1974 (1) TMI 107 - SC - Indian Laws

Summary

Issues Involved:
1. Applicability of the Probation of Offenders Act, 1958 to offences under the Customs Act, 1962 and the Defence of India Rules, 1962.
2. Whether smuggled gold falls under the purview of the "Gold Control" Rules in Part XII-A of the Defence of India Rules, 1962.

Detailed Analysis:

Issue 1: Applicability of the Probation of Offenders Act, 1958
The primary question in this appeal is whether the Probation of Offenders Act, 1958 can apply to offences under the Customs Act, 1962 and the Defence of India Rules, 1962, particularly Part XII-A ("Gold Control"). The respondents were charged under Section 135 of the Customs Act for possession of goods liable to confiscation under Section 111 and under Rules 126P(1)(i) and 126P(2)(ii) of the Defence of India Rules for failing to declare gold. The respondents pleaded guilty and were released on probation by the learned Magistrate under Section 4(1) of the Probation of Offenders Act. The High Court upheld this decision, stating that Rule 126P(2)(ii) prescribing a minimum sentence does not override the Probation of Offenders Act.

The Court noted that the Probation of Offenders Act is a reformative measure aimed at rehabilitating amateur offenders. It emphasized that while economic offences under the Customs Act and "Gold Control" Rules could have far-reaching consequences, not all contraventions are of such magnitude. The broad principle that punishment must be proportionate to the offence was highlighted, and the Court found that the words of Section 4(1) of the Probation of Offenders Act are wide enough to include offences under both the Customs Act and the Gold Control Rules.

The Court further elaborated that the Probation of Offenders Act aims to reclaim offenders who can be rehabilitated in society, thereby preventing the social stigma and potential recidivism associated with incarceration. The Court cited previous judgments, including *Ratan Lal v. State of Punjab* and *Isher Das v. State of Punjab*, to support the application of the Probation of Offenders Act to various offences, including those involving economic crimes.

Ultimately, the Court confirmed the judgment of the High Court, upholding the release of the respondents on probation.

Issue 2: Inclusion of Smuggled Gold under "Gold Control" Rules
In Criminal Appeal No. 115 of 1970, the respondent was found with three bars of foreign gold and was convicted under Section 135 of the Customs Act and Rules 126P(1)(i) and 126P(2)(ii) of the Defence of India Rules. The High Court set aside the conviction under the "Gold Control" Rules, reasoning that smuggled gold need not be declared as it was not "legal" gold.

The Supreme Court disagreed with the High Court's interpretation, stating that the definition of "gold" in Rule 126A(d) includes all forms of gold, whether lawfully possessed or smuggled. The Court emphasized that the intention of the legislature must be gathered from the words used, and the definition does not carve out an exception for smuggled gold. The Court found it illogical to impose the obligation to declare gold only on lawful possessors while leaving smuggled gold unregulated.

The Court examined the scheme and language of Part XII-A and concluded that the rules apply to all gold, irrespective of its lawful or unlawful possession. The Court restored the conviction and sentence under Rule 126P of the Defence of India Rules, thereby affirming that smuggled gold falls within the ambit of the "Gold Control" Rules.

Conclusion:
The Supreme Court upheld the application of the Probation of Offenders Act to offences under the Customs Act and the "Gold Control" Rules, emphasizing the reformative intent of the Act. Additionally, the Court clarified that smuggled gold is included within the scope of the "Gold Control" Rules, thus requiring declarations and compliance with the relevant regulations. The appeals were allowed, and the judgments of the lower courts were affirmed or restored as appropriate.