9911796707
TMI Blog1962 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... as per description herein below given, was seized by them as smuggled gold namely. (a) gold leaves weighing 44 tolas 13 annas 6 pies. (b) gold coins bearing inscription (i) Habib Bank, 6 pieces (ii) Murshidabad coins, 58 pieces (iii) S. L. Sen 502 pieces (iv) Sovereigns 6 pieces (v) gold mohurs, 4 pieces in all weighing 321 tolas 9 annas 6 pies. (c) gold bullion weighing 306 tolas 8 annas. The petitioners characterise the said search and seizure as wrongful and illegal. They also say that at the time when the gold was seized from the petitioners, the respondent No. 2, S.K. Srivastava, who at that time was an Assistant Collector and Preventive Inspector, was personally present at the premises. The name of respondent No. 2 figures prominently in the petition and the grievance of the petitioners principally directed against the part which he played in passing the impugned order. 3.On the night of December 29, 1954, the petitioners Nos. 2 to 4 were arrested by the respondent No. 2 S. K. Srivastava, and a Rumaging Inspector of the name of D. G. Banerjee. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was further alleged in the said notices that Zadkar had admitted having carried smuggled gold to the petitioner company each time in one or two boxes full of gold bars and that in this way delivered an "assumed" quantity of 3000 tolas of smuggled gold prior to December 29, 1954. The aforesaid admission was said to have been obtained from Zadkar by respondent No. 2. S. K. Srivastava. 7.In the cause shown by the petitioners on July 7, 1955, they denied having received smuggled gold as alleged. They also stated that they did not know any person of the name Zadkar and denied having had any arrangement with him for carriage and delivery of smuggled gold. They called upon the respondent No. 2 S. K. Srivastava to produce Zadkar and allow to the petitioners opportunity to cross-examine him. They emphasised to have lawfully acquired the gold, seized by the Customs authorities, in the ordinary course of business and stated that the entries regarding acquisition of gold were to be found in their books of accounts. The cause aforementioned was shown to S. K. Srivastava above named. 8.The opportunity prayed for by the petitioners to examine Zadkar was not allowed to the petitioners. Neverth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssaying. Such examination and assaying is to be effected within a fortnight after the aforesaid statement and Report are supplied to the petitioners by the Customs authorities. (3) A fortnight after the examination and assaying of the gold aforesaid, the Collector of Customs would give the petitioners, a hearing and allow the petitioners to cross-examine Zadkar, if possible. (4) Gold coins etc. which have been ordered to be released under Order No. 60 by the Customs authorities and are to be returned to the petitioners if the same had not already been returned. (5) The petitioners will not be entitled to challenge or raise any objection to the various notices to show cause served on the petitioners and in particular will not be entitled to take any objection regarding the omission of the Export Import Control Act being mentioned in the said Show Cause Notices. (6) No order as to costs". 11.Thus ended the first chapter of the attempt on the part of the Customs authorities to penalise the petitioners for large-sca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners on the basis of the order made by this Court, dated March 18, 1958, and also for a writ of mandamus directing the Customs authorities to return the gold wrongfully seized and also the books of account taken in custody by the Customs authorities. The petitioners obtained a Rule which was numbered as Matter No. 20 of 1960. That Rule was disposed of by Ray, J., also by consent on January 9, 1961, inter alia, on the following terms :- (i) the gold which was the subject matter of the adjudication would remain with the Customs authorities until the adjudication was completed. But the remaining quantities of gold must be returned to the petitioners within 3 weeks from the date of the order. (ii) The personal hearing to be given to the petitioners must be completed by March 31, 1961. 14. The Solicitors for the petitioners, however, did not remain idle while these things were happening. By their letter, dated January 31, 1961, they called upon the Customs authorities to comply with the terms of the order, dated the January 9, 1961, and also recorded their objection to the use of the alleged further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Zadkar, at first supplied to the petitioners. Zadkar himself was not produced at the hearing for cross-examination. According to the petitioners the hearing was concluded on that date and that fact they caused to be recorded by a letter on the same date. The allegation of conclusion of the hearing is, however disputed in the affidavit-in-opposition and the dispute is based on a letter written by respondent No. 2 S. K. Srivastava, to the Advocate for the petitioners bearing the date April 4, 1961, a relevant extract from which is set out below :- ***** (2) It was pointed out to you that Shri W. B. Zadkar had turned up in the Custom House on 15th February, 1961 at 11 A.M. when the personal hearing was fixed for the first time in connection with the present case. You were also informed that Shri Zadkar had been informed to be present in the Customs House in connection with hearing. I would like to know if you want to dispense with Shri Zadkar's presence. In the alternative we shall make one more effort to have Shri Zadkar present on another date which will be communicated to you shortly. (3) A reference abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29, 1961 and offer opportunities to the petitioners to be present at the hearing and cross-examine the said informers. The examination of the informers sought to be justified on the ground that the show-cause memorandum, dated July 1, 1955, started with the words "On receipt of reliable informations". It was further stated in the said letter that Zadkar was being requested to be present on the same date and that the petitioners would be at liberty to cross-examine him if he appeared. At the hearing on April 29, 1961 the petitioners were represented by their Solicitor Shri A.K. Dey of Messrs. R.K. Dey and Co. Solicitors. He raised two-fold objection to the effect that, (1) Respondent No. 2 S. K. Srivastava, having acted as the prosecutor in the matter would not adjudicate upon the matter and decide the same and (2) The informers should not be examined at that stage, firstly, because it was beyond the scope of the order of the High Court and secondly, because the endeavour to examine the informers was a new thing which was being tried at that late stage. 21. Respondent No. 2 S.K. Srivastava overruled both t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder respondent No. 2 S.K. Srivastava held as follows : "In the aforesaid circumstances, I hold that the seized gold leaves and the gold coins are made out of the smuggled gold which was not brought in the ordinary course of business and that the said gold had been imported into India in contravention of the Government of India Notification No. 12(II) F1/48, dated 25th August, 1948 (as amended) issued in pursuance of section 8 of the Foreign Exchange Regulation Act and under section 19 of the Sea Customs Act and that as such they are liable for confiscation under section 167(8) of the Sea Customs Act as read with section 23A of the Foreign Exchange Regulation Act", and on the aforesaid finding he imposed the following penalties severally on the petitioners: "1. I impose under section 167(8) of the Sea Customs Act as read with section 23A of the Foreign Exchange Regulation Act as personal penalty of Rs. 5,00,000/- (Rupees Five lakh) only on Messrs.. Shamlal Sen (Private) Limited for being the persons concerned in the illegal importation of not less than 3,000 tolas of gold in association with Shri W.B. Zadkar and others; 2. & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow I recount a few of them. In the case of Queen v. Lee (L.R. 9 Q.B.D. 394) Field J. observed : "There is no warrant for holding that, where the Justice has acted as a member by directing a prosecution for an offence under the Act, he is a sufficiently disinterested person so as to be able to sit as a Judge at the hearing of the information. Then again, there is the observation of Lord Justice Bowen in Leesen v. General Council of Medical Education and Registration (43 Ch Div. 366 at page 384) to the effect: "* * * nothing can be clearer than the principle of law that a person who has judicial duty to perform disqualifies himself for performing it if he has a pecuniary interest in the decision which he is about to give, or a bias which renders him otherwise then an impartial Judge. If he is an accuser, he must not be Judge." 26. Also there is the observation of Lord Esher in Allinsen v. General Council of Medical Education and Registration (1894) 1 Q.B. 750 at p.758, which is set out below :- "The question is not, whether in fact he was or was not biased. The Court cannot enquire into that. There is something between these two propositions. In the administration of justice, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect that he could in the circumstances held the scale even." 29.The same view was again expressed by the Supreme Court in the case of Gullapalli Nageswar Rao v. State of Andhra Pradesh (A.I.R.) (1959 S. C. 1376) :- "The principles governing the doctrine of bias' vis-a-vis judicial tribunals are well settled and they are: - (i) no man shall be a judge in his own cause: (ii) justice should not be a judge on his own cause: (iii) justice should not only be done but manifestly and undoubtedly seem to be done. The two maxims yield the result that if a member of a judicial body is 'subject to bias (whether financial or other) in favour of, or against, any party to a dispute, or is such a position that a bias must be assumed to exist, he ought not to take part in decision or sit on the tribunal'; and that 'any direct pecuniary interest, however small, in the subject-matter of inquiry will disqualify, a judge, and any interest, though not pecuniary, will have the same effect, if it be sufficiently substantial to create a reasonable suspicion of bias'. The said principles are usually applicable to authorities, though they are not courts of justice or judicial tribunals, who have to act ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interested in the question of the renewal of a license, including the licensing justices an opportunity of being heard. But the statute now here says that justices who elect to appear as opponents of the renewal and take active steps (such as instructing a solicitor) to make their opposition effective may nevertheless act as judges in the dispute; and in the absence of a clear provision to that effect I think that the ordinary rule that no one can be both party and a judge in the same cause holds good." 31. Explaining the limitation of the doctrine propounded by the aforesaid decision, in its application to India, the Supreme Court observed in the case of Gullapalli Nageswara Rao (Supra) as follows :- "This decision, therefore, is an authority for the proposition that, unless the legislature clearly and expressly ordained to the contrary, the principles of natural justice cannot be violated. In Rex. v. Liecster Justices, 1927 I.K.B. 557, a case also arising under the Licensing (Consolidation) Act, 1910, the Kings Bench Division held that the mere fact that the licensing justice has originated an objection to renewal of a licence does not disqualify him by reason of interest fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Act and relying on these sections contended that it was possible for a Customs Officers, who was concerned in the investigation and the prosecution of an offender, also to be the adjudicator of penalties. This argument is not very well-conceived. Section 6 provides for the appointment of Customs Officers and authorises them "to exercise the powers conferred and perform the duties imposed" by the Act. Under Section 6 there is a notification being Notification No. 6-Cus., dated January 18, 1952 (as amended from time to time) the material portion of which leads as follows :- "In exercise of the powers conferred by section 6 of the Sea Customs Act 1878 (VIII of 1878) and in supersession of all previous notifications on the subject, the Central Government hereby appoints each of the officers specified in the second column of the Schedule hereto annexed to be the Chief Customs Officers of Sea Customs and Customs Collector for the post or posts specified against the name in the corresponding entry in the third column thereof, and to exercise the powers conferred and perform the duties imposed by the said Act on such Officers." SCHEDULE Serial No. Description of Officer Port or Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Visakhapatnam and Kandla, namely :- (iii) The Customs authorities must comply with all other directions contained in the consent order, dated March, 18, 1958, not complied with until then. Thus ended the second chapter of the proceeding started against the petitioners on charges of smuggling gold. Pursuant to the consent order, dated January 9, 1961 the petitioners caused to a letter to be sent to the Customs authorities asking for the return of the gold which was not the subject matter of the adjudication. No reply was sent to that letter until January 30, 1961. In the meantime, however, by a letter, dated January 21, 1961, the petitioners were informed that they would be granted a personal hearing by the Additional Collector of Customs on February 15, 1961. Along with the said letter five statements, said to have been made by Zadkar and recorded by respondent No. 2 S. K. Srivastava, were sent to the petitioners also copy of a letter of reply given by Zadkar, dated January 7, 1955. The letter further informed the petitioners that at the personal hearing certain informers would be produced for the purpose of identifying Zadkar, who would be prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scation 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 Collector of Customs; (c) up to confiscation of goods not exceeding fifty rupees in value, and imposition of penalty or increased duty not exceeding ten rupees, by such other subordinate officers of Customs as the Chief Customs authority, may, from time to time, empower in that behalf in virtue of their office; Provided that the Chief Customs authority may, in the case of any officer performing the duties of a Customs Collector, limit his powers to those indicated in clause (b) or in clause (c) of this section and may confer on any officer by name, or in virtue of his office, the powers indicated in clauses (a), (b) or (c) of this section." 39.There is nothing contained in aforesaid provisions of the Sea Customs Act, on which Mr. Kar so much relied and also nowhere else in the said Act which clearly and expressly provide that an officer may be the judge or the adjudicator in a cause in which he is himself the prosecutor or the accuser. The afore-quoted provisions of the Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase where a large company is concerned'. This dictum, while technically accurate, seems divorced from the realities of the situation in which a handful of law lords do all the appeal work of the House and the lay peers do not sit during such appeals, or if they do, do not vote; (v) the words of Lord Brougham in 1959 in the case of Thellusson v. Rendlesham (1859) 7 H. L. Cas 429 where he justifies the hearing of a case by a judge (himself) who had previously been counsel in that case on the ground that not to do so would have caused great expense and delay and 'almost a denial of justice'; and (vi) a statement in Serjeant v. Dale (1877) 2 Q.B.D. 558, 566 by Lush, J. *** that by common law a judge who has an interest in the result of a suit is disqualified from acting except in cases of necessity where no other judge has jurisdiction." 41.Equally well balanced are the authorities against recognition of the exception founded on necessity and in Marshall's Book on Natural Justice there is again a collection of cases beginning 1613 to 1864 in which great judges refused to recognise the aforesaid exceptions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t not to be; as if an action be brought by the Chief Justice of Common Pleas in the Court of Common Pleas the placita must be coram Ed'ro Nevill Millet Sociis suit and not coram Thomas Trevor etc.' and it was quashed. (d) In Dimes, case (1852) 3 H. L. C. 759 it will be remembered that it was held that the Lord Chancellor was disqualified by his interest from hearing an appeal from the Vice-Chancellor but that the decree of the Vice-Chancellor might be made the subject of appeal direct to the House of Lords. (e) In R.V. Allan (1864) 4 B. and S. 1915, 1924 ***, Blackburn J. said: 'There may be difficulty in finding magistrates in this neighbourhood who are not interested to hear such an information, but members of the association which institutes the prosecution must not act as judges upon it." 42.I have already observed that the exception to the principle of natural justice based on necessity has not been received favourably or enthusiastically in Courts of Law and the aim of Courts has been directed more towards finding and establishing an alternative forum than towards upholding the judgment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have his vision clouded by the dust of conflict between the prosecutor and the defender. In the adjudication order respondent No. 2, S. K. Srivastava, no doubt observed as follows :- "Objections were raised against my being the Adjudicator in the present case on the ground that I could not be both the prosecutor and the Judge. I was alleged to have played the role of the prosecutor in the years 1954-56 as the Superintendent, Preventive Service. This allegation is incorrect. Shri Zadkar has made clear in the cross-examination what role had been played by me. It was the role of an Officer supervising certain investigations. The function of the investigator is not to concoct evidence for roping in innocent persons. His function is to find out the truth and to take action in the light of the same. He has as much cause to feel proud of exonerating and clearing an innocent being as of seeing the guilty punished by virtue and the result of his investigations. The officer supervising the investigations has to see that the investigator sticks to the functions as defined above. In the present case Shri Zadkar, the most persecuted man in connection with the circumstances some of which app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reinabove discloses beyond any doubt that for a number of years Messrs. Shamlal Sen (Pvt.) Ltd., had been carrying on transactions in smuggled gold on a large scale. This explains the irregularities which were discovered by the Customs Authorities on scrutiny of the books of account of Messrs. Shamlal Sen (Pvt.) Ltd. As a result of the scrutiny it was found that during April December, 1954 Messrs. Shamlal Sen (Pvt.) Ltd. had purchased in all more than 1,33,556 tolas of gold and that names of the sellers where indicated only against the purchases amounting to Rs. 16,743-14-3 P. None of the account books showed any purchase from such a frequent supplier of gold as W. B. Zadkar. In the aforesaid circumstances, it is proper to hold that the books of accounts had not been maintained correctly and in the ordinary course of business and are, therefore, not reliable. It is also proper to hold that all the gold had not been obtained by Messrs. Shamlal Sen (Pvt.) Ltd., in the ordinary course of business. Bira Singh has stated that the smuggled gold used to be received almost once a week. He has also stated that on 29th December 1954 gold representing the contents of 4 belts had been removed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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