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PETITIONER: LABHCHAND DHANPAT SINGH JAIN

       Vs.

RESPONDENT: THE STATE OF MAHARASHTRA

DATE OF JUDGMENT03/12/1974

BENCH: BEG, M. HAMEEDULLAH BENCH: BEG, M. HAMEEDULLAH CHANDRACHUD, Y.V. GUPTA, A.C.

CITATION:  1975 AIR  182            1975 SCR  (2) 907  1975 SCC  (3) 385  CITATOR INFO :  C          1980 SC 593  (18,19)  R          1980 SC 793  (8)

ACT: Customs Act, 1962, s. 108, 111, 123 and 135 Scope of. Evidence  Act (1 of 1872) S-106 and 114-Burden of  proof  of innocent  receipt  of gold-Presumption against  accused  oil totality of evidence, if properly drawn. Code of Criminal Procedure (Act 5 of 1898) s. 342-No  strict compliance with-Effect of.

HEADNOTE: The  appellant  was  arrested  because  of  his   suspicious conduct,  and,  when he was searched, 9 bars  of  gold  with foreign  markings  were  found secreted  in  specially  made concealed pockets of his trousers.  When he was produced be- fore  the  Additional Chief Inspector of Customs he  made  a statement  recorded under s.108, Customs Act, 1962, In  that statement he admitted the recovery of the bars, that he knew that  he  was carrying gold and that he knew  that  the  the transporting of the gold was an offence, but stated that  he was doing so on behalf of a 3rd party.  He was convicted for an  offence under s.135)1)(b) of the Act and the  conviction was confirmed by the High Court. In appeal to this Court, confirming the conviction, HELD:(1)  The offence under s. 135)1)(b) is  punishable if  the  offender acquires possession of or is  in  any  way concerned  in  carrying, removing,  depositing.  harbouring, keeping  concealing. selling or purchasing or in  any  other manner  dealing with any goods which he knows or has  reason to believe are liable to confiscation under- s. 1 1 1.  [909 C-D] In the present case, the totality of facts proved was enough to  raise a presumption under s.114. Evidence Act, that  the gold had been illegally imported into the country so as to be covered by s.111(d).   [911 D] (a)  The  clandestine and guilty manner of  transporting  it shows that it wasrecently smuggled gold carried  contrary to law. [910 0-H] (b)  The  appellant’s,  admission  that  he  know  that  the carrying  of gold was an offence shows that the,  gold  must

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have been recently imported, or it any rate after 1948, when restrictions on the import of gold were imposed. 1910 (c)  The  gold  was being, carried from Bombay,  a  port  of entry for smuggled good$ to Delhi, where there, is a  market for gold. [910 G] (d)  The  burden of proving an innocent receipt of gold  lay on  the appellant under s. 106, Evidence Act,. and-  he  had not discharged the  burden. [911 A-B] Issardas  Daulat  Ram  & Ors. v. Union of  India  and  Ors., [1962] Suppl (1) SCR 358 followed. (2)  Assuming  that  the  ratio of Gian Chand  v.  State  of Punjab  [1962]  Supp. 1 S.C.R. 364 applied  to  the  instant case. the result would only be that no presumption under  s. 123  of  Customs Act could be drawn against  the  appellant. But neither the trial Court nor the High Court had drawn any such  presumption  against  the  appellant.   The  inference regarding  the  character  of the  gold  recovered  and  the appellant’s  guilty knowledge was drawn from  circumstantial evidence. [910 C-D] (3)  The  general form of questions put in the case  do  not strictly  comply with the provisions of s.342, Cr.P.C.,  but the appellant has not suffered any 908 injustice  vitiating  his conviction.  He indicated  in  his answers  that  he would give a written explanation  and  his written   statement   dealt   elaborately   with   all   the circumstances appearing in the evidence against him. [911 G- H] (4)  In  view  of  his age and the fact that  there  was  no previous  conviction,  the  sentence of 3  months  R.I.  was reduced to the period already undergone, which was nearly  3 months, as it was not desirable to send him back to jail for a few days. [912 A-B]

JUDGMENT: CRIMINAL  APPELLATE JURISDICTION Criminal Appeal No.  79  of 1971. Appeal  by Special Leave from the Judgment and  Order  dated 16th  January 1-971 of the Punjab and Haryana High Court  in Criminal Appeal No. 1168 of 1968. Hardayal Hardey and Ashok Grover, for the appellant. H. R. Khanna and M. N. Shroff, for the respondent. The Judgment of the Court was delivered by BEG,  J.-The appellant aged 23 was arrested on  9-4-1967  by the Railway Police at the Bombay Central Railway Station  as he  was  hurriedly  trying  to  get  into  a  second   class compartment  of  the  Frontier Mail  bound  for  Delhi.   It appears  that  manner in which he was trying  to  enter  the second  class  compartment  and  his  nervourness  on  being questioned by a Railway C.I.D. Police Officer, although  the appellant had a ticket on him, aroused suspicion so that the appellant  was detained.  On a search of his person  at  the Police Station in the presence of Panchas, nine bars of gold with foreign markings were found secreted in especially made concealed pockets of his trousers.  These were seized by the Railway  Police.  After further questioning by  the  Police, the  appellant was summoned before Shri L. A. Digama,  Addi- tional  Chief  Inspector  of  Customs,  Bombay,  where   his statement  under  section 108 of the-Customs  Act  1962  was recorded  on  10-4-67.   In that  statement,  the  appellant admitted  the  recovery  of gold bars from  his  person  and stated  that he had agreed with one Pannalal to  carry  them for delivery at Delhi for a sum of Rs. 100 to be paid to the

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appellant.-He  stated that, from what Pannalal had told  him and  also from the weight of the bars, he knew that  he  was carrying gold.  He stated that his father was also with him, but, as nothing incriminating was recovered from the father, he  was allowed to go away.  He also admitted that  he  knew that transporting of Old like this was a criminal offence. The appellant was prosecuted and convicted by the Presidency Magistrate  of Bombay under section 135(b) of  the  Customs’ Act  of  1962  (hereinafter referred to as  ’the  Act’)  and sentenced  to  three months rigorous  imprisonment.  Charges under  the  Defence,  of India  Rules  were  also  preferred against  him but he was acquitted of these.  The High  Court of  Bombay; after carefully re-examining the whole  evidence in the case, had affirmed the conviction and sentence of the appellant; but, the appellant bad obtained special leave  to appeal to this Court.                             909 Learned  Counsel for the appellant had urged before us  that the  conviction  of  the  appellant  is  vitiated  on  three grounds. Firstly,  it is urged that there was no evidence  whatsoever to  hold  that  the  gold seized  from  the  person  of  the appellant  was "liable to confiscation" as  contemplated  by Section  Ill  of  the Act.  It is contended  that  the  only category in which the gold under consideration could fall is Section 111(d) which describes it as of "any goods which are imported or attempted to be- imported or are brought  within the Indian Customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act  or any other law for the time being in force". It  was  urged that, as restrictions on the import  of  gold were  only  imposed  in 1948, there should  have  been  some evidence to show when it was brought into India.  Apart from other  reasons  given  below, we think  that  this  argument overlooks  that  an  offence under section.  135(1)  (b)  is punishable if the offender "acquires possession of or is  in any   way  concerned  in  carrying   removing,   depositing, harboring, keeping, concealing, selling or purchasing or  in any  other manner dealing with any goods which he  knows  or has  reason  to  believe are liable  to  confiscation  under section Ill". Secondly,  it is contended that the High Court  had  wrongly used  section  123  of the Act so as  to-wrongly  place  the burden of proof on the appellant when this provision did not apply.  This Section reads as follows :               "(1)  Where  any goods to which  this  section               applies  are  seized  under this  Act  in  the               reasonable  belief  that  they  are   smuggled               goods, the burden of proving that they are not               smuggled goods shall be....               (a)   in  a  case where such seizure  is  made               from the possession of any person,. . . .               (i)   on the person from whose possession  the               goods were seized; and               (ii)  if  any  person, other than  the  person               from  whose possession the goods were  seized,               claims  to be the owner thereof, also on  such               other person;               (b)   in  any  other case, on the  person,  if               any,  who claims to be the owner of the  goods               so seize&’.               (2)   This   section  shall  apply  to   gold,               diamonds,  manufactures of gold  or  diamonds,               watches,  and any other class of  goods  which               the Central Government may by notification  in

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             the Official Gazette specify". The  argument is that, in order to apply section 123 of  the Act,  there must be a "seizure" of the goods by  the  proper Customs  Officer duly authorised as provided by section  110 of the Act.  Learned Counsel relied strongly on Gian Chand & Ors.  v. The State of Punjab,(1) where it. was  held,  under the corresponding provisions of (1)  [1962] Supp. 1 S.C.R. 364. 910 Sea Customs Act, 1878, that the burden of proof was  shifted on  to the accused only when the goods were "seized" in  the sense  that  they  were taken out of the  possession  of  an accused  by the "proper officer".  That was also a  case  of "seizure" of allegedly smuggled gold.  There, the police had initially commenced proceedings under Section 411 and 414 of the Indian Penal Code against the accused, but,  afterwards, the  case was handed over to the  Customs’.authorities.  The initial "seizure" being one by the, ordinary police, it  was held to be not one under the Act.  In that case, this  Court had  set aside the order of the High Court because  it  held that the statutory presumption could not be used to convict. But,  it did not, for that reason, acquit the  accused.   On the other hand, it sent back the case to the Trial Court for decision  after considering the evidence without the aid  of the statutory presumption. Even if we were to apply the ratio decidendi of Gian Chand’s case (supra) in the case before us, we find that the  result would  only be that no presumption under section 123 of  the Act  could be used against the appellant.  We do  not  think that  the  High  Court  or  the  Magistrate  had  used  this presumption.    We   find   that  they   had   relied   upon circumstantial  evidence in the case to infer the  character of the gold recovered and the accused’s guilty knowledge. This brings us back to the first and the main contention  on behalf of the appellant which was that there is no  evidence to  support  the conviction of the appellant  under  section 35(b) of the Act.  We are unable to accept this  submission. A reference to Issardas Daulat Ram & Ors.  V. Union of India & Ors.(1) is enough to show that the conduct of the  accused and  the  incredible version set up by him  were  enough  to saddle  the  accused  with the necessary  knowledge  of  the character of the goods found in his possession.  In the case before  us,  we  have not only evidence  of  the  suspicious conduct of the appellant but his own admission that he  knew that  it was an offence to carry the gold which he had  been asked to transport for payment of money to him.  He had  put forward an incredible story of having been entrusted with so much  gold  by one Pannalal whose identity  was  not  estab- lished- and whose address was not revealed by the appellant. According  to  the appellant, Pannalal had just met  him  by chance.  It is incredible that any person would entrust gold valued at about Rs. 40,000, on which Rs. 17,000 was  payable as  duty alone, to a youngster who was an utter stranger  to him  even  if the carrier was to get Rs. 100 for  the  risky undertaking.  It is significant that the appellant was found carrying  gold  from Bombay, a port of  entry  for  smuggled goods, to Delhi, where there is a good market for gold.   If it  was not recently smuggled gold carried contrary  to  law there  was no need for the clandestine and guilty manner  of transporting it.  We think that, in the circumstances of the case,  an  inference could very well be made that  the  gold must  have been recently imported into the country,  or,  at any  rate,  after the’ law passed in  1948  restricting  its entry.   The  appellant  admitted, in  his  statement  under Section 108 of the Act, that transporting of these pieces of

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gold was an offence.  If the gold had (1)  [1962] Supp .(1) S.C.R. 358. 911 been legally imported before 1948 it could not be an offence to carry it. The appellant had not proved who Pannalal,  the person who was alleged by him to have given him the gold  to carry,  was.   Atleast, the burden of  proving  an  innocent receipt  of  gold lay upon the appellant under  Section  106 Evidence  Act.  The totality of facts proved was enough,  in our  opinion,  to  raise a  presumption  under  section  114 Evidence Act that the gold had been illegally imported  into the  country so as to covered by Section 111(d) of the  Act. The   appellant  had  not  offered  any   other   reasonable explanation of the manner in which it was being carried.- Thirdly,  it  was  urged that Section 342  of  the  Criminal Procedure  Code had not been complied with inasmuch as  only two  very  general  questions  were  asked  by  the   Trying Magistrate,  followed by two others on one point.  But,  the seizure  of  gold from his possession  and  the  surrounding circumstances were, not put to him.  The first two questions and answers were :               "Q. ’Have you heard the evidence ?               Ans.  Yes.               Q.  What have you to say in regard     to  the               evidence ?               Ans.   I  am filing my written  statement.   I               have nothing more to say.               I  want  to  examine one  witness  from  Chief               Reservation Inspector, Western Railway, Bombay               Central".               The  questions  and  answers  which   followed               afterwards were               "Q.  Have  you  heard and  followed  the  Mint               Report read out and explained to you?               Ans.  Yes.               Q. What have you to say about the same ?               Ans.   I have to say nothing.  I want  to  add               that  I am producing the notice given  by  the               Customs dated 6-10-67" It is clear to us that the appellant was fully aware of  the nature  of  the allegations made against him.   He  had  not merely given a detailed explanation under section 108 of the Act, of the circumstances in which he’ said he was  arrested with  the  gold bars, but, he had also  filed  an  elaborate written  statement.  He had indicated that this is the  only form  in  which he would give his explanation.  It  is  true that  the  general form of questions put does  not  strictly comply with the provisions of Section 342 Criminal Procedure Code.   But,  we  are  unable to  hold  that  the  appellant suffered any injustice for this reason.  Indeed, he had  not even raised such a question in the Trial Court or before the High  Court.   If he had done so, the alleged  defect  could have  been  easily cured.  The objection seems to us  to  be most  technical  and  flimsy.  The  defect  could  not  have possibly vitiated the conviction of the appellant. 912 Lastly,  it is urged that the appellant has  already  served nearly three months of the sentence and there is no previous conviction recorded against him so that we should reduce his sentence  to the period already undergone.  In view  of  the age of the appellant and the fact that there is no  previous conviction  proved  against  him,  we  consider  it  to   be undesirable  to  send the appellant back to jail for  a  few days.   We,  therefore, reduce the sentence  to  the  period already  undergone.   Subject  to  this  modification,  this

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appeal  is dismissed.  The appellant, who is on  bail,  need not surrender. V.P.S.                            Appeal dismissed. 913