B.C. Chakrabarti, J.
1. This is an appeal against an appellate order of acquittal passed by the Sessions Judge, 7th Bench of the City Sessions Court at Calcutta.
2. The respondent Nand Kishore Kansal was prosecuted on a charge under Section 135 (a), (b), Customs Act, 1962, for having in his possession wrist watches, and other consumer goods, fountain pens of foreign origin and purchasing these smuggled goods which were kept concealed in the shop styled Messrs. H. Mohanlal & Co., situated at New Market, Calcutta, of which he was the partner-in-charge of the business. He was found guilty by the Metropolitan Magistrate, Calcutta and sentenced to undergo R.I. for 6 months and to pay a fine of Rs. 2,000, in default R.I. for 6 months more. The seized goods, namely, material exhibits I and II were ordered to be confiscated.
3. On appeal to the City Sessions Court, the learned lower appellate court found that the goods not having been recovered from the person of the accused independent of his character as a partner of the company the case attracted the provisions of Section 140, Customs Act. Relying upon an un-reported decision of this Court in the case of Krishna Swamp Agarwalla v. State (Criminal Revision No. 279 of 1973-Calcutta High Court), the learned Judge held that the liability of the person in-charge did not arise unless the company was also charged for the offence. Incidentally, it was also observed that the recording of statement of the accused in pursuance of the provisions of Section 108, Customs Act, in English by translating the statements made in Hindi but without keeping any endorsement on the body of the statements that the accused had put his signature thereon after the same had been explained to him and admitted by him to be correct, caused prejudice to the accused. In such a view of the matter the appeal was allowed and the conviction and the sentence of the accused were set aside.
4. Being aggrieved, the Union of India represented by Sri T.K. Lahiri, Assistant Collector of Customs, presented the appeal with the leave of the court.
5. Mr. Ghosh appearing on behalf of the appellant contended that the learned lower appellate court misdirected himself in thinking that in the facts and circumstances of the case the prosecution of the company as well as a condition precedent to the prosecution of the respondent. He wanted to distinguish the decision in Krishna Swamp Agarwalla v. State (Criminal Revision No. 279 of 1973-Calcutta High Court) which had been differently interpreted by the trial Magistrate and the court of appeal below. In his view the facts of that case were different and as such the principle held in that case cannot be made applicable to the facts of the case before us.
6. In order to appreciate the points thus urged on behalf of the appellant it is necessary to examine what exactly is the case of the appellant against the respondent. The case was briefly as follows :
7. On 18th September, 1974, a batch of Customs Officers searched a shop styled Messrs H. Mohanlal & Co. in course of which some imported goods were recovered from the shop for the possession of which the accused could not give any satisfactory explanation. The goods seized comprised amongst other things-wrist watches and fountain pens which were believed to be smuggled into India and which had not been entered in the relevant register of the shop even though it was a notified shop and as such the goods were required to be entered in the relevant register. It was also alleged that the accused could not produce any document of purchase of those articles. The accused made statements under Section 108, Customs Act, which were duly recorded and signed by the accused himself. Exhibit 4 is the search list prepared in the presence of the witnesses and signed by the witnesses as also the accused. Exhibits 5 and 6 are two statements made by the accused. Exhibit 5 clearly indicates that the accused was ape of the two partners of the said shop selling various consumer goods, that the other partner, Sri Mohanlal Damani, very seldom sits at the shop, that the business affairs of the shop is looked after by him, that the shop is an 'intimated place', that proper accounts in respect of possession, sale, purchase, acquisition/or disposal effected at the shop are noted. In regard to the seized articles the statements contains an admission that the seized goods were not entered in the notified register. It is then stated that he has no document whatsoever about the goods. Finally it is stated that none of the seized goods are the personal property. In the second statement, exhibit 6, the appellant makes it clear that the other partner does not look after the affairs of the shop and is a 'dormant partner' while the accused himself looks after the entire business affairs of the shop including purchase, disposal and all other transactions. He admitted having purchased the seized goods from different unknown brokers without any bill or voucher knowing that these goods were smuggled and that the brokers were for that reason unable to produce any legal document for acquisition/importation/possession of the goods. Nor did the accused insist upon the same. He conceded having kept those goods concealed in different secret chambers.
8. These statements contained endorsement to the effect that they were explained to the person concerned. The statements undoubtedly bear the signature of the accused in Hindi. The two statements were recorded by P.Ws. 4 and 5. Both of whom stated that the statements were made voluntarily in Hindi and English, that the statement was recorded in English and explained to the accused who admitted the same to be correct before putting his signature. In cross-examination some questions were put as to the extent of knowledge of the witnesses in Hindi. It was even suggested that the statements were not voluntarily made. But there was no specific cross-examination on the question whether the statements were explained to the accused and admitted to be correct. These statements, exhibits 5 and 6, are not really statements in the nature of confession made to a police officer. Section 25 of the Evidence Act provides that no confession made to a police officer, shall be proved against a person accused of any offence. The Supreme Court in the case of Ramesh Chandra v. State of West Bengal- : 1970CriLJ863 has held that the Customs Officers are primarily officers for the collection of duty and prevention of smuggling and are for all purposes officers of the revenue. Relying on an earlier decision of the Supreme Court in Badaku Joti Savant's case : 1966CriLJ1353 , it held that a Customs Officer under the Act of 1962 is not a police officer within the meaning of Section 25, Evidence Act, and the statements made before him by a person who is arrested or against whom an enquiry is made are not covered by Section 25, Evidence Act. A similar view was earlier taken by this Court in the case of Basanta v. Collector of Customs- : AIR1961Cal86 .
9. Therefore, the statements are admissible in evidence and the observations of the lower appellate court that the failure to record a statement to the effect that it was read over and explained to the accused and admitted by him to be correct caused prejudice to the accused cannot be supported. Factually, there are endorsements that the statements were explained to him. There is evidence that the statements were admitted to be correct before the accused signed the same and there was no effective cross-examination so far as that aspect was concerned. Therefore, we are unable to agree with the learned lower appellate court that this had caused any prejudice to the accused.
10. The only point that remains to be considered is whether by reason of the provisons of Section 140, Customs Act, the prosecution as against the respondent alone was maintainable. Section 140, Customs Act, 1962, in Sub-section (1) provides that if the person committing an offence under this chapter is a company, every person who, at the time the offence was committed, was incharge of, and was responsible to the company for the conduct of 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 against and punished accordingly. In view of this provision in the Customs Act a question arose in the unreported decision of this Court in Krishna Swamp Agarwalla v. State (Criminal Revision No. 279 of 1973-Calcutta High Court) as to whether a prosecution of the person-in-charge without a charge against the company was maintainable or not. The decision was differently interpreted by the trial court and the lower appellate court. We had the records of that case produced to see for ourselves the facts of the case and the actual decision rendered therein.
11. In that case the accused-petitioner, Krishna Swarup Agarwalla was stated to be the partner of a shop named and styled as Messrs Capital Watch Company. Basing upon a secret information the officers of the Customs Department searched the shop in the presence of the accused and other witnesses and in the course thereof certain articles were recovered and seized. On demand the accused who declared himself to be a partner and the person incharge of the shop, failed to produce any evidence in support of his bona fide possession of the articles. The accused was accordingly called upon to answer a charge under Section 135(b), Customs Act. One of the points urged by the accused in that case was non-compliance of the provisions of Section 140, Customs Act. Relying upon a decision in the case of State of Madras v. C.V. Parekh- : 1971CriLJ418 this Court held that the liability of the person in-charge of the company arises only when the contravention is by the company itself and since the company was not made a party and was not charged at all with the offence, the liability of the person-in-charge could not arise and the proceedings are vitiated by such non-compliance of the provisions of Section 140(1), Customs Act. The facts of that case as stated hereinbefore are almost identical.
12. True that Messrs Mohanlal & Co. is not a company within the meaning of the Companies Act but that seems to make no difference in view of the Explanation to Section 140. The Explanation provides that for the purpose of this section company means a body corporate and includes a firm or other association of individuals and the expression 'director' in relation to a firm means a partner in the firm. Therefore, it is needless to enter into the controversy as to whether this is a firm or a company within the meaning of the section which includes a firm. In view of the decision of this Court referred to earlier, it seems that in order to successfully maintain a charge against a person responsible to the company for its affairs of the conduct of business, it is incumbent upon the prosecution to charge the company as well. It is only in the event when the company is so charged that the person responsible may be vicariously made liable.
13. The object of Section 140 is to make provision for punishment of every person who at the time the offence was committed was in-charge of and was responsible to the company for the conduct of its business. Sub-section (2) of Section 140 also provides for the deeming of the commission of the offence by certain categories of persons who consented to the commission thereof or where the commission of the offence is attributable to them. Criminal liability of a corporate body, or for the matter of that of a firm, is an imputed liability and not vicarious liability. As the corporation itself cannot be executed or punished the liability is to be imputed to its high managerial agents who are responsible for the conduct of its business. The person is liable because his action is the very action of the company itself. The position may, however, be different if the person charged, though a partner of a firm, is charged in his individual capacity and not in his capacity as a partner. In the instant case the prosecution's allegation is not that the respondent personally had contravened the provisions of the Act and thereby made himself liable under Section 135, Customs Act. The prosecution clearly is that the goods seized were from the place of the business of the firm and the prosecution was foisted upon the respondent mainly in view of the fact that the affairs of the firm were looked after by him and not by the other partner. Such being the position it cannot be said that this was a case where the respondent was being prosecuted independently of his character as a partner of the firm. Necessarily, therefore, Section 140(I) must come into play which requires that the company is liable and since the company cannot be executed or punished the liability has to be fastened on the person in-charge. Therefore, in our view, it is incumbent that the company should be prosecuted as a condition precedent to the prosecution of the person in-charge. That being our view of the matter we respectfully agree with the decision of the Division Bench in Krishna Swamp Agarwalla v. State (Criminal Revision No. 279 of 1973- Calcutta High Court). In the result the appeal fails and is hereby dismissed.