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PETITIONER: VALLABHDAS LILADHAR AND ORS.

       Vs.

RESPONDENT: ASSISTANT COLLECTOR OF CUSTOMS

DATE OF JUDGMENT: 27/01/1964

BENCH: DAS, S.K. BENCH: DAS, S.K. GAJENDRAGADKAR, P.B. SARKAR, A.K. GUPTA, K.C. DAS AYYANGAR, N. RAJAGOPALA

CITATION:  1965 AIR  481            1965 SCR  (3) 854  CITATOR INFO :  R          1973 SC  62  (5)  RF         1992 SC1831  (32)

ACT:     Sea  Customs  Act,  1878  (8  of  1878)   ss.  186,  167 (81)--Statements made to Customs authorities--lf  admissible in Criminal trial-Confiscation and penalty imposed--if  bars prosecution--Dealing  in  Gold  proved  to  be  smuggled--If against the law--Indian Evidence  Act. 1872 (1 of 1872), ss. 24, 25.

HEADNOTE:    Smuggled   gold   recovered  from  the   appellants   was confiscated  and a penalty imposed on them.  Thereafter  the appellants were tried and convicted under s. 167(81) of  the Sea’  Customs Act. In their statements made to  the  customs authorities,  the  appellants had practically  admitted  the prosecution case and these statements were put in  evidence. An  appeal to the Sessions Judge and a revision to the  High Court were dismissed. In appeal to this Court:     HELD:  (i).Since  the  statements made  to  the  customs authorities bore the signature of the appellants which  were admitted, they must be taken to be proved by such  admission and no further evidence was necessary. [858C]     (ii)  Customs  officers  are not  in  the  circumstances arising in this case police officers and statements mad.e to them were not inadmissible under s. 25 of the Evidence  Act. Section  24 would apply, as customs authorities are  persons in  authority; and such statements would be inadmissible  if vitiated by inducement, threat or promise. [858E-F] State  of  Punjab  v.  Barkat  Ram,  [1962]  3  S.C.R.  338, followed.     (iii)  Section  186  of the Sea Customs  Act,  which  is merely  an enabling section, is no bar to a prosecution  for an  offence  under the Act in connection with  a  matter  in which  the award of confiscation, penalty or increased  rate of duty has been made. [859F, G]     Leo  Ray Frey v. Superintendent of District Jail  [1958] S.C.R. 822, referred to.

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   (iv)  Once the gold recovered is proved to  be  smuggled whosoever  is  found to have brought it and dealt  with  it, thereafter,  knowing it to be smuggled must be held to  have had   the  intention  of  evading  duty  or  violating   the prohibition or restriction. [860C-D]

JUDGMENT:     CRIMINAL APPELLATE JURISDICTION:Criminal Appeals Nos. 48 and 80 of 1960.     Appeals  by special leave from the judgment  and  orders dated December 11, 1959 and March 2, 1960 of the Bombay High Court  Rajkot (Now Gujarat High Court) In criminal  Revision Application No. 100 of 1959.          855 N.N. Keswani, for the appellants (in both the appeals).     D.R. Prom and R.N. Sachthey, for the respondent (in both the appeals). The Judgment of the Court was delivered by     Wanchoo, J.  The two  appeals  by  special  leave  arise out  of  the  same criminal trial  before  a  magistrate  at Porbunder  and  will  be  dealt  with  together.  The  three appellants  along  with one more person,  namely,  Keshavlal Nagjibhai  were  prosecuted  under s. 167 (81)  of  the  Sea Customs Act, No. 8 of 1878, (hereinafter referred to as  the Act).  The  prosecution  case briefly  was  that  Vallabhdas Liladhar, who is now dead, came in contact with an Arab from whom he purchased smuggled gold weighing a little more  than 84  tolas  on  December 1,  1956.  Before  this,  Vallabhdas Liladhar  had  borrowed  Rs.  3,600/-  from  the  other  two appellants  and Keshavlal about November 28, 1956, in  order to make the purchase. After making the purchase,  Vallabhdas Liladhar  came  to Porbunder to the house of the  other  two appellants  and Keshavlal and informed them of the  purchase and wanted their help in the disposal of the gold. The other two  appellants  namely, Narandas Nagjibhai  and  Vallabhdas Nagjibhai  are brothers. Keshavlal was also the  brother  of these two appellants. The prosecution case further was  that Narandas  Nagjibhai asked Vallabhdas Nagjibhai to  take  the gold  to Bantwa and sell it at the rate of Rs. 103/-  or  so per  tola. Vallabhdas Nagjibhai was also instructed that  in case  he  could  not sell the gold at that  rate  he  should contact Vallabhdas Liladhar and Narandas Nagjibhai at Bantwa bus stand from where they were to go to Junagadh to  dispose of  the gold if no suitable buyer could be found in  Bantwa. Consequently Vallabhdas Nagjibhai proceeded to Bantwa by bus on  December  2,  1956 in the  afternoon.  In  the  meantime information  was  received  by Mehta who  was  Inspector  of Customs  about the smuggling of this gold.  He  consequently followed   the  bus  in  which  Vallabhdas   Nagjibhai   was travelling  and  intercepted him at  Kutiyana bus  stand  at about  3 p.m. The Deputy Superintendent of Customs was  also with Inspector Mehta and Vallabhdas Nagjibhai was taken down from  the  bus  at Kutiyana. On search in  the  presence  of witnesses,  five bars of gold weighing about 84  tolas  were recovered  from  his possession. All these  five  bars  bore marks of foreign origin and were taken in possession by  the customs authorities after preparing a recovery list. Further investigation  was  made  in the matter  and  eventually  on October  7,  1957,  the Collector of Central  Excise  Baroda confiscated  the gold bars under s. 167 (8) of the Act  read with s. 23 of the Foreign Exchange Regulation Act, 1947  and also  imposed  a penalty of Rs. 1,000/- each  on  the  three appellants  and  a  penalty  of  Rs.  500/-  on   Keshavlal.

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Thereafter a complaint was filed by the Assistant  Collector of Customs under s. 167(81) of the Act before the magistrate at Porbunder on June 27. 1958. 856     The  case  of Vallabhdas Liladhar was that  he  had  not purchased the gold from any Arab but had brought it with him from Karachi in the year 1946. Vallabhdas Nagjibhai admitted the  recovery of gold from him but said that it belonged  to Vallabhdas Liladhar and he was carrying it at the request of the  latter  and that he did not know that it  was  smuggled gold.  Narandas  Nagjibhai also,  admitted  that  Vallabhdas Liladhar  had  come to their house with the gold  but  added that  it was not smuggled gold and that Vallabhdas  Liladhar had  told  him  that it belonged to him and  was  for  sale. Keshavlal,  the fourth person, who has been acquitted,  said that  he did not know anything about the matter and  had  no connection with it.     It  may  be  added that the three  appellants  had  made statements   before  the  customs  authorities   and   those statements  were  also  put in evidence in  support  of  the prosecution  case.  In those  statements,  they  practically admitted  the  prosecution case that the gold  was  smuggled gold  and they were trying to dispose it of. The  magistrate convicted all the four persons under s. 167 (81) of the  Act and  sentenced them to rigorous imprisonment for six  months and a fine of Rs. 500/- He relied on the statements made  by the appellants and Keshavlal before the customs  authorities and  also  on the evidence produced before  him,  which  was mainly about the recovery of gold.     All the four convicted persons appealed to the  Sessions Judge.  The  appeal  was heard by  the  Additional  Sessions Judge, Porbunder who acquitted Keshavlal. The appeal of  the other three (namely, the three appellants now before us) was dismissed  and their convictions and sentences Were  upheld. The  three  appellants  then went in revision  to  the  High Court.  The High Court rejected the revisions of  Vallabhdas Liladhar  and Vallabhdas Nagjibhai summarily.  The  revision application  of  Narandas  Nagjibhai was  admitted  but  was eventually dismissed. The three appellants then applied  for leave  to appeal to this Court which was refused. They  then prayed for special leave from this Court, which was granted, and that is how the matter has come up before us.     Vallabhdas  Liladhar, one of the appellants in Cr. A  48 of  1960, is dead. So far therefore as he is concerned,  his appeal  abates. It only remains to consider the  appeal   of Vallabhdas   Nagjibhai  (Cr.A.48)  and  Narandas   Nagjibhai (Cr.A.80).  Before  however we consider  the  points  raised before  us on behalf of the appellants we may refer  to  the circumstances  which have been found established by all  the courts  and  on  the basis of which the  conviction  of  the appellants has been upheld. These circumstances are--                  (1)  Though  the  price  of  gold  at   the               relevant time was over Rs. 105/- per tola, the               appellant  were intending to sell  these  gold               bars  at a lower price of about Rs. 103/-  per               tola.               857                  (2)  The  two appellants  were  working  as               goldsmiths  at  Porbunder  and  there  was  no               reason  why the gold had to be sent  elsewhere               for  disposal. As Porbunder is a fairly  large               town,  there was no reason why the gold  could               not be sold in the market at Porbunder.                  (3)  The  two  appellants  displayed  undue               haste in the disposal of gold.

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                (4)  The surreptitious manner in which  the               gold bars were kept by Vallabhdas Nagjibhai as               shown  at the time of recovery shows that  the               appellants  knew that they were  dealing  with               smuggled gold.                  (5) The amount of Rs. 3,600/- was  advanced               to Vallabhdas Liladhar but the entries in  the               account  book of the appellants were  made  in               the name of the brother of Vallabhdas Liladhar               who   is   the  brother-in-law  of   the   two               appellants.                  (6) The markings on the gold made it  quite               clear  that it was of foreign origin  and  the               two  appellants could not be unaware of  this,               particularly as they work as goldsmiths.     In  addition to the above circumstances, all the  courts relied  on the statements made by the two appellants  before the  customs authorities and the presumption under s.  178-A of  the  Act  was raised and on  that  basis  convicted  the appellants, though the High Court held that even without the presumption  under s. 178-A the evidence was  sufficient  to convict the appellants.     Learned counsel for the appellants has very properly not challenged  the  concurrent  findings of  fact  by  all  the courts.  He  has raised four points for  our  consideration, which are these--                  (1)  The  statements made  to  the  customs               authorities  were inadmissible in evidence  as               they were not properly proved.                  (2) The statement made before the Collector               of Customs were inadmissible in evidence under               ss. 24 and 25 of the Indian Evidence Act.                  (3)   As   the  gold   had   already   been               confiscated and penalty had been imposed under               s.  167(8)  of  the Act,  there  could  be  no               further  trial in a criminal court in view  of               s. 186 of the Act.                  (4)  The ingredients of s. 167(81) are  not               satisfied in this case.               858               Re. (1).                   So  far as the first point  is  concerned,               the  only  argument  is that  the  lawyer  who               signed the statements made before the  customs               authorities  was not produced to  prove  them,               and therefore the statements cannot be held to               have been properly proved. It is however clear               that  the statements were not only  signed  by               the  lawyer of the appellants but also by  the               appellants. In their statements in court,  the               appellants  admitted that they had signed  the               statements,  though they said. that  they  did               not  know  what the statements  contained  and               they signed it on being asked by their lawyer.               This part of the statements of the  appellants               has not been believed by the courts below  and               in our opinion rightly. As the statements bore               the  signature  of the  appellants  which  are               admitted,  they must be held to be  proved  by               this   admission  and  it  was   not   further               necessary to examine the lawyer who signed the               statements  along  with  the  appellants.  The               contention on this head must there fore fail.               Re. (2).                   As to the second point, we are of  opinion

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             that  s. 25 of the Indian Evidence Act has  no               application  on the facts of the present  case               which  are on all fours with the facts in  The               State  of Punjab v. Barkat Ram(1). In  similar               circumstances  it  was held by this  Court  in               that case that customs officers are not police               officers and statements made to them were  not               inadmissible  under  s. 25. Section  24  would               however apply, for customs authorities must be               taken   to   be  persons  in   authority   and               statements would be inadmissible in a criminal               trial if it is proved that they were caused by               inducement, threat or promise. But the finding               of all the courts is that the statements  were               not  made on account of any inducement  threat               or promise as required by s. 24 of the  Indian               Evidence  Act.  In the face of  this  finding,               therefore,   it  cannot  be  said   that   the               statements are inadmissible under s. 24 of the               Indian Evidence Act.               Re. (3).                   Next the appellants rely on s. 186 of  the               Act. which reads as follows: --                     "The award of any confiscation,  penalty               or increased rate of duty under this Act by an               officer  of  Customs  shall  not  prevent  the               infliction  of  any punishment  to  which  the               person  affected thereby is liable  under  any               other law." It is urged that when s. 186 lays down that the award of any confiscation,  penalty or increased rate of duty  under  the Sea  Customs  Act shall not prevent the  infliction  of  any punishment  to which the person affected thereby  is  liable under  any other law, it necessarily forbids by  implication infliction of any punishment to which (1) [1962] 3 S.C.R. 338. 859  the person affected thereby is liable under the Sea Customs Act  itself.  In this connection our attention is  drawn  to certain  observations in Leo Roy Frey v. The  Superintendent District  Jail(1). It is true that in that case  this  Court referred  to  s.  186  of the Act; but  that  case  was  not directly  concerned with the question whether a  prosecution under  s. 167(81) of the Act is permissible after the  award of confiscation, penalty or increased rate of duty under  s. 167(8)  of the Act in view of s. 186. Clause (81) in s.  167 was  introduced by the Amending Act No. 21 of  1955.  Before that there were 80 clauses in the section, and the scheme of those  clauses was that a person could either be dealt  with by  the award of confiscation, penalty or increased rate  of duty,  or  by a prosecution before a magistrate. It  was  in those  circumstances that s. 186 provided that the award  of confiscation,  penalty or increased rate of duty  would  not bar infliction of any other punishment under any other  law. The intention of the legislature by this provision in s. 186 was clearly to allow a prosecution under any other law  even though  there  might be award of  confiscation,  penalty  or increased  rate of duty under the Act. Section 186 was  thus meant  for  permitting prosecutions in  addition  to  action under  the  Act  in the shape of  confiscation,  penalty  or increased  rate of duty; it was never intended to act  as  a bar  to any prosecution that might be permissible after  the award of confiscation, penalty or increased rate of duty. It was merely an enabling section and not a barring section and seems to have been put in the Act ex abundanti cautela. When

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however,  cl.  (81)  was introduced in  s.  167,  it  became possible  in some cases where goods  had been   confiscated; and   penalty  inflicted  under  the  Act  by  the   customs authorities to prosecute persons also under cl. (81) of  the Act.  That  however  would  not change  the  nature  of  the provision  contained  in  s.  186  which  was  an   enabling provision and not a barring provision. If the intention  was to   bar   prosecutions   in  consequence   of   the   award confiscation,  penalty or increased rate of duty, the  words of  s.  186  would  have  been  very  different.  We  cannot therefore  read  in  s.  186  a  bar  by  implication  to  a prosecution  under  the Act simply because  s.  186  enables prosecution under any other law. In this view of the matter, s. 186 is no bar to the prosecution for an offence under the Act  in  connection  with a matter in  which  the  award  of confiscation,  penalty  or increased rate of duty  has  been made. Re. (4).     Next it is contended that the ingredients of cl. (81) of s.  167 are not satisfied inasmuch as it is not proved  that the   intention  of  the  appellants  was  to  defraud   the government  of  any duty payable on the gold which  was  the subject  matter of the charge in this case or to  evade  any prohibition or restriction for the time (1) [1958] S.C.R. 822, 827. 860 being in force. It is true that before cl. (81) can apply it has  to  be  proved  inter  alia  that  the  person  charged thereunder with possession of any dutiable or prohibited  or restricted   goods  or  concerned  in  carrying,   removing, depositing,  keeping  or  concealing  such  goods,  has  the intention  of defrauding the government of any duty  payable thereon or of evading any prohibition or restriction thereon for  the  time  being  in force. So  it  is  said  that  the prosecution has failed to  prove  by  positive evidence that the  intention  was to defraud the government  of  the  duty payable on the gold in this case or to evade the prohibition or  restriction on the import thereon for the time being  in force. We have not been able to understand this argument  at all.  Once it is proved that the gold is smuggled  gold,  it follows that it was brought into the country without payment of duty or in violation of the prohibition or restriction in force.  and  whosoever  brought  it  and   whosoever   dealt with  it thereafter knowing it to be smuggled in the  manner provided  in the section must be held to have the  intention of evading the payment of duty or violating the  prohibition or restriction. There is no force in this contention also.     Lastly  it  is urged that the  substantive  sentence  of imprisonment in the case of the two appellants before us may be reduced to the period already undergone, particularly, as the  appellants, have been on bail since March 1960  and  it would not be in the interest of justice to send them back to jail for a short period after four years when about half the sentence  has  already been served out. We  however  see  no reason  to  interfere  with the sentence in  cases  of  this nature. The appeals therefore fail and are hereby dismissed. Appeal dismissed. 861