G.K. Mitter, J.
1 This is an application under Article 226 of the Constitution by one Sitaram Agarwalla against (1) the Additional Collector, Customs, Calcutta, (2) the Assistant Collector of Customs and Superintendent, Preventive Service having his office at Customs House, Calcutta, and (3) the Union of India, for the issue of a writ in the nature of Mandamus directing the respondent No. 1 to withdraw and/or cancel the order levying the personal penalty of Rs. 60,000/-on him and to refrain from enforcing the said order, a similar writ directing the respondent No. 2 to withdraw and/or cancel the order of detention of currency notes of Rs. 49,320/- and of appropriating the same towards the penalty imposed and to retrain from enforcing the order and for other appropriate reliefs.
2. There is some dispute as to the facts in this case, but I shall proceed on the basis of those disclosed in the records relied on by the respondents to test whether the orders complained of can be upheld. The respondents' case seems to be as follows. On receipt of information to the effect that the petitioner and one Bholanath Agarwalla were about to purchase Chinese smuggled gold a constable of the Detective Department of the Calcutta Police was shadowing the petitioner and his said companion in northern Calcutta on 25-8-1958. The petitioner and his companion took up their position on the western portion of Jatindra Mohan Avenue near the Kali temple. After they had been there for some time a taxi cab with a Chinese passenger was seen to approach the place. At a signal from the petitioner the taxi cab stopped and the petitioner and his companion boarded the cab; on the constable challenging them and raising an alarm the taxi cab stopped when the Chinese gentleman got out and began to run away along Raja Naba Kissen Street. The petitioner and his companion were taken to Shampukur police station and interrogated. The Chinese gentleman Wong Chit Khaw by name was later on apprehended with the help of passers-by but before this he dropped some packets on the roadside which were found to contain gold of Chinese origin. While the petitioner & his companion were still at Shampukur police station Khaw was taken there under arrest. Khaw refused to sign the seizure list which was prepared and disowned the gold bars. On his person being searched a special cotton jacket prepared specially for carrying the gold bars was round underneath his shirt. A search of the person of Sitaram Agarwalla, the petitioner, revealed that he had in Indian currency notes a sum of Rs. 49,320/-. Khaw later on gave a statement in writing on the same date to the effect (a) that two persons of Chinese origin had visited him in China-town and made a proposal to him to carry some gold on their behalf for which he would receive a commission ofRs. 200/-, (b) he was asked to take a taxi cab and proceed towards the temple in the centre of Chittaranjan Avenue beyond Grey Street and to deliver the gold to two Indian nationals who would be waiting for him and who would give him in exchange Indian currency notes which he was to take back, (c) on his agreeing to the proposal the said two persons, gave him a piece of paper with the letters 'O.K.' written thereon, (d) this paper was cut in half across the said letters and Khaw was asked to hand over the gold contained in three packets to the persons who would meet him at the appointed place on their producing the other half of the paper, (f) on the day mentioned Khaw engaged a taxi and left with the gold in his jacket, (g) when he came to the temple he got out of the taxi and waited on the pavement (h) after some time two men approached him one of whom got into the taxi with him, (i) at this juncture a plain-clothed policeman appeared on the scene, stopped the taxi cab and caught hold of the men who had approached him (j) there was a scuffle and passers-by came to help the policeman, (k) both the men were arrested, (1) Khaw managed to run along the road to a certain distance and threw the gold bars on the road, (n) he was stopped by a police sergeant on a motor cycle and taken to a nearby police station. Khaw did not disclose the names and addresses of the two Chinese gentlemen who had commissioned him for the job. The petitioner also signed a statement in writing wherein he said (i) that he was employed in a bullion shop under the name and style of Sitaram Shamsunder at 19, Nalini Seth Road, (ii) he had been asked by the wife of one Puranmull Jaipuria of 51, Vivekananda Road, to purchase gold for her and had been given a sum of Rs. 49,320/- for the purpose, (iii) he was going towards Shyambazar accompanied by a person named Bholanath and was on the look out for a taxi cab, (iv) On his way to Shyambazar he was apprehended by the police near Beadon Street, (v) he did not know Khaw and had not got into the taxi cab which had brought Khaw there. According to the respondents Puranmull Jaipuria and his wife denied having had anything to do with Sitaram Agarwalla.
3. The case made in the petition differs materially from the statement alleged to have been made by the petitioner at the police station. In the petition the case made is:
(a) That on 25-8-1958 the petitioner in company of Bholanath Gupta was carrying Rs. 49,320/-from one Laduram Chudiwalla of 13 Rupchand Roy Street for payment to one P. N. Gagla of P-18 B. K. Pal Avenue;
(b) On account of the prevailing tram strike he could not get a taxi and had to come down to Harrison Road to get a bus. The bus was Overcrowded and he could not get down at the junction of Grey Street but had to proceed up to the next stop near about Jatindra Mohan Park.
(c) As they were walking towards B. K. Pal Avenue some rowdies surrounded them and tried to snatch away the money. At the shout for help by the petitioner a passing police car stopped and on a complaint being made the petitioner was picked up by the police and taken to Shampukur police station where he lodged a complaint that he was about to be robbed of a sum of money which he was carrying.
(d) Shortly afterwards a Chinaman was brought under arrest to the police station and it was alleged that he had been found carrying with him 3 packets of gold contained 23 bars weighing 368 tollahs valued at Rs. 40,441/-.
(e) The police instead of recording the petitioner's complaint alleged that he and his companion were carrying the money for purchase of gold found in the possession of the Chinaman. The petitioner never knew the Chinaman nor was he concerned in any way with the purchase of gold seized from the Chinaman,
(f) On 9-10-1958 a show cause notice was issued on the petitioner by the respondent No. 2 alleging that smuggled gold had been recovered from Khaw and that the petitioner and Gupta 'were considered to be persons concerned in the smuggling of gold' and as such had contravened the provisions of the Sea Customs Act and the Foreign Exchange Regulation Act making the Indian currency notes seized from the petitioner's possession liable to confiscation under Section 167(8) of the Sea Customs Act read with Sections 23A and 23B of the Foreign Exchange Regulation Act and making the petitioner liable for penal action under the same sections.
4. In issuing the show cause notice the respondent No. 3 stated that witnesses had been examined and their statements recorded. The petitioner complains that all this was done behind his back and the charge was framed against him when he was in complete ignorance as to the data on which the charge was based. The petitioner showed cause before the Assistant Collector of Customs on 113-10-1958 denying the allegations contained in the notice and stating that he had committed no offence.
5. The case made by the petitioner in answer to the notice is substantially the same as made in the petition.
6. In December, 1958, a complaint was filed by the respondent No. 2 before the Chief Presidency Magistrate, Calcutta, against Khaw under Section 167(81) of the Sea Customs Act as also the petitioner and his companion Bhola Natti Gupta. The petitioner pleaded not guilty to the offence charged and took the defence as aforesaid, but the Magistrate convicted Khaw to undergo a sentence of rigorous imprisonment for three months and to pay a fine of Rs. 1,000/-. The petitioner was sentenced to pay a fine of Rs. 2000/- Bhola Nath Gupta was acquitted. The petitioner preferred an appeal to this Court, being Criminal Appeal No. 345 of 1959, which is still pending. By a letter dated 23-6-1959, the petitioner requested the Assistant Collector of Customs to stay the proceedings in connection with the seizure of Rs. 49,320/- and not to appropriate the money as it wag an exhibit in the criminal trial.
7. By an order made by the respondent No. 1 on 15-6-1959, he found the petitioner to be a person concerned in the smuggling of gold into India in collusion with Khaw and as such guilty of an offence under Section 167(8) of the Sea Customs Act. The respondent No. 1 imposed a personal penalty of Rs. 60,000/- on the petitioner under the above section directing that the penalty should be paid within three days from the date of receipt of his order. In the said order the respondent No. 1 refers to the explanation given by Sitaram Agarwalla and describesthe same as unacceptable, specially because it is in conflict with his statement made immediately alter his arrest. The respondent No. 1 was unable to accept the petitioner's explanation that the money was being taken to B. K. Pal Avenue, because he found that both Sitaram Agarwalla and Bhola Nath Gupta had in fact boarded the taxi cab near Narendra Deb Square along with Khaw who had contraband gold in his possession. The respondent No. 1 relies particularly on the fact that the taxi cab had stopped at that place at a signal made by the petitioner and his associate and he held that this could only be explained on the basis of an understanding with the occupant of the taxi.
8. Reliance is also placed on the statements of the constable and of other witnesses to the effect that the petitioner had been found loitering in the park in company with Bhola Nath Gupta instead of proceeding to B. K. Pal Avenue. Besides the money found in the possession of the petitioner was sufficient to cover the cost of contraband gold which Khaw had with him and all these facts led the respondent No. 1 to the conclusion that Khaw was there to dispose of the contraband gold and the petitioner was present to receive the same in exchange for the currency notes in his possession. The following extract is taken from the order of the respondent No. 1:
'The highly suspicious manner in which Shri Sitaram Agarwalla behaved in this case revealed a bad guilty knowledge of the gold being smuggled and he went to Shri Wong Chit Khaw with money with the definite intention to buy the smuggled gold and was a party to the commission of the offence of illegal importation'.
9. On this finding the order was made on the petitioner that he was a person concerned in the act of smuggling of gold into India in collusion with Khaw and was guilty of an offence under Section 167(8) of the Sea Customs Act. Accordingly a fine of Rs. 60,000/- was imposed on Sitaram Agarwalla. The penalty had to be deposited in the Customs House within 3 days from the receipt of the order and currency notes of the value of Rs. 49,320/-seized from Shri Sitaram Agarwalla were to be retained until he paid the penalty imposed on him.
10. The affidavit-in-opposition of Ramesh
Chandra Misra, the Assistant Collector of Customs, Respondent No. 2 herein gives a narrative of the version of the Customs Authorities already mentioned. In paragraph 3, sub-paragraph (g) the deponent states
'It is evident from the facts and circumstances herein above stated that the petitioner and the said other persons were dealing in contraband and dutiable goods (i.e. gold)and but for the timely intervention of the police, the dealing would have been translated into complete sale'.
11. The difference in the versions of Sitaram Agarwalla given at the police station immediately after his arrest and made afterwards would make anybody suspect his bona fides. If there was evidence before the Customs Authorities that Khaw had contraband gold with him and that Sitaram Agarwalla had got in contact with him on a pre-arranged plan and that before Khaw could pass the gold on to Sitaram Agarwalla, both were arrested, there canbe little doubt that so far as the gold was concerned, the provisions of Section 167(8) of the Sea Customs Act would be attracted. The question then remains. Is Sitaram Agarwalla a person who can be dealt with under that section as one 'concerned in the offence' therein mentioned and can he be subjected to a penalty as was sought to be done in this case?
12. Section 167(8) of the Sea Customs Act provides that
'If any goods, the importation or exportation of which is for the time being prohibited or restricted by or under Chapter IV of this Act, be imported into or exported from India contrary to such prohibition or restriction; or if any attempt be made so to import or export any such goods; or if any such goods be found in any package produced to any officer of Customs as containing no such goods;
Such goods shall be liable to confiscation; and any person concerned in any such offence shall be liable to a penalty not exceeding three times the Value of the goods, ,or not exceeding one thousand rupees'.
The first quotation is from the first column and the second from the third column of Section 167(8).
13. For the purpose of finding out the offence referred to in the third column one must look at and examine the first column. According to the first column the offence is committed whenever
'any goods, the importation or exportation of which is for the time being prohibited or restricted by or under Chapter IV of this Act, be imported into or exported from India contrary to such prohibition or restriction'.
14. The first column also shows that any attempt to import or export any such goods would also be an offence. But we are not concerned here with an attempt to import or export. In my view, the offence is one of importing into or exporting from India any goods contrary to the prohibition or restriction mentioned in the first column and any person who is concerned in any such offence is liable to the penalty mentioned in the third column.
15. 'To be concerned in' means, according to the Oxford Dictionary, 'to take part in or to be related to'. Anybody, therefore, who takes part in importing into or exporting from India any goods which, are subject to any prohibition or restriction as to import or export would be committing an offence under this section. But the offence is completed as soon as the importing or exporting takes place. Anybody who takes part in any of the processes leading to the import into or export from India would be concerned in the offence of importing or exporting. If, for instance, a number of persons enter into a scheme whereby gold is to be brought into India from overseas through Calcutta and Patna, the ultimate destination of the gold being Delhi, the process of importation may not end until the gold reaches Delhi and anybody who takes any part in the carriage of the gold from Calcutta to Delhi although the gold has already found its way into India, may be a person concerned in the importing of gold into India. But if the Customs Authorities cannot show or if they have no materials at their command tending to show that a person who isabout to buy or deal with smuggled gold has taken any part in the importation of it, they cannot penalise such person under S, 167(8) of the Sea Customs' Act.
16. There are two Madras decisions on this point. One is the case of Sethuranjan v. Collector of Central Excise, Madras, Writ Petn. No. 425 of 1956. A certified copy of the judgment of Rajagopala Ayyangar J. produced before me shows that the facts were as follows: The petitioner, a partner of a firm carrying on business in jewellery at Bangalore, was found buying a quantity of gold bars brought in by some persons who formed part of the retinue of the King of Saudi Arabia on his visit to India in 1955. When the negotations relating to the sale of gold were still in progress, some officers of the Excise Department entered the petitioner's shop and seized the gold as well as a sum of Rs. 4,000/- which was lying on the table to be made over to the persons selling the gold. After the issue of a show cause notice an order was made on the petitioner by the Excise Authorities confiscating the 100 tolas of gold and levying a penalty of Rs. 5000/- on the petitioner and directing that the sum of Rs. 4000/- which, had been seized from the petitioner's shop be kept in custody until the payment of the fine. The learned Judge examined the provisions of Section 167(8) of the Sea Customs Act and observed as follows:
'The petitioner no doubt purchased the gold and on the finding of the officer, knowing that it was smuggled. But that was long after the gold was smuggled and the petitioner was no party to the smuggling of the gold. It was therefore a misnomer or misapplication of the words to term the act of the petitioner in purchasing the gold that he had 'aided or abetted' the illegal importation'.
17. In that case the point of time when the gold had been imported into India could be fairly well fixed, but the same cannot be said on the facts of this case. We do not know exactly when or through what channel the gold was imported into India. But on the facts as disclosed from the records there is nothing to show that the petitioner had participated in the act of smuggling the gold. The evidence against the petitioner at its best only establishes that he had entered into a conspiracy or a scheme to buy the gold according to a prearranged plan whereby Khaw was to take it along to a place near Jatindra Mohan Avenue and hand it over to him in exchange for a large sum of money.
18. The above decision of the Single Judge of the Madras High Court was approved of by another Judge of that Court in the case of Devichand Jestimall and Co, Bangalore v. The Collector of Central Excise Madras, : AIR1960Mad281 . In this case the facts as taken from the judgment disposing of several writ petitions were as follows:
'On receipt of certain information the Superintendent of Central Excise, Vellore, searched the shop and residence of Messrs. Venechand and Sons on 9-11-1957. He seized from the shop 121 tolas of gold. This included two bars of ten tolas each with foreign marks. XXX According to the accounts maintained by Venechand and Sons the stock of gold on hand should have been only 98tolas. A perusal of the private accounts maintained by this firm showed that it had received gold from the petitioners in the past and that such receipts were not accounted for in the regular account books. On 10-11-1957, Bijraj, son of Venechand Bhatwada, who was managing the business stated that the several gold bars bearing foreign marks and weighing 70 tolas which had been seized from the shop as well as from the residence were received from the petitioner in Writ Petition No. 110 of 1959. He also made a statement relating to the transactions of the firm with the petitioners in W. P. Nos. 109, 88 and 111 of 1959. He added that the gold was smuggled gold'.
The department had received incriminating information from other sources. On these facts, alter giving a personal hearing to counsel for the petitioners, the Collector of Central Excise recorded that the four parties at Bangalore were persons concerned in the smuggling of gold which they had been passing on to the firm at Vellore. He imposed a penalty or Rs. 6000/- on the petitioner in Writ Petition No. 88 of 1959, and of Rs. 25,000/- on the petitioner in Writ Petition No. 109 of 1959, a similar penalty on the petitioner in Writ Petition No. 110 of 1959 and of Rs. 12000/- on the petitioner in Writ Petition No. 111 of 1959. All these petitions were heard together. The learned Judge observed:
'To be in possession of the gold, or to sell the gold, or to buy the gold, once the process or importation assuming the importation is unlawful is completed and independently of the series of acts connected with such, importation will not fall within the terms of Item 8 of the Schedule''.
The learned Judge discussed the evidence in the case and said,
'To show that the petitioners in these cases imported the gold in question or were concerned in its import, there is really no legal evidence whatsoever'.
19. Mr. Kar, learned counsel for the respondents, drew my attention to several passages from the judgment of Sewpujanrai Indrasanrai Ltd. v. Collector of Customs, : 1958CriLJ1355 . But I do not think any observation in that case helps the respondents before me. There the Supreme Court pointed out that two kinds of action were possible under the Sea Customs Act and the Foreign Exchange Regulation Act when anything was being imported into India contrary to any restrictions or prohibitions lawfully imposed. One was an action in rem and the other a proceeding in personam, when goods are sought to be confiscated and forfeited to Government, an action in rem is taken but when a penalty is imposed, a proceeding in personam only takes place. Their Lordships were careful to point out the difference between the two. The following observations relied on by Mr. Kar occurs at p. 931 (of SCA): (at p. 853 of AIR):
'A person may be concerned in the importation of smuggled gold, without being a smuggler himself or without himself contravening any of the provisions of the Foreign Exchange Act'.
This however does not mean that any one dealing with smuggled gold becomes concerned in its importation.
20. In the illustration which I have given, any person who was concerned in the carriage of the gold from Calcutta to Patna or from Patna to Delhi might be a person concerned in the offence of Importing gold although, he was not a smuggler in the sense that he had nothing to do with the actual bringing of the gold across the customs frontier of India.
21. Further I do not think that the case of Attorney-General v. Robson, (1850) 5 Ex 790 (corresponding to 155 ER 346) helps Mr. Kar. That was a case of information, under the Statute 8 and 9 Vict. c. 87, Section 46 of which read as follows:
'Every person who shall, either in the United Kingdom or the Isle of Man, unship, or assist, or be otherwise concerned in the unshipping of any goods which are prohibited to be imported into the United Kingdom or into the Isle of Man, or the duties for which have not been paid or secured, or who shall knowingly harbour, keep, or conceal, or shall knowingly permit or suffer to be harboured, kept, or concealed, any goods which shall have been illegally removed without payment of duties X X X X; and every person, either in the United Kingdom or in the Isle of Man, to whose hands and possession any such prohibited or uncustomed goods shall knowingly come, or who shall assist or be in anywise concerned in the illegal removal of any goods from any warehouse or place of security, in which they shall have been deposited as aforesaid, shall forfeit either the treble value thereof, or the penalty of 1001., at the election of the Commissioners of Her Majesty's Customs'.
22. The defendant, a ship owner, was charged with being concerned in the illegal unshipping of tobacco, the duties for which had not been paid. The ship had been let on a voyage from Newcastle to Scheveling by the defendant who knew well that the object of the voyage was to fetch tobacco and run the same at Yarmouth. In order to carry out the scheme, the defendant had cleared the vessel in question at Newcastle, as for a voyage with coals to Yarmouth; but the captain sailed direct to Scheveling under the guidance of a pilot sent on board by the charterers with the knowledge of the defendant. The defendant was at Yarmouth when the vessel arrived there from Scheveling with the cargo of tobacco, and after it had been run, complimented the captain on the clever way in which he had managed the matter. The defendant received 2001, for the use of the vessel. On these facts it was submitted on the part of the defendant that he was not guilty of the offence charged; but the Court ruled otherwise, and a verdict was found for the Crown, with 8000 1, penalties. On a motion for a new trial on the ground of misdirection, it was argued on behalf of the defendant that he was not concerned in the unshipping of the tobacco, though the purpose for which the vessel was hired might have been known to him. It was further argued that a person who merely afforded to others the means of doing a particular act could not be said to do it himself. As the defendant had taken no part in the running of the tobacco, and in fact, his interest in the transaction ceased, when the vessel arrived at Yarmouth, he could not be inflicted with a penalty. This argument was negatived, Pollock C. B. observing that the defendant could easily be describedto be an associate in the transaction of unshipping tobacco illegally and Alderson, B. even observing that though he might not be said to be assisting, he was certainly concerned in the unshipping.
23. I do not think that this judgment helps Mr. Kar in any way. There the defendant Robson knowing full well that the object of the voyage was to run tobacco at Yarmouth without payment of duties had allowed his vessel to be so used and had actually been present when the vessel had come to Yarmouth and received a sum of 2001, as his commission. It was, therefore, futile to argue that he was not concerned in the offence of unshipping tobacco imported contrary to the prohibition.
24. On the facts of this case I am not preparedto hold that the petitioner, by his conduct ever sosuspicious, has been shown to be a person concerned in the offence mentioned in the first column ofclause 8 of Section 167 of the Sea Customs Act. He wascertainly concerned in the disposal of the gold thatwas contraband, but that would not, in my opinion,make him, liable to any penalty under Section 167(8) ofthe Sea Customs Act. The Rule must, accordingly,be made absolute. The parties will pay and beartheir own costs. With, regard to the sum ofRs. 49,320/- the only direction I shall give is thatit should be refunded to the petitioner subject to anyorders in the pending criminal Appeal No. 945 of1959 of this Court.