should not have been  granted, since the decision, judgment, or order appealed against, has



not been pronounced either by a Court or Tribunal within the meaning  of Art. 136(1).  The  Additional  Solicitor-General argues  that neither the Customs Collector, nor the  Central Board of Revenue, nor the Central Government is a  Tribunal, and  so,  special leave granted to the appellant  should  be revoked on that ground. It  is settled by decisions of this Court that  the  Customs Officer who initially acts under s. 167(12A) is not a Court 602 or Tribunal, though it is also settled that in  adjudicating upon the question as to whether s. 52A has been  contravened by any ship and by such contravention the said ship has made itself liable to confiscation under s. 167(12A), the Customs Officer   has  to  act  in  a  quasi-judicial  manner.    In Shewpujanrai  Indrasanarai Ltd. v. Collector of Customs  and Others(1) this Court has held that an order of  confiscation or  penalty passed under the Sea Customs Act is not  a  mere administrative  or  executive act, but is  really  a  quasi- judicial  act, and, therefore, an application for a writ  of certiorari  lies in respect of such order under Art. 226  of the Constitution.  In expressing this conclusion, S. K.  Das J.  who  spoke for the Court, has referred  to  two  earlier decisions  where this point had been considered and  it  was held  that in holding his proceedings under the Sea  Customs Act,  the  Collector  acts judicially, vide  F.  N.  Roy  v. Collector of Customs, Calcutta, (2) and Lea Roy Frey v.  The Superintendent,   District  Jail,  Amritsar   and   Anr.(3). Similarly, in Thomas Dana v. State of Punjab,(1) this  Court has  observed that the Collector and other Officers  in  the hierarchy  mentioned by the Sea Customs Act may have to  act judicially  in the sense of having to consider evidence  and hear arguments in an informal way; even so, the Act does not contemplate  that  in  doing so, the  said  authorities  are functioning as a Court. In  Maqbool  Hussain v. The State of Bombay  etc.,(1)  while dealing  with the impact of the confiscation of goods  under the relevant provisions of s. 167 of the Act on the question as  to  the constitutionality of  a  subsequent  prosecution launched against a person whose goods had been  confiscated, this Court had occasion to consider the effect of the  order of confiscation in relation to the provisions of Art. 20  Of the Constitution, and it was held that the proceeding before the  Sea  Customs  Authorities  under  the  Act  was  not  a prosecution  and  the  order  of  confiscation  was  not   a punishment inflicted by a Court or Judicial Tribunal  within the meaning of Art. 20(2), and so, the impugned prose- (1) [1959] S.C.R. 821. (2) [1957] S.C.R. 1151. (3)  [1958] S.C.R. 822. (4)  [1959] Supp. (1) S.C.R. 274. (5)  [1953] S.C.R. 730. at p. 742.                             603 cution  was  not incompetent or invalid.  It would  thus  be seen that one of the points which this Court had to consider in  that case was whether the Collector who had  passed  the order  of confiscation, was a Judicial Tribunal  within  the meaning  of Art. 20, and the answer rendered by  this  Court was in the negative.  It is true that in giving this  answer this  Court has observed that the Customs Officers  are  not required  to  act judicially on legal evidence  tendered  on oath  and they are not authorised to administer oath to  any witness.  The appeals, if any, lie before the Chief  Customs Authority  which  is the Central Board of  Revenue  and  the power  of revision is given to the Central Government  which certainly is not a judicial authority.  It would be  noticed



that  the  last observation is purely in the  nature  of  an biter observation because the status of the Central Board of Revenue  or  the  Central Government  is  dealing  with  the appeals  or revision applications under section 190 and  191 of  the Act did not fall to be considered in that case,  was not  argued,  and naturally has not been examined;  and  so, this  observation  cannot be treated as a  decision  on  the question  which  has been argued before us  in  the  present appeal.  The result, therefore, is that it is no longer open to  doubt  that  the  Customs Officer  is  not  a  Court  or Tribunal,  though in adjudicating upon matters under s.  167 of  the Act, he has to act in a judicial manner.  It may  be conceded that neither the Central Board of Revenue, nor  the Central  Government  is a Court within the meaning  of  Art. 136. The question which then arises is, can the Central Board  of Revenue  exercising its appellate power under s. 190 of  the Act,  or  the Central Government exercising  its  revisional jurisdiction  under s. 191, be held to be a  Tribunal  under Art.  136?  It is clear that before an appeal can be  enter- tained in this Court under Art. 136, two conditions have  to be satisfied; the order impugned must be an order of a judi- cial or quasi-judicial character and should not be purely an administrative or executive order; and the said order should have  been  passed either by a Court or a  Tribunal  in  the territory  of  India.   It  is difficult  to  lay  down  any definite or precise test for determining the character of  a body which is called upon to adjudicate upon matters brought before  it.  Sometimes in deciding such a  question,  courts enquire 604 whether  the body or authority whose status or character  is the subject-matter of the enquiry, is clothed with the trap- pings of a court.  Can it compel witnesses to appear  before it  and  administer oath to them, is it required  to  follow certain  rules of procedure, is it bound to comply with  the rules  of natural justice, is it expected to deal  with  the matters  before it fairly, justly and on the merits and  not be  guided by subjective considerations; in other words,  is the  approach  which  it is required to  adopt  judicial  or quasi-judicial  approach?  If all or some of  the  important tests  in that behalf are satisfied, the proceedings can  be characterised  as  judicial  proceedings  and  the  test  of trappings  may be said to be satisfied.  But apart from  the test of trappings, another test of importance is whether the body or authority had been constituted by the State and  the State  has conferred on it its inherent judicial power.   If it   appears  that  such  a  body  or  authority  has   been constituted by the legislature and on it has been  conferred the  State’s  inherent  judicial  power,  that  would  be  a significant,  if  not a decisive, indication that  the  said body  or  authority is a Tribunal.  It is in  the  light  of these considerations that we have to examine the question as to  whether  the Central Board of Revenue  and  the  Central Government is a Tribunal or not under Art. 136. Before  doing  so,  however, we may refer  to  some  of  the decisions  which  were cited at the Bar on this  point.   In M/s.   Harinagar  Sugar  Mills Ltd. v.  Shyam  Sunder  Jhun- jhunwala and Others(1) the question raised before this Court was  whether  the Central Government  while  exercising  its powers under section 111(3) of the Companies Act, 1956  (No. 1 of 1956) is a Tribunal within the meaning of Art. 136,  or not.   In  dealing  with this  question,  this  Court  first enquired  whether, while exercising its powers under s.  111 of the Companies Act, the Central Government was required to



act  judicially  or  not.  The scheme of  s.  111  was  then analysed  and  it was observed that in an  appeal  preferred under  s. 111, there was a lis or dispute between  the  con- testing  parties  relating to their civil  rights,  and  the Central Government was invested with the power to  determine that  dispute according to law.  This dispute was in  regard to  the claim made by a transferee of a Company’s shares  to have (1)  [1962] 2 S.C.R. 339.                             6o5 his  transfer registered in the Company’s register, and  the view which this Court took was that when such a dispute goes before  the  Central  Government under s.  111,  it  has  to consider  and decide the proposal and the objections in  the light of the evidence, and not on grounds of policy or expe- diency.  That is why this Court came to the conclusion  that the Central Government was a Tribunal under Art. 136 of  the Constitution. In  support  of  the view taken on this  point,  this  Court referred  to an earlier decision in Shivji Nathubhai v.  The Union  of  India  and Ors.,(1) where it was  held  that  the Central Government exercising power of review under r. 54 of the Mineral Concession Rules, 1949 against an administrative order  of the State Government granting a mining  lease  was subject to the appellate jurisdiction of this Court, because the  power  to review was judicial and  not  administrative. Thus,  these,  two decisions show how the character  of  the adjudication made by the Central Government either under  s. 111(3)  of the Companies Act, or under r. 54 of the  Mineral Concession  Rules, 1949, was determined by this  Court.   As illustrations  of  cases where the application of  the  said tests  leads  to  the conclusion  that  certain  authorities cannot  be  held  to  be tribunals,  we  may  refer  to  the decisions of this Court in Jaswant Sugar Mills Ltd.,  Meerut v.  Lakshmi  Chand  and  Ors.(2)  and  Engineering   Mazdoor Sabhaand  Anr.v.Hind Cycles Ltd.(3). It is in the  licht  of these decisions that we will proceed to consider whether the Central  Board of Revenue and the Central Government can  be said to be a Tribunal under Art. 136 of the Constitution. In  considering  this  matter, let us  briefly  examine  the procedure prescribed by the Act in relation to the adjudica- tions made under its provisions.  Before we do so,  however, we ought to refer to the authorities that function under the Act.   Section  3  of the Act refers inter  alia,  to  three authorities  which  function under it.   The  Chief  Customs Authority is the Central Board of Revenue constituted  under the  Central Board of Revenue Act, 1924.  The Chief  Customs Officer  is the Chief Executive Officer of  Sea-customs  for any (1)  [1960] 2 S. C.R. 775. (2) [1963] Supp. 1 S.C.R. 242. (3) [1963] Supp.  1 S.C.R. 625. 606 port  to  which the Act applies; and the  Customs  Collector includes  every  officer of Customs for the ’time  being  in separate  charge  of a custom-house, or duly  authorised  to perform  all,  or  any special duties of an  officer  so  in charge.   It  is by reference to these three  categories  of officers that the procedure prescribed by the Act has to  be considered.   Chapter  XVII  of  the  Act  deals  with   the procedure  relating to offences, appeals, etc.  Section  169 confers   on  the  Customs  Officers  power  to  search   on reasonable  suspicion.   Section 170A confers power  on  the Customs  Officer  to screen or X-ray bodies of  persons  for detecting secreted goods.  Section 171 prescribes the powers



of Customs Officer for boarding and searching such  vessels. Section 171-A lays down the powers of Officers of Customs to summon persons to give evidence and produce documents.   The power to summon a person to give evidence would include  the power to administer oath to him under s. 4 of Act 1 of 1873. An enquiry held by the Officer of Customs under s. 17 1 A is by sub-section (4) of s. 171-A deemed to be a judicial  pro- ceeding  within the meaning of sections 193 and 228  of  the Indian Penal Code.  Under s. 183, the officer adjudging  the matter  brought  before  him  under s. 167  of  the  Act  is empowered  to  give an option to a person to pay a  fine  in lieu of confiscation. Having  thus broadly referred to the provisions relating  to adjudication  by the Customs Officer, we would  now  examine the  provisions in regard to appeals and revisions  made  by the  Act.   Section 188 provides for an appeal  against  any decision  or order passed by any officer of Customs, and  it requires  that  the said appeal must be filed  within  three months  from the date of the order or  decision  challenged. This appeal lies to the Chief Customs Authority, or in  such cases  as the Central Government directs, to any Officer  of Customs  not  inferior in rank to a  Customs  Collector  and empowered in that behalf by name or in virtue of his  office by  the  Central Government.  The section  further  provides that the appellate authority may make such enquiry and  pass such  order  as  it  thinks  fit,  confirming,  altering  or annulling  the decision or order under appeal.  The  proviso to  this  section  makes it clear that no  order  passed  in appeal can impose upon the person any greater  confiscation, penalty or 607 rate  of  duty  than has been adjudged against  him  in  the original  decision  or order.  The section adds  that  every order  passed in appeal hall be final, subject to the  power of revision conferred by s. 191.  It is thus clear that  the orders  passed by the Officers of Customs are  made  appeal- able, and the appellate authority is required to  reconsider the matter, hold additional enquiry if thought necessary and decide  the  contentions  raised by  the  appellant  on  the merits. Section 189 refers to the requirement of the deposit of duty demanded  which has to be made by the appellant pending  the appeal, and it naturally provides that if as a result of the decision  of  the appeal, the whole or any  portion  of  the amount  deposited  is not leviable,  the  Customs  Collector shall return such amount or portion, as the case may be,  to the owner of such goods on demand by such owner. Section  190  confers upon the Chief Customs  Authority  the power to remit penalty or confiscation.  Section 190A  deals with  the revisional powers of the Chief  Customs  Authority and the Chief Customs Officer; and s. 191 prescribes for the revisional  powers  of  the Central  Government.   Both  the revisional  powers  specified by s. 190A and s. 191  can  be exercised either suo motu by the revisional authority, or on an  application made by an aggrieved party in  that  behalf. That,  briefly,  is  the scheme  of  appeals  and  revisions contemplated  by the Act.  There is a regular  hierarchy  of authorities  beginning  with the Customs Officer  who  deals with the problems of adjudication initially and ending  with the Central Government which is the final revisional  autho- rity.   We  may also incidentally refer to Rule  49  of  the Rules framed by the Central Government in exercise of powers conferred on it by s. 9 (c) of the Act.  This Rule  provides that  every appeal presented to the Chief Customs  Authority under  s.  188 and every application made to  the  Governor-



General-in-Council  under s. 191 shall be accompanied  by  a copy of the decision or order by which the appellant or  the applicant is aggrieved.  The question which we are consider- ing at this stage is whether the appellate authority  acting under  s.  188 and the revisional authorities  acting  under sections 190A and 191 can be said to be tribunals within the meaning of Art. 136. 608 It  is  thus clear that after the order of  confiscation  is made  under s. 167(12A) and an option is given to the  owner of the offending ship under s. 183, the initial  proceedings taken  ’under the Act come to an end and a stage is  reached for  making an appeal against the order of  confiscation  or the  imposition  of  fine.  In the present  appeal,  we  are concerned  with  the subsequent stage  of  the  proceedings, because what we have to decide on the preliminary  objection raised by the Additional Solicitor-General is the status  or character  of  the appellate authority or the  Central  Gov- ernment which exercises its revisional jurisdiction.  In our opinion,  having regard to the scheme of the sections  which we  have just cited, there is no difficulty in holding  that the Central Board of Revenue which functions as an appellate authority, and the Central Government which exercises  revi- sional powers are both Tribunals within the meaning of  Art. 136 of the Constitution.  A dispute is raised either by  way of  appeal or revision by the party aggrieved by  the  order passed  by the Customs Officers, and that dispute has to  be tried  by the appellate or the revisional authority  in  the light of the facts adduced in the proceedings and  according to  law.  All the proceedings under the Act, whether  before the Customs Officer, or whether in appeal or revision,  have to be conducted in accordance with the principles of natural justice  and  they  are in that  sense  judicial  or  quasi- judicial  proceedings.   The  fact that the  status  of  the Customs Officer who adjudicates under s. 167(12A) and s. 183 of  the  Act is not that of a tribunal, does  not  make  any difference when we reach the stage of appeal or revision.  A period  of  limitation  is  prescribed  for  the  appeal,  a procedure  is  prescribed  by Rule 49  that  the  appeal  or revision  must be accompanied by a copy of the  decision  or order  complained  against, and the obvious scheme  is  that both  the  appellate  and the  revisional  authorities  must consider the matter judicially on the evidence and determine it  in accordance with law.  It is obvious that heavy  fines are imposed in these proceedings and the confiscation orders passed may affect ships of very large value.  By his  appeal or revisional application the ship-owner naturally  contends that the order of confiscation is improper or invalid and he sometimes  urges that the fine imposed is  unreasonable  and excessive.   Where  disputes of this  character  are  raised before the appellate or 609 the revisional authority, it would be difficult to accede to the argument that the authority which deals with these  dis- putes  in its appellate or revisional jurisdiction is not  a tribunal under Art. 136.  These authorities are  constituted by  the legislature and they are empowered to deal with  the disputes  brought before them by aggrieved  persons.   Thus. the scheme of the Act, the nature of the proceedings brought before  the  appellate and the revisional  authorities.  the extent  of the claim involved, the nature of  the  Denalties imposed and the kind of enquiry which the Act  contemplates, all  indicate  that both the appellate  and  the  revisional authorities acting under the relevant provisions of the  Act constitute  Tribunals  under Art. 136 of  the  Constitution,



because  they  are invested with the judicial power  of  the State,  and are required to act judicially.   Therefore,  we must  over-rule  the  preliminary objection  raised  by  the Additional  Solicitor General and proceed to deal  with  the appeal on the merits. That  takes  us to the principal question as  to  the  cons- truction  of  s. 52A of the Act which has  been  elaborately argued  before  us  by Mr. Sachin  Choudhury.   Section  52A provides  that no vessel constructed, adapted,  altered,  or fitted  for the purpose of concealing goods shall enter,  or be  within  the limits of any port in India, or  the  Indian customs  waters.  This section is the only section  included in  Chapter VIA and it was inserted by Act 10 of 1957.   The plain  construction  of  this section  appears  to  be  that whenever  a ship answering the description contained in  its first  part  enters or is within the limits of any  port  in India,  or  the Indian customs waters,  it  contravenes  the prohibition prescribed by it. The prohibition is against the construction,  adaptation,  alteration or  fitting  for  the purpose of concealing goods.  What has to be proved  against a vessel which is charged with having contravened s. 52A  is that  there has been a construction, adaptation.  alteration or  fitting,  and that the  said  construction,  adaptation, alteration  or  fitting  has been made for  the  purpose  of concealing  goods.  Therefore, if an alteration in a  vessel made  for  the purpose of concealing goods  is  proved,  the contravention  of s. 52A must be inferred.  In other  words, the section prohibits absolutely the entry of vessels  which show that there has been any 134-159 S.C.-39. 610 construction, adaptation, alteration or filling made in them for the purpose of concealing goods. Mr.  Choudhury  contends that the contravention  of  s.  52A cannot be established unless the mens rea is proved  against the  persons responsible for the alleged contravention.   In that  connection he has relied on the fact that the  section makes  no difference between concealed goods which  are  not contraband and those which are contraband.  In other  words, the argument is that if an alteration is proved to have been made   for  the  purpose  of  concealing  goods  which   are legitimately  carried by the vessel, even so the  contraven- tion would attract the provisions of s. 167(12A) of the Act. That being so if the sweep of the prohibition prescribed  by s. 52A is so wide, it is necessary to import the requirement of mens rea in determining its scope.  He has also relied on the well recognised principle of criminal jurisprudence that unless  a statute creating an offence and providing for  its punishment  clearly, or by necessary implication, rules  out mens  rea  as an essential part of the  offence,  no  person should be found guilty of the said offence unless his guilty mind   is  proved.   There  is  no  doubt  that  in   Ravula Hariprasada Rao v. The State(1), this Court speaking through Fazl Ali J., has accepted the observations made by the  Lord Chief Justice of England in Brend v. Wood(1) that "it is  of the  utmost importance for the protection of the liberty  of the  subject  that a Court should always bear in  mind  that unless   the  statute,  either  clearly  or   by   necessary implication,  rules out mens rea as a constituent part of  a crime, a defendant should not be found guilty of an  offence against  the criminal law unless he has got a guilty  mind". (vide also Sherras v. De Rutzen(3). It  may also be conceded that offences in respect  of  which mens rea is not required to be established, are usually of a comparatively minor character and sentences imposed  against



the  offenders are, therefore, not of a severe type; and  in the  present  case,  it cannot be  disputed  that  the  con- fiscation of the ship may mean a serious loss to the owner (1) [1951] S.C.R. 322.         (2) (1946) 110 J.P. 317, 318. (3)  (1895) 1 Q.B. 918, 921.                             611 of the ship, or imposing a fine against him by way of giving him option in lieu of the confiscation of his ship may  also involve  the payment of a very large amount; and  so,  prima facie, there is some force in Mr. Choudhary’s argument  that the element of mens rea should not be excluded in  consider- ing the scope and effect of s. 52A of the Act. On  the  other  hand,  the scheme of  s.  167  supports  the contention  of the Additional Solicitor-General that  if  we read  s. 52A along with s. 167(12A), it would be clear  that the  legislature  intends,  by  necessary  implication,  the exclusion  of mens rea in dealing with the contravention  of s.  52A.   Section  167(12A)  provides  that  if  a   vessel constructed,  adapted, altered or fitted for the purpose  of concealing  goods  under  s. 52A, enters or  is  within  the limits  of  any port in India or within the  Indian  Customs waters  such vessel shall be liable to confiscation and  the master  of  such  vessel shall be liable to  a  penalty  not exceeding  Rs. 1,000. It would be noticed that in column  1, s. 167(12A) reproduces the material words of s. 52A and does not   add  the  words  "knowingly  or  wilfully".    It   is significant that the words "knowingly or wilfully" are  used in  several other provisions contained in s.  167.   Section 167(14)  and s. 167 (61) use the word "wilfully" in  respect of   the  commission  of  the  offences   there   specified. Similarly s. 167(3) and s. 167(81) use the word  "knowingly" and s. 167(78) uses the word "intentionally".  Similarly, in s. 167(8), though the words "knowingly or wilfully" are  not used,  we have the expression "concerned in", and  that  may introduce  considerations  of  mens rea.   Thus,  where  the legislature  wanted to introduce the knowledge or  intention actuating  the  commission of the offence  as  an  essential element  of  the offence, it has used appropriate  words  to indicate that intention.  The failure to use a similar  word in s. 167(12A) cannot, therefore, be regarded as accidental, but must be held to be deliberate.  In our opinion, there is some force in this argument as well. Besides, there can be no doubt that in construing a section, it  would be relevant for the Court to consider whether  the construction for which Mr. Choudhary contends would not make the   provisions   of  s.  52A  read  with  s.   167   (12A) substantially nugatory.  If it appears that the adoption 612 of the said construction would substantially defeat the very purpose  and  intention of the legislature in  enacting  the said  section,  that  would  be  a  legitimate  reason   for rejecting  the said construction.  If the words used  in  s. 52A  are capable of only one construction and no other,  and that construction is the one suggested by Mr. Choudhary, the fact  that  by adopting the said  construction  the  section would  be  rendered nugatory, would not be of  any  material significance.  If, on the other hand, two constructions  are reasonably  possible one of which leads to the anomaly  just indicated,   while  the  other  does  not  and   helps   the effectuation  of the intention of the legislature, it  would be the duty of the Court to accept the latter construction. The  intention  of  the legislature  in  providing  for  the prohibition  prescribed by s. 52A is, inter alia, to put  an end to illegal smuggling which has the effect of  disturbing very  rudely  the national economy of the  country.   It  is



well-known, for example, that smuggling,of gold has become a serious problem in this country and operations of  smuggling are  conducted  by operators who work  on  an  international basis.  The persons who actually carry out the physical part of  smuggling gold by one means or another are generally  no more than agents and presumably, behind them stands a  well- knit  Organisation  which,  for motives  of  profit  making, undertakes  this  activity.   That is why s.  52A  makes  an absolute  prohibition  against the entry of a  vessel  which contains, inter alia any alteration made for the purpose  of concealing goods.  Entry of contraband gold with the help of ships  has thus become a serious problem and is intended  to be  checked  by this absolute prohibition.  If it  was  held that the knowledge of the owners of the offending vessel  or of  its master should be proved before s. 52A is held to  be contravened,  in a majority of cases, the offending  vessels will escape punishment.  It is not difficult to imagine that mens rea or guilty mind could rarely be established  against the  owners of vessels which are traveling on the  High-seas and it may not be always easy to prove the guilty  knowledge even of the master of the ship.  If the guilty mind is  made an  essential constituent of the section, it would  be  very easy both for the owners and the master of the ship to plead that the alleged alteration, adaptation or fitting was  made with-                             613 out their knowledge and even contrary to their instructions. It  is not difficult to realise in this connection  that  it would  be almost impossible for the customs  authorities  to establish mens rea in the manner suggested by the appellant. Section  52A refers to the construction for the  purpose  of concealing  goods,  but it is obvious that no  vessel  would ordinarily  be  constructed  initially for  the  purpose  of concealing  goods.   Like  the  adaptation,  alteration   or fitting,  the  construction  also would be made  in  such  a manner  as  would  not be  easily  detected  or  discovered. Therefore, it seems to us plain that if we are to accept the construction  suggested  by Mr. Choudhary,  mens  rea  would rarely  be proved against the owners of the vessel, or  even its  master  and the section, in substance, would  remain  a dead letter on the statute-book. In this connection, it is necessary to bear in mind that  as the heading of the Chapter shows, what s. 52A aims at is the entry  of  the  vessels and that. in  fact,  is  the  manner deliberately  adopted by the legislature in prescribing  the prohibition.   It  is  the  entry  of  the  vessel  that  is prohibited  and the use of the negative form adopted by  the legislature in enacting s. 52A is intended to show that  the prohibition is not concerned with the owner of the vessel or the  master.  the prohibition is concerned with  the  vessel itself  and  it provides that a vessel  is  prohibited  from entering  the  limits  of any port in India  or  the  Indian Customs Waters. or remaining there, provided it answers  the description mentioned in the first part of s. 52A. The  only safeguard which is legitimately available  to  the vessel  in resisting the charge that it has  contravened  s. 52A is provided by the requirement that the alleged  altera- tion,  for  instance, must be shown to have  been  initially made for the purpose of concealing goods.  If the alteration is  shown to serve any operational or functional purpose  in the  ship, that would clearly justify the plea that  it  was not  made  for the purpose of concealing goods.  It  may  be that  if the alleged alteration, adaptation or  construction is  proved to have been initially made for a  functional  or operational  purpose, and it is shown that  subsequently  it



has  been  used without the knowledge of the master  or  the owners for the 614 illegal  purpose,  that  may raise a  triable  issue  as  to whether  the alteration falls within the description  of  s. 52A;  but  where the alteration is not shown  to  serve  any functional  or  operational  purpose  and  its  very  nature suggests that it was intended to serve some secret  purpose, it would be easy to draw the inference that its purpose  was to  conceal goods.  Therefore, in our opinion, there  is  no doubt  that  the Customs Authorities were right  in  holding that  the  mere fact that the owners of the  vessel  or  the master  were not shown to have been privy to the  alteration etc.  or  the concealment of gold bars  recovered  from  the offending ship would not take the case of appellant  outside the purview of s. 52A.  The knowledge of the owners, or even of  the  master  is,  in the context  of  s.  52A,  entirely irrelevant.  What is relevant is the proof of the fact  that the  vessel answering the description prescribed by  s.  52A entered  within  the limits of Calcutta which is a  port  in India. Mr.  Choudhary further argued that the alteration  on  which the case against the appellant is based in the present  case cannot  be said to be an alteration contemplated by s.  52A, because it is not an alteration of the vessel.  He  suggests that  the  construction, adaptation, alteration  or  fitting must  be of the vessel as a whole, or, at any rate,  of  any part of the vessel which can be regarded as its integral  or essential  part; the paneling wall in ’which  the  apertures were  made, cannot be treated as a part of the  vessel,  and so, the alteration in question cannot be said to attract  s. 52A.  That, in substance, is another argument which has been pressed before us on behalf of the appellant.  In support of this argument, Mr. Choudhary referred us to the  certificate issued by Mr. B. Hill who is a Surveyor to Lloyd Register of Shipping  united with the British Corporation Register.   In this  certificate  Mr.  Hill Purports to  say  that  in  his opinion  the panelling and lining constitute no part of  the vessel  &  the  expression "vessel" is  understood  for  the purpose  of  its being assigned the notation 100 Al  or  any other class notation in the Register Book of Lloyds Register of  Shipping or for the purpose of the issue of  a  Loadline Certificate  under the Merchant Shipping Acts and that  such panelling  or  lining  is not required to be  shown  in  the ship’s official 615 plans submitted to Lloyds Register of Shipping in connection with  the  above purposes.  He adds that such  panelling  is customarily installed in British Vessels for the health  and comfort of crew as a method of insulating accommodation. We are not prepared to accept Mr. Choudhary’s argument  that there  is  any  material  on the record  to  show  that  the panelling is not a part of the vessel.  A vessel is  defined by  s. 3 (f) of the Act as including anything made  for  the conveyance  by water of human beings or property; and  there seems to be no reason to hold that the panelling is not  its integral  part.   Mr. Hill who has purported  to  give  this certificate   has   not  given  evidence  in   the   present proceedings   and  the  statements  made  by  him   in   his certificate have, therefore, not been tested.  Besides,  his opinion that the panelling does not form part of the  vessel as  understood for the two purposes mentioned by him in  his certificate  cannot assist us in determining whether it  can be  held  to  be a part of the vessel  under  s.  52A.   For whatever  purpose panelling may be constructed, once  it  is



constructed it becomes a part of the vessel and as such, any alteration   made  in  the  panelling  would   attract   the provisions  of  s.  52A.   We  must  therefore.  reject  Mr. Cboudhary’s argument that even if an alteration is proved to have been made in the panels of the vessel, s. 52A could not be  applied.   The contention which  Mr.  Choudhary  faintly urged before us, that the holes made in the panelling  walls do  not  constitute an alteration at all  is,  clearly  ill- founded, because the manner in which the holes were made and the use which was obviously intended to be made of the  said holes, leave no doubt that they constitute alteration within the  meaning  of s. 52A.  Thus, our conclusion is  that  the Customs  Authorities  were right in holding that  the  facts proved  in  the  case showed  that  the  appellant’s  vessel Eastern  Saga contravened the provisions of s. 52A  when  it entered the port of Calcutta and as such, incurred liability prescribed by s. 197(12A) of the Act. What  is  the nature of the liability prescribed by  s.  167 (12A) is the next question which calls for an answer in  the present  appeal.   We  have already seen  that  s.  167(12A) Provides  that if a vessel contravenes s. 52A, it  shall  be liable 616 to  confiscation  and  the master of such  vessel  shall  be liable to a penalty not exceeding Rs. 1,000.  Can it be said that the penalty prescribed by s. 167(12A) may in any  given case not be imposed against the ship on the ground that  the contravention  proved  against  it  is  of  a  very  trivial character, or has been the result of an act on the part of a criminal  who acted on his own contrary to the  instructions of  the  master of the ship?  The words used  in  the  third column  of cl. 12A are that "such vessel shall be liable  to confiscation".  The context seems to require that it is  not open  to the Customs Authority to refuse to  confiscate  the vessel  on  the  ground  that  there  are  any   extenuating circumstances  surrounding the contravention of s. 52A in  a given case and that it would be unfair to impose the penalty of  confiscation.  Two penalties are prescribed, one is  the confiscation  of the ship, and the other is a  fine  against the  master.  In regard to the latter penalty, it is  within the  discretion  of  the Customs Authority  to  decide  what amount of penalty should be imposed; just as in the case  of the first penalty it is not open to it to say that it  would not impose the penalty of confiscation against the offending ship, so in the case of the second penalty it is not open to it  to  say that it will not levy any  penalty  against  the master.  In its discretion, it may impose a very small  fine against  the master if it is satisfied that the  master  was innocent and despite his best efforts, he could not  prevent the   contravention  of  s.  52A.   If  the  two   penalties prescribed by clause 12A had been alternative, the  position may have been different; but they are independent penalties. one  is  against  the  ship and the  other  is  against  the master,.  and so, there is no scope for contending that  the Customs  Authority  may  refuse to impose  one  penalty  and impose the other, or may refuse to impose either of the  two penalties.  It must be regarded as an elementary requirement of  clause  12A that as soon as the offence referred  to  in column  1 of the said clause is proved, some penalty has  to be imposed and cl. 12A indicates that two penalties have  to be imposed and not one, there being discretion in regard  to the  penalty  impassable against the master as  regards  the amount  of the said penalty.  Therefore, we do not think  it would  be  possible  to  take the view  that  if  there  are extenuating circumstances attending the contravention of  s.



52A in a given case the                             617 Customs Authority can refrain from confiscating the  vessel. Confiscation of the vessel is the immediate statutory conse- quence  of the finding that an offence under clause  12A  is established, just as the imposition of some penalty  against the  master  is another statutory consequence  of  the  same contravention.   In  fairness,  we ought  to  add  that  Mr. Choudhary  did  not support the view which appears  to  have been  taken by Sinha J. in the case taken before  him  under Art. 226 by the Everett Orient Line Incorporated (vide  W.P. No.  121/1959  and C.A. No. 374/1961 which have  been  heard along  with this appeal and will be dealt with  separately). It  appears that in that case Sinha J., held that there  was discretion in the Customs Authority in the exercise of which it may, in a proper case refuse to confiscate the  offending vessel.   In our opinion, this view is not justified by  the words of clause 12A of s. 167. But  the confiscation of the offending vessel  under  clause 12A  is  not  the end of the matter.  In  dealing  with  the offence  adjudicated  under cl. 12A of s. 167,  the  Customs Officer  has also to exercise his jurisdiction under s.  183 of the Act.  In fact, s. 167(12A) and s. 183 have to be read together  and the adjudication proceedings have to be  dealt with  in  the  light  of the  provisions  of  the  said  two sections.  Section 183 lays down that whenever  confiscation is authorised by this Act, the officer adjudicating it shall give  the  owner of the goods an option to pay  in  lieu  of confiscation  such  fine as the officer thinks fit.   It  is thus clear that in dealing with offences under s.  167(12A), an  obligation is, imposed upon the Customs Officer to  give the  owner  of the goods an option to pay fine  in  lieu  of confiscation.   It  is not disputed, and rightly,  that  the word  "goods" used in s. 183 includes vessels, and so,  when the adjudicating officer was dealing with the present  case, it was his duty to indicate the fine which the owners of the ship  can, in their option, choose to pay.  That is why  the construction  of  clause  12A  of s.  167  which  leaves  no discretion  in  the adjudicating officer in  the  matter  of confiscating  the  ship,  does  not  finally  determine  the matter.  Though confiscation is a statutory corollary of the contravention  of  s.  52A, the  legislature  realised  that confiscation of the vessel may cause unnecessary hardship to the owners of the vessel and so a. 183 expressly 618 requires  the adjudicating officer to give an option to  the owners  of the offending vessel.  Confiscation is  no  doubt authorised  and required by s. 167(12A), but  the  statutory obligation  makes  it necessary for the officer to  give  an option  to  the owners, and so, in substance,  the  ultimate penalty  which may be imposed on the owners does fall to  be determined in the discretion of the said officer.  Section 1 8  3  confers discretion on the officer  to  determine  what amount  of fine should be imposed in lieu  of  confiscation, and  in  doing  so, he will undoubtedly have  to  take  into account  an relevant and material  circumstances,  including the extenuating factors on which the owners may rely.  Thus, the  confiscation  of the offending vessel  which  has  been taken out of the domain of the Customs Officer’s  discretion under   clause  12A,  is  indirectly  brought   within   his discretion under s. 183.  Indeed, the scheme of s. 183 shows that  the only penalty which in law, the officer can  impose is  one  of  confiscation.  Having done that,  he  gives  an option to the owners of the vessel to pay a fine in lieu  of confiscation.   There is little doubt that this  scheme  has



been adopted, because if the imposition of fine was made  an alternative  penalty, difficulties would have arisen in  the way  of  recovering the fine; and so,  the  legislature  has provided that the offending ship should be detained; if  the offence is proved, it should be confiscated and the owner of the  vessel  should  be given an option to  get  his  vessel released  by  paying the fine, which may be imposed  on  him under s. 183.  The very fact that an option has to be  given to the owner shows that the fine imposed under s. 183 is not a  matter of penalty imposed by the officer as such, but  is only  an  option  given to the  owner.   Therefore,  we  are satisfied that on a fair reading of s. 16-/ (12A) and s. 183 of the Act, the course adopted by ,he Customs Authorities is not open to any challenge. Mr.  Choudhary then attempted to argue that on  the  merits, the Central Board of Revenue was in error in holding that s. 52A  had been contravened by the appellant’s vessel  Eastern Saga.   We  have  already indicated in  brief  the  findings recorded  by the customs authorities.  It is true  that  the Additional  Collector  of Customs accepted the plea  of  the appellant  that the owners of the vessel were not  concerned with the illegal importation of gold into India within the                             619 meaning of s. 167(8) of the Act; but he has also found  that the preventive measures taken by the owners, the agents  and the  master  for stopping smuggling on  board  their  vessel proved  hopelessly inadequate and ineffective.  He has  also examined  the  nature  of the alterations made  and  he  has concluded that the alterations were made for the purpose  of concealing goods.  In fact, the presence of so many  altera- tions  on  this vessel itself would justify  the  conclusion that they were made for the illegal purpose prohibited by s. 52A.  But when gold bars 1,358 in numbers were actually  re- covered from one of the holes made in the panelling wall, it is  impossible  to  resist  the  conclusion  that  the  said alteration  had been made for the purpose of concealing  the said  gold.  It is clear that the said alterations serve  no operational or functional purpose in the ship and the manner in  which the said alterations have been  made  unmistakably indicates  the  design for concealing goods.  If  the  goods intended to be concealed were not contraband, this elaborate designing  of  the alteration would be  wholly  unnecessary. Therefore,  we  see no substance in the  argument  that  the Customs Authorities were in error in finding that s. 52A had been contravened in the present case.  Besides, there is  no doubt  that  the  question as to whether  s.  52A  had  been contravened  is  substantially a question of fact  and  this Court would not ordinarily reconsider the matter on evidence with  a view to decide whether the said finding is right  or not. Mr. Choudhary has then argued that the imposition of a  fine of Rs. 25 lacs is excessive and should be modified by us. He suggests  that  if such a heavy fine is  imposed  against  a vessel, it may indirectly and eventually affect the trade of the country.  Besides, he urges that the fine appears to  be so unreasonable that it may be characterised as vindicative. Incidentally,  he has argued that in imposing the fine,  the Additional  Collector of Customs took into consideration  an irrelevant  fact  inasmuch  as  he bore  in  mind  the  loss suffered by the appellant during the period that the  vessel was detained.  There is no difficulty in rejecting the  last argument,  because  if  the consideration  in  question  was irrelevant,  it has operated in favour of the appellant  and not  against it.  If that consideration had not  weighed  in the mind of the Additional Collector,



620 he would obviously have imposed a higher fine.  Then, as  to the extent of the fine, we are not prepared to hold hat  the fine is unreasonable or excessive.  We have already  noticed the  value of the gold illegally imported and we  have  seen the   presence  of  many  suspicious  alterations  in,   the panelling  walls and other parts of the vessel.  It  is  not easy  to detect the illegal importation of gold, and so,  if the Customs Authorities took the view that having regard  to the  value  of the gold imported, the presence  of  a  large number of alterations and the value of the ship, Rs. 25 lacs should  be  imposed  as  a fine,  we  cannot  entertain  the argument that a case is made out for our interference  under Art. 136 of the Constitution.  After all, the imposition  of the fine merely gives an option to the appellant to pay  the fine and secure the release of the vessel.  Since the amount of the fine imposed is very much less than the value of  the vessel,  it is in the interests of the appellant to get  the vessel released.  Besides, the question as to the  propriety of  the fine imposed by the Additional Collector of  Customs has  been  examined  by the  appellate  and  the  revisional authorities  and they have seen no reason to interfere  with the amount of fine.  In such a case, the appellant cannot be heard  to complain against the impugned order of fine in  an appeal under Art. 136, when no question or principle of  law is involved. In  this connection, we may mention one consideration  which has weighed in our-mind.  It is true that modern criminology does  not  encourage  the imposition  of  severe  or  savage sentences  against  criminals,  because  the  deterrent  or, punitive  aspect  of punishment is no longer  treated  as  a valid  consideration in the administration of criminal  law. But it must be remembered that ordinary offences with  which the  normal criminal law of the country deals are  committed by  persons  either  under  the  pressure  of  provoked  and unbalanced emotions, or as a result of adverse  environments and  circumstances, and so, while dealing with these  crimi- nals who, in many cases, deserve a sympathetic treatment and in  a  few  cases, are more  sinned  against  than  sinners, criminal  law  treats punishment more as  a  reformative  or corrective than as a deterrent or punitive measure.  But  it may not be appropriate to adopt the same approach in deal- 621 ing  with every offence committed by a vessel which  contra- venes  s. 52A.  Illegal importation of gold has assumed  the proportions of a major problem faced by the country, and the manifold,  clever and ingenious devices adopted in  carrying out   these  illegal  operations  tend  to  show  that   the organisation  which  is  responsible for  them  is  inspired merely by cupidity because it conducts its operations solely for  the purpose of making profit, and so, it would be  open to  the Customs Authorities to take the view that  the  best way  to check the spread of these illegal operations  is  to impose   deterrent   fines  whenever  these   offences   are discovered and proved.  Having regard to this aspect of  the matter,  if the Customs Authorities took the view  that  the fine of Rs. 25 lakhs was called for in the present case,  we see  no  reason whatever to entertain the plea made  by  Mr. Choudhary  that  the  said  fine  should  be  reduced.   The argument that the impact of such heavy fines. may  adversely affect  the trade of the country, seems to us to  be  wholly misconceived and ill-founded. There  is one more point which must be mentioned  before  we part  with  this appeal.  Mr. Choudhary attempted  to  argue that if mens rea was not regarded as an essential element of



v.  52A, the said section would be ultra vires  of  Articles 14,  19 and 31(1) and as such,unconstitutional and  invalid. We  do not propose to consider the merits of this  argument, because  the  appellant is not only a company,  but  also  a foreign  company, and as such, is not entitled to claim  the benefits of Art. 19.  It is only citizens of India who  have been  guaranteed the right to freedom enshrined in the  said article.  If that is so, the plea under Art. 31 (1) as  well as  under Art. 14 cannot be sustained for the simple  reason that  in  supporting  the said  two  pleas,  inevitably  the appellant  has  to  fall back  upon  the  fundamental  right guaranteed by Art. 19(1)(f).  The whole argument is that the appellant  is deprived of its property by operation  of  the relevant  provisions  of the Act and  these  provisions  are invalid.   All  that Art. 31(1) provides is that  no  person shall be deprived of his property save by authority of  law. As  soon  as this plea is raised, it is met by  the  obvious answer that the appellant has been deprived of its  property by authority of the provisions 622 of the act and that would be the end of the plea under Art.a 31  ( 1 ) unless the appellant is able to take  the  further step  of  challenging  the validity of  the  Act,  and  that necessarily  imports Art. 19(1)(f).  Similarly, when a  plea is raised under Art. 14, we face the same position.  It  may be  that if s. 52A contravenes Art. 19(1)(f), a  citizen  of India may contend that his vessel cannot be confiscated even if it has contravened s. 52A, and in that sense, there would be  inequality  between the citizen and the  foreigner,  but that  inequality is the necessary consequence of  the  basic fact that Art. 19 is confined to citizens of India, and  so, the plea that Art. 14 is contravened also must take in  Art. 19  if it has to succeed.  The plain truth is  that  certain rights guaranteed to the citizens of India under Art. 19 are not available to foreigners and pleas which may successfully be raised by the citizens on the strength of the said rights guaranteed under Art. 19 would, therefore, not be  available to  foreigners.  That being so, we see no substance  in  the argument that if s. 52A is construed against the  appellant, it would be invalid, and so, the appellant would be able  to resist  the confiscation of its vessel under Art. 3  1  (1). We ought to make it clear that we are expressing no  opinion on the validity of s. 52A under Art. 19 (1) (f) If the  said question  were  to arise for our decision in  any  case,  we would have to consider whether the provisions of s. 52A  are not  justified  by Art. 19 (5).  That is a matter  which  is foreign to the enquiry in the present appeal. The result is the appeal fails and is dismissed with costs. The  appellant  has also filed W.P. No. 138  of  1961  chal- lenging the validity of the order passed by the Central Gov- ernment  in the same matter.  Since the appeal preferred  by the appellant against the said order is dismissed, the  writ petition  also  fails and is dismissed.  There would  be  no order as to costs in the writ petition. Appeal and petition dismissed.                             623