Bombay High Court
R.R. Kabra vs State on 21 February, 1969
ORDER
1. This is an appeal by the accused from the order passed by the Presidency Magistrate, Second Court, Mazgaon, Bombay, convicting the appellant of offences under S. 135(b) r.w.s. 135(ii) of the Customs Act, 1962 and also of offences under Rule 126H, Sub-rule (2)(d) r.w. Rule 126 P, sub-rule (2)(iv) and Rule 126 I, sub-rule (10), r.w. Rule 126 P, sub-rule (2)(ii) of the Defence of India Rules and sentencing him of suffer rigorous imprisonment for six months and to pay a fine of Rs. 1000, i.e. of payment of fine to suffer rigorous imprisonment for two months on each count.
2. The accused is a resident of Nanded in this State. Admittedly on 12-4-1966 he visited Bombay and was about to leave for Kurduwadi by Secunderabad Express, which leaves Victoria Terminus Railway Station at about 1.00 p.m. The prosecution case was that on that afternoon P.W. 1 Yeshwant Maruti Shirsat along with Head Constable attached to V.T. Police Station, who were on duty in plaint clothes at the V.T. Railway Station, noticed the accused hurriedly entering the platform and boarding the Secunderabad Express train. It was stated that the accused then wore a frightened look which aroused suspicions in the mind of the constable. They, therefore, interrogated and took him to the V.T. Police Station and produced him before Inspector Sawant. The Inspector collected panchas and in their present took a search of the person of the accused when it was found that the pocket of his under-wear contained three packets in which there were seven slabs of gold, each weighing 10 tolas, with making "Jonson Mathey, London". Indian currency of Rs. 1,340 was also found on him. The slabs as well as the currency were attached under a panchanama. On the following day the accused along with the property was produced by the police before the Superintendent Central Excise, Mr. R. S. Nayampalli. The Customs authorities took charge of the slabs believing that it was smuggled gold with foreign markings. A statement of the accused was also recorded by P.W. 3 Shri Tipnis the Inspector of Central Excise.
3. Ultimately the Assistant Superintendent of Customs filed a complaint against the accused on 13th March, 1967, alleging that the seven slabs were to gold of foreign origin, and that the accused was concerned in carrying and concealing them knowing or having reason to believe that they were liable to confiscation under Section 111(d) of the Customs Act, 1962, which is an offence punishable under Section 135(ii) thereof. It was further alleged that by acquiring these slabs of gold the accused had also contravened the provisions of Rule 126H, sub-rule (2)(d) of the Defence of India (Amendment) Rules, 1963, and had thereby committed an offence punishable under Rule 126P, Sub-rule (2)(iv) of the said Rules. It was also alleged that the accused had contravened the provisions of Rule 126(i), Sub-rule (10) of the said Defence of India Rules and had thereby committed an offence under Rule 126P, sub-rule (2)(ii) thereof.
4. The accused pleaded not guilty to the charge. He denied that the slabs of gold were found in his possession. According to him, after he boarded the train P.W. 1 Yeshwant Shirsat followed and accosted him and asked him to pick up a packet that was lying on the floor of the compartment alleging that it belonged to the accused. On his refusal to do so, the constable and his companion Head Constable are said to have forcibly taken the accused and the packet to the Police Station where a panchanama was drawn up showing that the packet was found on the person of the accused. The accused, however, admitted that Rs. 1340 in currency notes were recovered from his person. He admitted to have made the statement before the Customs Officer, Mr. Tipnis. He, however, challenged the correctness of only one recital from that statement as regards the amount which he had brought from Nanded. In the statement it has been recorded that he had brought with him Rs. 1450 and that the Officer had wrongly noted down the figure '14500' instead of '1450'. In short the accused disowned any connection with the slabs alleged to be of gold with foreign makings.
5. The prosecution examined constable Yeshwant Shirsat, the two panchas in whose presence the property was seized at the V.T. Police Station, Superintendent of Central Excise, Mr. Nayampalli, and the Inspector, Shri Tipnis. On consideration of this evidence, the learned Magistrate found that the seven slabs of gold bearing foreign markings were found in possession of the accused and that they were liable to confiscation under section 111(d) of the Customs Act as they were smuggled goods and that he had acquired and kept in his possession this gold in contravention of the provisions of Rules 126H and 126-I of the Defence of India (Amendment) Rules, 1963, as well. Consequently, he has been found guilty of the offences charged against him and has been sentenced as already state above.
6. In this appeal the findings recorded by the learned Magistrate that the seven slabs were of gold, that they were of foreign origin and were imported in contravention of the provisions of the Customs Act were challenged. It was also submitted that the learned Magistrate was in error in finding that these slabs were recovered from the person of the accused. As for the charge under the Defence of India Rules it was submitted that there is no evidence to show that the slabs alleged to be gold were of the purity of not less than 9 carats and that the accused had acquired them after the Defence of India Rules came into force.
7. Section 135(b), so far as is relevant for our purpose, provides :-
"135. Without prejudice to any action that may be taken under this Act, if any person -
(b) acquires possession of or in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, etc. or in any other manner dealing with any goods which he knows or has reasons to believe are liable to confiscation under S. 111, he shall be punishable with imprisonment for a terms which may extend to two years or with fine or with both."
8. Section 111(d) provides :-
iii. The following goods brought from a place outside India shall be liable to confiscation -
(d) any goods which are imported or attempted to be imported or are brought within 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."
9. Section 11 of the Act gives power to the Central Government to prohibit the import or export of goods of any specified description for any of the purposes specified in sub-section (2) thereof.
10. Section 8 of the Foreign Exchange Regulation Act 1947, gives power to the Central Government to order, by Notification in the official Gazette, that, subject to such exception, if any, as may be contained in the notification, no person shall, except with the general or special permission of the Reserve Bank and on payment of the fee, if any, prescribed, bring or send into India any gold. And section 25A of the same Act inter alia provides that the restriction imposed by sub-sections (1) and (2) of Section 8 shall be deemed to have been imposed under Section 11 of the Customs Act, 1962, and all the provisions of that Act shall have effect accordingly.
11. In exercise of the powers conferred by sub-section (1) of section 8 of the Foreign Exchange Regulation Act, 1947, the Central Government issued Notification No. 12(11)-F1/48, dated 25th August 1948, directing that except with the general or special or special permission of the Reserve Bank, no person shall bring or send into India from any place outside India any gold coin, gold bullion, gold sheets or gold ingot, whether refined or not.
12. In view of the provisions of section 23A of the Foreign Exchange Regulation Act, therefore, this restriction on import or export of gold is deemed to have been imposed under sequently, by virtue of the provisions of section 111(d) if gold is imported into India from any place outside India without the permission of the Reserve Bank as contemplated in the aforesaid Notification such gold shall be liable to confiscation and, therefore under section 135(b) of the Customs Act, 1962. Acquiring possession of or being concerned in carrying, removing concealing, etc., or in say other manner dealing with any such gold which is brought into India from any place outside India in contravention of the aforesaid Notification, is an offence punishable under Section 135 of that Act.
13. In this case the first charge against the accused was that he was concerned in carrying and concealing the seven slabs of gold which he knew or had reason to believe were liable to confiscation under section 111(d) of the Customs Act. In order, therefore, to bring home the charge to the accused what the prosecution will have to establish is that the seven slabs of gold which were imported into india in contravention of the provisions of the above notification, were found in possession of the accused. On behalf of the accused it is in the first instance contended that there is no evidence to show that the seven slabs are of gold and that they were imported into India. It is also contended that there is no evidence to establish that the accused was found in possession thereof.
14. In order to prove that the seven slabs before the Court were of gold imported into India, the prosecution relies on the recitals in the panchanama about the markings on these slabs and also on the testimony of Mr. Nayampalli, the Superintendent of Central Excise, before whom along with the accused, the slabs and the currency that were seized from him were produced on 3-4-1966. The panchanama Exh. C, under which these slabs were seized, states that they bore the marking "Jonson Mathey, 9990, London, 10 tolas". Mr. Nayampalli, the Superintendent of Central Excise has stated that he seized these slabs of gold on their production by the police before him, in the reasonable belief that it was smuggled gold as the gold slabs bore foreign markings. This evidence has totally gone unchallenged. On this evidence, therefore, it can perhaps be assumed that these 7 slabs are of gold.
15. The difficulty in the way of the prosecution however, does not end here. Because under section 135 of the Customs Act, it must also be shown in order to bring home the offence to the accused that the goods in question were such as the accused knew or had reason to believe were liable to confiscation under Section 111 of that Act. In order that the goods should be so liable for confiscation, they must have been imported in contravention of the provisions of the Notification issued by the Central Government under the Foreign Exchange Control Act. As already noted, import of gold from out-side India except with the general or special permission of the Reserve Bank of India is prohibited. It is, therefore, obvious that to establish the offence against the accused, the prosecution must show not only that goods are gold but that they are of foreign origin and have been imported without the permission of the Reserve Bank of India. That is to say they have been smuggled into India. There is no direct evidence led by the prosecution in this case to show that these slabs are of foreign origin and have been smuggled into India. Reliance, however, is placed on the fact that these slabs bear the marking of Johnson Mathey, London with the figure 9990 and the inscription 10 Tolas thereon and the Court in invited to hold that these slabs must be from the Refinery of Johnson Mathey there is, however no evidence that Johnson Mathey are the refiners of gold doing business in London. Mr. Bhonsale was also unable to point out anything entitled the court to take a judicial notice of this fact. From the mere markings, therefore, it is impossible to conclude that this gold is of foreign origin.
16. Even assuming for the sake of argument that such an inference can be drawn from the markings on these slabs, the next point that arise is whether there is anything to show that this gold has been smuggled into India in contravention of the provisions of the Notification. In this behalf the prosecuting has no direct evidence. Reliance, however, is placed on the provisions of Section 123(1) of the Customs Act, 1962, which shift the burden of proof in certain cases to the shoulders of the accused. It provides :
"123 (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 on the person from whose possession the goods were seized."
17. Sub-section (2) explains as to what goods this section would apply. It may be mentioned that "gold" is among these goods. Under sub-section (1) quoted above, the burden shifts to the person from whom goods are attached when goods are seized by the Customs Officer. In the present case, the goods were not seized by the Customs Authorities from the possession of the accused, but they were already seized by the Railway Police attached to the Victoria Terminus Police Station, Bombay on April 12 and it was on the subsequent day that the accused along, with the property and the cash that was found with him was produced before Mr. Nayampalli, the Superintendent of the Central Excise and then he seized these slabs in the reasonable belief that it was a smuggled gold, because the slabs, in his opinion bore foreign markings. Obviously, since the slabs were seized by the Customs Officer not from the possession of the accused but from the possession of the police the provisions of section 123(1) would not be attracted as has been held by the Supreme Court in Gian Chand and Other v. State of Punjab . In that case, as a result of a search of the house in the occupation of the accused certain bars of gold were recovered from the accused by the Police and the Police having suspected that this was stolen property retained by the accused, they were charge-sheets for offence under section 411 and 414 of the Indian Penal Code. Subsequently, however, for some reason the Police dropped Criminal Proceedings and on the orders of the Magistrate handed over the property to the Customs Authorities, who thereupon seized it. The Collector of Customs then issued notice to the appellant to show cause why gold should not be confiscated as being imported into India in contravention of the provisions of the Act. After consideration of the explanation given by the accused. The Collector passed an order of confiscation of gold and the accused were also prosecuted for offence under section 167(81) of the Sea Customs Act, 1878 which now stands repealed by the Customs Act, of 1962. The accused were convicted and against their conviction they approached the Supreme Court and one of the questions raised before the Supreme Court was whether the gold bars that were received by the Customs Department from the Court of the Magistrate can be said to be the goods seized under the Act within the meaning of section 178A of the Sea Customs Act, 1962. Their Lordship of the Supreme Court, while dealing with this question held that in such a case it cannot be said that the goods were seized by the Customs Authorities under the Act. While dealing with the point, Their Lordship observed in para 8 of the report as under :-
"ASSUREDLY when the goods are delivered to the Customs authorities by the Magistrate they are not taken from the possession of the person accused in Criminal Case as to throw the burden of proof on them ...... when the goods were seized by the Police they ceased to be in the possession of the accused and passed into the possession of the police ...... The suggestion that the goods continued to be, at that stage in the possession of the accused does not embody a correct appreciation of the law as regards possession. A "Seizure" under the authority of law does involve a deprivation of possession and not merely of custody and as to when the Police Officer seized the goods, the accused lost possession which vested in the Police."
18. On the authority of the above ruling, therefore, it is impossible to hold in the present case that the gold slabs were seized by the Customs Authorities from the possession of the accused. The burden of proof that they are not smuggled goods, therefore, would not shift in the present case to the accused. But the prosecution will have to establish that fact. As there is no evidence on that point, it must be held that the prosecution has failed to establish that the slabs in question have been smuggled from outside into India in contravention of the provisions of the aforesaid notification, and that they are, therefore, liable, to confiscation.
19. Mr. Bhonsale for the State invited my attention to the ruling of the Supreme Court in Issardas Daulat Ram and Others v. Union of India and Others and he contended that since the slabs were bearing foreign markings, the presumption would arise that this gold that was attached in this case was of foreign origin and that it was imported in India in contravention of the provisions of the Customs Act and the Notification issued by the Central Government under the Foreign Exchange Regulation Act. It is, however, difficult to accept this contention because as I have already discussed above, in the present case in the first place, the prosecution has failed to establish that the gold is of a foreign origin. In the case relied upon by him, it appears from the report that it was conceded on behalf of the appellant in the Supreme Court that the Gold was of foreign origin and the only question that was canvassed was that there was no evidence to show that this gold of foreign origin had been imported after restrictions on import were imposed in March 1947 by the notification under the Foreign Exchange Regulation Act. In that case, it appears, that some quantity of gold which was believed to be smuggled and which was sent by the appellants to the refinery for melting was seized by the Customs Officer from the refinery. Investigation was started for ascertaining whether this was or was not a smuggled gold. Notice was issued to the appellant by the Assistant Collector to show cause why the gold should not be confiscated under Section 167(8) of the Sea Customs Act. The appellants appeared before the Collector and contended that the gold was not smuggled and was not therefore liable to confiscation. The Collector of Customs however, rejected their contention and made an order under Section 182 of the Sea Customs Act, directing the confiscation of the gold. Appeals and revision to the appropriate authorities from this order having been unsuccessful, the appellants filed a Writ Petition in the High Court. But it also met with the same fate, and against that order they preferred the appeal to the Supreme Court. The short point that was, therefore, before their Lordships of the Supreme Court in that case was whether the order made by the Collector of Customs for the confiscation of the gold on the ground that it was smuggled gold, was justified. In order to reach his finding about the gold being smuggled, the Collector had referred to the conduct of the appellant in connection with (a) the credibility of the story about the purchase of this gold from three parties, (b) the price at which the gold was stated to have been purchased which was less than the market price, and (c) the hurry exhibited in trying to get the gold melted at the refinery with a small bit of silver added so as to reduce the fineness of the gold and thus approximate the resultant product to licit gold found in the market. Their Lordships while dealing with the contention of the appellants observed :-
"Though, no doubt, there was no direct evidence that the gold which was the subject of adjudication had come into the country after March 25, 1947 when the first notification under the Foreign Exchange Regulations Act placing a ban on the importation of gold was issued, it is not as if this could not be deduced or inferred otherwise. There has been little or no importation of gold from outside the country since 1947. If the gold now in question had been imported earlier it would be extremely improble that the gold would remain in the same shape of bars and with the same fineness as when imported after the passage of this length of time."
20. Their Lordships, therefore, held that the contention raised by the appellants that there was no material before the Collector to hold that it was smuggled gold was not right. It is necessary to point out that in that case there was not charge of criminal offence against the appellants but Their Lordships were only concerned with the question as to whether the Collector's order was on the material on record justified. In a criminal trial it need not be stated that the onus lies on the prosecution unless of course law throws the burden on the accused. As I have already pointed out above, under Section 167(1) which is applicable to the facts of the present case, the onus of proving the guilt of accused to the hilt which lay on the prosecution was not shifted to the accused.
21. Besides, in the present case there is hardly any circumstances from which a presumption can be raised that this gold is of foreign origin and that it must have been smuggled. Mr. Bhonsale, however, relied upon the circumstances that these slabs were concealed in three different packets that were kept in the inside pocket of the under-wear of the accused and that, as stated by constable Yeshwant Maroti, the accused appeared to be frightened when he was accosted by them. But in my opinion, these circumstances taken either singly or cumulatively are insufficient to raise any such presumption in favour of the prosecution. The fact that the accused carried these slabs in three different packets by keeping them in the inside pocket of the underwear can hardly be said to be in any way unusual. Even an innocent person would carry valuable things in this manner or take care to keep them as secure as possible, especially in Bombay where pickpockets are known for their dexterity. The circumstance that the accused looked frightened is also equally innocuous. The accused was in a hurry to leave by the train, and it appears that hardly there were 15 minutes for the train to leave. Besides when a person is accosted by the police, naturally he feels nervous. It is not, therefore surprising that the accused should have looked frightened to the constable when he was accosted.
22. In my opinion, therefore, in the present case the prosecution has utterly failed to establish that these 7 slabs of gold are of foreign origin and were imported into India in contravention of the Notification referred to above. On this ground alone, therefore, the order of conviction passed against the appellant for the offence under Section 135(b)(ii) must be set aside.
23. In view of my findings above, it is needless for me to go into the question whether these slabs were in fact recovered from the possession of the accused. The accused does not claim them and disputes that they were recovered from the possession of the accused. The accused does not claim then and disputes that they were recovered from his possession.
24. Now turning to the charge under the Defence of India Rules, rule 126(H)(2)(d) provides :
"Save as otherwise provided in this part no person other than a dealer licensed under this part shall buy or otherwise acquire or agree to buy or otherwise acquire, gold not being ornament, except,
(i) by succession, intestate or testmentery, or
(ii) in accordance with a pern it granted by the Administrator or in accordance with such authorisation as the Administrator may, by general or a special order make in this behalf."
25. Rule 126(P) prescribes penalties and sub-rule (2)(iv) provides penalty for buying, or otherwise acquiring or accepting gold in contravention of any provision of this Part. Similarly, Rule 126-I(10) provides :
"No person other than a dealer and a refiner, licensed under this part, shall acquire or have in his possession or under his control any quantity of gold required to be declared under this rule unless such gold has been included in a declaration or further declaration made thereunder : and as often as any such person acquires, or parts with, after any such declaration or further declaration, any quantity of gold, the quantity acquired or parted with shall be endorsed by such person and in such manner as may be prescribed, on the copy of the declaration retained by the person who has made the declaration or further declaration and such copy shall be produced by that person within thirty days from the date of such endorsement before the Administrator who shall make necessary changes in the register and also in the copies of the declaration kept in its safe custody."
26. Now, the expression "Gold" has been defined in Rule 126A(d) as follows :-
"Gold means gold, including its alloy, whether virgin, melted, remelted, wrought or unwrought, in any shape or form, of purity of not less than nine carats and includes any gold coin (whether legal tender or not), any ornament and any other article of gold".
27. It is therefore, obvious that it is only gold which is of the purity of nine carats and above, comes under this definition, and it would be only such gold that the provision of these rules would apply.
28. In the present case, it is contended on behalf of the appellants that there is not an iota of evidence to show that these gold-slabs are of a purity of nine carats or above, and that therefore, the charge made against the appellant under these provisions has not been established satisfactorily. Having regard to the definition of gold referred to above, in my opinion, the contention must prevail, and Mr. Bhonsale for the State also had very little to say in support of the finding of the learned Judge. He however, submitted that in fact in this case Mint Master's Report has been obtained by the Customs Authorities to whom these slabs were sent for examination, but through oversight it has not been produced on record. He, therefore, submitted that the prosecution should be allowed to lead additional evidence to establish that these slabs of gold are of a purity of not less than nine carats and above. In this respect Mr. Bhonsale relies on the provisions of section 428 Code of Criminal Procedure. Under that section, the Appellate Court is empowered to take additional evidence either itself of direct it to be taken by the trial Court But it must be remembered that this power can be exercised only where there are special reasons and the Court thinks that additional evidence is necessary. In the present case, it was the duty of the prosecution to lead satisfactory evidence in the trial Court. But although as stated by Mr. Bhonsale, Mini Master's report was in their possession, it was not produced by the prosecution in the trial Court and the prosecution now wants an opportunity to lead that evidence when the lacuna in the evidence was pointed out. In my opinion powers under Section 428 Code of Criminal Procedure cannot be used so as to allow the prosecution to fill in lacuna in their evidence. It is not that in the trial Court the prosecution had no opportunity or that they tried to adduce this evidence but was not admitted by the trial Court. It is through negligence that the evidence which is now sought to be adduced has not been adduced. I think it is putting a premium on negligence to allow the prosecution to lead such evidence in the exercise of the powers under section 423 Code of Criminal Procedure. The prosecution should always be diligent and careful in leading evidence in the trial Court. Powers under section 428 must be exercised sparingly and not for the mere asking. In my opinion, therefore, this is not a fit case to allow the prosecution to adduce fresh evidence, especially because the accused has been facing the prosecution for the last three years since 1966 and now to prolong this prosecution still further by allowing the prosecution to adduce additional evidence, would cause harassment to the accused. In my view, therefore, prayer for permission to allow additional evidence cannot be granted. It is, therefore, obvious that the charge levelled under section 126H(2)(d) r.w. rule 126P(2)(iv) and under Rule 126 I(10) punishable under rule 126P(2)(ii) of the Defence of India. Rules, 1963, have also not been satisfactorily proved.
29. The appeal, therefore, must be allowed.
30. The appeal is allowed, the order of conviction passed against the appellant is set aside and the appellant is acquitted of the charges made against him. Since the accused does not claim 7 slabs of gold seized in this case, it is needless to make any order as to the disposal of this property. As for the cash of Rs. 1,340, it should be returned to the accused, if not already returned. Bail-bond is cancelled. Fine, if already recovered, be refunded to the accused.