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Union of India (Uoi) Vs. Kanchanlal Trikamlal and ors. - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtGujarat High Court
Decided On
Judge
Reported in(1977)18GLR289
AppellantUnion of India (Uoi)
RespondentKanchanlal Trikamlal and ors.
Excerpt:
- - 5. on the brown paper of the parcel delivered at bombay office by or on behalf of kantilal chhaganlal, it was endorsed that it was insured for rs. therefore, it is clearly established by the prosecution that the wrist watches are smuggled goods in view of the presumption under section 113. the accused have not discharged the burden of proof which lie on them under the provisions of section 123 of the act that the wrist watches are not smuggled goods. even though the parcel was endorsed to be insured, nothing appears from the record as to why or in what circumstances the consignor changed his mind. 5 clearly indicated that both accused nos. section 140 of the act provides that if a person committing an offence under this chapter which includes section 135 is a company then every.....a.d. desai, j.1. the customs officers at baroda and ahmedabad received an information that a parcel containing smuggled goods was ''carried by the employee of the firm of m/s. somabhai kanchanlal and co., accused no. 4 in the case, from bombay to ahmedabad. in total 11 parcels of the firm of accused no. 4 arrived at ahmedabad railway station by gujarat mail on august 20, 1971. the parcels were in a break van. the parcels were received by an employee of the accused firm at ahmedabad railway station at about 6.30 a.m. the parcels were then loaded in a hand-cart and taken to the office of the firm situated at panchkuva, ahmedabad. the custom officers followed the parcels keeping a watch over them. at about 9 or 9-30 a.m. the manager of the firm of the accused at ahmedabad was called at the.....
Judgment:

A.D. Desai, J.

1. The Customs Officers at Baroda and Ahmedabad received an information that a parcel containing smuggled goods was ''carried by the employee of the firm of M/s. Somabhai Kanchanlal and Co., accused No. 4 in the case, from Bombay to Ahmedabad. In total 11 parcels of the firm of accused No. 4 arrived at Ahmedabad Railway Station by Gujarat Mail on August 20, 1971. The parcels were in a break van. The parcels were received by an employee of the accused firm at Ahmedabad Railway Station at about 6.30 a.m. The parcels were then loaded in a hand-cart and taken to the office of the firm situated at Panchkuva, Ahmedabad. The Custom Officers followed the parcels keeping a watch over them. At about 9 or 9-30 a.m. the Manager of the firm of the accused at Ahmedabad was called at the office and in his presence and in the presence of two panchas the parcels were opened. One parcel was found to be wrapped with a session cloth. The hessian was removed and a parcel wrapped in brown paper was found. On it there were writings. The name of the consignor and the consignee was written. There was also an endorsement to the effect that the parcel was insured for Rs. 120/-. On removing the brown paper, small packets wrapped in newspapers were found and on further opening 200 wrist watches of Hendry Sandoz and Sando's mark were recovered. The wrist-watches were of foreign make and origin. The documents for legal import and transport of foreign goods were demanded from accused No. 5 but he could not produce them. The watches were seized under a panchnama by the Custom Officers under a reasonable belief that the same were smuggled goods liable to be confiscated under the Customs Act, 1962. The goods were valued at Rs. 22000/- at the then market price.

2. Accused-appellants Nos. 1, 2 and 3 are the partners of the firm accused-appellant No. 4. Accused-appellant No. 5 is the Manager of the accused firm at Ahmedabad, while accused-appellant No. 6 is the Manager of the said firm at Bombay. Two statements of accused No. 5 dated August 20, 1971 and January 1, 1972 were recorded by Mr. Vora, Superintendent, Central Excise, Baroda, who investigated the case on behalf of the Custom Authorities. Mr. Vora also recorded two statements dated October 12, 1971 and January 10, 1972 of Kantilal Chaturdas Patel, accused No. 6, the Manager of the accused firm at Bombay. The statements of these two accused are proved to be voluntary and correctly recorded. The statements of the two accused recorded by Mr. Vora disclose the manner in which the business of the firm is carried on. The accused firm has its branch offices at Bombay, Baroda, Ahmedabad, etc. and has its main office at Sural. The parcels entrusted to the firm are carried from one place to another. The receiving office takes the parcels delivered to it for transport and if the persons entrusting the parcels insist for a receipt, it is given to him. The firm acts as a carrier of the goods and does not open the parcels unless it has some suspicion about the contents thereof Parcels are received upto 3-00 O'clock in the Bombay Office. The parcels are thereafter sorted out and divided in two categories, namely, insured parcels and ordinary parcels. Entries in respect of the parcels are made in the list which is known as Bharatia. There is no clear evidence on the record whether such entries are made in any other register or registers The Bharatia is prepared in triplicate. One copy thereof is sent to the Head Office of the firm at Surat. The other copy is sent along with the parcels, through the employee who carries the valuable parcels and the third copy is retained in the office receiving the parcels for dispatch. Ordinary parcels are put into one big parcel weighing about 60 or 70 Kgs. If the parcels are more, then more big parcels each weighing about 60 or 70 kgs. are made. Valuable parcels are covered by the firm with a hessian cloth. The ordinary parcel or parcels are carried in a break-van but the insured parcels are carried by the employee of the firm in a separate bag. The Custom Officers ordinarily first search the parcels carried personally by the employee. The parcels are taken delivery of at the destination station and then carried to the office of the firm. The octroi is paid at the office of the firm which receives the parcels. The Octroi Officers open the parcels if they have suspicion about the valuation thereof. The delivery of the parcel is given at the office under receipt to the consignee or to a person authorised by the consignee on payment of money if the charge for transfer is not paid at the receiving centre. One important feature to be taken notice of is that the firm does the business as a carrier and does not normally open the parcels, that is, there is no practice of opening the parcels to check their contents unless there is a suspicion about contents thereof. The practice that is followed by accused No. 4 does not require a description of the contents of the parcel to be given either on the parcel or by giving at a separate declaration form in that respect. There is no dispute as to the manner in which the accused firm carries on its business as a carrier of the goods.

3. So far as the present case is concerned, the record shows that a parcel wrapped in a brown paper was delivered by or on behalf of one Kantilal Chhaganlal at the Bombay Office of the firm at about 6 p. m. on August 19, 1971. In respect of this parcel an entry was made in the copy of the Bharatia kept at the Bombay Office and the said entry is the last entry in the Bharatia. The entry in respect of this parcel was not made in the Bharatia given to the employee who carried the parcel to Ahmedabad. As the parcel was delivered by the consignor at the last moment, the entry in connection thereto was made in the copy of the Bharatia kept at the Bombay Office and telephone call was made at 7 p.m. by accused No. 6 at the Ahmedabad Office instructing the office to make such entry in the copy of the Bharatia which they would receive. Such an entry was subsequently made by accused No. 5. On the brown paper of the parcel delivered at Bombay Office by or on behalf of Kantilal Chhaganlal, it was endorsed that it was insured for Rs. 120/- but the parcel was treated as in fact as an ordinary parcel because no insurance charges were paid. In the copy of the Bharatia received at Ahmedabad four more entries were made by accused No. 5 as four more parcels were received and one of those entries was made in such a manner that it is written over on the entry in the name of Kantilal Chhaganlal. These four entries are made in ink. This state of affairs appears from the record and Mr. Thakore for the respondents and Mr. Patel for the appellant did not dispute the same.

4. Now the complaint in this connection was filed by Mr. A.K. Mehta, Assistant Collector Customs, Ahmedabad, in the Court of the Metropolitan Magistrate, 11th Court, Ahmedabad against the accused and the charge was framed against them to the effect that on or about August 20, 1971, they were found in possession of 200 wrist watches and that they acquired the same in contravention of the Import (Control) Order, 1955 issued under Section 3(1) of the Imports and Exports (Control) Act, 1947 and that the goods were prohibited for importation under Section 11 of the Customs Act and were notified goods under Section 11-B of the Customs Act and that they were concerned in importing, transporting, carrying, keeping, concealing, selling and purchasing the said goods which were liable to be confiscated under Section Ill of the Customs Act, 1962 and had thus committed the offence punishable under Section 135 of the Customs Act, 1962. The learned Chief Metropolitan Magistrate, Ahmedabad, came to the conclusion that the provisions of Section 123 of the Customs Act were not attracted as the possession of the parcel by the accused was not proved to be a conscious one. According to the learned Magistrate, there was no evidence that the man working at the office at Bombay had occasion to open the parcel and check the materials contained in it and under the circumstances, it could not be said that the possession of the parcel by the accused was conscious. He further came to the conclusion that there was no evidence that there was no person named as Kantilal Chhaganlal and nobody had searched for him. He, therefore, acquitted all the accused. The State has filed this appeal challenging the said order of acquittal.

5. Before considering the arguments of the learned advocates, it is necessary to notice certain relevant provisions of the Customs Act, 1962 (hereinafter referred to as the Act), which provide far raising certain presumptions. Section 123 of the Act provides that where any goods to which this section applies are seized under the Act and under the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be--

(a) in a case where such seizure is made from the possession of any person--

(i) on the person from whose possession the goods were seized; and

(ii) if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person;

(b) in any other case, on the person, if any, who claims to be the owner of the goods so seized.

6. Section 138-A of the Act was added by Act 36 of 1973, and it is as under:

Presumption of culpable mental state; 138-A(1): In any prosecution for an offence under this Act which requires a culpable mental state on the part of the accused, the court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental slate with respect to the act charged as an offence in the prosecution.

Explanation: In this section, 'culpable mental state' includes intention, motive, knowledge of a fact and belief in, or reason to believe, a fact.

(2) For the purposes of this section, a fact is said to be proved only when the Court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability.

Provisions of both these sections have a far reaching effect. In the present case wrist watches of the foreign make have been seized. It has not been shown that the watches were imported on payment of duty. Thus there is sufficient evidence to show that wrist watches were smuggled goods. Wrist watches were also seized by the Custom Officers under reasonable belief that they were smuggled goods. This is the evidence on record. Therefore, it is clearly established by the prosecution that the wrist watches are smuggled goods in view of the presumption under Section 113. The accused have not discharged the burden of proof which lie on them under the provisions of Section 123 of the Act that the wrist watches are not smuggled goods. Section 138-A of the Act is a drastic provision which makes far reaching changes in the concept of the provisions of mens rea as necessary ingredients and radical departure from the concept of the traditional criminal jurisprudence. According to the provisions of this section wherever mens rea is a necessary ingredient in an offence under the Act, the Court shall presume its existence. No doubt this presumption is a rebuttable one. The explanation to the section provides for an inclusive definition of 'culpable mental state' which is wide in its field so as to include intention, motive, knowledge of a fact and belief in, or reason to believe a fact. The presumption arising under Sub-section (1) may be rebutted by the accused but the burden that is cast upon the accused to displace the presumption is very heavy. The accused has to prove absence of culpable mental state not by propounder-once of probability. The accused is required to prove that he did not possess the requisite mental state to the hilt, that is, beyond reasonable doubt. It is in light of these two presumptions that the facts of the case required to be considered.

7. The accused are charged for having committed an offence under Section 135 of the Act and one of the essential ingredients thereof is that the accused must have acquired possession or carried, removed, deposited, harboured, kept, concealed, sold or purchased or in any other manner dealt with any goods which he knew or had reason to believe were liable to confiscation under Section 111. The culpable mental state which is contemplated by the section is 'knowledge'. A person who consciously acquires, deposits, sells, keeps, purchases or in any other manner deals with any goods which he knows or reason to believe that are liable to confiscation under Section Ill can be held guilty under Section 135 of the Act. The accused must have knowledge of goods being smuggled goods in order that he may be held guilty under Section 135 of the Act. In the present case as shown hereinbefore the wrist watches which were found in the possession of the accused and they were smuggled goods. The question is whether the said accused were in conscious possession of the goods for transport, that is, they were in possession of the goods knowing them to be smuggled goods. Section 138-A of the Act imposes a duty on the Court to raise a presumption that the accused had such knowledge. The onus then shifts, on the accused to prove that they had no such knowledge and the onus is to prove this beyond reasonable doubt. It is argued by Mr. Thakore that the appellants accused are carrying on the business as a common carrier and during the course of this business they do not open a parcel unless they have suspicion about its contents. The accused carry hundreds of parcels daily and it is not possible for them to open each and every parcel. It is for this reason that the practice is to open a parcel if there is any suspicion about its contents. There was no apparent reason for the accused to open the parcel which contained the wrist watches. To support his argument Mr. Thakore relied upon the evidence of Mr. Vora, Ex. 4, and he had stated therein that merely from the appearance of the parcel one could not say that the same contained contraband goods. The business which is carried on by the accused firm can be compared with the business carried on by the post office and the railways. The manner in which the business is carried on by the accused firm is not unusual. The manner in which the business is carried on by the accused itself is sufficient evidence to rebut the presumption contended Mr. Thakore and the accused have given a satisfactory explanation to satisfy the Court beyond a reasonable doubt about their having no knowledge about the contents of the parcel.

8. The argument of Mr. Thakore is no doubt ingenious and attractive. The manner in which the accused carry on the business is no doubt a, most relevant factor. The question whether the presumption under Section 138-A of the Act is rebutted or not is a question of fact. Inspite of the manner in which the business is carried on by an accused, there may be circumstances in a case which may lead to the Court to conclude that the presumption under Section 138-A of the Act has not been rebutted beyond a reasonable doubt. Therefore, the mere manner in which the business is carried on by a carrier will not in all the cases be sufficient to rebut the presumption of knowledge which the Court is required to raise under Section 138-A of the Act. It is true that the usual custom in the trade is not to open the parcels unless a suspicion about the contents of the parcels is aroused. But this shows that if in a case there are circumstances to raise a suspicion the parcels are to be opened. What Mr. Vora stated in his evidence was that at the station 11 big parcels were received by the employee of the firm from the break van. He further stated that in all more than 100 parcels were there in a big parcel. They must have opened 25 to 30 parcels. They did not contain any contraband goods. Merely from the appearance one could not say that the same contained contraband goods. Mr. Vora when he stated this, made a general statement in respect of the parcels. The parcel containing the watches was covered with a hessian cloth. The evidence indicates that the parcel was received in the Bombay Office in the evening at 6 p.m. It was at that time wrapped in a brown paper on which the name and address of the consignee was written. It also contained an endorsement in writing that the parcel was to be insured for Rs. 120/-. It is obvious, therefore, that the parcel contained valuable articles. It is in the statement of accused No. 6 recorded by the Custom Officer that the person who delivered the parcel at the Bombay Office demanded a receipt. The parcel weighed 5 kgms. If an isolated insured parcel weighing 5 kgms. in respect of which the consignor had asked for a receipt was received ordinarily by a person in ordinary course of the business he is supposed to make some inquiry about the contents of the parcel. This is so because the valuable parcels according to trade custom are carried personally by an employee to avoid a civil liability. Even though the parcel was endorsed to be insured, nothing appears from the record as to why or in what circumstances the consignor changed his mind. The consignor insisted for the receipt for the parcel and inspite of this no such further inquiries were made. Kantilal Chhaganlal, the consignor was not the usual customer of the firm. It was for the first time that he had sent the parcel through accused No. 4. Kantilal Chaturdas, accused No. 6, in his statement has stated that he did not know whether any employee of the firm made any inquiry about the contents of the parcel which the firm received from Kantilal Chhaganlal. The duplicate of the receipt given to the consignor is not produced in the case by the accused. It would have disclosed perhaps the address of the consignor. The address of the consignee is given on the parcel but the accused had made no inquiry as to whether such a person exists or not. These circumstances are of importance. No explanation is given in respect of these circumstances. The burden cast on the accused under Section 138-A of the Act is to prove that the accused had no knowledge about the contraband goods, and this is required to be proved beyond a reasonable doubt and not by preponderance of probabilities. The burden thus casts on the accused is the same that is cast upon the prosecution in an ordinary criminal trial. Under the circumstances of this case, as discussed above, the accused cannot be said to have proved his case of having no knowledge about the contraband goods beyond a reasonable doubt.

9. Mr. Thakore contended that the offence was committed in the year 1971 and Section 138-A of the Act was added by Act 36 of 1973. Thus the said section came into operation subsequent to the date of offence and the prosecution cannot take an advantage of the said provisions. It is difficult to accept the argument of Mr. Thakore. Section 138-A requires a presumption to be raised and it thus provides a rule of evidence and the rule of interpretation is that the rule of evidence is restrospective in operation so also to affect the pending cases Therefore the peculator can rely upon the provisions of Section 138-A of the Act and the Court has to raise a presumption as required by the section.

10. Mr. Patel for the appellant contended that the Bharatia which was kept in the office at Bombay did contain the name of Kantilal Chhaganlal as the consignor and consignee of the parcel but the copy of the Bharatia meant for the Ahmedabad Office did not contain such an entry. Accused No. 5 who was in charge of the firm at Ahmedabad had made a statement before the Custom Officer that he cove of the Bharatia received at Ahmedabad did contain such an entry but subsequently he changed his stand and admitted that in his statement made before Custom Officers that he had made such an entry. Not only this contended Mr. Patel, but the manner in which the entry has been made by accused No. 5 clearly indicated that both accused Nos. 5 and 6 had the knowledge about the contents of the parcel. Now it is difficult to accent this argument. Accused No. 6 who was in charge of the Bombay Office had in his statement before the Custom Officer stated that the narcel from Kantilal Chhaganlal was received at about 6 p.m. in the evening and the entry in respect of the parcel was made in the copy of the Bharatia at Bombay but no such entry was made m the copy of the Bharatia to be forwarded to Ahmedabad. It was for this reason that he telephoned to the Ahmedabad Office to make such an entry. Accused No 5 his statement before the Custom Officer stated that on receiving a telephone message he made an entry in the copy of his Bharatia of course this statement was made by him subsequently, that is after he was faced with the statement of Kantilal Chaturbhai, the Manager of the Bombay Office. Now it is also in evidence that the parcels were received it Ahmedabad at about 6-30 a.m. on August 20 1971 and the Custom Officers kept a watch on the parcel received by the firm, not only when feel were taken to the office but also thereafter. It is m evidence that accused No. 5 was not present in the office, therefore, Custom Officers sent a person to call him. The copy of the Bharatia which was received at Ahmedabad was produced subsequently by accused No 5 The Custom Officers were already present the office when accused No 5 came there. Alterations, therefore, in the Bharatia were made subsequent to arrival of the Custom Officer in the office Mere fact that the entry was made in the Bharatia which was received by the Ahmedabad Office by reason of the telephone conversation or that over the said entry another entry had been over-written cannot lead to the only conclusion that accused No. 5 or 6 had the knowledge that the parcel delivered for transport by Kantilal Chhaganlal contained contraband goods, especially because the entry in respect of the parcel was made in the copy of the Bharatia kept at Bombay and there are statements of accused Nos. 5 and 6 about telephone conversations in this connection.

11. The next question which arises is who are the accused who are guilty 'of the offence charge. Accused No. 4 is the firm which received, the parcel. Section 140 of the Act provides that if a person committing an offence under this chapter which includes Section 135 is a company then every person who at the time the, offence was committed was in charge of and was responsible to the company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded and punished accordingly. The word 'company' includes a firm according to the provision of the section. There is one important proviso attached to the section which says that nothing contained in this sub-section shall render any such person liable to such punishment provided in this Chapter if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence. As said hereinbefore the offence in respect of the parcel of Kantilal Chhaganlal is proved and the firm is guilty under Section 140 read with Section 135 of the Act.

12. Accused No. 6 in his statement before the Custom Officer has stated that the parcel was received in the evening and the consignor required the parcel to be dispatched on the same day. The parcel was, therefore, packed in a hessian cloth and the same was sent to the office at Ahmed-abad. The evidence clearly shows that accused No. 6 is directly concerned with the parcel as he dealt with it. He was the Manager of the firm who ought to have, as aforesaid, made further inquiries in the matter and which he did not do. Therefore, accused No. 6 has failed to discharge the burden which lies on him and as he has failed to discharge the burden the accused is held guilty of the offence under Section 135 of the Act.

13. So far accused No. 5 is concerned, he was in charge of the Office at Ahmedabad. The duty of accused No. 5 was to deliver the parcels which he received from the Bombay Office to the consignees. The parcel of wrist watches which was received by the Ahmedabad Office was covered in a hessian cloth. At the time when accused No. 5 arrived at the office, the Custom Officers were already present. Accused No. 5 could not have in the -circumstances of the case any knowledge of the contents of the parcel. Accused No. 5 would, therefore, be entitled to the benefit of the provisions of the proviso to Section 140 of the Act. The circumstances of the case as discussed above clearly show that he has discharged the burden which lies upon him and has established the fact that he did not know about the contents of the parcel. Therefore, he cannot be held guilty of the offence under Section 135 of the Act.

14. So far accused Nos. 1, 2 and 3 are concerned, they are partners of the firm of accused No. 4. Accused Nos. 1 and 3 have stated in their statement under Section 313 of the Criminal Procedure Code that they reside at Surat and they do not know anything about the parcels. They were not present at Bombay on that day. It is in evidence that a copy of the Bharatia was also sent to the Head Office at Surat and, therefore, accused Nos. 1 and 3 are the persons who had over all control over the firm and, therefore, covered by substantive part of Section 140(1) of the Act, but it is open to them at the same time to show that they had no knowledge about the offence having been committed by the firm. Accused Nos. 1 and 3 can prove that they had no knowledge about the contents of the parcel which contained the wrist watches and which was received at the Bombay Office. The accused have made such a statement under Section 313 of the Criminal Procedure Code. There is no evidence of the prosecution to contradict these statements or to make them unreliable and the statements of the accused have to be accepted. The prosecution wants to make them liable vicariously, but they have in their statements clearly stated that they had no knowledge about the contents of the parcel which contained the contraband wrist watches. Therefore, accused Nos. 1 and 3 cannot be held guilty of the charge.

15. So far as accused No. 2 is concerned, he had made a statement in the Court under Section 313 of the Criminal Procedure Code that he was at Ahmedabad on the date of the offence. He has also stated that he did not know about the incident. He was not present in the Office when the goods were brought or the Custom Officers seized the contraband goods. There is nothing in the prosecution evidence to indicate why the statement of the accused should not be relied upon. He has, therefore, satisfactorily proved that he had no knowledge of the commission of the offence. Thus the prosecution has also failed to prove the charge against him.

The result is that the prosecution successfully proved the charge against accused No. 4, the firm and accused No. 6, the Manager of the Bombay Office and the order of the learned Chief Metropolitan Magistrate acquitting these accused cannot be sustained. Accused No. 4 is the firm and it is, therefore, sentenced to pay a fine of Rs. 7000/- (rupees seven thousand) for having committed an offence under Section 135 of the Customs Act. So far as accused No. 6 is concerned, he is sentenced to suffer rigor our imprisonment of one year for the offence under Section 135 of the Act. He is an employee of the firm and I see no reason to impose a sentence of fine on him. The appeal against the aforesaid accused No 4 and 6 is allowed and the same is dismissed as against the rest of the accused.

16. Mr. Thakore requests the Court to stay the execution of the order of sentence co far accused No. 6 is concerned for a period of 4 weeks from today as he desires to take the matter further. Mr. Patel for the appellant has no objection and, therefore, it is directed that the order of sentence of accused No. 6 should not be executed for a period of 4 weeks from to-day. Accused No. 4 to pay fine of Rs. 7030/- within a period of 15 days from to-day.


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