Full Judgment Text
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PETITIONER:
AGRAWAL TRADING CORPORATION & ORS.
Vs.
RESPONDENT:
COLLECTOR OF CUSTOMS AND ORS.
DATE OF JUDGMENT17/01/1972
BENCH:
REDDY, P. JAGANMOHAN
BENCH:
REDDY, P. JAGANMOHAN
HEGDE, K.S.
PALEKAR, D.G.
CITATION:
1972 AIR 648 1972 SCR (3) 85
1972 SCC (1) 553
ACT:
Foreign Exchange Regulations Act, 1947-Section 8 and 23A-Its
scope-Sea Customs Act S. 19, 167(3), (8) (37)-Does the word
’goods’ in the said Sections include Currency Notes.
HEADNOTE:
The appellant, a partnership firm having 2 partners,
carried, on business of importers and exporters, etc. The
Cashier of the firm handed over a wooden case, to the Swiss
Airways at Dum Dum for being sent to Hong Kong by air.
According to the consignment note, the consignment was being
sent by one R. of Karnani mansions, Calcutta, who was a
fictitious person. The shipping bill showed that the
consignment purported to contain food and dried vegetables
and was sent to 1, of Hong Kong, also a fictitious person.
After the consignment was accepted and when customs examined
it for clearance, it was found that it contained Rs. 51,000
in Indian currency. On investigation, a search warrant was
issued by the Presidency Magistrate and the office of the
firm and the residence of partners were searched. In the
course of search, accounts books and other documents were
seized. Investigation revealed that the Cashier, had signed
the consignment note as Rs, which, as the subsequent
writings showed, were in his hand. Even the consignment
note appears to have been typed on the type-writer of the
appellant firm. Thereafter, Customs authorities served a
notice, on the appellant pointing out that exportation of
Indian currency out of India was in contravention of S. 8
(2) of the Foreign Exchange Regulations Act, 1947 read with
Reserve Bank Notification dated 27-2-1951 as specified
therein and it was asked to show cause and to produce within
4 days the permit, if any, of the Reserve Bank of India,
failing which, it would be liable for prosecution under
Section 23(1) read with S. 8(2) of the Foreign Exchange
Regulations Act. The appellant denied that the firm bad
anything to do with the case.
Apart from criminal prosecutions against the partners, a
fine of Rs. 1,000 under section 167(3) of the Sea Customs
Act with a further personal liability of Rs. 1,000 u/s.
167(37) of the Act was imposed against the firm. It was
further fined Rs. 51,000 u/s. 167(8) of the Act read with s.
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23(1) of the Foreign Exchange Regulations Act. Apart from
these, the currency notes of Rs. 51,000 which were seized,
were also confiscated.
This order was challenged before the single judge of the
Calcutta High Court who issued a rule-but later discharged
it. An appeal against that order was also dismissed. In
appeal to this Court, three points, raised before the
Appellate Court were also reiterated : (1) Currency Notes
are not ’goods’ and therefore, the provisions of s. 167(3),
(8) and (37) of the Sea Customs Act are not attracted. (2) A
firm is not a legal entity and therefore, it cannot be a
’person’ within the meaning of any of the above provisions
of law. (3) Even if a ’firm’ be a ’person, no penalty can be
imposed on the firm or any of its members unless the members
have consciously taken any step to violate the provisions of
law;
8 6
even so, only the partner-member against whom there is
evidence of guilt can be held liable.
Dismissing the appeal,
HELD :P (i) S. 23A of the Foreign Exchange Regulations Act,
incorporates, by reference, the provisions of the Sea
Customs Act by deeming the restrictions under section 8 of
the Foreign Exchange Regulations Act, to be prohibiting and
restricting under s. 19 of the Sea Customs Act. The
legislature can always incorporate by reference, the
provisions of some other Act, if they are relevant for the
purposes of the scheme and object of that Act. Restrictions
specified in s. 8 of the Foreign Exchange Regulations Act
are deemed to be prohibitions and restrictions mentioned
under s. 19 of the Sea Customs Act. The prohibitions
mentioned under s. 8 are not necessarily confined to goods
alone but must be deemed, for the purposes of Foreign
Exchange Regulations Act, to include therein restrictions in
respect of the articles specified in s. 8 thereof, including
currency notes as well. [94 B]
(ii) Although there is no definition of the word ’person’ in
either of. the Acts, the definition in s. 2(42) of the
General Clauses Act, 1897 or Section 2(3) of the Act of 1863
would be applicable to the present Acts. in both of which,
person has been defined as including any Company or
association, or body of individuals whether incorporated or
not. Further, the explanation to s. 23C clearly envisages
that a company for the purposes of that Section is defined
to mean any body corporate and includes a firm or other
association of individuals and a Director in relation to a
firm also means a partner of the firm. Therefore, for "he
purposes of Foreign Exchange Regulations Act and Sea Customs
Act. a registered partnership firm L is a ’legal entity’.
[94G]
(iii) From the evidence, it was clear that the appellant
attempted to hoodwink the customs officials (currency notes
secreted in a cavity), that the consigner and consignee were
not shown as real persons, the charges and expenses
incurred. in connection with the despatch were found in the
entry in the books of account of the firm that the amount,
sought to be sent was half a lakh of rupees which could
hardly be within the mean’, of the Cashier and the High
Court was right in holding that it was the firm which was
interested in sending the currency notes out of India .,II a
clandestine manner.[198 A]
Radha Krishna Bliatia v. Union of India & Ors., [1965] 2
S.C.R. 213 Thomas Dana v. The State of Punjab, [1959] Supp.
1 S.C.R. 274 and Additional Collector of Custo is v. Sita
Ram Agarwal, C.A. No. 492 of 1962 decided on 14-9-1962
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referred to and distinguished.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 357 of 1967.
Appeal from the judgment and order dated December 9, 1963 of
the Calcutta High Court in Appeal from Original Order No.
110 of 1960.
B. Sen, Sadhu Singh, Jagmohan Khanna, R. N. Kapoor and S. K.
Dholakia, for the appellants.
G. L. Sanghi, B. Dutta and S. P. Nayar, for the respondents.
87
The Judgment of the Court was delivered by
P. Jaganmoban Reddy, J. This is an appeal by certificate
under Article 1 3 3 ( 1 ) (b) of the Constitution against
the judgment of the Calcutta High Court which dismissed an
appeal from an order of the single Judge of that Court
discharging a rule granted by it to the appellants calling
on the respondents-the Collector of Customs and others-to
show cause why certain orders under various sections of the
Sea Customs Act and the Foreign Exchange Regulation Act
should not be quashed and why a written complaint made by
the respondents under the Foreign Exchange Regulation Act
and the case pending in the Court of the Presidency Magis-
trate, Calcutta, should not be stayed.
The appellant is a registered partnership firm carrying on
business of importers, exporters, commission agents, brokers
and general merchants. It consists of two partners,
Girdhari Lal Gupta and Pooran Mal Jain. On the 25th October
1958. the Cashier of the appellant Bhagwandeo Tiwari handed
over a consignment of wooden case to the Swiss Airways at
Dum Dum Airport for being sent by air freight to Hongkong.
According to ,the consignment note, the consignment was
being sent by one Ramghawan Singh of Karnani Mansions, Park
Street, Calcutta, who in fact was a fictitious person. The
Shipping Bill showed that the consignment purported to
contain Rassoglla, Achar, Papar and dried vegetables and it
was being sent to one Ishwar Lal, 41, Wyndham St., Hongkong
who is also alleged to be, a fictitious person. After the
consignment was accepted and when The Customs examined it
for clearance on 25th October 1958 before its onward
despatch to Hongkong, there was found concealed in a
specially made secret cavity on the battens nailed to the
inner sides of the case, Indian currency notes of Rs.
51,000/-. An investigation was set on foot and on 22nd
January 1959 a search warrant was issued by the Presidency
Magistrate, pursuant to which the Customs Officers caused a
search to be made of the office of the firm and the
residences of the appellant’s partners. In the course of
search account books and other documents were seized. This
investigation revealed that the Cashier, Bhagwandeo Tiwari
had signed the consignment note as Ramchandra which, as the
subsequent writings showed, were in his hand. Even the
consignment note appears to have been typed on the
typewriter of the appellant firm. It was further alleged
that from a comparison of the consignment note with a letter
admittedly sent out by the appellant firm and signed by one
of its partners, Girdhari Lal Gupta, it became evident that
the slip seized from the office of the appellant firm had
contained entries, to show that Bhagwandeo Tiwari was the
person who actually transported and booked the offending
consignment in question and that he made an entry
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of Rs. 123.73 being the Air freight paid for its transport
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to Hongkong which was the exact amount shown on the
consignmer the account slip was in his handwriting, and that
the expense note. Bhagwandeo Tiwari, it was said, had in
fact admitted the and charges shown therein were also found
in the books of account of the appellant firm. In view of
this evidence, the customer authorities served a notice on
the appellant firm on April 2, 1959 by which after setting
out in detail the aforesaid facts and after pointing out
that the exportation of Indian currency out of India was in
contravention of section 8 (2) of the Foreign Exchange
Regulations Act 1947 read with the Reserve Bank of India
Notification dated 27-2-1951 as specified therein, it was
asked to show cause and to produce within four days of the
receipts of the notice, the permit, if any, of the Reserve
Bank of India, for export of the Indian currency and if it
did not do so, it would be liable for prosecution under
section 23(1) read with section 8(2) of the Foreign Exchange
Regulations Act. On 13-4-1959, the appellant firm replied
to the notice denying that the firm had anything to do with
the despatch of the box containing currency notes; that it
was not aware of any person by the name of Ramghawan Singh
or Ishwar Lal, or that Bhagwandeo Tiwari had ever despatched
the consignment in question or visited any Air office in
connection therewith. It may be mentioned en passant that
in the High Court, in the reply affidavit affirmed on 11-1-
1960 to the affidavit in opposition, Girdhari Lal Gupta, one
of the partners of the firm went even to extent of denying
that Bhagwandeo Tiwari was the Cashier of the firm, notwith-
standing the fact that in the earlier reply to the show
cause notice as also in the Writ Petition, it was tacitly
assumed that he was the Cashier.
Apart from the criminal prosecutions that were launched
against the partners, in the penalty proceedings which were
initiated by the aforesaid show cause notice, the firm was
held to be knowingly concerned in the offence and
accordingly, a fine of Rs. 1,000/- was imposed on it under
section 167(3) of the Sea Customs Act with a further
personal liability of Rs. 1,000/under section 167(37) of the
said Act. It was further fined Rs. 51,0001- under section
167(8) of the Act read with section 23 (1) of the Foreign
Exchange Regulations Act. Apart from these fines, the
currency notes of Rs. 51,000/- which were seized were
confiscated.
This order was challenged before the single Judge of the
Calcutta High Court who, as already stated, had issued a
rule but later discharged it. Against that order an appeal
was filed
89
Reddy, J.)
but that also was dismissed. Of the four points that were
urged in that appeal, the first three have been reiterated
before us on behalf of the appellant, viz. :-
(1) Currency notes are not ’goods’ and there
fore the provisions of section 167(3),
(8) and (37) of the Sea Customs Act are not
attracted;
(2) A ’firm’ is not a legal entity and
therefore it cannot be a ’person within the
meaning of any of the above provisions of law;
(3) Even if a firm be a person within the
meaning of the said provisions no penalty can
be imposed on the firm or any of its members
unless it appears from the evidence that the
members of the firm had consciously taken any
steps to violate the provisions of law; even
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so only the particular member against whom
there is evidence of guilt can be held liable.
Before dealing with the above contentions it will be
necessary to consider the relevant provisions of the Foreign
Exchange Regulations Act as also those under the Sea Customs
Act, Sections 8(1), 23(a), (b), (1A), 23A, 23B and 23C of
the Foreign Exchange Regulations Act and section 19, 167(3).
(8) and (37) of the Sea Customs Act are relevant for the
purpose of this appeal. These are given below :--
8 (1). The Central Government may, by
notification in the Official Gazette, order
that, subject o such exemptions, 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 or silver or any
currency notes or bank notes or coin whether
Indian or foreign.
Explanation-The bringing or sending into any port or place,
in India of any such article is aforesaid intended to be
taken out of India without being removed from the ship or
conveyance in which it is being carried shall nonetheless be
deemed to be a bringing
L864SupCI/72
90
or as the case may be sending, into India of
that article for the purposes of this section.
(2)
23(1) If any person contravenes the provisions
of section 4, section 5, section 9 or sub-
section (2) of section 12 or of any rule,
direction or order made thereunder, he shall-
(a) be liable to such penalty not exceeding
three time,-, the value of the foreign ex-
change in respect of which the contravention
has taken place, or five thousand rupees,
whichever is more, as may be adjudged by the
Director of Enforcement in the manner
hereinafter provided, or
(b) upon conviction by a Court, be punish-
able with imprisonment for a term which may
extend to two years, or with fine, or with
both.
23(1A) Whoever contravenes-
(a) any of the provisions of this Act or of
any rule, direction or order made thereunder,
other than those referred to in subsection (1)
of this section and section 19 shall, upon
conviction by a court, be punishable with
imprisonment for a term which may extend to
two years, or with fine or with both;
(b) any direction or order made under sec-
tion 19 shall, upon conviction by a court, be
punishable with fine which may extend to two
thousand rupees.
23A. Without prejudice to the provisions of
section 23 or to any other provision contained
in this Act, the restrictions imposed by sub-
sections (1) and (2) of section 8, sub-section
(1) of section 12 and clause (a) of subsection
(1) of section 13 shall be deemed to have been
imposed under section 19 of the Sea Customs
Act, 1878 (8 of 1878), and all the provisions
of that Act shall have effect accordingly
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except that section 183 thereof
shall have effect as if for the word ’shall’,
therein the word ’may’ were substituted.
23B. Whoever attempts to contravene any of
the provisions of this Act or of any rule,
direction or order made thereunder shall be
deemed to have contravened that provision,
rule, direction or order, as the case may be.
23C(1) If the person committing a
contravention is a company, every person who,
at the time the contravention was committed,
was incharge of, and was responsible, to the
company for the conduct of the business of the
Company as well as the company, shall be
deemed to be guilty of the contravention and
Shall be liable to be proceeded against and
punished accordingly
Provided that nothing contained in this sub-
section shall render any such person liable to
punishment, it’ he proves that the contraven-
tion took place without his knowledge or that
he exercised ill due diligence to prevent such
contravention.
(2) Notwithstanding anything contained in
subsection (1), where a contravention tinder
this Act has been committed by a company
and it is proved that the contravention has
taken place with the consent or connivance of,
or is attributable to any neglect on the part
of, any director, manager, secretary or other
officer of the company, such director,
manager, secretary or other officer shall also
be deemed to be guilty of that offence and
shall be liable to be proceeded against and
punished accordingly".
Sea Customs Act:
"19. The Central Government may from time to
time, by notification in the official Gazette,
prohibit or restrict the bringing or taking by
sea or by land goods of any specified descrip-
tion into or out of India across any customs
frontier as defined by the Central Government.
167. The offences mentioned in the first
column of the following schedule shall be
punishable to the extent mentioned in the
third column of the
9 2
same with reference to such offences
respectively
Offences Section of Penalties.
this Act to
which offence
has reference.
1 2 3
3. If any person ship or General such person shall be
aid on the shipment or lan- liable to a penalty
ding of goods, or knowing not exceeding one
keep or conceal, or knowingly thousand rupees.
permit or procure to be kept
or concealed to be shipped
or landed or intended to be
shipped or landed, contrary
to provision of this Act; or
if any person be found to have 11
been on board of any vessel
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liable to confiscation on account of the commission of
an offence under (No. 4) of this section, while such vessel
is within any bay, river, creek or arm of the sea which is
not a port for the shipment and landing of goods.
8. If any goods, the importation 18 & 19 such good shall
or exportation of which is for be liable to
the time being prohibited or rest- to confiscation;
restricted by or under Chapter IV of this and
Act, be imported into or exported
from India contrary to such prohibition any person conc-
or restriction or erned in any such
offence shall be
liable to a pena-
lty not exceedig
three times the
value of the
goods, or not
exceeding one
thousand rupees.
if any attempt be made so
to import or export any such goods; or
if any such goods be found
in any package produced to any officer of Customs as
containing
no such goods; or
if any such goods, or any
dutiable goods, be found either before or after landing or
shipment to have been concealed in any manner on board of
any
vessel within the limits of any port in India; or
if any goods, the exportation
of which is prohibited or restricted as aforesaid, be
brought to any wharf in order to be put on board of any
vessel
for exportation contrary to such prohibition or restriction.
93
37. If it be found, when any 86 & 137 such package, tog-
goods are entered at, or brought ether with the
to be passed through, a whole of the good
custom house, either for contained therein
importation or exportation, that- shall be liable
to confiscation,
and every person
concerned in any
such offence shall
liable to a pen-
lty not exceeding
one thousand
rupees.
(a)the packages in which they
are contained differ widely from the description given
in the bill-of entry or application for passing them; or
(b) the contents thereof have
been wrongly described in such
bill or application as
regards the denominations,
characters, or conditions according
to which such goods are
chargeable with duty or are being
imported or exported; or
(c) the contents of such
packages have been misstated
in regard to sort, quality, quantity or value; or
(d)goods not stated in the
bill-of-entry or application
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have been concealed in, or
mixed with, the articles specified
therein, or have
apparently been packed so as
to deceive the officers of
Customs.
and such circumstance is not accounted
for to the satisfaction of the Customs
Collector."
A perusal of these provisions would show that no gold or
silver or any currency notes or Bank notes or coin, whether
Indian or foreign, can be sent to or brought into India, nor
can any gold, precious stones or Indian currency or foreign-
exchange other than foreign exchange obtained from an
authorised dealer can be sent out of India without the
general or special permission of the Reserve Bank of India.
These restrictions by virtue of section 23A of the Foreign
Exchange Regulation Act are deemed to have been imposed
under section 19 of the Sea Customs Act and all the
provisions of the latter Act shall have effect accordingly
except section 183 thereof shall have the effect as if for
the word ’shall’ therein the word ’may’ were substituted.
What section 23A does is to incorporate by reference the
provisions of the Sea Customs Act by deeming the
restrictions under section 8 of the Foreign Exchange
Regulation Act to be prohibitions and restrictions under
section 19 of the Sea Customs Act. The contention is ’that
since section 19 restricts the bringing or taking by sea or
by land goods of ,my specified description into or out of
India, these restrictions are not applicable to the bringing
in or taking out the currency notes which are not goods
94
within the meaning of that section, and, therefore, the
appellant is not guilty of any contravention of section 19
of the Sea Customs Act and cannot be subjected to the penal
provisions of the said Act. This argument, in our view, is
misconceived, because firstly, it is a well accepted
Legislative practice to incorporate by reference, if the
Legislature so chooses, the provisions of some other Act in
so far as they are relevant for the purposes of and in-
furtherance of the scheme and objects of that Act and
secondly, that merely because the restrictions specified in
section 8 of the Foreign Exchange Regulation Act are deemed
to be prohibitions and restrictions under section 19 of the
Sea Customs Act, those prohibitions and restrictions are not
necessarily confined to goods alone but must be deemed for
the purposes of the Foreign Exchange, Regulation Act to
include therein restrictions in respect of the articles
specified in section 8 thereof, including currency notes as
well. The High Court thought that there is no definition of
goods in the General Clauses Act and that contained in the
Sale of Goods Act which excludes money is inapplicable
inasmuch as that Act was a much later statute than the Sea
Customs Act. It is, however, unnecessary to consider this
aspect because even if the currency notes are not goods, the
restrictions prescribed in section 8 of the Foreign Exchange
Act cannot be nullified by section 23A thereof which
incorporates section 19 of the Sea Customs Act. We cannot
attribute to the Legislature the intention to obliterate one
provision by another provision of the same Act. On the
other hand, we construe it as furthering die object of the
Act which is to restrict the import into or export out of
India of currency notes and to punish contravention of such
restrictions.
The second contention that because the firm is not a legal
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entity, it cannot be a person within the meaning of Section
8 of the Foreign Exchange Regulation Act or of section 167
(3), (8) and (37) of the Sea Customs Act, is equally
untenable. There is of course, no definition of ’person’ in
either of these Acts but the definition in section 2 (42) of
the General Clauses Act 1897. or section 2(3) of the Act of
1868 would be applicable to the said Acts in both of which
’person’ has been defined as including any company or
association or body of individual,, whether incorporated or
not. It is of course contended that this definition does
not apply to a firm which is not a natural person and has no
legal existence, as such clauses (3), (8) and (37) of
section 167 of the Sea Customs Act are inapplicable to the
appellant firm. In our view, the explanation to section 23C
clearly negatives this contention, in that a company for the
purposes of that section is defined to mean any body
corporate and includes a firm or other association of
individuals and a Director in relation to a firm
9 5
means a partner in the firm. The High Court was clearly
right in holding that once it is found that there has been a
contravention of any of thee provisions of the Foreign
Exchange Regulation Act read with Sea Customs Act by a firm,
the partners of it who are in-charge of its business or are
responsible for the conduct of the same, cannot escape
liability, unless it is proved by them that .he
contravention took place without their knowledge or the
exercised all due diligence to prevent such contravention.
There is, also no warrant for the third submission that
unless it appears from the evidence that members of the firm
had consciously taken any steps to violate the provisions of
law and even then only the particular members against whom
there is evidence of guilt, can alone be held liable. This
contention was said to be based on a decision of this Court
in Radha Krishan Bhatia v. Union of India and others,(1)
that as the ’person concerned’ specified in section 167(8)
of the Sea Customs Act is the person actually involved or
engaged or mixed up in contravening the restrictions imposed
under the Foreign Exchange Act or the Sea Customs Act, he
must be the person who must be, shown to be actually
concerned. That was also a case under section 167(8) of the
Sea Customs Act where, in fact, a number of gold bars held
to be smuggled were recovered from the person of the
,appellant. The single Bench of the Punjab High Court ha(
allowed the Writ Petition of the appellant on ’,he ground
that the Collector had not recorded a finding that the
appellant was connected with the act of smuggling gold into
the country. This finding was set aside on a Letters Patent
Appeal and the writ petition was dismissed. This Court
held that the concern of the appellant in the commission of
the offence must be at a stage prior to the completion of
the offence of illegal importation of gold into the country.
The mere finding of fact recorded by the Collector of
Customs about the smuggled -old being recovered from the
person of .he appellant was not sufficient to conclude that
the appellant was concerned in the illegal importation of
gold into the country and, therefore, liable for penalty
under section 167(8) of the Act. What the order of the
Collector of Customs must show is that be had considered the
question of the person being concerned in the commission of
the offence of illegal importation of the goods. It should
further indicate that the matters he had considered had a
bearing on the question and the reasons for his arriving at
that conclusion. This has really no bearing on the question
before us because under section 23B, even an attempt to
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contravene any of the provisions of the Act or of any rule,
direction or order made thereunder shall be deemed to have
contravened that provision, rule, direction or order as the
(1) [1965] 2 S.C.R. 213.
96
case may be. in respect of this very incident where the
petitioners were prosecuted it was held by this Court in
Girdhari Lal Gupta and another v. D. N. Mehta, Assistant
Collector of Customs and another,(1) that Girdhari Lal
Gupta, one of the two partners and Bhagwandeo Tiwari,
Cashier, have been rightly convicted under the provisions of
the Foreign Exchange Regulation Act for contravention of the
restrictions imposed under section 8(2) read with section
23(1A) of the Foreign Exchange Regulation Act. In that case
it was contended that there is no evidence to show that the
contravention took place with the knowledge of Girdhari Lai
Gupta or that he did not exercise due diligence to prevent
such contravention. That contention was negatived because
he had ’not only stated under section 342, that he alone
looks-after the affairs of the firm but it had been found
that there were entries in his account books. It is true,
that the relevant provisions of the Sea Customs Act are
penal in character and the burden of proof is on the Customs
authorities to bring home the guilt to the person alleged to
have committed a particular offence under the said Act by
adducing satisfactory evidence. But that is not to say that
the absence of direct evidence to connect a person with the
offence will not attract the penal provisions to establish
the guilt in a criminal proceeding of the type which the
customs authorities have to take. The evidence of the kind
which has been adduced in this case would be sufficient to
lead to the conclusion that the partner of the firm was
interested in or involved in attempting to export Indian
currency notes out of India. As observed by this Court in
Thomas Dana v. The State of Punjab(2), while dealing with
section 167 of the Sea Customs Act, that "All criminal
offences ’are offences but all offences in the sense of
infringement of law are not criminal offences. Likewise,
the other expressions have bean used in their generic sense
and not as they are understood in the Indian Penal Code or
other laws relating to criminal offences .... Out of more
than 82 entries in the schedule to section 167, it is only
about a dozen entries which contemplate prosecution in the
criminal sense, the remaining entries contemplate penalties
other than punishments for a criminal offence".
In the Additional Collector of Customs v. Sita Ran?
Agarwal(3), to which the High Court has referred, while dis-
missing the appeal from the judgment of the Calcutta High
Court, this Court had stated that "the High Court was right
when it observed that if any one is interested or
consciously takes any step whatever to promote the, object
of illegally bringing bullion into the country, then even if
no physical connection is established between him and the
thing brought, he will be guilty." In that case, the
respondent, Sita Ram Agarwal who was seen moving
(1) [1970] 2 S.C.C. 530.
(3) Civil Appeal No. 492/162 decided on 14-9-62.
(2) [1959] Suppl. (1) S.C.R. 274,
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in the company of one Bhola Nath Gupta on the western
Pavement of Jatindra Mohan Avenue, Calcutta, had proceeded
in the direction of a taxi which had come to the place where
they were, and on a signal being flashed, a Chinese national
alighted therefrom, shook hands, with the respondent after
which all the three boarded the taxi. A police constable
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who was on the spot raised an alarm and secured the
respondent and his companion with the help of the members of
the public. All of them were taken to the police station
for the purpose of interrogation but the Chinese national
tried to get away and started to run. He was chased and
eventually secured. Before his apprehension. however, he
was seen to drop three packets which were found to contain
23 bars of illicit gold. The respondent was charged as a
person concerned in the offence of attempting to import
contraband gold under section 167(8) of the Sea Customs Act.
The High Court while holding that there was no evidence to
establish that he was in conscious relation with the gold,
observed, "in order that a person may be said to be so
concerned, some facts have to be proved which will establish
that he was in conscious relation with the gold in one or
other of the several successive steps preceding its actual
receipt into the country". In order that he was concerned
in the offence, the High Court further pointed out that
there need be no physical connection between the gold and
the person charged and "if the offence did not relate to his
being concerned in the importation of the gold. but related
to his having something to do with smuggled gold, the
position might have been different". The facts of the
instant case clearly disclosed, as was observed by the High
Court, " a well laid plain". We have earlier stated that
the currency notes were secreted in a cavity and were sought
to be despatched out of the country in a package which
ostensibly looked inocuous. containing eatables. The manner
in which the attempt was made was to hood-wink the Customs
officials and escape their detection. Further, the
consignor and the consignee were not shown as real persons
but were fictitious so that even if the attempt to smuggle
out of the country the currency notes was detected, the real
persons could not be traced. The charges and expenses
incurred in connection with the despatch found in the
entries in the books of account of the firm were the same a
those relating to the offending package which was being
despatched to Hongkong. The freight mentioned in the
account slip the exact amount which appears on the
consignment note in respect of that offending package. The
amount sought to be sent is half a lakh of rupees which can
hardly be within the means of the Cashier. leading to the
inescapable inference that the firm through its partners was
concerned in the attempt to transgress the restrictions
under section 8 of the Foreign Exchange Regulation Act and
liable to penal action by virtue of section 23A
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under the provisions of the Sea Customs Act. On these facts
as established, the High Court came to the conclusion and in
our view rightly, that it was not unreasonable to infer that
it was the firm which was interested in sending the currency
notes out of India in a clandestine manner.
In this view, the appeal has no merits and it is dismissed
with costs.
S.N. Appeal dismissed.
99