IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 18497 of 2009(F)
1. THE NEW INDIA ASSURANCE COMPANY LTD.,
... Petitioner
Vs
1. STATE OF KERALA, REPRESENTED
... Respondent
2. THE ADDL.EXCISE COMMISSIONER,
3. THE ASSISTANT EXCISE COMMISSIONER,
4. THE EXCISE INSPECTOR,
5. THE PREVENTIVE OFFICER,
For Petitioner :SRI.KKM.SHERIF
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice K.T.SANKARAN
Dated :21/06/2010
O R D E R
K.T. SANKARAN, J.
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W.P(C) No. 18497 of 2009
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Dated this the 21st day of June, 2010
J U D G M E N T
The nature and extent of the burden of proof on the owner
of the vehicle under Section 67C(2) of the Kerala Abkari Act, is
the question involved in this Writ Petition.
2. KL-01-AE-7269, a Hyundai Santro car belonged to
Achan Kunju @ Francis. Between 1 A.M. and 5 A.M. on 9/1/2008,
the said car was stolen from the car porch of the house of
Francis. The matter was reported to the police on 9/1/2008 itself.
A crime was registered. The experts of the Finger Print Bureau
inspected the premises. Message was sent by the police to the
other police stations. The investigation was vigorously conducted.
The details of the recently released victims for the offence of
theft was also taken into account. Investigation was taken in that
line also. Finally, the police concluded that the offence was
undetected. A report dated 19/7/2008 was filed by the Circle
Inspector of Police before the Magistrate’s Court having
jurisdiction.
3. On 13/6/2008, the Excise Preventive Officer, Excise
W.P(C) No. 18497 of 2009
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Range Office, Pathanamthitta and party seized a Santro car
bearing registration No. KL 23-3016 at Alakode Junction for
transporting 420 litres of spirit. The driver of the vehicle Sujayraj
was arrested. Another person (Binu), who was in the vehicle, ran
away and he could not be arrested. An abkari case was
registered as CR No. 43/2008 of the Excise Range Office,
Pathanamthitta under Sections 55(a) and 67B of the Abkari Act.
4. During the course of investigation of the case, the
registration particulars of the vehicle was verified with registering
authorities. It was revealed that KL 23-3016, which was exhibited
on the seized vehicle, really, belongs to a Hero Honda Motor Bike.
The correct registration number of the Santro Car was found to
be KL-01-AE-7269. That car belonged to Achan Kunju @ Francis.
Proceedings under Section 67B of the Abkari Act were initiated by
the Assistant Commissioner of Excise. Notice was issued to
Francis, the owner of the vehicle. He appeared before the
Assistant Excise Commissioner, who is the authorised officer, and
filed reply to the show cause notice. In the reply, it was stated
that the vehicle in question was stolen from the car porch on
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9/1/2008. Though a crime was registered by the police, the
offender could not be apprehended. The relevant records in
relation to the registration of the crime were produced before the
authorised officer. The owner of the vehicle also stated that he
had received compensation from the Insurance Company and
that he has no right over the vehicle. The authorised officer did
not issue any notice to the Insurance Company. However,
Exhibit P6 order dated 31/10/2008 was passed by the authorised
officer confiscating the vehicle under Section 67B of the Abkari
Act.
5. The New India Assurance Company Ltd. filed an appeal
before the Addl. Commissioner of Excise, Thiruvananthapuram
challenging the order passed by the authorised officer. The
Insurance Company contended that the owner of the vehicle had
availed comprehensive insurance package in respect of the
vehicle. On reporting that the vehicle was stolen and after
satisfying that the vehicle could not be traced out and also taking
into account all the relevant facts, the claim of the owner of the
vehicle was settled for a sum of Rs. 2, 10,000/-. Accordingly, the
W.P(C) No. 18497 of 2009
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registered owner of the vehicle (Francis) issued irrevocable power
of attorney dated 5/09/2008 in favour of the Insurance
Company. The registered owner also executed another document
dated 5/9/2009 subrogating all his rights over the vehicle in
favour of the Insurance Company.
6. The appellate authority, namely, the Addl.
Commissioner of Excise, Thiruvananthapuram did not accept the
contentions put forward by the Insurance Company against
confiscation. The contentions put forward by the Insurance
Company under Section 67C(2) of the Abkari Act were rejected
finding thus:
“The next issue to be considered is whether the
RC owner has proved to the satisfaction of the
Authorized Officer that, provisions of section 67C(2) is
applicable in this case.
Moreover mere absence of knowledge and
connivance on the part of the R.C. Owner is not
sufficient to prevent the confiscation u/s.67C(2) of the
Abkari Act. The argument that the appellant had no
knowledge or connivance and he is innocent, is not
adequate, as onus lies on his to prove the conditions
prescribed u/s.67C(2).”
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7. The Insurance Company filed a revision before the
Commissioner of Excise, Thiruvananthapuram, which was
dismissed as not maintainable as per Exhibit P8 order dated
8/5/2009. It was held that the power of revision of the Excise
Commissioner under Section 67F is only Suo moto power of
revision and an aggrieved party have no right to file a revision.
The orders passed by the authorities, confiscating the vehicle, are
under challenge in this Writ Petition.
8. The finding made by the Excise Commissioner that no
revision lies to him appears to be correct and therefore, the
challenge against Exhibit P8 order need not be considered in this
Writ Petition. However, the correctness or otherwise of Exhibit P6
order passed by the authorised officer and Exhibit P7 order
passed by the appellate authority is to be looked into in this Writ
Petition.
9. Section 67B of the Abkari Act provides for seizure and
confiscation of contraband articles as well as vehicles, utensils,
animal, cart, vessel and other conveyance used for carrying the
contraband. Section 67 C provides for the procedure to be
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followed before confiscation and the matters to be proved by the
owner of a vehicle to avoid an order of confiscation. For the sake
of convenience, Sections 67 B and 67 C are extracted below:
Section 67B : Confiscation by Abkari Officers in
certain cases: (1) notwithstanding anything contained
in this Act or in any other law for the time being in
force, where any liquor, intoxicating drug, material,
still, utensil, implement or apparatus or any
receptacle, package or covering in which such liquor,
intoxicating drug, material, still, utensil, implement or
apparatus is found or any animal, cart, vessel, or
other conveyance used in carrying the same is seized
and detained under the provisions of this Act; the
officer seizing and detaining such property shall,
without any unreasonable delay, produce the same
before an officer authorised by the Government in this
behalf by notification in the Gazette, not being below
the rank of an Assistant Excise Commissioner
(hereinafter referred to as the authorised officer).
(2) Where an authoised officer seizes and detains
any property specified in sub section (1) or where any
such property is produced before an authorised officer
under that sub-section and he is satisfied that an
offence under this Act has been committed in respect
of or by means of that property and that such property
W.P(C) No. 18497 of 2009
7
is liable to confiscation under this Act, such authorised
officer may, whether or not a prosecution is instituted
for the commission of such offence, order confiscation
of such property and where such property consists of
any receptacle or package, the authorised officer may
also order confiscation of all contents thereof.
(3) When making an order of confiscation under
sub-section (2), the authorised officer may also order
that such of the properties to which the order of
confiscation relates, which in his opinion cannot be
preserved or are not fit for human consumption, be
destroyed.
Section 67C. Issue of show cause notice before
confiscation under Section 67B:- (1) No order
confiscating any property shall be made under Section
67B unless the person from whom the same is seized-
(a) is given a notice in writing informing him of
the grounds on which it is proposed to confiscate such
property;
(b)is given an opportunity of making a
representation in writing within such reasonable time
as may be specified in the notice against the grounds
of confiscation and
(c) is given a reasonable opportunity of being
heard in the matter.
(2) Without prejudice to the provisions of sub-
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section(1), no order confiscating any animal, cart,
vessel or other conveyance shall be made under
section 67B if the owner of the animal, cart, vessel or
other conveyance proves to the satisfaction for the
authorised officer that it was used in carrying the
liquor or intoxicating drug or the material, still, utensil,
implement or apparatus or the receptacle, package or
covering without the knowledge or connivance of the
owner himself, his agent, if any, and the person in
charge of the animal, cart, vessel or other conveyance
and that each of them had taken all reasonable and
necessary precautions against such use.
10. There is no dispute that the vehicle was involved in an
abkari offence. There is also no dispute that the vehicle was
insured with the New India Assurance Company Ltd by the owner
of the vehicle. It is also not in dispute that the vehicle was stolen
from the possession of the owner of the vehicle. It is also an
admitted case that the theft of the vehicle was reported to the
police and the police could not find out the vehicle and
apprehend the offender. While the vehicle was out of the control
of the registered owner, it was used for the commission of the
offence under the Abkari Act by two persons. There is no case for
W.P(C) No. 18497 of 2009
9
the authorities below that two accused in the abkari case have
any connection with the registered owner of the vehicle. The
registered owner was not made an accused in the abkari offence.
Evidently, since there is no case that the registered owner of the
vehicle had involved himself in the abkari offence, without
knowing that the vehicle was seized by the Excise Officials in an
abkari offence, the insurance claims were settled by the New
India Assurance Company Ltd with the registered owner of the
vehicle and a sum of Rs.2,10,000/- was paid to him. The
registered owner of the vehicle had executed Exhibit P5
irrevocable power of attorney and Exhibit P5(a) subrogation
letter in favour of the Insurance Company. The Insurance
Company has acquired the rights of the registered owner in
respect of the vehicle. Therefore, the Insurance Company can
challenge the order passed by the authorised officer confiscating
the vehicle under Section 67B of the Act. The contention raised
by the respondents that the Insurance Company has no locus
standi to challenge the order of confiscation, is therefore
rejected.
W.P(C) No. 18497 of 2009
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11. The registered owner of the vehicle appeared before
the authorised officer and proved that his vehicle was stolen
about five months before the date of its seizure in an abkari
offence. He had also produced all the relevant records in respect
of the registration of the crime and the reports filed by the
investigation officer before the Magistrate’s court. The question is
whether proof of these facts would constitute proof of the
ingredients of Sub section (2) of Section 67C of the Abkari Act.
Under Section 67C(2) of the Abkari Act, the owner has to prove
to the satisfaction of the authorised officer that the vehicle was
used in carrying the contraband without knowledge or connivance
of the owner himself, his agent, if any, and the person in charge
of the vehicle and that each of them had taken all reasonable and
necessary precautions against such use of the vehicle. In the
facts situation of the present case, there was no agent or person
in charge of the vehicle. Therefore, it was for the owner of the
vehicle to prove the ingredients of Sub Section (2) of
Section 67C. What he has to prove is that the vehicle was used in
carrying the contraband without his knowledge or connivance. In
W.P(C) No. 18497 of 2009
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the practical sense, it is a negative fact. Still, it can be proved by
the proof of positive facts. The positive facts proved by the owner
are the following:
(i) The vehicle was stolen on 9/1/2008 from his
lawful possession. (ii) The vehicle could not be traced out
even after several months. (iii) The vehicle was seized by
the Excise Officials only on 13/6/2008.(iv) The number of
the vehicle was changed and another number was being
used. The number exhibited on the vehicle belongs to the
motor bike.
Before the seizure of the vehicle, the police had
reported to the Magistrate’s court that the offence was not
detected.
12. It is to be noted that though the vehicle was seized on
13/6/2008, the police or the Excise Authorities were not aware
till 19/7/2008 that the seized vehicle was the vehicle which
belonged to Francis, because the registration number found on
the vehicle was different. Only later, it was revealed that the
correct registration number is the registration number of the
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12
vehicle owned by Francis. In these circumstances, what else
could be expected to be proved by the registered owner of the
vehicle to avoid the confiscation of the vehicle? It is true that the
burden of proof is on the owner of the vehicle, but nobody can
accept an impossible thing to be proved. Each case has to be
decided by the confiscating authority on the facts and
circumstances of the case. Only certain general principles could
be laid down. Section 67C(2) mandates only proof of those facts
which would enable the authorised officer to find that the vehicle
was used for illegal purposes without the knowledge or consent
or connivance or instructions or directions of the registered
owner. In other words, if it is proved that the owner had no
control and dominance over the vehicle and he was in the dark
as to who actually possessed the vehicle at the relevant time,
proof of those facts by themselves would be enough to attract
the ingredients of Sub Section (2) of Section 67C of the Act.
What is to be looked into is whether the vehicle was used for
illegal purposes with the knowledge or connivance of the owner
or his agent or the person in charge of the vehicle. Section 67(2)
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is not a provision to penalise the owner or take away the
available rights of the owner in respect of the vehicle. The
provision for confiscation is intended for deterrent to the
commission of an abkari offence. A provision like Section 67C(2)
is intended to deal with a possible false defence that the owner or
his agent or the person in charge of the vehicle was not aware of
the commission of the crime and that they had mens rea in
respect of the same. The owner is compelled to prove the facts
and the ingredients mentioned in Sub-Section(2) of Section 67C
to dispel any circumstances pointing out the complicity in the
offence directly or indirectly. If the owner or his agent or the
person in charge of the vehicle is innocent and the vehicle was
used by a stranger, who dispossessed the owner by committing
the crime, the owner cannot be deprived of his right over the
vehicle by compelling him to prove the impossible things. The
very fact that the vehicle owner was dispossessed of the vehicle
by the commission of a crime and that the offenders were not
apprehended and the vehicle was not found out by themselves
are sufficient, prima facie, to show that the owner is not involved
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in the commission of the offence. Coupled with that the absence
of any allegation that the owner of the vehicle is not involved in
the abkari offence, is to be taken note of. The cumulative effect
of proof of these facts is the proof of the ingredients of
Section 67C(2).
13. In Vijayan Vs. Asst. Excise Commissioner, Cannanore
[1980 K.L. T 45], it was held as follows:
“The following propositions emerge from the
above discussion: (i) to confiscate a conveyance under
Section 67C of the Act, it is necessary that its owner,
his agent or the person to whom it is entrusted by
him should have a guilty mind (mens rea), though not
to the extent of an intention on his part to commit
the Abkari Offence of carrying contraband goods
therein or to abet the same, at least to the extent of
knowingly and willingly permitting its user for the
carriage of such goods; (ii) the onus is on the owner
to establish absence of any guilty mind and not on the
department to prove its presence;(iii) the owner, his
agent and the person in charge of the conveyance
should also have taken all reasonable and necessary
precautions against such use; (iv) here again, the
burden of proof is upon the owner to prove that each
W.P(C) No. 18497 of 2009
15of them had exercised reasonable and necessary
precautions against such use; (v) there are no rules
specifying the nature of the precautions to be taken by
them, the only guideline in that behalf being that all
reasonable and necessary precautions should be
taken;(vi) S.67B(2) is only permissive and not
obligatory (this sub-section uses only the word ‘ may’
and not ‘shall’, even which word was construed by the
Supreme Court in the above-mentioned case, as only
permissive and not obligatory); (vii) it is a penal
provision and should be construed in such a way that
an innocent person is not visited with a penalty; and
(viii) a very strict and rigid construction of the
provision in S. 67B(2) may lead to absurdity and
unconstitutionality. It is bearing in mind all these
aspects that the question of ordering confiscation of a
stage carriage from which contraband liquor was
detected in a Suit-Case and in a packet, both
admittedly belonging to a passenger travelling in it, is
to be considered.”
14. The learned Government Pleader submitted that the
Insurance Company is not entitled to put forward the contentions
which are available to the owner under Section 67(2) of the Act
and that the Insurance Company is not an aggrieved party under
W.P(C) No. 18497 of 2009
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Sections 67E to 67F. It is true that the proof of facts to constitute
his discharge of burden of proof under Section 67C(2) is to be
made by the owner, but the benefit of the same could inure to
the transferee of the owner or the person who steps into the shoe
of the owner or the person who derives some rights from the
owner. The question is not whether the vehicle was transferred to
some other persons and that some other persons became the
beneficial persons of the order of release of the vehicle. The
question is whether the vehicle is liable to be confiscation. If the
vehicle is liable to be confiscation, the benefit of release of the
vehicle could go to the owner or any rightful claimant. In the case
on hand, the owner of the vehicle had relinquished all his rights
in favour of the Insurance Company after receiving a sum of
Rs.2,10,000/- from the company. Therefore, the person who is
entitled to receive the vehicle is the Insurance Company. This
question can be answered in any way. Suppose, there was no
involvement of the vehicle in an abkari offence. If the vehicle in
question was stolen, after the police seized the vehicle naturally
it would be produced before the criminal court concerned and the
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Insurance Company would approach the criminal court for the
release of the vehicle either under Section 451 or Section 457 of
the Code of Criminal Procedure. Then answer would be yes,
since the Insurance Company had acquired rights over the
vehicle in the meanwhile. If so, the same result would follow, if it
is found that there is no ground for confiscation of the vehicle.
15. I am of the view that the orders passed by the
authorised officer and the appellate authority confiscating the
vehicle are illegal and contrary to the provisions of Sections 67B
and 67 C of the Act. Exhibits P6 and P7 orders are therefore set
aside. The respondents shall release the vehicle in favour of the
petitioner, namely, the New India Assurance Company Ltd.
forthwith.
K.T. SANKARAN, JUDGE
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