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East India Commercial Co. Ltd.,calcutta and anr. Vs. the Collector of Customs, Calcutta - Court Judgment

LegalCrystal Citation
SubjectCustoms;Criminal
CourtSupreme Court of India
Decided On
Judge
Reported inAIR1962SC1893; 1983(13)ELT1342(SC); [1963]3SCR338
ActsSea Customs Act, 1878 - Sections 19, 167, 167(8) and 182; Import and Exports (Control) Act, 1947 - Sections 3, 3(1), 3(2), 4 and 5; Defence of India Rules - Rule 84; Indian Penal Code (IPC), 1860 - Sections 120, 120B and 420; Code of Criminal Procedure (CrPC), 1898 - Sections 253; Constitution of India - Article 226; Emergency Powers (Defence) Act, 1939; ;Emergency Provisions (Continuance) Ordinance, 1946
AppellantEast India Commercial Co. Ltd.,calcutta and anr.
RespondentThe Collector of Customs, Calcutta
Cases ReferredMackonochie v. Lord Penzance
Excerpt:
customs - license conditions - sections 19, 167, 167 (8) and 182 of sea customs act, 1878 and sections 3, 3 (1), 3 (2), 4 and 5 of import and exports (control) act, 1947 - proceeding initiated for confiscation of goods imported under valid license - such proceeding initiated by collector for violation of public notice challenged - infringement of public notice does not constitute violation of license order - act of importer did not summon cancellation of license by competent authorities - import license seems valid - held, in such circumstances proceedings initiated by collector exceeded his jurisdiction and liable to be quashed. - labour & services promotion: [tarun chatterjee & v.s. sirpurkar,jj] arrears of pay for period during which promotion denied due to pending criminal.....sarkar, j. 1. the appellants had brought into india from the u.s.a. a large quantity ofelectrical instruments under a licence. the respondent, the collector ofcustoms, calcutta, started proceedings for confiscation of these goods under s.167(8) of the sea customs act, 1878. the appellants contend that theproceedings are entirely without jurisdiction as the collector can confiscateonly when there is an import in contravention of an order prohibiting orrestricting it and in the present case the collector was proceeding toconfiscate on the ground that a condition of the licence under which the goodshad been imported had been disobeyed. the appellants, therefore, ask for a writof prohibition directing the collector to stop the proceedings. the questionis, has the collector jurisdiction to.....
Judgment:

Sarkar, J.

1. The appellants had brought into India from the U.S.A. a large quantity ofelectrical instruments under a licence. The respondent, the Collector ofCustoms, Calcutta, started proceedings for confiscation of these goods under s.167(8) of the Sea Customs Act, 1878. The appellants contend that theproceedings are entirely without jurisdiction as the Collector can confiscateonly when there is an import in contravention of an order prohibiting orrestricting it and in the present case the Collector was proceeding toconfiscate on the ground that a condition of the licence under which the goodshad been imported had been disobeyed. The appellants, therefore, ask for a writof prohibition directing the Collector to stop the proceedings. The questionis, has the Collector jurisdiction to adjudicate whether the goods are liableto be confiscated The decision of that question, however, depends on certainstatutory provisions and the fact of the case to which, therefore, I shallimmediately turn.

2. Sub-section (1) of s. 3 of the Import and Exports (Control) Act, 1947,provides that the Government may by order prohibit, restrict or otherwisecontrol the import of goods. By Notification No. 23 I.T.C./43 issued under r.84 of the Defence of India Rules which by virtue of s. 4 of the Act of 1947 isto be deemed to have been issued under that Act, it was ordered that noelectrical instrument could be brought into India except under a licence. Byanother order made under s. 3 of the Act and contained in Notification No.2-ITC/48, dated March 6, 1948, it was provided that the licence to importelectrical instruments might be issued subject to the condition that the goodswould not be disposed of or otherwise dealt with without the written permissionof the licensing authority.

3. The first appellant is a company and the second appellant, one of itsdirectors. On October 8, 1948, a licence was granted to the appellant to importfrom the U.S.A. a large quantity of electrical instruments, namely fluorescenttubes and fluorescent fixtures. In the application for the licence it wasstated that the goods were not required for sale but for modernising thelighting system of the appellant's factory at Ellore in Madras. The licence wasissued subject to the condition that the goods would be utilised only forconsumption as raw material or accessories in the licence holder's factory andthat no portion thereof would be sold to any party.

4. The goods duly arrived in India and were cleared out of the customssometime about the end of February, 1949. Soon thereafter, the authoritiesconcerned are said to have got information that the goods were being sold inthe market in breach of the condition of the licence. Thereupon the police tooksteps and after obtaining a search warrant from a Magistrate in Calcutta onAugust 12, 1949, seized a large stock of the goods from the godown of theappellants.

5. Thereafter on January 12, 1951, two proceedings were started. Once ofthem was a prosecution of various officers of the appellant company includingthe second appellant under s. 420 read with s. 120 of the Indian Penal Code onthe allegation that the licence had been obtained on false and fraudulentrepresentations as there was no intention at any time to use the goods for any factory.After certain proceedings to which it is unnecessary refer, the accused personswere discharged by a Presidency Magistrate of Calcutta on July 27, 1953, unders. 253 of the Code of Criminal Procedure and the prosecution under Sections 420 and120B of the Penal Code came to an end. The learned Magistrate held that it hadnot been proved that the licensing authority had been deceived by anyrepresentation of the accused officers of the company nor that 'right fromthe time of applying for the licence, the intention was to sell the goods orpart thereof'.

6. The other proceeding was a prosecution of the second appellant andanother person under s. 5 of the Act of 1947. That section provides that'if any person contravenes any order... under this Act, he shall... bepunishable with imprisonment... '. It was alleged that the accused personshad in violation of the conditions of the licence disposed of portions thegoods covered by it and, therefore, committed an offence under s. 5 of the Actof 1947. This proceeding resulted in a acquittal by the trial Court which wasconfirmed by the High Court at Calcutta on March 3, 1955. Sen J., who deliveredthe judgment of the High Court said that it was difficult to hold that acondition of the licence amounted to an order under the Act and unless thepenal section included the contravention of the condition as an offence itcould not be held that such a contravention amounted to an offence under thesection.

7. While these proceedings were pending an order was made by the High Courton January 16, 1953, directing the seized goods to be sold and the saleproceeds kept with the Chief Presidency Magistrate, Calcutta. Pursuant to thisorder the goods were sold for a sum of Rs. 4,15,000 and the sale proceeds havesince been lying with the Chief Presidency Magistrate.

8. After the aforesaid proceedings had come to an end, the Collector ofCustoms, Calcutta on August 28, 1955, served a notice on the appellant to showcause why the moneys lying with the Chief presidency Magistrate representingthe imported goods should not be confiscated under s. 167(8) of the Sea CustomsAct read with s. 3(2) of the Act of 1947 and why further penalty should not beimposed on them under these provisions. It is this notice which gave rise tothe proceedings with which we are concerned. The notice stated that aprohibition on the import of the goods except under a special licence andsubject to the conditions stated in it was imposed under s. 3(1) of the Act of1947 and that by virtue of this prohibition the importation of the goods wouldbe deemed to be illegal unless '(1) at the time of importation of goodswere covered by a valid special licence which had not been caused to be issuedby fraudulent misrepresentation, (2) after importation the goods or any part ofthem were not sold or permitted to be utilised by any other party, except theimporters for consumption as raw material.' It also stated thatinvestigation had revealed that portion of the goods were sold by theappellants to other people.

9. After receipt of the notice the appellants moved the High Court atCalcutta under Art. 226 of the Constitution for a writ of prohibitionprohibiting the respondent, the Collector of Customs, Calcutta, from taking anyproceeding pursuant to the notice under Sections 167 and 182 of the Sea Customs Actagainst the appellants. The application was first heard by Sinha, J., and wasdismissed. An appeal by the appellants to an appellate bench of the High Courtalso failed. The appellants have now approached this Court in further appeal byspecial leave.

10. Sub-section (2) of s. 3 of the Act of 1947 provides that 'all goodsto which any order under sub-section (1) applies shall be deemed to be goods ofwhich the import or export has been prohibited or restricted under s. 19 of theSea Customs Act, 1878 and all the provisions of that Act shall have effectaccordingly'. Section 19 of the Sea Customs Act is contained in Chapter IVof that Act. Section 167(8) of the Sea Customs Act states the 'If anygoods, the importation or exportation of which is for the time being prohibitedor restricted by or under Chapter IV of this Act, be imported into or exportedfrom India contrary to such prohibition or restriction.... such goods shall beliable to confiscation; and any person concerned in any such offence shall beliable to a penalty'. Section 182 of this Act authorises various CustomsOfficers including a Customs Collector to adjudicate on questions ofconfiscation and penalty under s. 167(8).

11. As earlier stated the question is one of jurisdiction. The contention oflearned counsel for the appellant is that under s. 167(8) of the Sea CustomsAct read with s. 182 of that Act under which the Collector of Customs isproceeding, he has jurisdiction only to decide whether goods have been importedcontrary to the prohibition or restriction imposed by an order made under s.3(1) of the Act of 1947 but he has no jurisdiction under these sections todecide any question of confiscation of goods for breach of a condition of alicence issued under such an order. It is said that it appeared from the noticeserved by the Collector that he was proceeding to decide whether the goods wereliable to confiscation because they had been disposed of in breach of thecondition of the licence under which they had been imported which he has nojurisdiction to do and hence the appellants were entitled to a writ ofprohibition which they sought. For the purpose of this argument the appellantsproceed on the assumption that there has been a breach of the condition butthis they do not, of course, admit.

12. The basis of the appellant's contention is the proposition that a breachof the conditions of a licence is not a breach of the order under which thenlicence was granted and the condition imposed and that no offence under s.167(8) of the Sea Customs Act is committed if a condition of the licence iscontravened. In my view this proposition is not well founded. But assume it iscorrect. Even so it seems to me that there is no lack of jurisdiction in theCollector in the present case. He has admittedly jurisdiction to decide whetherthere has been breach of an order. It follows that he has jurisdiction todecide what is a breach of an order and, therefore, whether the breach of acondition of a licence is breach of an order. To say that the breach of acondition is not a breach of an order is only to set us a defence that thegoods cannot be confiscated for such a breach. Such a contention does not oustthe jurisdiction of the Collector to decide whether the breach of a conditionis breach of an order. If the Collector decides that the breach of a conditionis a breach of an order, his decision, on the assumption that I have made,would be wrong but it would not be a decision made without jurisdiction. Thisis the view which all the learned Judges of the High Court took and it seems tome to be the correct view.

13. Further I think in the present case one of the allegations in the noticeis that the goods had been imported without a licence and therefore in directviolation of an order made under s. 3(1) of the Act of 1947. Clearly, theCollector has jurisdiction to decide the question raised by such an allegation.Now the notice served by the Collector on the appellants contains a statementthat an importation of goods would be illegal unless it was covered by alicence which has not been procured by fraudulent misrepresentation and that inthe present case the licence had been obtained by fraudulent misrepresentation.The notice hence alleges that the goods had been imported really without alicence, that is, in breach of an order. Even if it be assumed, as theappellants contend that an importation under a licence fraudulently procured isnot an importation without a licence, that would only show that there has beenno importation without a licence, that is, in breach of an order, but it wouldnot deprive the Collector of his jurisdiction to decide that question. Likewisethe fact that a Magistrate has decided that the licensing authority had notbeen deceived by the appellants in the matter of the issue of the licencewhich, if binding on the Collector, would only show that the licence had notbeen fraudulently procured and cannot affect the Collector's jurisdiction inany way.

14. It is also said that the decision of a High Court on a point of law isbinding on all inferior Tribunals within its territorial jurisdiction. It is,therefore, contended that the Collector is bound by the decision of Sen. J., towhich I have earlier referred, that the breach of a condition of a licence isnot a breach of the order under which the licence was issued and the conditionimposed. As at present advised I am not prepared to subscribe to the view thatthe decision of a High Court is so binding. But it seems to me that thequestion does not arise, for even if the decision of the High Court was bindingon the Collector, that would not affect his jurisdiction. All that it wouldestablish is that the Collector would have, while exercising his jurisdiction,to hold that the breach of condition of the licence is not a breach of anorder. Its only effect would be that the appellants would not have to establishindependently as a proposition of law that a breach of a condition of a licenceis not the breach of an order under which it had been issued but might for thatpurpose rely on the judgment of Sen, J.

15. I think, therefore, that the Collector has jurisdiction in this case todecide whether the goods were liable to confiscation. If he has thisjurisdiction, he has clearly also the jurisdiction to decide whether theappellants are liable to have a further pecuniary penalty imposed on them unders. 167(8) of the Sea Customs Act. If this is the correct view, as I think itis, then the appellants are not entitled to the writ.

16. But suppose I am wrong in what I have said so far about the Collector'sjurisdiction. Suppose as the appellants contend, he had in this case nojurisdiction to decide whether the goods are liable to confiscation. That wouldbe because the breach of a condition of a licence is not a breach of an orderunder which it was issued and the Collector has no jurisdiction to decidewhether it is so or not. This is how the appellants themselves put it. It hasnot been contended, and indeed it cannot be, that if the breach of a conditionof a licence is the breach of an order under which it was issued, the Collectorwould have jurisdiction to decide whether in the present case the goods areliable to confiscation.

17. I am unable to agree that the breach of a condition of a licence issuedunder an order made under the Act of 1947 is not a breach of the order. In myview, such a breach is a breach of the order itself. Sub-section (1) of s. 3 ofthe Act of 1947 empowers the Government to make orders prohibiting, restrictingor otherwise controlling the import of goods. Now clearly, one method ofrestricting or controlling the import of goods would be to regulate their useor disposition after they had been brought into India. Therefore, under the Actof 1947 the Government has power to restrict or control imports in this way; itcould lawfully provide that the goods would not after import be dealt with in acertain way. It would follow that Notification No. 2-ITC/48 was quite competentand intra vires the Act and, therefore, the condition in the licence issued inthis case that the goods would not be sold after they had been brought intoIndia had been legitimately imposed. The contrary has not indeed been seriouslycontended. When, therefore, such a condition is contravened, it is really theorder authorising its imposition that is contravened. That seems to me to bethe clear intention of the legislature for otherwise the efficacy of the Act of1947 would be largely destroyed. That Act was intended to preserve and advancethe economy of the State on which the welfare of the people depended. In such astatute large powers have to be given to the Government and they wereundoubtedly so given in the present case. The statute clearly intended and itshould be so read that these power could be effectively exercised. Thereforethe breach of a condition of a licence legitimately imposed in exercise of thatpower has to be read as a breach of the order by which the power was exercisedand the condition imposed. It follows that the Collector has jurisdiction todecide whether there has been a breach of a condition of a licence and whether,therefore confiscation should be ordered under s. 167(8) of the Sea Customs Actand further penalty imposed.

18. I observed that Sen, J., in dealing with the argument advanced on behalfof the customs authorities that a breach of a condition of a licence imposedunder an order issued under the Act would be a breach of that order said thatthere might be some substance in it in the present case, if notification No.23-ITC/43 which provided that electrical instrument could not be importedwithout a licence had itself provided that the licence might impose conditionas to how the goods were to be dealt with after they had been brought intoIndia but that had not been done. I am unable to appreciate this reasoning.Notification No. 23-ITC/43 has to be read along with Notification No. 2-ITC/48.The latter provided that a licence to import might be issued subject to acondition like the one which we have in the present case. The licence that wasissued in this case was subject to these notifications and was issued underboth of them. The position, therefore, is the same as if one order had providedthat the goods could not be imported except under a licence which could imposethe condition. I am unable to agree with Sen, J., and also Sinha, J., whoexpressed the same view without giving any reason to support it.

19. I find that the view that I have taken is supported by authority.Willingale v. Norris (1909) 1 K.B. 57 is a case fully in point and is amuch stronger case. That case dealt with a prosecution under s. 19 of theLondon Hackney Carriages Act, 1853, which provided that 'for every offenceagainst the provisions of this Act for which no special penalty is hereinbeforeappointed the offender shall be liable to a penalty not exceeding fortyshillings.' A cab driver was prosecuted under the section for breach of aregulation made under s. 4 of the Hackney Carriages Act, 1850. Section 21 ofthe Hackney Carriages Act, 1853, provided that the Acts of 1850 and 1853 wereto be considered as one Act. The driver was held liable to be penalised unders. 19 of the Act of 1953. It was observed at p. 66.

'How are the words 'against the provisions of theAct' to be read The two statutes are to be construed as one. In my opinion,to break the regulations made under the authority of a statute is to break thestatute itself, and therefore s. 19 of the London Hackney Carriages Act, 1823must be read thus : 'For every offence against the regulations promulgatedunder these two Act, which are to be read as one, a penalty not exceeding fortyshillings may be imposed.''

20. That case received the full approval of the House of Lords in Wicks v.Director of Public Prosecutions (1947) A.C. 362 where Viscount Simonsaid,

'There is, of course, no doubt that when a statutelike the Emergency Powers (Defence) Act, 1939, enables an authority to makeregulations, a regulation which is validly made under the Act, i.e., which isintra vires of the regulation-making authority, should be regarded as though itwere itself an enactment.'

21. I think these observations fully apply to an Act like the Imports andExports (Control) Act. Then I find that in our country to the same view hasbeen taken. Thus in Emperor v. Abdul Hamid A.I.R. 1923 Pat. 1, Mullick, J.,observed,

'When a notification is issued by an executiveauthority in exercise of a power conferred by statute, that notification is asmuch a part of the law as if it had been incorporated within the body of thestatute at the time of its enactment.'

22. It has, therefore, to be held that where an order passed under the Actauthorises the imposition of a condition a breach of the condition would bepunishable as breach of the order under the Act.

23. I might now notice another argument. It was this : Under s. 167(8) ofthe Sea Customs Act, it was the import in contravention of the restriction thatwas an offence. The contention was that once the goods had been importedvalidly, that is to say, once they had been allowed to cross the Customsbarrier under a valid licence, there could not be an import contrary to any prohibitionor restriction. It seems to me that this is taking too narrow a view of s.167(8). Suppose the order under s. 3(1) of the Imports and Exports (Control)Act had itself said that goods imported shall not be sold in the market withoutthe permission of a certain authority and the goods imported werenotwithstanding this sold without such permission. It would to my mind makenonsense of s. 167(8) if it were to be said even in such a case that the goodshad not been imported in contravention of the restriction imposed by alegitimate order duly made. I have earlier stated that the conditions in thelicence have to be treated as conditions contained in an order issued under theAct of 1947 itself. Therefore, the breach of such a condition would amount to acontravention of an order restricting the import of goods. Such a contraventionis clearly punishable under s. 167(8). The word 'import' has not beendefined in the Sea Customs Act. In order that the Act of 1947 does not becomeinfructuous, which result the legislature could not have intended, it must beheld that where after crossing the Customs barrier lawfully, goods are disposedof in contravention of a restriction duly imposed, they have been importedcontrary to the restriction.

24. It remains only to consider the argument that under the Sea Customs Actonly the goods imported can be confiscated and therefore, the money now lyingwith the Presidency Magistrate cannot be confiscated. I think argument iswholly untenable. The money represents the goods. The order for sale was madeby the High Court with the consent of both the parties because the goods weredeteriorating. Therefore there can be no doubt that the sale proceeds of thegoods which could be confiscated, can also be confiscated.

25. I think that the appeal fails and should be dismissed.

Subba Rao, J.

26. This appeal by special leave is directed against the judgment of adivision Bench of the High Court at Calcutta dated January 5, 1957, confirmingthe order of a single Judge of that Court dismissing the petition filed by theappellants under Art. 226 of the Constitution.

27. The dispute which culminated in this appeal has had a tortuous careerand had its origin in they year 1948. To appreciate the contentions of theparties it is necessary to survey broadly the events covering a long period.The appellants are Messrs. East Indian Commercial Co., Ltd., a company havingits registered office in Calcutta and the Director of that Company. OnSeptember 27, 1948, the appellant-Company filed an application with the ChiefController of Imports, New Delhi, for the grant of a licence to import 20,000fluorescent tubes and 2,000 fluorescent fixtures from the United States ofAmerica. The application was accompanied by a covering letter. In the applicationit was mentioned that the goods aware required for the Company's own use asindustrial raw material or accessories; but in the covering letter it wasstated that the goods were required primarily for their mills at Ellore in theMadras Presidency where they were planning to arrange for an up-to-datelighting system. The Chief Controller of Imports issued a special licence tothe appellants on October 8, 1948. The licence granted was in respect offluorescent tubes and fixtures of the approximate CIF value of Rs. 3,33,333equivalent to $ 100,000 and the shipment was to be made within one year fromthe date of issue of the licence. The licence issued had a rubber stamp whichran thus :

'This licence is issued subject to the conditionthat the goods will be utilised only for consumption as raw material oraccessories in the licence holder's factory and that no portion thereof will besold to any party.'

28. The licence did not impose any restriction as regards the number oftubes and fixtures to be imported, but a ceiling was placed on the value of thegoods as stated supra. Between March 21, 1949, and March 26, 1949, theappellants took delivery of the said tubes and fixtures of the specified valueand cleared them on payment of customs duty. The number of tubes and fixturesimported was larger than that mentioned in the application, but it is commoncase that the value did not exceed the ceiling fixed under the licence. Oninformation alleged to have been received by the Chief Controller of importsthat the appellant-Company was selling the goods to various parties, the matterwas placed before the Special Police Establishment Government, of India, NewDelhi. On August 31, 1949, the said Police establishment obtained a searchwarrant from the Chief Presidency Magistrate, Calcutta, and seized, amongothers, from the appellants' godown a large stock of fluorescent tubes andfixtures, and left them with the appellants on their executing a bond. It maybe mentioned at this stage that the value of the stock imported was about Rs.4,66,000 i.e., the purchase price of Rs. 3,33,333, together with the customsduty paid on the said goods. In the sale subsequently made at the instance ofthe High Court, the stock seized fetched a sum of Rs. 4,15,000. On December 9,1950, the appellants filed an application before the Chief PresidencyMagistrate, Calcutta, for the return of the seized goods, whereupon the learnedMagistrate called for a report from the Special Police Establishment, NewDelhi. On January 9, 12, 1951, the said Police Establishment submitted aChallan against appellant No. 2 and others for alleged offences under s.420/120B of the Indian Penal Code and the same was registered as Case No. C.121 of 1951. On the same day, the Assistant Collector of Customs filed acomplaint before the said Magistrate against appellant No. 2 and others forcommitting an offence under s. 5 of the Imports and Exports (Control) Act, 1947(hereinafter called the Act, for having sold a portion of the stock offluorescent tubes and fixtures in contravention of the terms of the licence andthe same was registered as Case No. C. 120 of 1951. On June 28, 1951, thelearned Presidency Magistrate discharged all the accused in both the casesunder s. 253 of the Code of Criminal Procedure after holding that no primafacie case had been made out against any of them. Two revisions were filedagainst that order in the High Court - one by the State and the other by theCustoms Authorities. Chunder, J., who heard the revisions, set aside the ordersof discharge made by the Presidency Magistrate and remanded the cases for freshdisposal. On June 8, 1952, the appellants filed an application before the ChiefPresidency Magistrate for the release of seized goods on the ground that theywere deteriorating, but that was dismissed. But in a revision against thatorder, the High Court on January 16, 1953, directed the goods to be sold by thePresidency Magistrate and the sale proceeds to be kept in his custody. Thegoods were sold accordingly and they fetched a sum of Rs. 4,15,000 and themoney has since then been in the custody of the said court. After remand, thePresidency Magistrate took the evidence of innumerable witnesses for theprosecution and for the defence, considered a number of documents and dischargedappellant No. 2 in both the cases. He held that appellant No. 2 was neitherguilty of the offence under s. 420 of the Indian Penal Code, as, in his view,there was no fraudulent or dishonest inducement at the time the application forlicence was made, nor of any contravention of the provisions of the Act. Thoughhe discharged appellant No. 2, he did not make over the sale proceeds to him,though the said appellant filed an application for payment of the same : thelearned Magistrate adjourned the said application till August 29, 1953. TheAssistant Collector of Customs filed a revision to the High Court against theorder of discharge of appellant No. 2 passed in case No. C. 120 of 1951 and thesame was registered as Criminal Revision No. 1124 of 1953; he also obtained aninterim stay of the return of the money to appellant No. 2. But no revision wasfiled against the order of the Presidency Magistrate discharging appellant No.2 of the offence under s. 420, Indian Penal Code. The Criminal Revision (No. 1124of 1953) came up before a division Bench of the Calcutta High Court, Consistingof Mitter and Sen, JJ., and the learned Judges, by their judgment dated March3, 1955, dismissed the revision holding that there had been no contravention ofthe order made or deemed to be made under the Act. The learned Judges construeds. 5 of the Act and held that the said Section penalised only a contraventionof an order made or deemed to have been made under the said Act, but did notpenalise the contravention of the conditions of licence issued under the Act orissued under a statutory order made under that Act, and dismissed the revision.On March 24, 1955, the appellants filed an application before the ChiefPresidency Magistrate for making over the sale proceeds to them; and the saidMagistrate issued a notice to the Assistant Collector of Customs and also tothe Delhi Special Police Establishment to show cause on or before April 19,1955. On April 19, 1955, the Superintendent, Special Police Establishment, didnot show cause, but the Assistant Collector of Customs asked for an adjournmentand the same was granted till May 7, 1955; and again on May 7, 1955, he tookanother adjournment of the hearing of the application on the ground thatdepartmental proceedings were pending against the appellants. On May 9, 1955,the appellants filed a revision in the High Court, presumably, against theorder adjourning the application and the said revision was numbered as RevisionCase No. 582 of 1955 and it was adjourned from time to time at the request ofthe respondent. On May 28, 1955, the respondent started a proceeding purportedto be under s. 167(8) of the Sea Customs Act, read with s. 3(2) of the Act andcalled upon the appellants by notice to show cause within seven days from thedate thereof why the said proceeds, namely, Rs. 4,15,000 should not beconfiscated and also why Penal action should not be taken against them. It wasstated in the notice that the special licence was issued on the expresscondition that the goods covered by the said licence should be utilised forconsumption as raw material or assessories in the factory of the licence holderand that no part thereof should be sold or permitted to be utilised by anyother party, that the appellants sold a portion of the goods imported under thesaid licence to others in Breach of the said condition and that, as theappellants infringed the said condition, the goods, or the money substituted inthe place, were liable to be confiscated. On June 3, 1955, the appellant filedan application in the High Court at Calcutta under Art. 226 of the Constitutionfor the issue of an appropriate writ, including a writ in the nature ofprohibition, against the Collector of Customs from continuing with theproceedings initiated by him. The application, in the first instance, came upbefore Sinha, J., who by his order dated March 18, 1957, dismissed theapplication as premature; but, in the course of his judgment, the learned Judgeagreed with the earlier division Bench, which disposed of the revision againstthe order of discharge, that a breach of a condition alone would not be aviolation of the order passed by the Central Government, but he observed thatthe learned Judges on the earlier occasion did not decide the question as towhat was permitted to be imported : he drew a distinction between a licenseewho imported goods perfectly bona fide for his own consumption but who laterchanged his mind and a licensee who, even from the inception, knew that he didnot require the goods for his own use, but entered into the transactionfraudulently; in the second situation, he learned Judge proceeded to state, thegoods imported were never goods required for the petitioner's company for itsown use. The appellants preferred an appeal to a division Bench of the HighCourt, consisting of Das Gupta, C.J., and Bachhwat, J. The learned Judgesdismissed the appeal solely on the ground that it was within the jurisdictionof the Collector of Customs to ascertain whether there had been a contraventionof the relevant provisions of the Act as would entail an order of confiscationand that, therefore, Sinha, J., was right in refusing to issue a writ; but theymade it clear that all the questions raised in the case were left open fordecision by the Chief Controller of Imports. Hence the present appeal.

29. Mr. Vishwanatha Sastri, learned counsel for the appellants, raisedbefore us the following points : (1) The Assistant Collector of Customs has nojurisdiction to initiate proceedings under s. 167(8) of the Sea Customs Act,1878, read with s. 3(2) of the Imports and Exports (Control) Act, 1947, in thecircumstances of the case, and therefore, the High Court should have issued anorder in the nature of a writ of prohibition restraining him from proceeding withthe said inquiry. (2) A division Bench of the High Court of Calcutta inCriminal Revision No. 1124 of 1953, to which the respondent was a party,declared the law on the construction of the provisions of s. 5 of the Act, readwith s. 3(2) thereof, viz., that it penalizes only a contravention of an ordermade or deemed to have been made under the Act and not a contravention of acondition imposed by the licence issued under the Act or issued under astatutory order made under the Act; and after that declaration, which isbinding on all the authorities and tribunals within the territorialjurisdiction of that court, the respondent has no jurisdiction to ignore thesaid order and proceed with a fresh inquiry in direct contravention of the lawso declared. (3) That apart, the proposition so laid down by the said divisionBench is sound and, if so, the respondent could not initiate proceedings unders. 167(8) of the Sea Customs Act in respect of a contravention of a conditionof the licence, as it is neither a part of an order nor a condition laid downby the Order within the meaning of s. 3 of the Act. (4) The Chief Controller ofImports has no jurisdiction to take action under s. 167(8) of the Sea CustomsAct on the ground that a condition inserted in a licence is subsequentlyinfringed by an importer, for it is said, the rule only enables the CustomsAuthorities to confiscate the goods imported without a license whereas in thepresent case the goods were imported under a valid subsisting licence. (5)Clause (8) of s. 167 of the Sea Customs Act does only authorize theconfiscation of goods so imported and not the sale proceeds of the said goods,for the reasons that the said money could not conceivably be goods in any senseof the term.

30. Mr. Prem, learned counsel for the respondent, argued contra. Hisargument may be summarized thus : (1) The Collector of Customs has jurisdictionto consider under s. 167(8) of the Sea Customs Act whether the goods areimported contrary to the restrictions imposed under the Act, and, therefore,the High Court could not issue a writ of prohibition against the said authorityfrom proceedings with the inquiry. (2) The notice issued is not a statutorynotice but is only an intimation to the appellants of the initiation of theproceedings and, therefore, the question of jurisdiction could not be decidedon the contents of the said notice. (3) The Customs Authorities have aconcurrent jurisdiction with the criminal court to deal with matters entrustedto them under the Acts and, therefore, the findings of a criminal court or evenof a High Court on the same or similar matters could not bind them and theycould come to a different conclusion of their own both on the question of lawas well as on facts from those of criminal courts, though the decision of theHigh Court may have persuasive influence on them. (4) The condition impose in alicence is under the relevant order issued by the Central Government inexercise of its power under s. 3 of the Act, and, as the appellants infringedthat condition, the goods imported are liable to be confiscated under s. 167(8)of the Sea Customs Act, read with s. 3(2) of the Act. (5) As the appellantsimported goods on a misrepresentation, in law the import must be deemed to beone made without a licence and therefore the goods imported are goods eitherprohibited or restricted within the meaning of s. 167(8) of the Sea CustomsAct. (6) The Customs Collector has jurisdiction to confiscate goods after theyhave left the customs barrier, and, as the money in deposit in court is theproceeds of the sale directed to be held by the High Court in the interest ofboth the parties, it represents the said goods, and, in any view, as the orderof the High Court is binding on both the parties, it is not open to the appellantsto plead that the goods are not represented by the said money.

31. The first question is whether the petition filed by the appellants underArt. 226 of the Constitution for the issue of a writ in the nature ofprohibition is maintainable in the circumstances of the case. A writ ofprohibition is an order directed to an inferior Tribunal forbidding it fromcontinuing with a proceeding therein on the ground that the proceeding iswithout or in excess of jurisdiction or contrary to the laws of the land,statutory or otherwise : Mackonochie v. Lord Penzance (1881) 6 AC 424and Halsbury's Laws of England, 3rd Edn : Vol. 11, p. 52.

32. The argument of learned counsel for the appellants is that on the faceof the notice dated May 28, 1955, issued by the respondent, the latter has nojurisdiction to initiate proceedings under s. 167(8) of the Sea Customs Act,read with s. 3(2) of the Act. Learned counsel for the respondent argues thatthe said notice is not a statutory notice but only a memorandum informally sentto the appellants intimating them that proceedings have been started againstthem, that the said notice is neither full nor exhaustive and thatjurisdictional facts could be ascertained only by the Customs Collector in thecourse of the said proceedings on full inquiry. We do not see any justificationfor this argument. The respondent proposed to take action under s. 167(8) ofthe Sea Customs Act, read with s. 3(2) of the Act. It cannot be denied that theproceedings under the said sections are quasi-judicial in nature. Whether astatute provides for a notice or not, it is incumbent upon the respondent toissue notice to the appellants disclosing the circumstances under whichproceedings are sought to be initiated against them. Any proceedings takenwithout such notice would be against the principles of natural justice. In thepresent case, in our view, the respondent rightly issued such a notice whereinspecific acts constituting contraventions of the provisions of the Acts forwhich action was to be initiated were clearly mentioned. Assuming that a noticecould be laconic, in the present case it was a speaking one clearly specifyingthe alleged act of contravention. If on a reading of the said notice, it ismanifest that on the assumption that the facts alleged or allegations madetherein were true, none of the conditions laid down in the specified sectionswas contravened, the respondent would have no jurisdiction to initiateproceedings pursuant to that notice. To state it differently, if on a trueconstruction of the provisions of the said two sections the respondent has nojurisdiction to initiate proceedings or make an inquiry under the said sectionsin respect of certain acts alleged to have been done by the appellants, therespondent can certainly be prohibited from proceedings with the same. Wetherefore, reject this preliminary contention.

33. The next question is, what is the true construction of the provisions ofthe relevant sections It would be convenient at this stage to read therelevant parts of Sections 3 and 5 of the Act and Sections 19 and 167(8) of the SeaCustoms Act.

34. Imports and Exports (Control) Act, 1947

Section 3. (1) The CentralGovernment may, by order published in the Official Gazette, make provisions forprohibiting, restricting or otherwise controlling, in all cases or in specifiedclasses of cases, and subject to such exceptions, if any, as may be made by orunder the order :-

(a) the import, export,carriage coastwise or shipment as ship stores of goods of any specifieddescription.

(b) the bringing into any portor place in India of goods of any specified description intended to be takenout of India without being removed from the ship or conveyance in which theyare being carried.

(2) All goods to which any orderunder sub-section (1) applies shall be deemed to be goods of which the importor export has been prohibited or restricted under section 19 of the Sea CustomsAct, 1878 (VIII of 1878) and all the provisions of that Act shall have effectaccordingly, except that section 183 thereof shall have effect as if for theword 'shall' therein the word 'may' were substituted.

35. Section 5. Penalty - If any person contravenes or attempts tocontravene, or abets a contravention of any order made or deemed to have beenmade under this Act, he shall, without prejudice to any confiscation or penaltyto which he may be liable under the provisions of the Sea Customs Act, 1878(VIII of 1878), as applied by sub-section (2) of section 3, be punishable withimprisonment for a term which may extend to one year, or with fine, or withboth.

36. The Sea Customs Act, 1878.

37. Section 19. The Central Government may from time to time, bynotification in the Official Gazette, prohibit or restrict the bringing ortaking by sea or by land goods of any specified description into or out ofIndia across any customs frontier as defined by the Central Government.

38. Section 167. The offences mentioned in the first column of the followingschedule shall be punishable to the extent mentioned in the third :-

Section of this

Offences Act to which Penalties

offences has

reference.

8. If any such goods shall

goods, the be liable to

importation confiscation, and

or exportation any person concerned

of which is for in any such offence

the time being 18 and 19 shall be liable

prohibited or to a penalty not

restricted by or exceeding three times

under Chapter IV the value of the

of this Act, be of goods, or not

imported into or exceeding one

exported from India thousand rupees.

contrary to such

prohibition or

restriction.

39. The essence of the offence is a contravention of any order made ordeemed to have been made under the Act. All orders under this Act can only bemade by the Central Government in exercise of the power conferred upon it bythe s. 3 of the Act, and 'all orders made under r. 84 of the Defence ofIndia Rules or that rule as continued in force by the Emergency Provisions(Continuance) Ordinance, 1946 (XX of 1946), and in force immediately before thecommencement of this Act, shall continue in force and be deemed to have beenmade under this Act'. The contravention of only these two categories oforders attracts the provisions of s. 19 of the Sea Customs Act. By reason of s.3(2) of the Act, all goods to which any order under sub-s. (1) of s. 3 appliesshall be deemed to be goods of which the import or export has been prohibitedunder s. 19 of the Sea Customs Act and all the provisions of the Sea CustomsAct, with some modifications - with which we are not concerned now - shallapply. This provision in its turn attracts, along with others s. 167(8) of theSea Customs Acts, and under that section, read with s. 3(2) of the Act, thegoods imported in contravention of an order under the Act shall be liable to beconfiscated. But the section does not expressly or by necessary implication empowerthe authority concerned to confiscate the goods imported under a valid licenceon the ground that a condition of the licence not imposed by the order isinfringed or violated. If that be the true construction of the said provisions,the question arises whether in the instant case the allegations made in thenotice bring the goods imported within the scope of the provisions of s. 167(8)of the Sea Customs Act. We shall now proceed to deal with that question.

40. As we have already noticed in the earlier stage of the judgment, thenotice issued by the respondent charges the appellants thus :

'One of the conditions of the special licence wasthat the goods would be utilized for consumption as raw material or accessoriesin the factory of the licence-holder and no part thereof would be sold theother parties, but in contravention of that condition the appellants sold apart of the goods imported to a third party and as the goods had been caused tobe issued by fraudulent misrepresentation, they were liable to be confiscatedunder s. 167(8) of the Sea Customs Act.'

41. Section 167(8) of the Sea Customs Act can be invoked only if an orderissued under s. 3 of the Act was infringed during the course of the import orexport. The division Bench of the High Court held that a contravention of acondition imposed by a licence issued under the Act is not an offence under s.5 of the Act. This raises the question whether an administrative tribunal canignore the law declared by the highest court in the State and initiateproceedings in direct violation of the law so declared. Under Art. 215, everyHigh Court shall be a court of record and shall have all the powers of such acourt including the power to punish for contempt of itself. Under Art. 226, ithas a plenary power to issue orders or writs for the enforcement of the fundamentalrights and for any other purpose to any person or authority, including inappropriate cases any Government, within its territorial jurisdiction. UnderArt. 227 it has jurisdiction over all courts and tribunals throughout theterritories in relation to which it exercise jurisdiction. It would beanomalous to suggest that a tribunal over which the High Court hassuperintendence can ignore the law declared by that court and start proceedingsin direct violation of it. If a tribunal can do so, all the sub-ordinate courtscan equally do so, for there is no specific provision, just like in the case ofSupreme Court, making the law declared by the High Court binding on subordinatecourts. It is implicit in the power of supervision conferred on a superior tribunalthat all the tribunals subject to its supervision should conform to the lawlaid down by it. Such obedience would also be conducive to their smooth working: otherwise there would be confusion in the administration of law and respectfor law would irretrievably suffer. We, therefore, hold that the law declaredby the highest court in the State is binding on authorities or tribunals underits superintendence, and that they cannot ignore it either in initiating aproceeding or deciding on the rights involved in such a proceeding. If that beso, the notice issued by the authority signifying the launching of proceedingscontrary to the law laid down by the High Court would be invalid and theproceedings themselves would be without jurisdiction.

42. We shall now proceed to consider the merits. Sub-section (2) of s. 3 ofthe Act clearly lays down that all goods, to which an order under sub-s. (1)thereof applies, shall be deemed to be goods of which the export or import hasbeen prohibited or restricted under s. 19 of the Sea Customs Act. Therefore, s.167(8) of the Sea Customs Act can be attracted only if there was contraventionof the order issued under s. 3 of the Act. Does any order so issued by its ownforce imposed such a condition The Import Trade Control Notification datedJuly 1, 1943, reads thus :

The notification of the Government of India in the lateDepartment of Commerce No. 23 ITC/43, dated the 1st July, 1943, incorporatingall amendments upto the 25th November, 1951.

43. In exercise of the powers conferred by sub-rule (3) of rule 84 of theDefence of India Rules the Central Government is pleased................... toprohibit the bringing into British India by sea, land or air from any placeoutside India of any goods of the descriptions specified in the Schedule heretoannexed except the following, namely : ..................................................................

(xiii) any goods of thedescriptions specified in the schedule which are covered by a special licenceissued by any officer specially authorised in this behalf by the CentralGovernment.

44. It is not disputed that the goods imported in the present case werespecified in the schedule. This order prima facie does not impose a conditionin the matter of issuing a licence for the specified goods. On March 6, 1948,another notification No. 2-ITC/48 was issued by the Ministry of Commerce. Therelevant part of it reads :

In exercise of the powersconferred by sub-section (1) and sub-section (3) of section 3 of the Importsand Exports (Control) Act, 1947 (XVIII of 1947), the Central Government ispleased to make the following order, namely :-

(a) any officer issuing alicence under clauses (viii) to (xiv) of the Notification of the Government ofIndia in the late Department of Commerce No. 23-ITC/43, dated the 1st July1943, may issue the same subject to one or more of the conditions stated below:

(i) that goods covered by thelicence shall not be disposed of or otherwise dealt with without the writtenpermission of the licensing authority or any person duly authorised by it; ...................................................................

(v) that such other conditionsmay be imposed which the licensing authority considers to be expedient from theadministrative point of view and which are not inconsistent with the provisionsof the said Act.

(b) Where a licensee is found tohave contravened the order or the terms and conditions embodied in oraccompanying a licence, the appropriate licensing authority or the Chief Controllerof Imports may notify him that, without prejudice to any penalty to which hemay be liable under the Imports and Exports (Control) Act, 1947 (XVIII of1947), or any other enactment for the time being in force, he shall eitherpermanently or for a specified period be refused any further licence for importof goods.

45. It will be seen from this order that it does not provide for a conditionin the licence that subsequent to the import the goods should not be sold.Condition (v) of clause (a) only empowers the licensing authority to impose acondition from an administrative point of view. It cannot be suggested that thecondition, with which we are now concerned, is a condition imposed from anadministrative point of view, but it is a condition which affects the rights ofparties. Learned counsel for the respondent argues that a public notice issuedby the Government on July 26, 1948, is an order made in exercise of the powerconferred on the Central Government under s. 3 of the Act and that the order directsthe imposition of a condition not to sell to a third party the goods permittedto be imported and that condition was contravened. The public notice dated July26, 1948, was published in the Gazette on July 29, 1948. The relevant part ofit reads :

Government of India

MINISTRY OF COMMERCE

PUBLIC NOTICES

New Delhi, the 26th July, 1948

Subject :-Principles governing the issue of import licences for the period July-December,1948.

No. I(13)-I.T.C./47 (i). Thefollowing decisions made by the Government of India governing the issue ofimport licences for goods falling under Parts II to V of the Import TradeControl Schedule for the licencing period July-December, 1948 are herebypublished for general information. These decisions do not apply to goods fallingunder Capital Goods and H.E.P. Licensing procedure which has been prescribed inthe Public Notice issued on 10th April, 1948.

46. Under paragraph 5, importers are requested to study the Appendixcarefully and avoid making applications for import licences for articles whichwill not be licensed; para. 7 prescribes the form of application; para. 8 saysthat in the case of articles which are subject to overall monetary limits, weregoods are raw materials and accessories used in Industrial concerns, applicationsfrom actual consumers of goods will receive consideration, and that actualconsumers should clearly specify in their application their past and estimatedconsumption of the article concerned as required in para. 6 of the form ofapplication. Paragraphs 6 to 10 deal with would be applicants. Paragraph 11says that no time limit has been fixed for receiving applications fromimporters who are actual consumers of industrial raw material and accessoriesand who have imported the commodities concerned during any financial yearbetween 1938-39 and 1947-48 (inclusive) and that it is hoped to deal with theseapplications chronologically as and when received. Paragraph 13 describes theauthorities to whom applications should be made. A perusal of this notice showsthat it is intended to give information to the public as regards the procedureto be followed in the matter of filing of applications by different categoriesof applicants. It not only does not on its face purport to be a statutory orderissued under s. 3 of the Act, but also the internal evidence furnished by itclearly shows that it could not be one under that section. That apart, thisorder does not amend the previous orders or direct the imposition of acondition on an importer not to sell the goods to a third party or provide fora penalty for doing so.

47. Learned counsel for the respondent asserts that the said public noticeis an order made in exercise of the power conferred on the Central Governmentunder s. 3(1) of the Act. On the other hand, learned counsel for the appellantscontends that public notices are not such orders but only information given tothe public for their guidance.

48. Firstly, the said notice does not purport to have been issued under s.3(1) of the Act, whereas the orders referred to earlier, that is, notificationsNos. 23-ITC/43 and 2-ITC/48 and similar others, were issued by the CentralGovernment in exercise of the power conferred on it by sub-r. (3) of r. 84 ofthe Defence of India Rules or s. 3(3) of the Act, as the case may be. TheCentral Government itself makes a clear distinction in the form adopted inissuing the notice. Secondly, while the notifications issued under s. 3 of theAct are described as orders, the notices are described as 'public notices';while the notifications under s. 3 of the Act regulate the rights of parties,the public notices give information to the public regarding the principlesgoverning the issue of import licences for specified periods. It is also clearthat the orders issued under s. 3 of the Act, having statutory force, have tobe repealed, if the new order in any manner modifies or supersedes theprovisions of an earlier order; public notices are issued periodically withoutrepealing or modifying the earlier notices or notifications. For instance, onDecember 7, 1955, the Central Government in exercise of the power conferred bySections 3 and 4-A of the Act made an order and under clause 12 thereof the orderscontained in Schedule IV were repealed; Schedule IV only mentioned five notificationsissued under s. 3 of the Act, but no public notice was included in that list.To put it differently, orders made under s. 3 of the Act have statutory force,whereas public notices are policy statements administratively made by theGovernment for public information. The foreword to the Import Trade ControlHand-book of Rules and Procedure, 1952, under the signature of the Secretary tothe Government of India, in the Ministry of Commerce and Industry brings outthis distinction thus :

'In the past the half-yearly publication on ImportControl, popularly known as the 'Red Book', has included not only astatement of policy for the ensuring six months but also a reproduction ofvarious notifications relating to Import Control and detailed information onpoints of procedure'.

49. It is true the Chief Controller made an affidavit in the High Court thatthe policy-statements are issued under s. 3 of the Act. But, as we have said,that is only on information which has no support either in the form adopted orthe practice followed or the matter incorporated in the notifications. We haveno hesitation in holding that public notices are not orders issued under s. 3of the Act.

50. It follows from the above that the infringement of a condition in thelicence not to sell the goods imported to third parties is not an infringementof the order, and, therefore, the said infringement does not attract s. 167(8)of the Sea Customs Act.

51. Nor is there any legal basis for the contention that licence obtained bymisrepresentation makes the licence non est, with the result that the goodsshould be deemed to have been imported without licence in contravention of theorder issued under s. 3 of the Act so as to bring the case within clause (8) ofs. 167 of the Sea Customs Act. Assuming that the principles of law of contractapply to the issue of a licence under the Act, a licence obtained by fraud isonly voidable : it is good till avoided in the manner prescribed by law. On May1, 1948, the Central Government issued an order in exercise of the powerconferred on it by s. 3 of the Act to provide for licences obtained bymisrepresentation, among others, and it reads :

The authorities mentioned in theSchedule hereto annexed may under one or other of the following circumstancescancel licences issued by any officer authorised to do so under clauses (viii)to (xiv) of the notification of the Government of India in the late Departmentof Commerce No. 23-ITC/43, dated 1st July 1943, or take such action as isconsidered necessary to ensure that the same is made ineffective, namely :-

(i) when it is found subsequentto the issue of a licence that the same has been issued inadvertently,irregularly or contrary to rules, fraudulently or through misleading statementon the part of the importer concerned; or

(ii) when it is found that thelicensee has not complied with any one or more of the conditions subject towhich the licence may have been issued.

SCHEDULE

----------------------------------------------------------------------

Clauses Licensing Cancelling

Authority authority

----------------------------------------------------------------------

Clause (xii) Any officer authorised Chief Controller

by the Central Government. of Imports

and/or Government

of India.

----------------------------------------------------------------------

52. This order, therefore, authorised the Government of India or the ChiefController of Imports to cancel such licences and make them ineffective. Thespecified authority has not cancelled the licence issued in this case on theground that the condition has been infringed. We need not consider the questionwhether the Chief Controller of Imports or the Government of India, as the casemay be, can cancel a licence after the term of the licence has expired, for nosuch cancellation has been made in this case. In the circumstances, we musthold that when the goods were imported, they were imported under a validlicence and therefore it is not possible to say that the goods imported were thoseprohibited or restricted by or under Ch. IV of the Act within the meaning ofclause (8) of s. 167 of the Sea Customs Act.

53. If follows that on the assumption that the allegations made in thenotice are true, the tribunal has no jurisdiction to proceed with the inquiryunder s. 167(8) of the Sea Customs Act.

54. Learned counsel for the appellants further contends that s. 167(8) ofthe Sea Customs Act applies only to an act done before or during the course ofan import or export into or out of India in contravention of the prohibition orrestrictions imposed under s. 3 of the Act and that, as in the instant case thebreach of the condition was committed subsequent to the importation of theconcerned goods, the said goods could not be confiscated under the saidsection. But we do not propose to express our opinion on this question, as itdoes not arise in view of our findings on other questions raised in the case.

55. Before closing we may briefly notice one more contention raised bylearned counsel for the appellants. It is said that, as the goods imported wereconverted into money, the Customs Collector has no jurisdiction to confiscatethe same and that he can, at the best, only trace the goods in whosesoeverhands they may be. We have pointed out that the goods were sold only at theinstance of the court in the interest of both the parties, as they weredeteriorating. The order is binding on the parties. The sale proceeds arepreserved for the benefit of the party who finally succeeds. In the circumstancesit is not open to the appellants to argue that money deposited in the courtdoes not represent the goods.

56. In the result, the order of the High Court is set aside and the appealis allowed with costs. There will be an order of prohibition restraining theCustoms Authority from proceedings with the inquiry under s. 167(8) of the SeaCustoms Act.

57. BY COURT : In view of the majority opinion of the Court, the appeal isallowed with costs. There will be an order of prohibition restraining theCustoms Authority from proceeding with the enquiry under s. 167(8) of the SeaCustoms Act.

58. Appeal allowed.


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