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Hemchand JaIn Vs. Union of India (Uoi) - Court Judgment

LegalCrystal Citation
SubjectCriminal
CourtChennai High Court
Decided On
Judge
Reported in1975CriLJ1472
AppellantHemchand Jain
RespondentUnion of India (Uoi)
Excerpt:
- - in my opinion, the failure to give an opportunity to the appellant to demonstrate his case that what was contained in the alloy was less than 9 carats of purity gold, is a vital circumstance, especially when the margin is little, affecting the case of the prosecution. if he had really wanted to smuggle gold of more than 9 carats purity by adopting a device of mixing the gold with silver, he would have mixed much more than 9 carats purity of gold say 14, 18 like that. it is quite unnecessary to deal with them as i am of the view that the prosecution has failed to establish beyond reasonable doubt that the gold contained in the alloy was more than 9 carats of purity......difference in the colour of the bar, p. w. 2 asked the appellant about it and he stated that the bars contained zavi silver. on suspicion that the bars might be gold bars, they took the bars to the refinery of pandurao & co. the appellant, in the meanwhile, sought the assistance of advocate p. c. kothari, and they all proceeded to the refinery. on refining the bars. 1,755.800 grams of gold was obtained. the silver alone weighed 2,609.00 grams.4. the house of the appellant was searched and some documents were seized.5. the appellant stated that the gold and silver were lawfully obtained, that the 27 bars of silver looking materials were examined and passed by the customs authorities at the madras meenambakkam airport, that the 27 bars were melted and refined without his approval and.....
Judgment:

Krishnaswamy Reddy, J.

1. The appellant Hemchand Jain is Accused-1. He was tried along with Nanakchand Jain (accused-2), by the Chief Presidency Magistrate, Egmore, Madras, for having committed an offence under Section 135 (b) (ii) of the Customs Act and also for having contravened Rules 126-H (2) (d) and 126-I (10) of the Defence of India (Gold Control) Rules, 1962. The appellant alone was convicted under charges 1 to 3 namely under Section 135 (b) (ii) of the Customs Act; Rule 126-H (2) (d) read with Rule 126-P (2) (iv); and Rule 126-I (10) read with Rule 126-P (2) (ii) of the Defence of India (Gold Control) Rules and sentenced to pay a fine of Rs. 2,000/- under charge No. 1. Under charges 2 and 3, he was further sentenced to undergo simple imprison-for six months and to pay a fine of Rupees 1,000/- under each charge, the substantive sentence of imprisonment to run concurrently.

2. The prosecution case is this : P. W. 2 Kothandabalan, the Preventive Officer attached to Madras Customs House, while he was on duty at about 10 a. m. on 5-8-1967 on suspicion intercepted a car bearing No. MPG 8131 at the junction of N. S. C. Bose Road and Mint Street along with P. W. 1 Balasubramaniam who was also an officer attached to the Madras Customs House. The appellant and Accused-2 were travelling in the said car. The Appellant had a brief case (M. O. 1) with him. There was a hold-all in the luggage boot, which belonged to the Appellant.

3. When the Appellant was questioned, he stated that he was coming from Bombay and that he alighted at Meenambakkam Air Port and when the was further questioned, he stated that his brief case (M. O. 1) contained silver bars. On a search of the brief case, they found 27 silver looking bars. Then the car was taken along with the appellant and the other accused to the shop of Ameenchand Nagindas. These bars were weighed and they were found to weigh 4415 grams As there was some slight difference in the colour of the bar, P. W. 2 asked the appellant about it and he stated that the bars contained Zavi silver. On suspicion that the bars might be gold bars, they took the bars to the refinery of Pandurao & Co. The appellant, in the meanwhile, sought the assistance of Advocate P. C. Kothari, and they all proceeded to the refinery. On refining the bars. 1,755.800 grams of gold was obtained. The silver alone weighed 2,609.00 grams.

4. The house of the appellant was searched and some documents were seized.

5. The Appellant stated that the gold and silver were lawfully obtained, that the 27 bars of silver looking materials were examined and passed by the Customs authorities at the Madras Meenambakkam Airport, that the 27 bars were melted and refined without his approval and consent, that there is no restriction either under the Customs Act, 1962 or under the Gold Control Rules to possess an alloy consisting of gold and silver, that he melted silver and silver vessels, zari gold and gold ornaments belonging to his family in a refinery prior to the enforcement of Gold Control Rules and made it into 27 bars, that the material evidence of 27 bars were destroyed without keeping one bar or a bit in the original form, that the gold contents in the bars were not above 9 ct. purity and, therefore, no offence under the Gold Control Rules was committed, that the bills pertaining to purchase of silver recovered from him did not pertain to the silver in dispute, that the letters seized on the search do not reveal any shady transactions, that his brother-in-law Nanakchand Jain (Accused-2) had nothing to do with the 27 bars recovered that the opinion of Ameenchand Nagindas was not binding on him and that neither the gold nor the silver is liable to confiscation under the Customs Act.

6. The Appellant repeated the same statement in this case while he was questioned under Section 342, Criminal Procedure Code.

7. The learned Chief Presidency Magistrate convicted the appellant as he was of the view that there was a reasonable inference that the gold contained in the alloy was smuggled from the foreign country and that the appellant had contravened the Defence of India Rules by having been in possession of gold.

8. In this case, there was no dispute that the 27 silver looking bars were seized from the appellant. But the question is whether he committed the offence either under the Customs Act or under the Defence of India Rules for having been in possession of these 27 bars. It is a little bit extraordinary that we are dealing with the case of 'not pure' gold but of alloy where more silver is found than gold. It is the case of the defence that such alloy is used for making ornaments and there cannot be much dispute about it. But whatever it is, we have now to find out whether what was contained in the alloy can be said to be gold within the mischief of Gold Control Rules.

9. Before dealing with the provisions of the Gold Control Rules it will be relevant to note that what was contained in the alloy was 9.54 Ct. purity. It is the case of the defence that the gold content in the alloy was of only 8.8 ct. purity.

10. 'Gold' is defined in Section 2 (.1) of the Gold (Control) Act, 1968 as follows:

'Gold' means gold, including its alloy (whether virgin, melted or re-melted, wrought) or unwrought in any shape or form, of a purity of not less than nine carats and includes primary gold, article and ornaments.

It is, therefore, clear that the possession of gold of less than 9 carats purity is not an offence under the Gold Control Act.

11. In this case, the prosecution has let in evidence to show that what was contained in the alloy was 9.54 carats. There is a slight margin by .54 carats which would bring it within the meaning of 'gold'. According to the appellant, the slight margin might be due to an error in refining the alloy containing gold. It is very significant to note that even in the earlier stages, at the refinery itself, the appellant had engaged P. W. 4, Mr. Kothari, the Advocate, and it was challenged by him (the Advocate) that at least one sample bar should be retained without melting, so that the appellant may have the opportunity of demonstrating it in a Court of law, by an Expert that what was contained in the alloy was less than 9 carats of purity gold.

12. P. W. 4, Mr. P. Kothari, the Advocate stated that he went to the refinery of P. W. 8 Mr. A. Sankaran Tampi and the appellant told the officers not to refine all the bars but to keep a few, but the officers did not give heed to the request made by the appellant. P. W. 8 who chemically tested the gold contained in the alloy admitted that there might be a percentage of error; but according to him, it would be only .1%. In the further cross-examination, he stated that he was told that the refinement was done by Nitric acid treatment, that no sample of the nitric acid solution was sent to him for test, that there is a possibility of evaporation in certain types of nitrate solution and that if the nitrate solution had been sent to him, he would have been able to analyse it and return it with the other components in the solution. P. W. 1 admitted that he did not take any precaution of keeping at least one silver looking bar for scrutiny by the Court,

13. When the appellant had challenged even at the earlier stage, and when there is a possibility of an error as admitted by P. W. 8 the officers of the Customs should have kept at least one silver bar out of 27 bars for the purpose of giving an opportunity to the appellant to have it tested through court by an expert. The natural justice requires, when a man challenges, that he should be given an opportunity to demonstrate his stand by due process. This opportunity has been denied by the officers to the appellant. Especially when the marfiin is very little, it would be very difficult to say that P. W. 8 would not have committed any error, though he would concede that the error will be of a lesser margin. In my opinion, the failure to give an opportunity to the appellant to demonstrate his case that what was contained in the alloy was less than 9 carats of purity gold, is a vital circumstance, especially when the margin is little, affecting the case of the prosecution. Even otherwise, when a person had mixed gold with the silver, he should have mixed it with less than 9 carats of purity knowing that he could be in possession legitimately of gold of less than 9 carats purity. Normally, a person is expected to know the Gold Control Rules. If he had really wanted to smuggle gold of more than 9 carats purity by adopting a device of mixing the gold with silver, he would have mixed much more than 9 carats purity of gold say 14, 18 like that. The fact that even on chemical test, the gold was found only of 9.54 carats of purity, would indicate that the appellant, in all probability would have taken care to see that he was mixing gold of less than 9 carats purity with the silver. His case is that he mixed 8.8 carats purity gold with silver for the purpose of making ornaments. In all probability, the gold that was mixed in the silver must have been less than 9 carats of purity. If that were so, no offence under the Gold Control Rules is committed. The learned Chief Presidency Magistrate has observed that no ornaments could be made of an alloy of this nature. It does not appear to be correct. As a matter of fact, the learned Counsel brought number of jewels, available in the local market, made out of an alloy of this nature. It also appears that most of the North Indian women prefer white metal for their ornaments.

14. The learned Chief Presidency Magistrate has made certain comments in respects of some documents seized and also the explanations given by the appellant. It is quite unnecessary to deal with them as I am of the view that the prosecution has failed to establish beyond reasonable doubt that the gold contained in the alloy was more than 9 carats of purity. There is possibility of an error in the test and that possibility cannot be eliminated. The convictions and sentences imposed on the appellant under charges 2 and 3 as mentioned above, are set aside.

15. In respect of the offence under Section 135(b)(ii) of the Customs Act, (charge No. 11 the learned Chief Presidency Magistrate found that the appellant was in possession of gold of foreign origin. There is no basis for this view. The Learned Chief Presidency Magistrate has merely stated that since P. Ws. 1 and 2 had a genuine suspicion that the bars might be gold bars and since the bars were seized on such suspicion, the onus of proof will shift to the appellant to show that the gold was not smuggled.

16. This is not a case of the gold bars being seized on suspicion. Admittedly, the bars which were seized were silver looking bars. We do not know as to how and where the gold contained in the alloy was obtained. There is no indication at all in the gold that it must be of foreign origin. One of the points put against the appellant is that on chemical test, 99.91% purity was found in the gold and that such purity can normally be found only in foreign gold. Even if it is true, it cannot be said that the appellant knew that the gold mixed in the alloy was foreign gold. It might be that he got gold from others and the gold might have passed through several persons, and, therefore, it cannot be said with any amount of certainty that the gold contained in the alloy was contraband gold, especially when there is no indication at all in the gold itself. I am, therefore, of the view that the prosecution has not made out the offence against the appellant even under Section 135 (b) (ii) of the Customs Act. The conviction and sentence imposed on the appellant under this section are also set aside.

17. In the result, the appeal is allowed and the appellant is acquitted. The fine amounts, if paid, will be refunded to him.


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