TMI Blog1961 (9) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... K. Sarkar, M. Hidayatullah, N. Rajagopala Ayyangar and J.R. Mudholkar, JJ. REPRESENTED BY : S/Shri C.K. Daphtary, Solicitor-General of India, H.J. Umrigar, T.M. Sen and R.S. Narula, K.N. Keswani and R.L. Kohli and N.C. Chatterji, S.K. Kapur and Ganpat Rai and A.S. Bodbe, Shankar Anand and S. Venkatakrishnan, for the Petitioners. S/Shri N.A. Palkhiwala, S.R. Vakil, R.J. Joshi, S.J. Sohrabji, J.B. Dadachanji, S.N. Andley, Rameshwar Nath and P.L. Vohra, for the Respondents. [Judgment per : Ayyangar, J.]. The Sea Customs Act, 1878 (Act 8 of 1878) (referred to hereinafter as the Act), was amended by Section 14 of Act 21 of 1955 by the introduction of Section 178A reading : 178A. (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. (2) This section shall apply to gold, gold manufacturers, diamonds and other precious stones, cigarattes and cosmetics and any other goods which the Central Government may, by notification in the Official Gazette, specify in this behalf. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directed the confiscation of the gold. The respondent thereupon filed a petition (Writ Petition 384 of 1957) under Article 226 of the Constitution before the High Court of Madras for the issue of a writ of certiorari or other appropriate writ for quashing the order of the Collector of Customs on various grounds to which we shall advert later, including the constitutional validity of Section 178A. 5. While this writ petition was pending, the respondent filed another petition (Writ Petition 660 of 1958) for a writ of mandamus directing the Collector to return the gold seized and confiscated by him. 6. The two writ petitions were heard together and by an order dated September 11, 1958, the learned Judges of the High Court held, allowing Writ Petition 384 of 1957, that Section 178A of the Sea Customs Act was void under Article 13 of the Constitution. They further held that even if Section 178A were valid, the condition precedent for invoking the rule as to the burden of proof prescribed by the section had not been complied with, in that the customs officer who effected the seizure which preceded the adjudication did not entertain a reasonable belief that the gold was smuggled , w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son 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 as aforesaid intended to be taken out of India without being removed from the ship of conveyance in which it is being carried shall nonetheless be deemed to be a bringing, or as the case may be sending, into India of that article for the purposes of this section." Gold is defined in Section 2(f) of this Act thus : `gold includes gold in the form of coin, whether legal tender or not, or in the form of bullion or ingot, whether refined or not and jewellery or articles made wholly or mainly of gold. These provisions have to be read in conjunction with the provisions of the Sea Customs Act which form, as it were, integrated provisions in relation to the import and export of, among other commodities, gold, and Section 23A of the Foreign Exchange Regulation Act which was introduced by an amendment of 1952 effects this co-ordination. This section reads : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 178. Any thing liable to confiscation under this Act may be seized in any place, in India either upon land or water, or within the Indian Customs waters, by any officer of Customs or other person duly employed for the prevention of smuggling. Section 181. When anything is seized, or any person is arrested, under this Act, the officer or other person making such seizure or arrest shall, on demand of the person in charge of the thing so seized, or of the person so arrested, give him a statement in writing of the reason for such seizure or arrest. Section 182. In every case, except the cases mentioned in Section 167, Nos. 26, 72 and 74 to 76, both inclusive, in which, under this Act, anything is liable to confiscation or to increased rates of duty; or any person is liable to penalty, such confiscation, increased rate of duty or penalty may be adjudged - (a) without limit, by a Deputy Commissioner or Deputy Collector of Customs, or a Customs Collector; (b) up to confiscation of goods not exceeding two hundred and fifty rupees in value, and imposition of penalty or increased duty, not exceeding one hundred rupees, by an Assistant Commissioner or Assistant Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 19 of the Sea Customs Act, with the result that any person concerned in the act of importation would have been liable to the penalties specified in the third column of Section 167(8) and the imported gold would have been liable to confiscation under the opening words of that column. The gold being a thing liable to confiscation could have been seized by any officer of the Customs under Section 178 of the Sea Customs Act with an obligation on the officer effecting the seizure to give to the person from whom the gold was seized a statement in writing of the reason for such seizure (Section 181). Thereafter the officers specified in Section 182 would have adjudged the confiscation of these goods subject to the option mentioned in Section 183 with the modification to this provision enacted by Section 23A of the Foreign Exchange Regulation Act. It would further be manifest that at that date before the gold seized was liable to be dealt with under the third column of Section 167(8) by an officer adjudicating on the matter under Section 182, the burden of proving that the gold was smuggled lay upon the department and unless the adjudging officer who was acting quasi-judicially w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve diamond pieces which had been seized from the petitioner, were directed to be confiscated holding them to be smuggled, by the application of the burden of proof laid down in Section 178A. The validity of the confiscation was challenged before this Court on the ground that Section 178A was unconstitutional as being violative of Article 14 of the Constitution and the contention was rejected. It has been urged by the learned Solicitor-General, for the appellant, that the points regarding the constitutional validity of Section 178A raised in the present appeal are concluded in his favour by this judgment. We shall, therefore, have to examine the exact scope of this decision in detail which we shall do later, but for the present it is sufficient to state that the case dealt mainly with an objection based on a violation of Article 14 of the Constitution which the following extract from the headnote would indicate : Section 178A of the Sea Customs Act which places the burden of proving that any of the goods mentioned in the section and reasonably believed to be smuggled are not really so on the person from whose possession they are seized, is not discriminative in character and does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Amichand [1960] 62 Bom. L.R. 1043]. 14. We shall now proceed to deal with the points urged by learned Counsel for the respondent in support of his plea that the impugned provision violates the fundamental right to hold property under Article 19(1)(f) and the right to carry on trade or business under Article 19(1)(g) and was not saved by Clauses (5) and (6) respectively of Article 19. Before we do so, however, it is necessary to advert to the points upon which learned Judges have, in the judgment under appeal, allowed the petition of the respondent, because in deciding these appeals we have necessarily to pronounce upon them also. Besides holding Section 178A of the Sea Customs Act which was called in aid by the Collector of Customs to direct the confiscation of the gold seized to be unconstitutional and therefore void under Article 13, the learned Judges also upheld two further contentions urged on behalf of the respondent in support of their petition : (1) that Section 178A was not attracted to the determination of a question raised in relation to the confiscation of an article imported in contravention of a notification under Section 8(1) of the Foreign Exchange Regulation Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e person from whose possession the goods were seized, however innocent he may be, has to prove that the goods are not smuggled articles. This is no doubt a very heavy and onerous duty cast on an innocent possessor who, for aught one knows, may have bona fide paid adequate consideration for the purchase of the articles without knowing that the same has been smuggled. The only pre-requisite for the application of the section is the subjectivity of the Customs-officer in having a reasonable belief that the goods are smuggled. This passage is followed by an examination of the matters with reference to Article 14 expressing the opinion that the petition did not show in what manner there had been a violation of that Article, and the judgment continues : But Mr. Chatterjee argues that the burden of proof enunciated therein is opposed to fundamental principles of natural justice, as it gives an unrestricted arbitrary and naked power to the Customs authorities without laying down any standard or norm to be followed for exercising powers under the section ............ It is a heavy burden to be laid upon the shoulders of an innocent purchaser who might have come into possession after t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Article 14 of the Constitution. 16. We cannot accept the further submission either that, even if this Court did not in terms consider the validity of Section 178A with reference to Article 19(1)(f) and (g), still the reasoning by which it rejected the contention that it violated Article 14 would be sufficient to cover the former also. No doubt, there are situtations when the points regarding a violation of Article 14 and an objection that a restriction is not reasonable so as to conform to the requirements of Article 19(5) or (6) may converge and appear merely as presenting the same question viewed from different angles. Such, for instance, are cases when the denial of equality before the law is based on the ground that the power vested, say, in an administrative authority to affect rights guaranteed to a citizen is arbitrary, being unguided or uncanalised. The vesting of such a power would also amount to the imposition of an unreasonable restriction on the exercise of the guaranteed right to trade or carry on a business etc. Where however, there is guidance and the legislation is challenged on the ground that the law with the definite guidance for which it provides has o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y other cause of forfeiture, or for the recovering any penalty or penalties under the Customs Acts, any dispute shall arise whether the duties of customs have been paid in respect of such goods, or whether the same have been lawfully imported or lawfully unshipped, or concerning the place from whence such goods were brought, then and in every such case the proof thereof shall be on the defendant in such prosecution. the learned C.J. said : The onus is put on the defendant when there is a dispute in the proceedings whether duty has been paid or whether the goods were lawfully imported. The obvious reasons for this provision is that the facts must be within the knowledge, and often within the exclusive knowledge of the defendant. If, for instance, it is found that he has dealt in prohibited goods, if he can show that he acquired them in the ordinary course of business obviously he would not be guilty of dealing in them with intent to avoid the prohibition. He can prove the positive and, unless he had to undertake the proof, the Crown would generally have to undertake the proof of a negative. 19. Mr. Palkivalla, learned Counsel for the respondent, stated that if the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of being split and there can be a fusion of diverse quantities of gold. It is easily changeable in form, size and shape. The gold available in the market hardly bears any identification mark. It is impossible for any person looking at gold to say whether duty has been paid thereon or not or whether it has been smuggled. It is precisely the difficulty experienced by the customs officers with the whole machinery of Government at their disposal in proving that the gold has been smuggled which is itself made a reason for throwing the burden upon the citizens to establish that the gold is not smuggled ...... Gold as such has no earmark. It is impossible to identify gold in the possession of a person with the gold mentioned in the Bill of Entry of any importer of gold..... Gold has been imported through centuries into this country and it is virtually impossible for a person to establish that any particular quantity of gold in his possession was the gold imported in the country at a particular time without resort to smuggling. The proof required pre-supposes the existence of gold in an identifiable form from the time of its import to the time of its ultimate sale to the person from who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otherwise of the information conveyed to him, (3) There is no reasonable or rational connection between the fact to be proved, viz., that the gold was smuggled and the fact from which such an inference is permitted to be drawn by the impugned provision, viz., the reasonable belief of the officer effecting the seizure that the gold was smuggled. There is therefore no adequate basis on which the provision could be sustained as a rule of evidence, (4) The operation of Section 178A is not restricted in point of time or to persons actually suspected to be connected with the import but extends also to persons who are able to establish bona fide acquisition of gold but who are unable to prove how the person from whom they acquired, obtained the gold they sold, (5) A presumption of this sort might be reasonable in respect of goods which are dangerous or noxious per se, like firearms or poison, since ordinarily people might be expected to be on their guard before obtaining such goods to ensure that their acquisition was lawful and in accordance with the formalities, if any prescribed by the relevant statute or rule. Gold, however, is not such a type of commodity. It is an innocuous a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve is that the gold seized is smuggled; with the result that the practical effect of the provision is that there is a statutory direction to the adjudicating officer to treat the gold as smuggled so as to entitle him to confiscate the same. It is only if learned Counsel for the respondent is right that the effect of the section is as above that the several decisions of the American Courts to which he invited our attention, could have any application. Learned Counsel relied particularly on the decisions in Bailey v. State of Alabama - (1911) 219 U.S. 219 : 55 L. Ed. 191, and Manley v. State of Georgia (1929) 279 U.S. 1 : 73 L. Ed. 575. The first of these was concerned with the validity of a law of the State of Alabama by which refusal without just cause, to perform the labour agreed to be performed in a written contract of employment under which the employee had obtained money which he did not refund was made prima facie evidence of an intent to commit a fraud. The Supreme Court held the law invalid. Two grounds were urged in support of the argument that the legislation was unconstitutional. The first was that it was a violation of the 13th amendment against involuntary servitude e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would be seen that the decisions proceed on the application of the due process clause of the American Constitution. Though the test of `resonableness laid down by Clauses (2) to (6) of Article 19 might in great part coincide with that for judging of `due process , it must not be assumed that these are identical, for it has to be borne in mind that the Constitution framers deliberately avoided in this context the use of the expression `due process with its comprehensiveness, flexibility and attendant vagueness, in favour of a somewhat more definite word reasonable , and caution has, therefore to be exercised before the literal application of American decisions. In making these observations we are merely repeating a warning found in the judgment of this Court in A.S. Krishna v. The State of Madras - [1957] SCR 399, 412, where, Venkatarama Ayyar, J., speaking with reference to the point now under discussion after quoting the passage already extracted from Rottschaefer s treatise stated : The law would thus appear to be based on the due process clause, and it is extremely doubtful whether it can have application under our Constitution. 24. With this caution we shall procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 All. E. R. 769, 772, already referred to, we might mention that the prosecution there was for a violation of Section 186 of the U.K. Customs Consolidation Act, 1876, which, so far as material, was in substantially the same terms as the relevant portion of Section 167(8) of the Sea Customs Act, 1878, the essential ingredient of the offence being indicated by the words person concerned in dealing with goods the import of which is prohibited or which are liable to duty with intent to defraud His Majesty , and it was a violation of this section that Fitzpatrick was found guilty of by the application of the rule as to onus of proof prescribed by Section 259 extracted earlier. If in a prosecution for dealing in smuggled goods the onus could with constitutional propriety be cast upon the accused to prove that the goods were not smuggled, it is difficult to see any reasonable basis for the contention that where the offence charged against a person is not dealing in but possession of smuggled goods, there is a constitutional bar on the burden being so laid. 26. Secondly, is learned Counsel correct in his submission that under Section 178A the onus is cast upon the possessor of the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld rest on reasonable grounds provided no safeguard to the citizen, as the seizing-officer who acts administratively entertains the belief on unproved information gathered from sources which most often are not and in practice will not be possible to be disclosed to the party affected. In connection with this point two alternative submissions were made : (1) that the reasonable belief of the officer effecting the seizure was one entirely for his subjective satisfaction and that this rendered the protection wholly illusory and therefore patently unreasonable. This was advanced on the basis of the passage in the judgment of this Court in Babulal Amthalal Mehta v. The Collector of Customs, Calcutta - [1957] SCR 1110, already extracted reading : the only pre-requisite for the application of the section is the subjectivity of the Customs Officer in having a reasonable belief that the goods are smuggled. The learned Solicitor-General, on the other hand pointed out that this was not really part of the decision, but was just an observation and that he would not support it. The learned Solicitor-General submitted that a seizure to which Section 178A was applicable was merely a prelimi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in that it was not restricted in point of time or to persons connected with the import. The point suggested may be expanded in these terms : What the party affected has to prove is not that his acquisition has been bona fide, which of course he might be in a position to prove and might properly be required to prove, but that somebody else over whom he has no control and of whose actions he would, in most cases, be completely ignorant has similarly bona fide acquired the gold without violating the law and so on until one reached the stage of the origin of the gold which is the subject of seizure and of adjudication before the Customs authority. It would be seen that this is really the argument upon which the sixth of the points urged by learned Counsel rests and therefore it will be convenient to examine the soundness of the contention and the answers which have been made on the other side after dealing with point No. 5. 31. The fifth point relates to the fact that the presumption raised by the section is about the possession of an innocuous article of property which under the law is the subject of unrestricted trade in the open market as distinguish from articles which are inhere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 1939, or if imported subsequently had either been permitted to be imported or had paid duty, if such duty was leviable. We consider that this is not the effect of the section and that it does not, on any reasonable construction, justify this picture of its operation. 32. We shall now proceed to consider the last of the points raised by learned Counsel in conjunction with point No. 4 which we had reserved for being examined along with it. This point learned Counsel expanded in the following terms. The burden of proof cast by the section is or is almost impossible of discharge, because (1) it extends to facts which would not be in the possession of bona fide purchaser at all, facts which he never knew and which he could never reasonably ascertain; (2) large quantities of gold have been imported into this country before the introduction of restrictions on their importation by virtue of the legislation brought into force from 1939. In this context, learned Counsel relied on the several matters set out in the passage from the judgment of K.T. Desai, J., extracted earlier and laid particular emphasis on the fact : (a) that gold was held in myriad forms and for diverse purposes by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision to be unreasonable or void. Commenting on a passage in the judgment of the Court of Appeal of Northern Ireland which stated : If such powers are capable of being exercised reasonably it is impossible to say that they may not also be exercised unreasonably and treating this as a ground for holding the statute invalid Viscount Simonds observed in Belfast Corporation v. O.D. Commission - (1960) A.C. 490, 520-521 : It appears to me that the short answer to this contention (and I hope its shortness will not be regarded as disrespect) is that the validity of a measure is not to be determined by its application to particular cases....... If it is not so exercised (i.e., if the powers are abused) it is open to challenge and there is no need for express provision for its challenge in the statute . The possibility of abuse of a statute otherwise valid does not import to it any element of invalidity. The converse must also follow that a statute which is otherwise invalid as being unreasonable cannot be saved by its being administered in a reasonable manner. The constitutional validity of the statute would have to be determined on the basis of its provisions and on the ambit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of would be unconstitutional, for surely the principle underlying Section 106 of the Evidence Act which, it is conceded, enunciates a just and reasonable principle would serve to sustain the validity of the impugned provision. The two classes of cases which we have just set out would in themselves constitute most of the cases in which suspicion or information of the type which leads to seizure and the ensuring proceedings would occur. Section 178A however does not exhaust those classes, and that is the ground of complaint by the learned Counsel, and it is precisely on this basis or for this reason that learned Counsel contends that the entire provision is constitutionally invalid. This analysis would show that the provisions of the section are constitutionally valid in the sense of being reasonable restrictions on the right to hold property or to carry on trade or business in the large percentage of cases to which the section would apply, and it is only in the marginal cases already described that it can, with any justification, be contended that the restriction is unreasonable. From this position, the question that rises is whether because of the inclusion of this type of case the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the provision would achieve the desired end. In this connection he drew our attention to the Report of the Taxation Enquiry Commission, 1953-54, which pointed out the factual position regarding the existence of widespread smuggling in certain commodities including inter alia gold. They stated at Page 320 of the Report : 11. Smuggling now constitutes not only a loophole for escaping duties but also a threat to the effective fulfilment of the objectives of foreign trade control. The existence of foreign pockets in the country accentuates the danger. The extent of the leakage of revenue that takes place through this process cannot be estimated even roughly, but, we understand, it is not unlikely that it is substantial. Apart from this deleterious effect on legitimate trade, it also entails the outlay of an appreciable amount of public funds on patrol vessels along with sea costs and permanent works along the land border, and watch and ward staff on a generous scale. It is, therefore, necessary, in our opinion, that stringent measures, both legal and administrative should be adapted with a view to minimising the scope of this evil. The deleterious effects of smuggling, as poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted to the prohibitions enacted by Section 23A of the Foreign Exchange Regulation Act. The reasoning on which this conclusion was reached was that Section 23A, whose terms we have set out, when enacted in 1952 in effect incorporated into the provisions of the Foreign Exchange Regulation Act all the relevant provisions of the Sea Customs Act, 1878, as that enactment stood in 1952, with the result that any subsequent amendments to the Sea Customs Act did not and could not affect, modify or enlarge the scope of the incorporated Sea Customs Act which had become part of the Foreign Exchange Regulation Act. In support of this conclusion the learned Judges of the High Court have relied largely on the decision of the Privy Council in The Secretary of State for India in Council v. Hindustan Co-operative Insurance Society - (1931) L.R. 58 I.A. 259. We consider that the legislation regarding which the Privy Council rendered the decision bears no resemblance, whatever to the matter now on hand and that the ruling in The Secretary of State for India in Council v. Hindustan Co-operative Insurance Society Ltd. - (1931) L.R. 58 I.A. 259, cannot therefore furnish any guidance or authority applicab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with by Brett. L.J., the legislation from which provisions are absorbed continue to retain their efficacy and usefulness and their independent operation even after the incorporation is effected. 38. We consider that on the language of the provisions in the two Acts- Section 19 of the Sea Customs Act and Section 23A of the Foreign Exchange Regulation Act - there is no scope for any argument that there has been any incorporation of the provisions of the earlier statute in the latter. We shall repeat the terms of Section 19 of the Sea Customs Act which runs : 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 description into or out of India across any customs frontier as defined by the Central Government. Section 8(1) of the Foreign Exchange Regulation Act enables similar notifications by the Central Government in these terms : 8. (1) The Central Government may, by notification in the Official Gazette, order that subject to such exemptions, if any, as may be contained in the notification, no person shall, except with the general or special permissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn instances, 10 and 11 George VI Chapter 51, (the Town and Country Planning Act, 1947), Section 44(1) enacts : Section 19 to 30 of the Act of 1944 which provide for the disposal and appropriation by local Planning Authorities of land acquired or appropriated under Part I of that Act, for the carrying out by such authorities of development of such land, and for other matters arising in relation to the acquisition of land in that part shall, except so far as repealed by this Act, be incorporated with this part of this Act, subject to the amendments specified in the second column of the 8th Schedule of this Act and of the following provision of this section . 6 7 Eliz. 2 Chapter 63 (the Park Lane Improvement Act, 1958), Section 5 reads : The Land Clauses Act (other than the excepted provision); so far as they are applicable for the purposes of this Act and are not inconsistent with the provisions thereof, are hereby incorporated with this Act. 40. A comparison of the formulae with the text of Section 23A shows that the reference in it to Section 19 of the Sea Customs Act is merely for rendering notifications under the named provisions of the Foreign Exchange Regulation A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting certain provisions from and existing Act, and for convenience of drafting doing so by reference to that Act, instead of setting out for itself at length the provisions which it was desired to adopt. It was for this, among other reasons, that the Judicial Committee held that rights of appeal created by amendments effected to the Land Acquisition Act subsequent to the enactment of the Local Act were not attracted to the incorporated provisions in the Local Act . We consider that there is no analogy between the provisions held to be incorporated in the Calcutta Improvement Trust Act, 1911 dealt with by the Privy Council and Section 23A of the Foreign Exchange Regulation Act now under discussion. We hold therefore that when a notification issued under Section 8(1) of the Foreign Exchange Regulation Act is deemed for all purposes to be a notification issued under Section 19 of the Sea Customs Act, the contravention of the notification attracts to it each and every provision of the Sea Customs Act which is in force at the date of the notification. 42. The other ground upon which the learned Judges upheld the respondents contention that the rule as to the burden of proof enunci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded the gold to the Inspector of Customs (Special Division) with a letter in these terms : I send herewith 1,000 (One thousand) tolas of gold in 4 (four) blocks seized from G. Nandgopal, Clerk, M/s. Nathella Sampathu Chetty, Madras, No. 177, N.S.C. Bose Road. The passenger came from Bombay to Madras in N.Y. Bombay Mail on 26th June 1956, at 6 A.M. He has no records of any kind for the purchase of gold. Hence the gold was seized and he was arrested under a mahazar. The passenger and gold are forwarded for further action under Customs Act." It would be seen that up to this point there had been no seizure by an officer acting under the Sea Customs Act within Section 178A of the Act. It has also to be noticed that Nandgopal had in his possession admittedly no receipt of any kind for the purchase of the gold; further he had on him the letter addressed by the first respondent to Mathuradas Gopalakrishnayya Co., Bullion Merchants, Bombay intimating that cash to the extent of rupees one lakh was being sent through the representative, which obviously could not possibly remain in the possession of Nandgopal if his story about his taking cash to that addressee and the purchase of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef has to be judged by all the circumstances appearing at that moment. In the present case the quantity of gold in the possession of Nandgopal - of the value of over one lakh of rupees - was certainly a very relevant factor to be taken into account and which could be considered in judging the matter. No doubt, such a quantity could be the subject of bona fide purchase in the course of normal trade, particularly when the person in possession was the representative of a well-known firm of bullion dealers. But one would also normally expect that the representative would have secured a bill or voucher to evidence the purchase. In other words : (1) it was not a case of a few trinkets of gold or small quantity purchased for domestic or personal use by a considerable amount for purposes of business, (2) the undelivered letter addressed to M/s. Mathuradas Gopalakrishnayya and Co., which admittedly had a bearing upon the purchase of gold in the possession of Nandgopal necessarily drew an amount of suspicion on the theory of a bona fide purchase. These circumstances, in our opinion, which were admittedly present at the moment when the gold was taken by the Customs Officer at the Central Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
