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TMI Blog1958 (5) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... and Bharat Bank Ltd., a company incorporated under the Indian Companies Act, 1913, and having its registered office at 143, Cotton Street, Calcutta. The material facts are these. The appellant Company carries on business as a bullion merchant and in that capacity used to buy gold and silver in the Calcutta and Bombay markets and sell the same either direct or through bankers at the aforesaid two places. It is stated that between November 14,1950, and November 20, 1950, the appellant Company, ill the usual course of its business, purchased about 9,478 tolas of gold, and in respect of the said purchases, borrowed money from respondents 4 and 5. The gold so purchased was deposited with the respondent banks as security for the loans taken, 7,044 tolas being deposited with respondent 4 and about 2,437 tolas with respondent 5. With the consent of the appellant Company, the two Banks respondents 4 and 5, sent the gold to the Calcutta Min for the purpose of assaying. On November 20, 1950, the Collector of Customs, Calcutta, asked the Mint authorities not to part with the gold, and on November 21, 1950, the gold was seized at the instance of the Customs authorities, Calcutta, in pursuance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Act read with section 8 of the Foreign Exchange Regulation Act, 1947. 3. You are also requested to send copies of all documentary evidence including all books of account, vouchers etc., along with your explanation. 4. On receipt of your explanation, the Collector has directed me to further inform you that in this case a date and time will be fixed for hearing at which you will be required to produce all oral evidence in support of your explanation and also to make your submissions." This notice was issued on the strength of an information contained in a note which the Superintendent, Preventive Service of the Customs authorities, submitted and which said that the gold in question had been smuggled into India in violation of the provisions of the Sea Customs Act, 1878 (hereinafter referred to as the Sea Customs Act) and the Foreign Exchange Regulation Act, 1947 (hereinafter referred to as the Foreign Exchange Act) and that the gold had been sent to the Mint for processing; that is, for melting and casting the same into bars, weighing and stamping the same with the Mint Marks, and also assaying small portions thereof. On July 3, 1951, the appellant Company submitted its exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toms Act in the present case, the Customs authorities had acted in prejudice to the provisions of s. 23 of the Foreign Exchange Act and this was in violation of s. 8(3) of the Foreign Exchange Act as it stood at the relevant time. He said: " If the petitioners had not been implicated in the charge it might have been open to the Customs authorities to proceed under section 182 if steps were intended to be taken only against the offending goods but the notice to show cause makes it clear that that is not the case. Although I am not prepared to go to the length of holding that section 23 of the Foreign Exchange Regulation Act altogether excludes the operation of section 182 of the Sea Customs Act and although I have no doubt, that in appropriate cases where section 23 is not attracted, recourse can be had to section 182 of the Sea Customs Act, the present case is one in which adoption of the procedure under section 182 of the Sea Customs Act has prejudiced section 23 of the Foreign Exchange Regulation Act. The entire proceedings before the Customs authorities must therefore be held to be without jurisdiction. " Secondly, he held that the conditions which the Collector of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be set aside. " In the result, it accepted the appeal and set aside the judgment and order of Bose J. The present appeal is from the aforesaid judgment and order of the Division Bench dated July 3, 1953. There are two preliminary points which we may conveniently dispose of here, before we go on to the main contentions urged on behalf of the appellant Company. In giving a certificate in this case the learned Chief Justice, with whom Das Gupta J. agreed, expressed the view that the question whether the proceeding in which the order appealed from was made was of a civil or crinlinal nature, or was, in the language of Art. 132 of the Constitution, other proceeding' was not free from difficulty; he added that, in any event, Art. 135 of the Constitution applied in the present case, because it was not disputed that certain questions of interpretation of the Constitution were involved and, therefore, the case was clearly one where an appeal would lie to the Federal Court immediately before the commencement of the Constitution. The learned Solicitoreneral, who has appeared before us on behalf' of respondents I to 3, has not accepted as correct the view that Art. 135 justif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Exchange Act. To appreciate this point it is necessary to read some of the relevant sections of the Foreign Exchange Act and the Sea Customs Act. Sub-sections (1) and (2) of s. 8 of the Foreign Exchange Act impose restrictions on import and export of currency and bullion. Sub-section (1) states, inter alia, that the Central Government may, by notification in the official gazette, order that, subject to such exemption, if any, as may be contained in the notification, no person shall, except with the general or special permission of the Reserve Bank, bring or send into the-States any gold or silver. Such a notification was published on August 25, 1948, which said in substance that except with the permission of the Reserve Bank, no person shall bring into the States from any place outside India. any gold, bullion, etc, sub-section (3) was at the relevant time in these terms- 8 (3) The restrictions imposed by subsections (1) and (2) shall be deemed to have been imposed under section 19 of the Sea Customs Act, 1878, without prejudice to the provisions of section 23 of this Act, and all the provisions of that Act shall have effect accordingly." The aforesaid sub-section was later d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t; 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 167 occurs in Chapter XVI of the Sea Customs Act and in so far as it is relevant for our purpose, it states- " 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 same with reference to such offences respectively:- Section of Offences. this Act to Penalties. which offence has reference.8. If any goods the importation or exportation of penalty which is for the time being prohibited Such goods shall be liable to confiscation and any person concerned in any such offence shall be liable to a or restricted by or 18 $ 19 not exceeding three times under Chapter IV of this the value of the goods, Act, be imported into or not exceeding one or exported from India thousand rupees contrary to such prohibition or restriction; Section 182 of the Sea Customs Act deals with adjudication of confiscation and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Sea Customs Act is this. Under sub-s. (3) of s. 8 a restriction imposed by a notification made under sub-s. (1) of the section shall be deemed to have been imposed under s. 19 of the Sea Customs Act and all the provisions of the Sea Customs Act shall have effect accordingly; but the argument is that this deeming provision is subject to an important qualification contained in the words without prejudice to the provisions of s. 23 of this Act', meaning thereby the Foreign Exchange Act. The contention is that though the restriction imposed under sub-s. (1) of s. 8 is to be deemed to have been imposed under s. 19 of the Sea Customs Act, such deeming is to be without prejudice to, that is, subject to the provisions of s. 23 of the Foreign Exchange Act; therefore, where a contravention of any of the provisions of the Foreign Exchange Act has taken place such as is punishable under s. 23 thereof, the only remedy available in such a case is the one under s. 23 and it is not open to the Customs authorities to take action against the offender under ss. 167 (8), 182 and 183 of the Sea Customs Act. It is contended that this is the true scope and effect of sub-s. (3) of s. 8 of the Fore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny other remedy under the Sea Customs Act is barred; because that is the effect of the second part of the sub-section which says that the deeming provision shall be without prejudice to the provisions of s. 23 and the concluding part of the sub- section which says that all the provisions of the Sea Customs Act shall have effect accordingly is controlled by the second part, as is indicated by the use of the word ' accordingly therein. The learned Solicitor-General has put forward a different construction. According to him, the second part of the sub-section when it says without prejudice to the provisions of s. 23' merely means that the remedy under s. 23 is also available in an appropriate case, but it does not bar the remedy available under the Sea Customs Act; otherwise, the third and concluding part of the sub-section is renderedotiose. He has further suported his contention by a reference to s. 23A, inserted in 1952, which repeats the phraseology of deleted sub-s. (3) of s. 8 but makes it sufficiently clear what the meaning of the clause I without prejudice to the provisions of s. 23 is. We do not so decide, but let us assume that the construction put forward on behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e barred; when on the facts of the case s. 23 can have no application, no question of prejudicing its provisions by the adoption of the procedure under the Sea Customs Act can at all arise. Bose J. was fully aware of this distinction between s. 23 of the Foreign Exchange Act and s. 167(8) of the Sea Customs Act. Indeed, he expressly said that he had no doubt that in appropriate cases where s. 23 is not attracted, recourse can be had to s. 182 of the Sea Customs Act; but lie thought that the notice which was issued to the appellant Company in this case on June 20, 1951, showed that the intention was to proceed against the offender also, and this, according to him, made a difference and brought in s. 23. We are unable to agree. We have quoted. the notice in an earlier part of this judgment. The notice asked the appellant to show cause why penal action should not be taken against it and the gold under the provisions of s. 167(8) for alleged violation of s. 19, Sea Customs Act, and s. 8, Foreign Exchange Act. Neither the notice, nor the note of the Superintendent, Preventive Service (enclosed with the notice) suggested that the appellant was the smuggler and, therefore, liable to pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms authorities under the Sea Customs Act and the other by the Court tinder s. 23, Foreign Exchange Act-in case two concurrent remedies were open; and (iii) what would happen to the safeguards given to an accused person under s. 23, if it were open to the Customs authorities to by-pass s. 23,and proceed under the Sea Customs Act. These are interesting and, may be, important questions; and we have no doubt that they will be decided when they really fall for decision in an appropriate case. In the case under present consideration, it is sufficient to state that on the facts found, no prejudice was caused to the provisions of s. 23 by adopting the procedure resulting in the impugned order of confiscation, and the contention of the appellant that the Customs authorities had no jurisdiction to adopt the procedure under the Sea Customs Act cannot be accepted as correct. This brings us to the second main contention urged on behalf of the appellant. By the impugned order the Collector of Customs confiscated the gold, and in lieu thereof gave the appellant an option to pay a fine of ₹ 10,00,000 (Rupees ten lakhs). It is not disputed that the impugned order up to the extent stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The question of severability does not present any great difficulty. It has been the subject of consideration in more than one decision of this Court, and in the recent decision in R. M. D. Chamarbaugwalla v. Union of India ([1957] S.C.R. 930) the principles governing it have been summarised. Applying those principles we find no difficulty in holding that the invalid conditions imposed by the Collector are not so inextricably mixed up that they cannot be separated from the valid order of confiscation and fine in lieu thereof; there is also no doubt that the Collector would have passed the order of confiscation and fine in lieu thereof on his finding that the gold was smuggled gold, even if he realised that the conditions he was imposing were invalid; it is also clear that the conditions do not form part of a single scheme which can be operative only as a whole. Learned counsel for the appellant has referred us to the sixth rule enunciated in Chamarbaugwalla's decision (supra) and has contended that if the invalid conditions are expunged, what remains of the impugned order cannot be enforced without making an alteration or modification as to the time limit fixed, and therefore th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature of a, writ of certiorari, under Art. 226 of the Constitution. Broadly speaking, it is true that an essential feature of a writ of certiorari is that the control which is exercised through it over judicial or quasi-judicial tribunals or bodies is not in an appellate but supervisory capacity. This Court observed in T. C. Basappa v. T. Nagappa and Another ([1955] 1 S.C.R- 250), at p. 257- " In granting a writ of certiorari the superior Court does not exercise the powers of an appellate Tribunal. It does not review or reweigh the evidence upon which the determination of the inferior Tribunal purports to be based. It demolishes the order which it considers to be without jurisdiction or palpably erroneous but does not substitute its own views for those of the inferior Tribunal. The offending order or proceeding so to say is put out of the way as one which should not be used to the detriment of any person." In the same decision, it was also observed: " In view of the express provisions in our Constitution we need not now look back to the early history or the procedural technicalities of these writs in English law, nor feel oppressed by any difference or change ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the order of confiscation. These prayers were neither unnecessary nor a inere surplusage; they were appropriate for the purpose of avoiding the conditions which the Collector had imposed for release of the gold. It is well settled that where proceedings in an inferior court or tribunal are partly within and partly without its jurisdiction, prohibition will lie against doing what is in excess of jurisdiction. (see Halsbury's Laws of England, 3rd Edn. vol. 11, para. 216, p. 116). In the recent decision in Dalmia's case, Shri Ram Krishna Dalmia V. Shri Justice S. R. Tendolkar and others([1959] S.C.R. 279), this Court held a part of a notification made under s. 3 of the Commission of Enquiry Act (LX of 1952) to be bad, and holding that it was severable from the rest of the notification, deleted it and held that rest of the notification to be good. Therefore, we do not see any insuperable difficulty in the present case in prohibiting respondents I to 3 from enforcing the two invalid conditions which the Collector of Customs had imposed for release of the gold on payment of the fine in lieu of confiscation, and the time limit of four months fixed by the Collector must acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral has pressed (as to which it is -un- necessary for us to express any final opinion), namely, (1) that a pledgee cannot have a right higher than that of the pleader, (ii) that the pledgor does not cease to be the owner by reason of the pledge, and (iii) that in an action in rem the order operators directly upon the status of the property and, as in this case, vests the property absolutely in Government, there are certain other circumstances which militate against the claim now put forward by respondent 5. The order of the Collector shows that all throughout the adjudication proceedings respondent 5 was represented by counsel before the Collector. The Collector passed his order oil May 14, 1952, and a copy was forwarded to respondent 5. The respondent took no steps against the order, but was content with its position as respondent to the application which the present appellant filed in the High Court. It is also to be noticed that the Collector's order shows that he was not fully satisfied with the story of the appellant that the gold had been pledged with the Banks in the manner suggested. So far as the transactions with the Bharat Bank are concerned, he said: " The Maj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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