TMI Blog1958 (11) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... are these : The first petitioner is a Cuban national. He came to India on a special Cuban passport No. 11822, dated 16th November, 1954 issued by the Government of the Republic of Cuba. The second petitioner is a citizen of the United States of America, and holds a U.S.A. passport No. 45252, dated 1st July, 1955. In May 1957, both the petitioners were in Paris. There, the second petitioner purchased a motor car from an officer of the American Embassy. He is said to have sold that car to the first petitioner on 14th May, 1957, and the same month, it was registered in the first petitioner s name. The two petitioners sailed by the same steamer at the end of May. The car was also shipped by the same steamer. They reached Karachi on 11th June 1957, and from there, flew to Bombay. From 11th to 19th June, 1957 they stayed together in Hotel Ambassador in Bombay. The car was delivered to the first petitioner in Bombay on June 13th and on June 19th both of them flew from Bombay to Delhi. In Delhi, also, they stayed, together at Hotel Janpath. The first petitioner received the car at Delhi by rail on June 22nd and the same night, the two petitioners left by the said car for Amritsar, where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hamber above the petrol tank, behind the hind seat of the car, was discovered. The chamber was opened, and the following things which had not been declared by the petitioners, were recovered from inside the secret chamber : Indian currency Rs. 3,50,000 U. S. Dollars $. 10,000.00 Empty tincontainers 10 (rectangular (The containers bore marks to indicate that they were used for carrying gold bars) Mirror 1 besides other insignificant things. Under the Indian law, Indian currency over Rs. 50, Pakistan currency over Rs. 10 and any foreign currency, could not be exported out of India, without the permission of the Reserve Bank of India. The export of a pocket radio also required a valid licence under the Imports and Exports (Control) Act, 1947. The petitioners could not produce, on demand, the requisite permission from the Reserve Bank of India, or the licence for the export of the pocket radio, or a permit for exporting a time-piece, as required by the Land Customs Act, 1924. The car also was handed over to the police for necessary action. The offending articles, namely : Indian cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms Act, 1924. He further imposed a personal penalty of Rs. 25,00,000 on each of the petitioners, under Section 167(8) of the Sea Customs Act. 3. After making further inquiry, on 12th August, 1957, the Assistant Collector of Customs and Central Excise, Amritsar, under authority from the Chief Custom Officer, Delhi, filed a complaint against the petitioners and a third person, named Moshe Baruk of Bombay, (since acquitted), under Section 23, read with Section 8 of the Foreign Exchange Regulation Act, 1947, and Section 167(81) of the Sea Customs Act, 1878. The petition of complaint, after stating the facts stated above, charged the accused persons with offences of attempting to take out of India Indian and foreign currency, in contravention of the provisions of the Acts referred to above. 4. After recording considerable oral and documentary evidence, the learned Additional District Magistrate, Amritsar, by his judgment dated 13th November, 1957, convicted the petitioners, and sentenced them each to two years rigorous imprisonment under Section 23 read with Section 23B, of the Foreign Exchange Regulation Act, six months rigorous imprisonment under Section 120-B(2) of the Indian P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders were passed on 28th April 1958. Subsequently, the first petitioner moved this Court for revocation of the special leave granted to him, and for an early hearing of his Writ Petition No. 65 of 1958 as the points for consideration were common to both the cases. This Court granted the prayers by its order dated 13th May 1958. 8. Before dealing with the argument advanced on behalf of the petitioners, in order to complete the narrative of events leading up to the filing of the cases in this Court, it is necessary to state that the petitioners had moved this Court separately under Article 32 of the Constitution, against their prosecution, in the Magistrate s court, after the aforesaid orders of confiscation and penalty, passed by the Collector of Customs. They prayed for a writ of certiorari and/or prohibition, and for quashing the proceedings. There was also a prayer for a writ in the nature of habeas corpus. On that occasion also, the protection afforded by Article 20(2) of the Constitution, was pressed in aid of the petitioners writ applications. This Court, after hearing the parties, dismissed those writ petitions, holding that the charge against the petitioners included an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l has countered that argument by the contention that the previous adjudication by the Collector of Customs, was by an administrative body which has to act judicially, as held by this Court in F.N. Roy v. Collector of Customs, Calcutta, 1983 (13) E.L.T. 1296 (S.C) = AIR 1957 S.C. 648, and reiterated in 1983 (13) E.L.T. 1302 (S.C.) = AIR 1958 S.C. 119; but the Collector was not a criminal court which could, in law, be said to have tried the petitioner for an offence under the Indian Penal Code, or under the penal provisions of the other Acts mentioned above. 10. It is, therefore, necessary first to consider whether the petitioners had really been prosecuted before the Collector of Customs, within the meaning of Article 20(2). To prosecute , in the special sense of law, means, according to Webster s Dictionary, (a) to seek to obtain, enforce, or the like, by legal process; as, to prosecute a right or a claim in a court of law. (b) to pursue (a person) by legal proceedings for redress or punishment; to proceed against judicially; especially, to accuse of some crime or breach of law, or to pursue for redress or punishment of a crime or violation of law, in due legal form before a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue Authorities into a court of law, if the Act did not contemplate their functioning as such. That the Sea Customs Act did not envisage the Chief Customs Officer or the other officers under him in the hierarchy of the Revenue Authorities under the Act, to function as a Court, is made absolutely clear by certain provisions of that Act. The most important of those is the new Section 187A, which was inserted by the Sea Customs (Amendment) Act, (21 of 1955). That section is in these terms :- 187A. No Court shall take cognizance of any offence relating to smuggling of goods punishable under item 81 of the Schedule to Section 167, except upon complaint in writing, made by the Chief Customs officer or any other officer of Customs not lower in rank than an Assistant Collector of Customs authorised in this behalf by the Chief Customs officer. This section makes it clear that the Chief Customs Officer or any other officer lower in rank than him, in the Customs department, is not a court , and that the offence punishable under Item 81 of the Schedule to Section 167, cannot be taken cognizance of by any court, except upon a complaint in writing, made, as prescribed in that sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers in the hierarchy created by the Act is the same thing as a punishment imposed by a criminal Court by way of punishment for a criminal offence. 12. This distinction has been very clearly brought out in the recent judgment of this Court in the case of Sewpujanrai Indrasanrai Ltd. v. Collector of Customs - 1983 (13) E.L.T. 1305 (S.C.) = 1958 SCR 916. In that case, though the question of double jeopardy under Article 20(2) of the Constitution had not been raised this Court has pointed out the difference in the nature of proceedings against offending articles and offending persons. A proceeding under the Sea Customs Act and the corresponding provisions of the Foreign Exchange Regulation Act, in respect of goods which have been the subject-matter of the proceeding, has been held to be of the nature of a proceeding in rem whereas, a proceeding against a person concerned in smuggling goods within the purview of those Acts, is a proceeding in personam, resulting in the imposition of a punishment by way of imprisonment or fine on him, where the offender is known. In the former case, the offender may not have been known, but still the offending goods seized may be confiscated as a resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other than punishments for a criminal offence. The provisions of Chapter XVII of the Act, headed Procedure relating to Offences, Appeals, etc. , also make it clear that the hierarchy of the Customs Officers under the Act have not been empowered to try criminal offences. They have been only given limited powers of search. Similarly, they have been given limited powers to summon persons to give evidence or to produce documents. It is true that the Customs Authorities have been empowered to start proceedings in respect of suspected infringements of the provisions of the Act, and to impose penalties upon persons concerned with those infringements, or to order confiscation of goods or property which are found to have been the subject-matter of the infringements, but when a trial on a charge of a criminal offence is intended under any one of the entries of the Schedule aforesaid, it is only the Magistrate having jurisdiction, who is empowered to impose a sentence of imprisonment or fine or both. 13. It was also suggested in the course of the argument that the use of a particular phraseology in the Act, should not stand in the way of looking at the substance of the matter. It may be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... criminal Court, his proceedings against the petitioners were, in the nature of Revenue proceedings, with a view to detecting the infringement of the provisions of the Sea Customs Act, and imposing penalties when it was found that they had been guilty of those infringements. Those penalties, the Collector had been empowered to impose in order not only to prevent a recurrence of such infringements, but also to recoup the loss of revenue resulting from such infringements. A person may be guilty of certain acts which expose him to a criminal prosecution for a criminal offence, to a penalty under the law intended to collect the maximum revenue under the Taxing law and/or at the same time, make him liable to damages in torts. For example, an assessee under the Income-tax law, may have submitted a false return with a view to defrauding the Revenue. His fraud being detected, the Taxing Officer may realise from him an amount which may be some multiple of the amount of tax sought to be evaded. But the fact that he has been subjected to such a penalty by the Taxing Authorities, may not avail him against a criminal prosecution for the offence of having submitted a return containing false state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel placed reliance upon the two American decisions in T.W. Morgan v. Devines - (1915) 59 Law Ed. 1153: 237 U.S. 632 and United States of America v. Anthony La Franca - (1931) 75 Law Ed. 551: 282 U.S. 568. The former decision is really against the contention of double jeopardy, raised in this case. That case lays down that persons who steal postage stamps and postal funds from a post office of the United States, after having committed burglary, and thus, having effected their entry into the premises, committed two distinct offences which may be separately charged and punished under the United States Penal Code. Two separate convictions and sentences as for two distinct offences in those circumstances were not held to be within double jeopardy within the meaning of the United States Constitutional 5th Amendment. The reason given for the decision against the contention of double jeopardy was that though the offences had been committed in the same transaction, they had been constituted separate and distinct offences by the United States Penal Code - Articles 190 and 192. In the latter case, the plea of double jeopardy was given effect to because the special statutes, infringements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the letter Exh. P. DD/2, admittedly written by him to his father in German, had not been specifically put to him with a view to eliciting his explanation as to the circumstances and the sense in which it had been written. The learned Magistrate in the trial Court put the following question (No. 20) to him :- It is in evidence that Ex. P. FF/1 is the translation of the letter Ex. P. DD/2. What have you to say about it? The answer given by the accused to this question was The translation of Ex. P. FF/1 is mostly correct except for few variations which could have been due to misinterpretation of handwriting. It is clear from the question and answer quoted above, that the learned Magistrate did afford an opportunity to this petitioner to explain the circumstances appearing in the evidence against him with particular reference to the letter. If the Court had persisted in putting more questions with reference to that letter, perhaps, it may have been argued that the examination under Section 342, Criminal P. C., was in the nature of a cross-examination of the accused person, which is not permitted. In our opinion, there is no substance in the contention that the petitioner had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titution as he has been prosecuted and punished for the same offence by the Collector of Customs. The learned Additional Solicitor General counters this argument by stating that the petitioner was not prosecuted earlier before a judicial tribunal and punished by such tribunal, and, in any view, the prosecution was not for the same offence with which he was charged before the Magistrate, and, therefore, this case does not fall within the Constitutional protection given under Article 20(2). 24. Before addressing myself to the arguments advanced it would be convenient at this stage to steer clear of two decisions of this Court. The first is [1983 (13) E.L.T. 1284 (S.C.) = 1953 SCR 730]. There proceedings had been taken by the Sea Customs Authorities under Section 167(8) of the Act and an order for confiscation of goods had been passed. The person concerned was subsequently prosecuted before the Presidency Magistrate for an offence under Section 23 of the Foreign Exchange Regulation Act in respect of the same act. This Court held that the proceeding before the Sea Customs Authorities was not a prosecution and the order for confiscation was not a punishment inflicted by a Court or a j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a penalty not exceeding three times the value of the goods, etc. The point to note is that so far as the confiscation of the goods is concerned, it is a proceeding in rem and the penalty is enforced against the goods, whether the offender is known or not known; the order of confiscation under Section 182, Sea Customs Act, operates directly upon the status of the property, and under Section 184 transfers an absolute title to Government. Therefore, in a case where the Customs authorities can proceed only against the goods, there can be no question of applying Section 23 of the Foreign Exchange Act and even on the construction put forward on behalf of the appellant company as respects Section 8(3), the remedy under the Sea Customs Act against the smuggled goods cannot be barred. This decision also indicates that the confiscation of the goods is an action in rem and is not a proceeding in personam. A combined effect of the aforesaid two decisions may be stated thus : Section 167(8) of the Act provides for the following two kinds of penalties when contraband goods are imported into or exported from India: (1) such goods shall be liable to confiscation; (2) any person concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment . The punishments to which offenders are liable under the provisions of the Indian Penal Code are : (1) death; (2) imprisonment for life; (3) imprisonment, which is of two descriptions, viz., (i) rigorous, i.e., with hard labour; and (ii) simple; (4) forfeiture of property, and (5) fine. 27. The word `prosecuted is comprehensive enough to take in a prosecution before an authority other than a magisterial or a criminal Court. Having regard to the historical background, a restricted meaning has been placed upon it by this Court in 1983 (13) E.L.T. 1284 (S.C.) = 1953 SCR 730 (supra). Bhagwati J., in delivering the judgment of the Court observed at page 742 (of SCR) thus : Even though the customs officers are invested with the power of adjudging confiscation, increased rates of duty or penalty, the highest penalty which can be inflicted is Rs. 1,000. Confiscation is no doubt one of the penalties which the Customs Authorities can impose, but that is more in the nature of proceedings in rem than proceedings in personam, the object being to confiscate the offending goods which have been dealt with contrary to the provisions of the law and in respect of the confiscation also an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not a judicial Tribunal. But I am bound by the decision of this Court in so far as it held that the earlier prosecution should have been held before a Court of law or a judicial Tribunal and that the Customs Authority adjudging confiscation was not such a tribunal. But the said observations must be confined to the adjudication of confiscation by the Customs Authority. 28. The outstanding question therefore is whether a Collector of Customs in adjudging on the question whether any person concerned in the importation or exportation of the prohibited goods committed an offence, and in imposing a penalty on him, acts as a judicial Tribunal. There is a current of judicial opinion in support of the contention that under a particular Act an authority may act as a judicial Tribunal in discharge of certain duties and as an executive or administrative authority in discharge of other duties. The question whether a particular authority in discharging specified duties is a judicial tribunal or not falls to be decided on the facts of each case, having regard to the well settled characteristics of a judicial tribunal. 29. In `Words and Phrases permanent edition. Vol. 23, Judicial Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oming to that conclusion the following criteria were applied to ascertain the character of the proceedings (i) duty to investigate an offence and impose a punishment: (ii) prosecution must be in reference to the law which creates the offence and punishment must also be in accordance with what the law prescribes: (iii) there must be the trappings of a judicial tribunal and (iv) the decision must have both finality and authoritativeness, which are the essential tests of a judicial pronouncement. Having regard to the aforesaid tests, I shall now proceed to consider the applicability of Article 20 to the present prosecution. 31. A fundamental right is transcendental in nature and it controls both the legislative and the executive acts. Article 13 explicitly prohibits the State from making any law which takes away or abridges any fundamental right and declares the law to the extent of the contravention as void. The law therefore must be carefully scrutinized to ascertain whether a fundamental right is infringed. It is not the form but the substance that matters. If the legislature in effect constitutes a judicial tribunal, but calls it an authority, the tribunal does not become any th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty is punishment inflicted by law for its violation for doing or failing to do something that is the duty of the party to do. Section 167 therefore defines a criminal act and fixes a penalty or punishment for that act. The two words `penalty and `punishment are interchangeable and they convey the same idea. 34. The more difficult question is whether a Customs Authority, when it functions under Section 167 of the Act, is a judicial tribunal. It is not, and cannot be, disputed that a Magistrate, who convicts and punishes a person for the infringement of some of the provisions of Section 167 of the Act, is a judicial tribunal. Is it reasonable to assume that when another authority adjudges on similar offences under the same section, it is functioning in a different capacity? Section 182 defines the jurisdiction of the Customs Authority in respect of the offences mentioned in Section 167 of the Act. It says : 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; such confiscation, increased rate of duty or penalty may be adjudged - (a) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uiry, to summon persons to give evidence and produce documents and the witnesses summoned are under a statutory duty to speak the truth. The circumstance that under clause (4) of the said section, an inquiry is deemed to be a judicial proceeding within the meaning of Section 193 and Section 228, Penal Code, viz., for the purpose of punishment for giving false evidence and for contempt of Court, does not detract from the judicial characteristics conferred upon the authority by the other clauses of the section. Clause (4) must have been enacted only by way of abundant caution to guard against the contention that the authority is not a Court; and to bring in the inquiry made by the Customs Officer in regard to administrative matters other than those conferred upon him under Section 167, within the fold of Section 193 and Section 228, Penal Code. Sections 188, 189, 190A and 191 provided a hierarchy of tribunals for deciding appeals and revisions. The Chief Customs authority may, suo motu or otherwise exercise revisional powers in regard to the orders of the subordinate officers. Power is also conferred on Government to interfere in matters in regard whereof no appeal is provided for. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as he was subsequently prosecuted and punished under Section 167(81) of the Act. Section 167(81) of the Act reads as follows : If any person knowingly, and with intent to defraud the Government of any duty payable thereon, or to evade any prohibition or restriction for the time being in force under or by virtue of this Act with respect thereto acquires possession of, or is in any way concerned in carrying, removing, depositing, harbouring, keeping or concelaing or in any manner dealing with any goods which have been unlawfully removed from a warehouse or which are chargeable with a duty which has not been paid or with respect to the importation or exportation of which any prohibition or restriction is for the time being in force as aforesaid ; or if any person is in relation to any goods in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any such prohibition or restriction as aforesaid or of any provision of this Act applicable to those goods. such person shall on conviction before a Magistrate be liable to imprisonment for any term not exceeding two years, or to fine, or to both." It is contended that under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant Collector of Customs and Central Excise, Amritsar) in contravention of the law prohibiting such export. It is not the case that the knowledge on the part of the petitioner of his illegal act is excluded from the first prosecution and included in the subsequent one. In the circumstances, I cannot hold that the offence for which he was prosecuted by the Magistrate is different from that in regard to which he was prosecuted and punished by the Customs Authority. In this view the prosecution and punishment by the Magistrate directly infringes the fundamental right under Article 20(2) of the Constitution. 36. No attempt has been made by the learned Solicitor General to contend that the offence under Sections 23 and 23B of the Foreign Exchange Regulations Act for which the petitioner is convicted is an offence different from that for which he was prosecuted earlier under Section 167(8) of the Act. 37. It is conceded that the decision in the Writ petition covers the decision in the connected appeal also. In the result, the writ petition and the appeal are allowed. 38. ORDER : - In view of the opinion of the majority, the Petition and the Appeal are dismissed. - - TaxTMI - TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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