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Sheikh Mohammed Sayeed Vs. Assistant Collector of Customs for Preventive (i) and ors. - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtKolkata High Court
Decided On
Case NumberMatter Nos. 332 and 359 of 1966
Judge
Reported inAIR1970Cal134
ActsCustoms Act, 1962 - Sections 2(25), 110(1), 110(2), 111, 124 and 130; ;Constitution of India - Article 226
AppellantSheikh Mohammed Sayeed
RespondentAssistant Collector of Customs for Preventive (i) and ors.
DispositionPetition dismissed
Cases ReferredR. v. Criminal Injuries Compensation Board
Excerpt:
- orderb.c. mitra, j. 1. this is an application for appropriate writs and orders directing the respondents to recall and cancel the seizure of the petitioner's goods and also an order dated december 5, 1965, authorising detention of the petitioner's goods and from giving any effect to the said order. there is a further prayer for a writ in the nature of mandamus directing the respondents to release and return to the petitioner the goods, books, papers and documents seized by the customs authorities and a further writ restraining the respondents from starting any proceedings on the basis of the seizure and also detention of the goods. 2. the petitioner is the sole proprietor of a firm known as anglo-swiss watch company. on december 1, december 2, december 3 and december 5, 1965 the customs.....
Judgment:
ORDER

B.C. Mitra, J.

1. This is an application for appropriate writs and orders directing the respondents to recall and cancel the seizure of the petitioner's goods and also an order dated December 5, 1965, authorising detention of the petitioner's goods and from giving any effect to the said order. There is a further prayer for a writ in the nature of mandamus directing the respondents to release and return to the petitioner the goods, books, papers and documents seized by the Customs authorities and a further writ restraining the respondents from starting any proceedings on the basis of the seizure and also detention of the goods.

2. The petitioner is the sole proprietor of a firm known as Anglo-Swiss Watch Company. On December 1, December 2, December 3 and December 5, 1965 the Customs authorities conducted searches at the petitioner's business premises and also in the show-room, factory and residence of the petitioner and seized various goods and documents. Thereafter the Customs Officers made inquiries and investigations regarding the violation by the petitioner of the Import and Export Control Act, 1947, the Sea Customs Act, 1878 and the Customs Act, 1962. It is alleged that with regard to the import of parts of Watches, Clocks and Time-pieces, show cause notices under the Customs Act, 1962, could not be served upon the petitioner within the prescribed period of six months from the date of tile seizure as required by Section 110(2) of the Customs Act, 1962.

3. On December 5, 1965, an order was made by the Customs authorities under the proviso to Section 110(1) of the Customs Act, 1962, whereby thepetitioner was directed not to remove, part with or otherwise deal with the goods except with the previous permission of the respondents No. 3. With regard to this order the petitioner's case is that there was no material on the basis of which the respondents could have any reason to believe that the goods or any of them were liable to confiscation under the Act in the petition there is a challenge to the vires of Section 110 of the Customs Act, 1962, on the ground that it confers upon the Customs Officer an absolute arbitrary, untrammelled and uncontrolled power without laying down any standard or principle for his guidance, and enables a Customs Officer to pick and choose any person for the favour of giving premission to deal with the goods so detained, and for that reason the said provision is violative of Article 14 of the Constitution, as it denies equal protection of laws to the owner or holder of goods. There is also a challenge to the vires of Section 110(3) of the Customs Act, 1962, on the ground that it is violative of Articles 14, 19(1) (f) and (g) and 31(1) of the Constitution.

4. The seizure of the goods was followed by criminal proceedings against the petitioner and by an order dated 29th June 1966 the petitioner was discharged from one of the said proceedings and by another order dated August 26, 1967, the petitioner was again discharged in a second criminal case in which a proclamation was issued against the petitioner. This proclamation was also recalled.

5. In exercise of the powers under the proviso to section 110(2) of the Act, an order was made whereby the period of six months was extended by two months with effect from June 1, 1966, and this order of extension was communicated to the petitioner by a letter dated May 30. 1966. The petitioner's contention is that the said order of extension was passed ex parte and without giving the petitioner an opportunity to show cause against the said extension and without hearing him. It was also contended that it was incumbent on the Customs authorities to serve notice on the petitioner before making the order of extension, and also to give him an opportunity of being heard, on the question whether extension of tune should be granted or not. It is alleged that there was no cause or sufficient cause justifying extension of time and the order was passed without jurisdiction and for that reason is null and void.

6. On July 7, 1966, the petitioner moved this Court for a Rule Nisi and also for an order of injunction. On that date a Rule Nisi was issued and also an orderof injunction restraining the Customs authorities from taking any steps on the basis of or in connection with the order of detention whereby the petitioner was restrained from removing, parting with or otherwise dealing with the goods mentioned in the Schedule to the order. The injunction also restrained the Customs authorities from taking any steps on the basis of or in connection with the order of extension of the period of detention by two months as communicated by the letter of May 30, 1966, or from issuing any notice or initiating any proceedings whatsoever against the petitioner.

7. On May 31, 1966, the six months period prescribed by Section 110 of the Customs Act, 1962, for issue of a show cause notice under Section 124 of the Act expired. By a letter dated May 30, 1966, the petitioner was informed that the Additional Collector of Customs, on sufficient cause being shown, had extended the period by two months with effect from June 1, 1966. This extended period of two months expired on July 31, 1966, but before the expiry of this period however the petitioner obtained the Rule Nisi and the order of injunction mentioned above. On September 27. 1966, by consent of parties an order was made by this Court whereby the interim order already passed was modified so as to enable the Customs authorities to serve show cause notices on the petitioner. The order was made without prejudice to the rights and contentions of the parties and it was also ordered that the petitioner's contentions regarding the validity of the show cause notices was to be dealt with by the Court at the hearing of the Rule Nisi.

8. Although in the petition the vires of Section 110 of the Act and the Sub-sections thereunder has been challenged on the ground of violation of Articles 14, 19(1) (f), (g) and 31(1) of the Constitution, the only question canvassed before me, was that the extension of two months granted by the Assistant Collector of Customs was bad, as the order was made without hearing the petitioner, and without giving him an opportunity of showing cause as to why such an order of extension should not be made. It was contended that in exercising the power of extension under the proviso to Section 110(2) of the Act, the Customs Officer was acting quasi-judicially, and he was therefore bound to hear the objections of the petitioner to such an order of extension, before granting the extension. It was argued that the statute required the Customs Officer in dealing with an application for extension under the proviso to Section 110(2) to adopt a judicial approach. The statute required. It was further argued, that an order for extension could be made on sufficient cause being shown, and this requirement of the statute, it was submitted, quite plainly indicated that the Customs Officer should act judicially or at any rate quasi-judicially, and for that reason the petitioner who would be vitally affected by an order of extension, should be given an opportunity of showing cause against such an order, and of being heard with regard to the objections that he may have, to such an order being made. In this case no such opportunity was given to the petitioner, and the order of extension was made without considering the petitioner's objections to such an order. The extension order was made, it was submitted, in violation of the rules of natural justice, and was therefore illegal and should be struck down. It was next contended that the extension order being bad, the petitioner has acquired a vested right to the return of the goods and also of the books and documents which had been seized. The respondents, it was further submitted, were not entitled to retain the goods any longer and were bound to return the same to the petitioner as required by the statute.

9. The argument in substance is that a valid order for extension to retain the goods beyond the period of six months, could be made only upon notice to the party whose goods had been seized, and after giving him an opportunity of being heard, and of making representations against such an order of extension; and if an order was made without hearing the party, and without giving him an opportunity of making representations against the proposed order of extension, such an order would be clearly violative of the rules of natural justice, as the statute required the Customs authorities to have a judicial or quasi-judicial approach to any request for extension of time.

10. The next contention on behalf of the petitioner was that even assuming that the order of extension was validly made, the period of extension expired on July 31, 1966, and as no show cause notice was served within the extended period, the petitioner was entitled to the return of the goods, as also of the books and documents seized by the Customs authorities. Several show cause notices dated 1-10-66, 3-10-66, 15-10-66 and 8-11-66 were issued and served on the petitioner. These notices, it was argued, were clearly served beyond the extended time which expired on July 31, 1966. Leave to serve show cause notices was obtained by the petitioner from this Court on September 27, 1966, on which date by consent of parties the order of injunction was modified to enable the respondents to serveshow cause notices on the petitioner. This leave was obtained after expiry of the extended period and thereafter the show cause notices were served as mentioned above. It was therefore submitted that as no show cause notice was served upon the petitioner within the period prescribed by the statute, the respondents were bound to restore the goods, books and documents seized, to the petitioner and the respondents had no authority in law to withhold or retain them any longer.

11. In my view there is no merit in the contention that the respondents are bound to restore to the petitioner all that was seized, as the show cause notices were served beyond the extended period By the order of ad interim injunction passed by this Court the respondents were restrained from taking any steps in connection with the seizure and order of detention dated December 5, 1965, and also from issuing any notice or initiating any proceeding whatsoever against the petitioner. The respondents were restrained from issuing the show cause notices, and therefore, even though time was extended by two months from June 1, 1966, they could not possibly serve a show cause notice in violation of the ad interim injunction issued by this Court. Having regard to the ad interim injunction, it was not open to the respondents to serve any show cause notice on the petitioner for commencing proceedings which may terminate in an order for confiscation of the goods under Section 111 and an order imposing penalty under Section 112 of the Act. This is precisely what the petitioner apprehended, and it was on his prayer that the order of injunction was made restraining the respondents from taking any steps whatsoever in connection with the search and seizure of the goods. The order of injunction was wide and comprehensive in its terms, and having obtained this order it is not open to the petitioner now to contend that the show cause notices were not served upon him within the period prescribed by the statute I shall revert to this question later in the judgment.

12. In support of the contentions mentioned above Mr. A.K. Sen learned counsel for the petitioner relied upon a Bench decision of this Court, Charan Das Malhotra v. Assistant Collector of Customs and Superintendent Preventive Service, : AIR1968Cal28 . In that case also the appellant carried on the business of a watch dealer and a search was conducted at his place of business. Several watches of foreign make were seized on March 19, 1963, and a show cause notice was issued on March 6, 1964. Between the dates of the seizure and the issue of theshow cause notice, two extensions were granted under the proviso to Section 110(2) of the Act The first extension was granted on September 19, 1963, for four months and a second extension for two months was granted extending the time till March 17, 1964. The first extension for four months granted on September 19, 1963, expired on January 19, 1964. The second extension of two months, however, was granted after the expiry of the first extension on January 19, 1964, as the order of second extension of two months was made on February 20, 1964. The show cause notice under Section 124 of the Act in that case was given on March 6, 1964. Admittedly therefore in this case the second extension was granted after the expiry of the first extension on January 19, 1964. The contention of the appellant was that both the extensions were granted ex parte and without notice to him. It was held, however, that even if the first extension granted on September 19, 1963, was justified the ex parte order made on February 20, 1964, by which a second extension of two months was granted could not be justified. It was further held that notice under Section 124 of the Act must be given within six months of any extended time and if it was not so given, the goods seized must be returned to the person from whom they have been seized. It was further held that the first extension expired on January 19, 1964, and since on that date no extension order was made, the right to the return of the Roods devolved on the appellant The second extension was granted on February 20, 1964. a month after the expiry of the first extension and by this order of extension, it was held, a vested right of the appellant was being taken away. It was also held that as the Collector of Customs had to consider whether the cause shown was sufficient or not specially as it affected a vested right, he should have a Judicial approach in the sense 'that he would have to hear the pros and cons from all parties affected and then come to a decision as to whether the cause shown was 'sufficient', so as to warrant the taking away of a vested right.' It was held that under those circumstances a determination requires a judicial approach and could not be made ex parte. This decision to my mind does not uphold the petitioner's contention in the instant case now before me. In that case the second order of extension was admittedly made after the expiry of the first extension of four months, so that immediately on the expiry of the first extension of four months the appellant acquired a vested right to the return of the goods as there was no order of extension on January 19, 1964, on whichdate, the first extension expired. Secondly in that case the first order of extension was made before the expiry of the initial period of six months and the Division Bench observed with regard to the first extension which also was made ex parte 'that even if, the first extension on the 18th September. 1963, was justified, the ex parte order made on 20th February 1964, cannot be justified.' Quite clearly therefore although the Division Bench held that an order of extension made ex parte after the expiry of the period was bad, it did not hold, that an ex parte order extending the time within, the period of six months as prescribed by the proviso to Section 110(2) of the Act was bad. The question decided in that case was that where the period prescribed by the statute had expired or lapsed in consequence whereof a party had acquired a vested right to the return of the goods seized, such a vested right could not be taken away so as, to deprive the party to the return of the goods by an order made ex parte extending the time. In other words it was held that where a party had acquired a vested right to the return of the goods by reason of the expiry of the time within which notice was to be served, such a vested right could not be taken away by an order of extension made ex parte without hearing the party. For these reasons this decision, to my mind, is of no assistance to the petitioner in this case.

13. The next decision relied upon by learned counsel for the petitioner was a decision of this Court reported in (1969) 73 Cal WN 340, Bibhuti Bhusan Bagh v. I.J. Rao. In that case on May 5, 1966, various type-writers adding and calculating machines were seized by the Customs Authorities after a search. Before the expiry of the period of six months within which a notice under Section 124 was to be served, the Additional Collector of Customs by an order made on November 3, 1966, extended the initial period of six months for giving notice under Section 124, and within this extended period a notice under Section 124 was served on December 16, 1966. The order of extension, however, in that case, was not served and communicated until December 16, 1966, that is to say, after expiry of the initial period of six months from the date of seizure. Ghose J. relying upon two decisions reported in : AIR1959Cal219 , came to the conclusion that the order of extension though made on November 3, 1966, was to be treated as made on the day when it was communicated to the party namely December 16, 1966, and as by this time the right to get back the goods seized had become vested in the petitioners in that case, the order extending the time wasbad. The facts in this case are clearly distinguishable from the facts in the instant case now before me, in which the initial period of six months expired on May 31, 1966, but before the expiry of this period that is to say, on May 30. 1966, the petitioner was informed about the order of extension by two months with effect from June 1, 1966. Ghose J. came to the conclusion that the order of extension was to be treated to have been made on the day on which it was communicated to the petitioners in that case namely, December 16, 1966, and as on that date the petitioners had already acquired a vested right to the return of the goods, such a right could not be taken away without given an opportunity of being heard to the petitioner.

14. The decision reported in (1969) 73 Cal WN 340 was strongly relied upon by the learned counsel for the petitioner in support of his contention that in making the order of extension the Customs Officer must act judicially or quasi-judicially and must have a judicial approach; and therefore he must give notice to the party whose goods have been seized and give an opportunity of being beard to such a party and if an order was made extending the time without giving such an opportunity, and without hearing the party, such an order must be held to be bad and must be struck down. In dealing with this contention it is to be considered, if the pharse 'on sufficient cause being shown, in the proviso to Section 110(2) of the Act requires an objective analysis of the grounds made out for extension of tune or merely postulates a subjective satisfaction of the Collector of Customs who is empowered to make the order of extension.

15. The provisions in statute requiring public servants to make confiscatory orders, whenever they have reason to believe that grounds exist for formation of such a reason to believe have received judicial attention in several decisions to which I shall presently refer. It is necessary to go into these decisions to find out if the phrase 'on sufficient cause being shown' in the proviso to Section 110(2) of the Act is a matter of subjective satisfaction of the Customs Officer or postulates an objective analysis, which demands a show cause notice to the party likely to be affected by the order and also an opportunity of being heard being given to him. The first case to which I shall refer in this connection is a decision of the Supreme Court, Collector of Customs, Madras v. N. Sampathu Chetty, : 1983ECR2198D(SC) . In that case Section 178 (1) of the Sea Customs Act, 1878, which prescribed that where goodsto which that section applied were seized in the reasonable belief that they were smuggled goods, the burden of proving that they were not smuggled goods shall be on the person from whose possession the goods were seized, came up for consideration and it was held that if circumstances existed to raise a reasonable suspicion that the goods seized had been obtained illicitly, that was sufficient to constitute in the words of the statute, 'a reasonable belief that the goods (gold) were smuggled.' It was held to be a matter of subjective satisfaction of the Customs Officer and a suspicion that goods were obtained illegally was sufficient to constitute a reasonable belief.

16. The next case to which I shall refer on this question is also a decision of the Supreme Court Babulal Amthalal v. Collector of Customs, Calcutta : 1983ECR1657D(SC) , in which the Supreme Court considered the questions of reasonable belief that the goods were smuggled goods as prescribed by Section 178-A (1) of the Sea Customs Act 1878. In that case several pieces of diamond were seized by the Customs Officer upon a search. This seizure was made in the reasonable belief of the Customs authorities that the diamonds were smuggled goods. Under Section 178-A (1) the burden of proving that the goods were not smuggled goods is on the person from whose possession the goods were seized. Dealing with this provision and also the question of reasonable belief it was held at page 21 of the report as follows :--

No doubt the content and Import of the section are very wide. It applies not only to the actual smuggler from whose possession the goods are seized but also to those who came into possession of the goods after having purchased the same after the same has passed through many hands or agencies. For example, if the Customs authorities have a reasonable belief that certain goods in the possession of an innocent party are smuggled goods and the same is seized under the provisions of this Act, then the person from whose possession the goods were seized, however innocent he may be, has to prove that the goods are not smuggled articles. This is no doubt a very heavy and onerous duty cast on an innocent possessor who for aught one knows, may have bona fide paid adequate consideration for the purchase of the articles without knowing that the same has been smuggled. The only pre-requisite for the application of the section is the subjectivity of the Customs Officer in having a reasonable belief that the goods are smuggled.'

The queston of 'reasonable belief' was again considered by the Supreme CourtIn Pukhraj v. D.R. Kohli, : 1983(13)ELT1360(SC) . In that case the Collector of Central Excise, Nagpur, passed an order directing confiscation of gold found in the possession of a party and imposing upon him a personal penalty of Rs. 25,000 under Section 167 (8) of the Sea Customs Act, 1878, read with Section 19 of the said Act and Section 23-A of the Foreign Exchange Regulation Act, 1947. It was contended that there were nothing on record to show that the seizure of gold had been effected by the Officer acting on a reasonable belief that the gold was smuggled. It was also contended that the question whether there was a reasonable belief or not was Justiciable and since there was no material on the record to show that the belief could have been reasonable the statutory presumption could not be raised. In rejecting this contention the Supreme Court held :

'After all, when you are dealing with a question as to whether the belief in the mind of the Officer who effected the seizure was reasonable or not, we are not sitting in appeal over the decision of the said Officer. All that we can consider is whether there is ground which prima facie justifies the said reasonable belief. That being so, we do not think there is any substance in the argument that the seizure was effected without a reasonable belief and so is outside Section 178-A.'

17. The next case on this point relied upon by the learned counsel for the respondents was a Bench decision of this Court reported in (1966) 70 Cal WN 349, Nathmall Jalan v. Additional Collector of Customs. In that case certain gold bars were seized and thereafter a show cause notice under Section 167 (8) of the Sea Customs Act, 1878, read with Section 23-A of the Foreign Exchange Regulation Act, 1947, was served. It was argued in that case that as the bullion was purchased from a dealer at Bombay, the onus of proof that the gold involved was smuggled gold shifted from the party to the Customs authorities and that in those facts there could be no ground for having a reasonable belief that the bullion was smuggled. It was held that the question whether the gold was smuggled gold was a matter of subjective satisfaction of the Customs authorities and that it was not open to the party from whom the gold was seized to challenge the grounds of reasonable belief of the respondents as required by Section 178-A of the Sea Customs Act, 1878.

18. It is to be noticed that the decisions mentioned above have dealt with the question of 'reasonable belief' or 'reason to believe' in the Sea CustomsAct, 1878, and the matter with which I am concerned in this case is the phrase 'on sufficient cause being shown' in the proviso to Section 110(2) of the Act. Under the proviso to Section 110(2) of the Act, sufficient cause is to be shown to the Collector of Customs, and it is he who is to be satisfied about the sufficiency of the cause shown by the department for an extension of time. Section 178-A (1) which was considered by the Supreme Court in Babulal Amthalal Mehta's case, : 1983ECR1657D(SC) (supra) and also in Pukhraj's case, : 1983(13)ELT1360(SC) (supra) runs as follows :--

'Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.

In dealing with the question of reasonable belief in the section quoted above it was held in Pukhraj's case, : 1983(13)ELT1360(SC) (supra) that the Court does not sit in appeal over the decision of the Customs Officer in dealing with a question as to whether the belief in the mind of the Officer was reasonable or not. In my view the same principles are attracted in construing the phrase 'on sufficient cause being shown' in the proviso to Section 110(2) of the Act. With regard to the nature and sufficiency of the cause, it is the satisfaction of the Collector of Customs that provides the ground and justification for an order extending the time to complete the inquiry. Objections raised on behalf of the party from whose custody goods have been seized, however strong and cogent they may be, cannot in my view provide any grounds for challenging the legality or validity of an order of the Collector of Customs extending the tune under the proviso to Section 110(2) of the Act. If the order of extension is made before expiry of the initial period of six months, or before expiry of the extended period, it cannot in my view be challenged on the ground that notice to show cause, or opportunity of being heard was not given to the party, provided however that such an order of extension is made within the limit of one year prescribed by Sub-section (2) and the proviso thereto to Section 110 of the Act.

19. Let me now proceed to test the question from a different point of view. The proviso requires the department to show sufficient cause to the Collector of Customs, What is this cause that the department can show? Quite plainly the cause that can be shown is that the investigation is not complete and that inquiries have yet to be made from personsA. B. and C at places X, Y and Z and that for one reason or another, such inquiries could not be completed either within the initial period of six months or within the extended period, which must not of course exceed a further period of six months. Such is the cause to be shown, and such is the cause that can provide the ground for an order of extension. If an order of extension is made after expiry of the initial period of six months or after expiry of the extended period, different considerations will apply, as a statutory right to the return of the goods vests in the party under Sub-section (2) of Section 110 of the Act But if it la held that notice must be given to the party whose goods have been seized, before making an order of extension, and that such order of extension can be made only upon hearing the party it must follow that the materials which have been produced before the Collector of Customs by the department, must also be placed before the party, and he must be told that inquiries have yet to be made from persons A, B and C at places X, Y and Z. What would be the result of disclosure of such materials to a party who is charged with smuggling and whose dealing with the goods are under investigation? It is obvious that such disclosure would lead to disappearance of or at any rate tampering with material evidence. Such a course of action in my view would defeat the purpose of the investigation itself and is entirely against; public interest.

20. The purpose for which six months time has been given by Parliament to the department for serving a notice under Section 124 of the Act, and the purpose for which provision has been made for extension of the initial period of six months by a further period not exceeding six months, is quite plain. That purpose is to enable the department to commence and conclude investigation regarding the importation of the goods and subsequent dealings therewith. If the party from whose custody the goods have been seized, and who may be charged with smuggling of the goods, and against whom an order confiscating the goods, and imposing a personal penalty may be made, is informed that investigations with regard to the import of, and subsequent dealings with the goods are going to be made, from such and such persons at such and such places, the purpose of the investigation itself, and indeed the whole proceedings commencing from search and seizure would be altogether defeated. The investigation contemplated by the statute, must be made without the knowledge of the party (from whom the goods have been seized) as to the sources at which investigation is to be made. For such an investigation to succeed, it must be made behind the back of the party who has been charged with the offence of smuggling. Parliament in my view did not intend that when an order of extension was made before expiry of the statutory period or extension thereof notice must be given to the party from whom goods have been seized and such a party must be heard by the Collector of Customs before making the order. When Parliament desired that notice should be given, followed by an opportunity of making representations, and an opportunity of being heard, provision to that effect has been expressly made in the statute itself. This becomes clear on a reference to Section 124 of the Act in which mandatory provision has been made firstly for giving notice in writing of the grounds on which goods are proposed to be confiscated, or penalty imposed; secondly of giving an opportunity of making the representation and thirdly of giving reasonable opportunity of being heard. Keeping in mind the mandatory provisions regarding service of notice, written representations and opportunity of being heard in Section 124 of the Act, in my view it is not open to the Court in construing the terms of the proviso to Sub-section (2) of Section 110 of the Act in a case in which the order of extension was made before expiry of the initial period of six months, or expiry of subsequent extension not exceeding a further period of six months, to hold that the statute requires by implicaion though not expressly, that a notice and an opportunity of being heard is to be given to the party. That in my view would have the result of introducing in the proviso to Sub-section (2) of Section 110 something which is not there at all. It is true that when statutory authorities are given jurisdiction to deal with the rights of citizen, they may be required to act judicially by the statute and in such cases there may be either an express provision in the statute or such a provision may be implied. In other words when a statutory authority is required by the statute to deal with the rights of citizens, they may be required to act judicially or Quasi-judicially by implication, even though no express provision has been made in the statute. But such an implication, in my view cannot be inferred when the Collector of Customs is exercising his jurisdiction under the proviso to Section 110(2) of the Act. From what I have said above it will be amply clear that in circumstances such as these, namely an investigation following seizure of goods, to hold that the Collector of Customs must act judicially, and give notice to the party and also an opportunity of being heard,would defeat the purpose of the investigation itself. To read into the proviso to Section 110(2) of the Act an implied provision requiring the Customs Officer to act judicially will be altogether contrary to the scheme of the Act in Chapter XIII which deals with search, seizure and arrests.

21. It was argued by learned counsel for the petitioner, that even if it was held that the order of the Collector of Customs was an administrative order and not a judicial or quasi-judicial order, notice should have been given to the petitioner, who should also have been given an opportunity of being heard. In other words, it was contended that even in case of an administrative order, the authority making the order is required to follow the rules of natural justice, and should therefore give to the party affected, a notice that an order affecting him may be made and also give such a party an opportunity of being heard. In support of this contention reliance was placed upon a decision of the Supreme Court. State of Orissa v. Dr. (Miss) Binapani Dei, : (1967)IILLJ266SC . In that case there was a dispute with regard to the declared age of a Government servant who claimed that her age as recorded in the Civil List and the Service Records of Gazetted Officers should be accepted. The age of superannuation was raised from 55 to 58 from December 1, 1962. But before this alteration in the age of retirement, she was due to retire on April 10. 1965 upon completing 55 years. According to her, her age of birth was April 10, 1910. But upon an inquiry being made on the basis of some anonymous letters she was required to show cause why her date of birth should not be treated to be April 4. 1907. The Goverment of Orissa thereupon determined the date of birth of the Government servant to be April 16, 1907, and declared that she would be deemed to have retired on April 16, 1962, subject to certain extensions owing to which she was to retire on July 15, 1963. The High Court of Orissa held that the order whereby the Government servant was superannuated on April 16, 1962, on the basis of her date of birth as April 16, 1907, amounted to compulsory retirement before she attained the age of superannuation and was removed from service within the meaning of Article 311, and as the Government servant was not given a reasonable opportunity of showing cause against the order of removal, the order itself was invalid, in order to find out the correct position regarding the age, the Additional Director of Planning was asked to make a report, and he made a report regarding the age of the Government servant.This report was not disclosed to the Government servant. It was in these facts that the Supreme Court held that the said authority should have placed all the materials before the Government servant and called upon her to explain the discrepancy, and to give an explanation, and that although the order was administrative in character, it should have been made consistently with the rules of the natural justice after informing the Government servant of the state of evidence with regard to her age, and after giving her an opportunity of being heard. It is to be noticed that in that case question of superannuation of an employee was involved. There was dispute on the question of the correct age and the State Government had collected various materials with regard to her age, and these materials were not placed before her and she was not given an opportunity of explaining the discrepancies. It was in the background of these facts that the observation of the Supreme Court that even in case of an administrative order rules of natural justice should be followed was made. This decision, to my mind, does not support the petitioner's contention in this case. Certain materials collected behind the back of the Government servant were going to be used against her and she was not informed of such materials, nor was she given an opportunity of explaining the discrepancy arising out of her declared age and the age arrived at on materials collected by the Government, and relying on the materials collected by the Government an order of superannuation was made. In the instant case now before me no order has been made against the petitioner to his prejudice nor has any materials collected against him been used. All that has been done was that of order of extension was made in terms of the proviso to Section 110(2) of the Act. The decision of the Supreme Court mentioned above is not an authority for the proposition that rules of natural justice must be followed in the case of every administrative order and a notice should be served to the party against whom an order is proposed to be made. An order of search and seizure for instance under the Act is also an administrative order, and it is an order which is seriously detrimental to the party against whom it is made. But can it be said that notice must be given to the party against whom an order for search and seizure is going to be made and further that the party should be given an opportunity of being heard before making an order of search and seizure? Quite plainly the answer must be in the negatives.

22. In support of the contention mentioned above reliance was also placed on another decision of the Supreme Court Barium Chemicals Ltd. v. Company Law Board, : [1967]1SCR898 . In that case an order of investigation under Section 237 of the Companies Act, 1957, was challenged on the ground that circumstances did not exist and they were not such as to enable the Central Government to form an opinion suggestive of the things set out in Sub-clauses (i), (ii) and (iii) under Section 237 (b) of the Companies Act, 1957. It was held that if it was shown that circumstances did not exist or that they were such that it was impossible for any one to form an opinion suggestive of the aforesaid things, the opinion of the Central Government was challengeable on the ground of non-application of mind or perversity or on the ground that it was formed on collateral ground and was beyond the scope of the statute and was based on grounds extraneous to the legislation. This decision again, to my mind, is of no assistance to the petitioner in this case. Sub-clauses (i), (ii) and (iii) under Section 237 (b) of the Companies Act lays down certain condition precedent to the exercise of the power to appoint Inspectors to investigate into the affairs of a company, and it was held that it there was a challenge to the exercise of the power by the Central Government, it must be shown that circumstances did exist to enable the Central Government to form an opinion in the matter so as to exercise its power to direct investigation into the affairs of the company. In the instant case now before me there is no condition precedent to the exercise of the power to extend the time under the proviso to Section 110(2) of the Act. The decision in Barium Chemicals' case, : [1967]1SCR898 (supra) to my mind has no application to the facts of this case. Section 237 (b) at the Companies Act lays down conditions which must exist before the power to order an investigation can be exercised by the Central Government, and the majority view of the Supreme Court was that as the existence of 'circumstances' was the condition fundamental to the making of an opinion, the existence of the circumstances, if questioned, had to be proved at least prima facie and that it was not enough to assert that circumstance existed and give no clue to what they were because the circumstances must be such as to lead to conclusions of certain definiteness, on the question of subjective satisfaction of the Central Government as to the existence of the circumstances. A material portion of the observations runs as follows :--

'No doubt the formation of opinion is subjective but the existence of circumstances relevant to the inference as the sine qua non for action must be demonstrable. If the action is questioned on the ground that no circumstances leading to an inference of the kind contemplated by the section exists, the action might be exposed to interference unless the existence of the circumstances is made out.'

It will be amply clear that the questions considered by the Supreme Court in Barium Chemicals' case, : [1967]1SCR898 (Supra) were entirely different from the question with which I am concerned in this application. There are no conditions precedent to the exercise of the power to extend the time, nor is there any challenge to the existence of any such conditions precedent.

23. On the same question reliance was also placed, by the learned counsel for the petitioner on another decision of the Supreme Court, Bhagawan v. Ram Chand, : [1965]3SCR218 . In that case the Supreme Court considered the question of the validity of an order of the State Government under the Uttar Pradesh (Temporary) Control of Rent and Eviction Act, on the ground that the State Government did not hear the parties who were affected by it. In that case the landlord applied to the Rent Controller and Eviction Officer under Section 3 of the said Act for permission to sue the tenant for ejectment. This permission was granted and the tenant thereupon appealed to the Additional District Magistrate. The Appellate authority declined to confirm the permission granted to the landlord and remanded the case for fresh hearing. On remand the officer changed his views and rejected the application for permission. The landlord then moved the Appellate authority again for extending the original order directing him to sue. The appellate authority granted permission to the landlord and thereupon the tenant moved the Commissioner of Agra in revision. This application in revision was allowed and the appellate order granting permission was set aside. Thereupon the landlord went up to the State Government under Section 7-F of the said Act, and the State Government directed the Commissioner to revise his order on the ground that it thought the need of the landlord to be genuine. On this direction the Commissioner passed an order cancelling the previous order and confirming the order passed by the Appellate Authority granting permission to the landlord to sue. The landlord thereupon sued the tenant in ejectment and obtained a decree. The matter went up to theAllahabad High Court in second appeal and the only issue in the High Court was if the order of the State Government was valid as it was made without giving the tenant an opportunity of being heard. The Allahabad High Court came to the conclusion that the order of the State Government wag invalid as exercising its power under Section 7-F of the Act the State Government did not give an opportunity of being heard to the tenant. Thereafter the matter went up to the Supreme Court and it was held that when an Act conferred jurisdiction and power on any authority to deal with the rights of citizens, it may be required by the statute to act judicially in dealing with matters entrusted to it and that an obligation to act judicially might in some cases be inferred from the scheme of the statute and its provisions. In such cases it was held, it is easy to hold that the authority must act in accordance with the principles of natural justice and that it was not necessary that the obligation to follow the principles of natural justice must be expressly imposed on the authority. On the obligation to act judicially the Supreme Court observed at page 1770 of the report as follows :--

'If it appears that the authority or body has been given power to determine questions affecting the rights of citizens, the very nature of the power would inevitably impose the limitation that the power should be exercised in conformity with the principles of natural justice. Whether or not such an authority or body is a tribunal would depend upon the nature of the power conferred on the authority or body, the nature of the rights of citizens the decision of which falls within the jurisdiction of the said authority or body, and other relevant circumstances.'

This decision also to my mind, is of no assistance to the petitioner in this case. In making the order of extension the Collector of Customs, in my view, was not making any order determining a question affecting the rights of the petitioner. The rights of the petitioner, such as they were, were already affected by the search and the order of seizure. The extension order was made within the period of six months and it cannot therefore be said that the petitioner had acquired any right to the return of the goods. The order of extension merely enlarged the tune within which the department was to complete its investigation. There was in my view, no determination of a question affecting the rights of the petitioner. It is to be remembered that the attack in this case was confined to the order of extension and not directedagainst the order of search and seizure.

24. The next case relied upon by the learned counsel for the petitioner was also a decision of the Supreme Court M. Gopal Krishna Naidu v. State of Madhya Pradesh, : (1968)IILLJ125SC . That was again a case relating to certain orders made against the appellant who was a Government servant. The appellant was suspended from service and was prosecuted under the Indian Penal Code. He was convicted but this conviction was set aside on appeal, for want of a sanction to prosecute. He was prosecuted for the second time on the same charge but this prosecution was quashed on the ground that the investigation was not conducted by the proper authority. In revision the Nagpur High Court held that the Court below was in error in so holding but recommended that the prosecution should not be proceeded with as 10 years had gone by since it was lodged. Thereafter the prosecution was dropped but a departmental enquiry was held on the same charges. The appellant was found not guilty, but the Government disagreed with that view, and served a show cause notice for dismissal. On cause being shown, the Government held that the charges were not proved beyond doubt but that the suspension and the departmental enquiry were not wholly unjustified. The appellant was directed to be reinstated with effect from the date of the order, but retire from that date as he had attained the age of superannuation already, and the entire period of absence from duty was to be treated as spent on duty for pension only but he was not to be allowed any pay beyond what he had actually received or what was allowed to him by way of subsistence allowance. The appellant thereafter filed a writ petition for quashing the order of reinstatement without pay and for an order directing the Government to treat the period of absence from duty as period spent on duty. This petition, however, was dismissed by the High Court and the matter thereafter went up to the Supreme Court in appeal. It was held that the order passed under the relevant fundamental rule would affect the Government servant adversely if it was made under Clauses III and V and that consideration of the case depended on facts and circumstances in their entirety, and an order resulting from a finding of the facts and circumstances would result in pecuniary loss to the Government servant and such an order must be held to be an objective rather than a subjective function. It was further held that the very nature of the function implied the duty to act judicially and ifan opportunity to show cause against the action proposed was not given the order was liable to be struck down as invalid on the ground that it was made in breach of the principles of natural justice. This decision, in my view, does not upheld the contentions advanced on behalf of the petitioner. The order made on the face of it caused pecuniary loss to a Government servant and seriously affected the question of his pension and it was held that an order causing pecuniary loss to a Government servant by non-payment of salary and also reducing his pension could not be made without giving him an opportunity of being heard. The questions raised and decided in this case have no application to the question with which I am concerned in the instant writ petition.

25. The next decision relied upon by the learned counsel for the petitioner was also a decision of the Supreme Court, Calcutta Discount Co. Ltd. v. Income-Tax Officer, Companies District I, Calcutta, : [1961]41ITR191(SC) . In that case the Supreme Court considered the validity of a notice issued under Section 34 of the Income-tax Act, 1922. It was held that Section 34 of the said Act laid down two conditions precedent to the exercise of the power to issue of notice namely that the Income-tax Officer must have reason to believe that income, profits or gains chargeable to tax had been under-assessed and secondly that the Income-tax Officer must have reason to believe that the under-assessment had occurred by reason either of omission or failure on the part of the assessee to make a true return of his income, or omission or failure on his part to disclose fully and truly all material facts necessary for his assessment. It was held that both these conditions precedent must be satisfied before the Income-tax Officer could have jurisdiction to issue a notice for the assessment or reassessment beyond four years but within eight years from the end of the year in question. In the facts of that case it was found that the conditions precedent mentioned above did not exist and the Income-tax Officer therefore had no jurisdiction to issue notices under Section 34 of the Act. This decision again, to my mind, has no application to the question with which I am concerned in this case. There are no conditions precedent to the exercise of the power by the Collector of Customs under the proviso to Section 110(2) of the Act. The only requirement of the statute is that an order for extension can be made on sufficient cause being shown and whether the cause shown by the department, for extension of tune to complete investigation into the charge of illegal importation is sufficient or not, asI have said earlier must be a matter of subjective satisfaction of the Collector of Customs.

26. The next case relied upon by the learned counsel for the petitioner was the decision of the Supreme Court, Rohtas Industries Ltd. v. S.D. Agarwal, : [1969]3SCR108 . In that case also the validity of an order made by the Central Government under Sub-clauses (i), (ii) of Clause (b) of Section 237 of the Companies Act, 1956, appointing Inspectors to investigate into the affairs of a company was considered by the Supreme Court. The challenge to the order was on the ground that the Central Government had no material before it from which it could have come to the conclusion that the appellant's business was being conducted in violation of the provisions of the statute. Agreeing with the majority view in Barium Chemicals' case, : [1967]1SCR898 (supra) it was held as follows :--

'For the reasons stated earlier we agree with the conclusion reached by Hidayatnllah and Shelat JJ. In Barium Chemicals' case that the existence of circumstances suggesting that the company's business was being conducted as laid down in Sub-clause (1) or the persons mentioned in Sub-clause (2) were guilty of fraud or misfeasance or other misconduct towards the company or towards any of its members is a condition precedent for the Government to form the required opinion and if the existence of these conditions is challenged the Courts are entitled to examine whether those circumstances were existing when the order was made. In other words, the existence of the circumstances in question are open to judicial review though the opinion formed by the Government is not amenable to review by the Courts. As held earlier the required circumstances did not exist in this case.'

For the reasons mentioned by me while dealing with Barium Chemicals' case, this decision also is of no assistance in deciding the questions with which I am concerned in the case.

27. The next case relied upon by Mr. Sen was also a decision of the Supreme Court, Purtabpore Co. Ltd. v. Cane Commissioner of Bihar, 1969-1 SCC 308 (SC). In that case there was a dispute between two sugar manufacturing companies with regard to allotment of sugarcane producing villages in Bihar and U. P. The Cane Commissioner had allotted certain villages to the appellant, but the Chief Minister of Bihar intervened in the matter and passed an order for alteration of the allotment made. On the order of the Chief Minister, the Cane Commissioner revised his earlier order ofallotment, and this revised order was challenged in a writ petition. The ground of challenge was that though the order was made by the Cane Commissioner it was in substance the order of the Chief Minister and the Cane Commissioner had abdicated his authority and function and therefore the order revising the earlier allotment was bad. The second ground of challenge was that the Cane Commissioner acted in a quasi-judicial capacity and as no opportunity was given to the appellant for making representation against the order of revision, the order was bad. The third ground of challenge was that even if the order was an administrative order, it was liable to be set aside on the ground of violation of rules of natural justice. The Supreme Court held that though the impugned order was purported to be made by the Cane Commissioner, it was in fact made by the Chief Minister, and hence they were invalid. The Cane Commissioner, it was held, merely carried out the orders of the Chief Minister and though the order was that of the Cane Commissioner, he had merely carried out the directions of the Chief Minister and the Chief Minister had imposed his opinion on the Cane Commissioner. It was further held that the power exercisable by the Cane Commissioner was a statutory power and he alone could have exercised that power and he could not abdicate his responsibility in favour of any one, and that the Cane Commissioner acted in a quasi-judicial capacity as there was a lis between two contending parties and this lis commenced as soon as one of the parties moved the Government for altering or modifying the reservation made in the earlier order. It was further held that the order was bad on the ground that though the Cane Commissioner acted in a quasi-judicial capacity no opportunity for making representation was given to the appellant I do not see how this decision helps the petitioner in the instant case now before me. There is no question involved in this case of the order having been made by any authority other than that whom the statute has empowered to make the order. There is no question of abdication of power or authority by the Collector of Customs in favour of anybody else, and there is no challenge to the order of extension on that ground. Secondly there was no lis between two rival or contending parties. The only question is whether the Collector of Customs should have granted the extension in exercise of the powers under the proviso to Section 110(2) of the Act This decision, to my mind, is therefore of no assistance to the petitioner in this case.

28. The next contention of Mr. Sen was that even if an order is an administrative order, the authority making the order must act fairly if not judicially. It was argued that if it was held that the Collector of Customs was not bound to act judicially, he was nevertheless bound to act fairly. In support of this proposition reliance was placed on an English decision Re: H. K. (an infant), (1967) 1 All E. R. 226. In that case a national of Pakistan to whom the Commonwealth Immigrants Act, 1962, applied, had settled in England leaving his wife and family in Pakistan. In order to bring his eldest son to England he forwarded to the Pakistan High Commission in England a sworn declaration dated June 8. 1966, stating that his son was 15 1/2 years old and that it was his intention to be responsible for and maintain his son in England. A Passport was issued in Pakistan to the son in which his date of birth was given as February 29, 1951. Thereafter the Pakistan national arrived at London Airport with his son and they were interviewed by the Immigration authorities. The Immigration Officer was of the view that the son was not more than 16 years old and thereupon sent the son to the Medical Officer whose opinion was that the son was 17 plus. Thereafter the father and son were again interviewed and this interview was followed by a formal notice in writing from the Chief Immigration Officer to the son refusing him admission. Subsequently it appeared that the son had in his possession a school leaving certificate in Arabic script which showed that the son was born on February 29, 1951. An application was made for the issue of Writ of Habeas Corpus to secure release of the son from the custody of the Chief Immigration Officer and there was also a prayer for a Writ of certiorari for quashing the decision refusing the son's admission to the United Kingdom. After referring to an earlier decision of the Judicial Committee under a statute which required the officer to hold an inquiry and specific provision was made for service of notice and for hearing. Lord Parker C. J. held that that was a clear case where the officer was acting judicially or quasi-judicially and he was required to adopt a judicial process and then went on to hold at p. 231 of the report :

'This, as it seems to me is a very different case, and I doubt whether it can be said that the Immigration authorities are acting in a judicial or quasi-judicial capacity as those terms are generally understood. At the same time, however, I myself think that even if an Immigration Officer is not acting in a judicial or quasi-judicial capacity, he must at any rate give the immigrant an opportunity of satisfying him of the matters in the Sub-section and for that purpose let the immigrant know what his immediate impression is so that the immigrant can disabuse him. That is not, as I see it, a question of acting or being required to act judicially, but of being required to act fairly. Good administration and an honest or bona fide decision must, as it seems to me, require not merely impartiality, nor merely bringing one's mind to bear on the problem, but of acting fairly and to the limited extent that the circumstances of any particular case allow and within the legislative framework under which the administrator is working, only to that limited extent do the so-called rules of natural justice apply, which in a case such as this merely a duty to act fairly.'

In the same case Salmon L. J. held at page 232 of the report:

'I have no doubt at all that in exercising his powers under that section, the Immigration Officer is obliged to act in accordance with the principles of the natural justice. That does not of course mean that he has to adopt judicial procedure or hold a formal inquiry, still less that he has to hold anything in the nature of a trial, but he must act, as Lord Parker C. J. has said fairly in accordance with the ordinary principles of natural justice. If for example, and this I am sure would never arise, it could be shown that when he made an order refusing admission he was biased or had acted capriciously or dishonestly, this Court would have power to intervene by the prerogative writ'

In the facts of that case, however, it was held that it was impossible to hold that the decision made by the Chief Immigration Officer was not arrived at fairly and that both the father and son knew full well of what they had to satisfy the authorities and they were given ample opportunity to do so and the fact that the officer was not satisfied was not a matter for the Court. It is clear that in that case it was held that an administrative officer must act fairly in dealing with a matter under a statute which did not require the officer to act judicially or quasi-judicially. But this decision, to my mind, is of no assistance to the petitioner in this case, firstly because an immigrant under the English Act was required to satisfy the officer about the age of his son whom he wanted to bring into England for permanent residence. The officer was required to come to a decision on the fact of the correct age and he was empowered either to admit or to refuse admission to the son of the immigrant. Secondly, evidence regarding age is required to be produced and the officer is required to apply his mind in coming to a decision on the question. In the case with which I am concerned, the party whose goods have been seized is not required by the statute to produce any evidence as to why an order of extension should not be made because all that the statute requires is a cause to be shown by the department and not by the party from whose custody goods have been seized. Secondly there is no charge in this case that the Collector of Customs was biased or had acted capriciously or dishonestly. There is nothing in the petition to show that the order of extension was unfairly made.

29. In support of the same contention reliance was placed on another English decision R. v. Criminal Injuries Compensation Board, Ex parte Lain. (1967) 2 All E. R. 770. In that case a police constable became blind as a result of shooting by suspect, whom he was about to question. He applied to the Criminal Injuries Compensation Board for compensation under the scheme. He was offered and accepted an interim compensation of 300. Later he committed suicide which was attributable to the injury. His widow became entitled to the interim award and also applied for further compensation. On this application a single member of the Board made a final award of 300. The widow thereupon applied for a hearing before three members of the Board who decided that having regard to other payments made she was not entitled to any compensation and made a nil award. The widow thereupon applied for a certiorari to quash the decision. The contention that the jurisdiction of the Court did not extend to the Board was repelled by Lord Parker C. J. and it was held that the Court had jurisdiction although the Board was not a statutory Board. It was held that the Board was a body of persons, of a public as opposed to a purely private or domestic character, that they were performing public duties and were quite clearly under a duty to act judicially. This decision again, to my mind, is of no assistance to the petitioner as the main question with which the Court was concerned in that case was whether the Board not being a statutory body, the Court had jurisdiction to issue a prerogative writ against its decision. On the question whether an applicant was entitled to the healing there could be no dispute because the scheme which provided for disposal of the matter by our members of the Board, itself laid down that the applicant would be entitled to a hearing before three other members excluding one who hadmade the initial decision. It is clear therefore that the constitution of the Board itself provided for a hearing and therefore this decision does not touch the question with which I am concerned in this application.

30. The next case relied upon by Mr.Sen was a decision of the Judicial Committee De Verteuil v.


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