TMI Blog1958 (5) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... nies Act, 1913, and having its registered office at 143, Cotton Street, Calcutta. 3. 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, in the usual course of its business, purchased about 9478 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, 7044 tolas being deposited with respondent 4 and about 2437 tolas with respondent No. 5. With the consent of the appellant Company, the two Banks, Res. 4 and 5, sent the gold to the Calcutta Mint for the purpose of assaying. On Nov. 20, 1950, the Collector of Customs, Calcutta, asked the Mint authorities not to part with the gold, and on Nov. 21, 1950, the gold was seized at the instance of the Customs authorities, Calcutta, in pursuance of a search warrant issued by the Chief Presidency Magistrate, Calcutta. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 explanation in answer to the aforesaid notice. The parties were then heard by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was in violation of Section 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 prejudiced Section 23 of the Foreign Exchange Regulation Act. The entire proceedings before the Customs authorities must therefore be held to be without justification." Secondly, he held that the conditions which the Collector of Customs had imposed in the impugned order for release of the confiscated gold were not warranted by the statute, and as the impugned order was one com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the aforesaid judgment and order of the Division Bench dated July 3, 1953. 8. 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 criminal nature, or was, in the language of Article 132 of the Constitution, `other proceeding' was not free from difficulty; he added that, in any event Article 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 Solicitor-General, who has appeared before us on behalf of res. 1 to 3, has not accepted as correct the view that Article 135 justified the grant of a certificate in this case. He has not, however, pressed us to decide in this case the question of the competency o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and the Sea Customs Act. 11. Sub-sections (1) and (2) of Section 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 sub-sectiosn (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 deleted by Act VIII of 1952, and a new section, namely, Section 23A, was introduced which provided inter alia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 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 : Offences Section of this Act to which offence has reference Penalties 8. If any goods, the importation or exportation of which is for the time being prohibited or restricted by or under Chapter IV of this Act, be imported into or exported from India contrary to such prohibition or restriction. $THAlign=C; 18 19 Such goods shall be liable to confiscation; and any person concerned in any such offence shall be liable to a penalty not exceeding three times the value of the goods, or not exceeding one thousand rupees." Section 182 of the Sea Customs Act deals with adjudication of confiscation and penalties referred to in Section 167 aforesaid. It states : "182. In every case, ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by a notification made under Sub-section (1) of the Section shall be deemed to have been imposed under Section 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 Section 23 of the Act' meaning thereby the Foreign Exchange Act. The contention is that though the restriction imposed under sub-section (1) of Section 8 is to be deemed to have been imposed under Section 19 of the Sea Customs Act, such deeming is to be without prejudice to, that is, subject to the provisions of Section 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 Section 23 thereof, the only remedy available in such a case is the one under Section 23 and it is not open to the Customs authorities to take action against the offender under Sections 176 (8), 182 and 183 of the Sea Customs Act. It is contended that this is the true scope and effect of sub-section (3) of Section 8 of the Foreign Exchange Act, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Sea Customs Act shall have effect accordingly. The construction put forward on behalf of the appellant Company is that where Section 23 of the Foreign Exchange Act is applicable, any 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 Section 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 section 23' merely means that the remedy under Section 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 rendered otiose. He has further supported his contention by a reference to Section 23A, inserted in 1952, which repeats the phraseology of deleted sub-section (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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; when on the facts of the case Section 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. 16. Bose, J., was fully aware of this distinction between Section 23 of the Foreign Exchange Act and Section 167(8) of the Sea Customs Act. Indeed, he expressly said that he had no doubt that in appropriate cases where Section 23 is not attracted recourse can be had to Section 182 of the Sea Customs Act; but he though that the notice which was issued to the appellant Company in this case on 20-6-1951, showed that the intention was to proceed against the offender also, and this, according to him, made a difference and brought in Section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of arguments. We were addressed at some length on (i) what would happen to the smuggled goods if the offender died in the course of a trial under Section 23 and the provisions of the Sea Customs Act were not available; (ii) what would be the position if two contradictory findings were given with regard to the goods one by the Customs authorities under the Sea Customs Act and the other by the Court under Section 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 Section 23, if it were open to the Customs authorities to by-pass Section 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 Section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant it has been argued that the order being a composite and integrated order, it is not severable; and secondly, it is contended that on an application for writ of certiorari, the superior Court must quash the whole order when it is found to be bad and in excess of jurisdiction even as to a part thereof. 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 SCR 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 ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Crown office, 2nd edition, pp. 504-505). We do not think that we are called upon in this case to go into the early history of the prerogative writ of certiorari in England or even to decide what is the extent of the power of the High Court on a prayer for the issue of a writ in the nature of a writ of certiorari, under Article 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, 1955-1 SCR 250 at page 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 on 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the orders of seizure, detention and confiscation of the gold and further requiring them to return the gold, and also asked for a writ of prohibition restraining res. 1 to 3 from taking further steps in pursuance of the order of confiscation. These prayers were neither unnecessary nor a mere 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 express of jurisdiction (see Halsbury's Laws of England, third edition, Vol. II, paragraph 216, page 116). In the recent decision in Dalmia's case (Civil appeals Nos. 455 to 457 and 656 to 658 of 1957, dated 28-3-1958, this Court held a part of a notification made under Section 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, deleated it and held that rest of the notification to be good. 23. Therefore, we do not see any insuperable difficulty in the present case in prohibition res. 1 to 3 from enforcing the tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esently state, we do not think that its complaint as to the infraction of a fundamental right can be raised at this stage. Apart altogether from the considerations which the learned Solicitor-General has pressed (as to which it is unnecessary for us to express any final opinion) namely (i) that a pledgee cannot have a right higher than that of the pledgor, (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 operates 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 res. 5. The order of the Collector shows that all throughout the adjudication proceedings res. 5 was represented by counsel before the Collector. The Collector passed his order on May 14, 1952, and a copy was forwarded to res 50. The res. took no steps against the order, but was content with its position as res. 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 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urisdiction to impose the other two conditions which he imposed for the release of the gold. Though the High Court held on appeal that the invalid conditions were severable from the rest of the order, it did not give any appropriate direction regarding those conditions as it should have done, but allowed the appeal and dismissed the writ application In Toto. We think that the appropriate order to pass in this case is to dismiss the writ application in so far as it seeks to quash the impugned order of confiscation of the gold and the payment of fine in lieu therefore, and to allow it in so far as it wants a direction restraining res. 1 to 3 from enforcing the two invalid conditions imposed by the Collector of Customs, which the Collector had no jurisdiction to impose. The time limit of four months given by the Collector will accordingly run from the date of this order. 28. The appeal is accordingly allowed to the very limited extent indicated above but dismissed as to the rest, and in the circumstances of this case, particularly in view of the invalid conditions imposed by the Collector, we direct that the parties must bear their own costs of the hearing in this Court. - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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