1. The 1st Petitioners are the owners of a vessel M. V. 'Marhaba'. The 2nd Petitioner, at the material time, was the master of the said vessel. The said vessel had come to the port of Bombay some time in the third week of September 1981. The 2nd Petitioner had duly filed the declaration of the private property which mentioned the personal belongings of the crew members of the said vessel. After the said declaration was made, the Officers of the Rummaging Section of the Customs Department rummaged the said vessel on the 18th/19th September 1981 and found that the crew members had disposed of a part their personal belongings together valued at Rs. 55,925/- CIF and Rs. 1,67,775/- at the market value. The said crew members were detained by the Customs Authorities and they finally pleaded guilty, with the result that they were levied with personal penalties in various amounts. Criminal prosecutions were also filed against them, and in the said prosecutions also they were convicted on their pleading guilty.
2. Thereafter a show cause notice was issued to both the Petitioners on the 4th March 1982 under Sections 111, 112 and 115 of the Customs Act, 1962 (hereinafter referred to as the said Act), asking the Petitioners to show cause, firstly, as to why the vessel should not be confiscated under Sections 115(1)(e) and 115(2) of the said Act and secondly why a personal penalty should not be imposed against them under Section 112 of the Act for their failure to account for the said goods. After their inquiry, an order was passed on the 2nd August 1982 by the Additional Collector of Customs whereby, among other things, (1) the vessel was confiscated under Section 115 of the Act and a redemption fine in lieu of confiscation was imposed to the extent of Rs. 1,81,000/-; and (2) a personal penalty of Rs. 10,000/- was levied on the 2nd Petitioner in his capacity as the master of the vessel under Section 112 of the Act. The Petitioners did not prefer an appeal against the said order, but approached this Court by this petition filed under Articles 226 of the Constitution, challenging the jurisdiction of the Additional Collector, who passed the impugned order.
3. Although by the impugned order unclaimed goods of the market value of Rs. 2,600/- and of the CIF value of Rs. 1,200/- were also confiscated under Sections 111(d) and (f) of the Act, that part of the order is not challenged in this petition, and therefore, we are not concerned with the same.
4. Coming first to the order of the personal penalty imposed against the 2nd Petitioner, admittedly that has been done under Section 112 of the Act. Section 112 reads as follows :-
'Section 112. Any person, -
(a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 111, or abets the doing or omission of such an act, or
(b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under Section 111; ....'
As far as the provisions of clause (a) above are concerned, it cannot be said that any act or omission of the 2nd Petitioner had rendered the goods sold by the crew members liable to confiscation under Section 111. Nor is there anything on record to show that the 2nd Petitioner had abetted the sale of the goods or had failed to take any action which had enabled the crew members to sell the same. The Additional Collector in his impugned order has observed that the 2nd Petitioner ought to have kept independent watchmen to keep a watch on the activities of the crew members. In the first instance, there is no such obligation on the owner or the master of the vessel. The 2nd Petitioner had appointed some of the members of the crew to watch the movements of the crew members. Unfortunately, it happened that some of those very watchmen had sold their goods also. But that by itself will not make the 2nd Petitioner a party to or an abettor of the sale. It will be illogical to suggest that the omission on the part of the 2nd Petitioner to employ independent watchmen had by itself directly contributed to the said act of the crew members. Hence the case cannot be brought within the provisions of clause (a). As far as clause (b) is concerned, the Additional Collector has nowhere come to the conclusion in his findings that the 2nd Petitioner was in any way concerned with carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any manner dealing with the goods in question. The Additional Collector has held the 2nd Petitioner guilty under the said provisions again because he had not kept independent watchmen. I am, therefore, more than satisfied that there is no case made out against the 2nd Petitioner even under clause (b) for imposing the personal penalty in question.
5. Coming now to the order of confiscation of the vessel, the action has been taken under Section 115(1)(e) as well as under Section 115(2). Section 115(1)(e) and Section 115(2) read as follows :
'Section 115(1) - The following conveyances shall be liable to confiscation :-
x x x x x x x x x x x x x x x x x x x x x x x x x x x x
(e) any conveyance carrying imported goods which has entered India and is afterwards found with the whole or substantial portion of such goods missing, unless the master of the vessel or aircraft is able to account for the loss of, or deficiency in, the goods.
115(2) Any conveyance or animal used as a means of transport in the smuggling of any goods or in the carriage of any smuggled goods shall be liable to confiscation, unless the owner of the conveyance or animal proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance or animal and that each of them had taken all such precautions against such use as are for the time being specified in the rules :
Provided that where any such conveyance is used for the carriage of goods or passengers for hire, the owner of any conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a fine not exceeding the market price of the goods which are sought to be smuggled or the smuggled goods, as the case may be.'
Sub-clause (e) of sub-section (1) says that if the whole or substantial portion of the goods imported into India are found missing and if the master of the vessel is unable to account for the same then the vessel is liable to be confiscated. Admittedly the master of the vessel had filed the declaration of the said goods as required by law before the vessel was rummaged. Admittedly further the crew members were found guilty of having removed and sold the goods in question. Hence the goods in question were accounted for. As regards the goods which were unclaimed, they were found in the vessel itself and have been confiscated by the Respondents. Therefore even in respect of those goods it cannot be said that they were either missing or not accounted for. It is therefore difficult to appreciate as to how the provisions of sub-clause (e) will at all be attracted to the facts of the case.
5A. Coming now to the provisions of sub-section (2) of Section 115, admittedly the goods in question were declared as required by law. There was therefore no question of having used the vessel for smuggling the goods which were declared. As regards the goods which were unclaimed, it is not the finding of the Additional Collector that the goods in question were carried with the knowledge or connivance of either of the Petitioners. The only case made out against the Petitioners is that they had failed to keep independent watchmen to watch the activities of the crew members. That is hardly any reason to rope in the Petitioners under the said sub-section (2). Hence, the order of confiscation of the vessel cannot be sustained under the said provisions.
6. The result therefore is that those parts of the impugned order which purport to levy personal penalty against the 2nd Petitioner and to confiscate the vessel or to direct the Petitioners to pay a redemption fine in lieu of the confiscation, will have to be struck down and are hereby struck down. The Rule is made absolute accordingly with costs.
7. Writ Petition No. 1290 of 1981 was filed in this Court against the seizure of the vessel even before the show cause notice was issued. After the show cause notice was issued and the finding was recorded in the enquiry it was challenged in the present writ petition. That petition therefore became infructuous and was withdrawn on the 25th January 1985. However, the Petitioners had given a Bank Guarantee in that petition in the sum of Rs. 2,25,000/- against which the vessel was released in their favour. In view of the fact that the Petitioners succeed in this petition, the Petitioners will stand discharged from the said Bank Guarantee and the Prothonotary will take steps accordingly.