PETITIONER:
SHAH GUMMAN MAL
Vs.
RESPONDENT:
THE STATE OF ANDHRA PRADESH
DATE OF JUDGMENT06/02/1980
BENCH:
FAZALALI, SYED MURTAZA
BENCH:
FAZALALI, SYED MURTAZA
KOSHAL, A.D.
CITATION:
1980 AIR 793 1980 SCR (2)1005
1980 SCC (2) 262
ACT:
Customs Act 1962, Section 135(1)(b) & Evidence Act,
1872, Section 106 and 114-Premises searched-Gold biscuits
with foreign markings recovered-Accused not disclosing
identity of person who gave the gold-Whether court can
presume that the gold was smuggled and imported without
permit.
HEADNOTE:
An offence under section 135(1)(b) of the Customs Act,
1962 is punishable if the offender, acquires possession of
or is in any way concerned in carrying removing, depositing,
harbouring, keeping, concealing, selling or purchasing or in
any other manner dealing with any goods which he knows or
has reason to believe are liable to confiscation under
section 111.
Section 111 enumerates the categories of goods which
are imported into India and are liable to confiscation.
The Central Excise officials searched the house of the
appellant and found in a secret chamber of an iron safe,
which was opened by him with the keys in his possession, a
bundle containing 28 gold biscuits and a half biscuit, all
of which bore foreign markings. In another secret chamber
were found gold earnings in plastic boxes and a bundle of
currency notes. When questioned in the presence of the
witnesses he stated that he had been receiving gold biscuits
from some unknown person from Bombay and that the other
articles belonged to him and his mother. He admitted that he
had no general or special permit from either the Reserve
Bank of India or the Gold Control Administrator to import or
keep foreign gold. The statement of the appellant was
recorded. Thereafter the appellant was prosecuted for
offences under Section 135(1)(b)(ii) of the Customs Act,
1962 and Section 85(ii) read with Section 8(i) of the Gold
Control Act, 1968.
The Magistrate convicted and sentenced the appellant to
rigorous imprisonment for nine months under each count. On
appeal, the Sessions Judge set aside the conviction and
sentence under the Gold Control Act as the requisite
sanction for prosecution was not accorded, but maintained
the conviction and sentence under Section 135(i) (b) (ii) of
the Customs Act, which order was confirmed by the High Court
in revision.
In appeal to this Court it was contended on behalf of
the appellant : (1) that if the presumption under Section
123 of the Customs Act is not available to the prosecution,
then there is no legal evidence to show that the appellant
had any knowledge or had any reason to believe that the
goods were imported or were smuggled without a lawful permit
and (2) as the case had been going on for eight years, a
lenient view on the question of sentence may be taken; while
on behalf of the respondent-State it was submitted that the
fact that the gold bore foreign markings and was recovered
from the possession of the appellant who had admitted in his
statement before the Customs Officers that some unknown
person had given it to him,
1006
would itself raise a sufficient presumption to attribute
knowledge to the appellant that the gold was smuggled
without any permit.
Dismissing the appeal,
^
HELD : (1) The prosecution has clearly proved the
charge under Section 135(1)(b)(ii) of the Customs Act.
[1014D]
(2) The sentence being one only of rigorous
imprisonment for nine months, there is no room for any
reduction thereof. [1014E]
(3) The fact as to how the appellant came into
possession of the gold and whether it was imported or not
being within the special knowledge of the appellant, if he
failed to disclose the identity of the person who gave him
the gold, it was open to the Court to presume under sections
106 and 114 of the Evidence Act that the appellant knew that
the gold in his possession was smuggled and imported without
a permit. [1010E-F]
(4) The broad effect of the application of the basic
principles underlying section 106 of the Evidence Act would
be that the onus is discharged if the prosecution adduces
only so much evidence, circumstantial or direct, as is
sufficient to raise a presumption in its favour with regard
to the existence of facts sought to be proved. [1012F]
Issardas Daulat Ram & Ors. v. The Union of India & Ors.
[1962] Supp. 1 S.C.R. 358; Commissioner of Income Tax,
Madras v. Messrs Best & Co. [1966] 2 S.C.R. 480; Collector
of Customs, Madras & Ors. v. D. Bhoormul [1974] 3 S.C.R.
833; Labchand Dhanpat Singh Jain v. The State of Maharashtra
[1975] 2 S.C.R. 907; Balumal Jamnadas Batra v. State of
Maharashtra [1976] 1 S.C.R. 539 referred to; Berham Khurshed
Pesikaka v. State of Bombay [1955] 1 S.C.R. 613; State of
Punjab v. gian Chand & others Crl. A. 195/62 disposed of on
April 2, 1968 distinguished.
In the instant case though the seizure was not made
under Section 111 of the Customs Act and the prosection
could not press into service the presumption arising from
section 123 of the Customs Act. It is proved that the
appellant was in the possession of gold biscuits with
foreign markings which were kept in a secret chamber of the
safe, and he admitted that the gold was brought from outside
the country and given to him by somebody, whose identity he
was not prepared to disclose. These circumstances are
sufficient to raise a presumption under Section 106 of the
Evidence Act so as to attribute knowledge to the appellant
that the gold was smuggled. [1014B-D]
JUDGMENT:
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.
47 of 1974.
Appeal by Special Leave from the Judgment and Order
dated 10-8-1973 of the Andhra Pradesh High Court in Criminal
Revision Case No. 648/72 and Criminal Revision Petition No.
992/72.
Dr. Y. S. Chitale and Vineet Kumar for the Appellant.
M. A. Khader and Venkatarao & G. N. Rao for the
Respondent.
The Judgment of the Court was delivered by
FAZAL ALI, J.-This appeal by special leave is directed
against a judgment dated August 18, 1973 of the Andhra
Pradesh High Court.
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The facts of the case have been detailed in the judgment of
the High Court and it is not necessary to repeat them all
over again. The appellant was tried by the Magistrate for
offences under s. 135(1) (b) (ii) of the Customs Act, 1962
and s.85(ii) read with s. 8(i) of the Gold Control Act, and
sentenced to rigorous imprisonment for nine months under
each count. Both the sentences were directed to run
concurrently. Sentences of fine were also imposed. The
Sessions Judge, on appeal, set aside the conviction and
sentence under the Gold Control Act and acquitted the
appellant of that charge for the reason that the requisite
sanction for his prosecution was not accorded, but
maintained the conviction and sentence of the appellant
under s. 135 (1)(b) (ii) of the Customs Act. Thereafter, the
appellant went up in revision to the High Court which
confirmed the conviction and sentence upheld by the Sessions
Judge. Then the appellant moved this Court and this appeal
is by special leave.
The allegations made against the appellant may be
briefly stated. On 16-4-1971 P.W. 4, Superintendent of
Central Excise issued a warrant (Ext. P-3) authorising P.W.
3 and another Inspector to proceed to the house of the
appellant at 6.30 a.m. P. W. 3 called P.W. 1 and one
Nihalchand as mediators and informed them that the accused
had concealed gold biscuits of foreign origin in his house
and hence it was decided to search his house. When the
search was conducted, the accused was directed to produce
the gold biscuits of foreign origin in his possession. The
accused denied that he possessed any but the Excise
officials searched the house and found in a secret chamber
of an iron safe, which was opened by the accused with the
keys in his possession, a bundle containing 28 gold biscuits
and a half biscuit marked as M. Os. 1-29. All these biscuits
bore foreign markings. In another secret chamber were found
gold earrings in plastic boxes and a bundle of currency
notes. The accused was then questioned in the presence of
the witnesses and he stated that he had been receiving gold
biscuits from some unknown person from Bombay and that the
other articles belonged to him and his mother. On being
questioned further, the accused admitted that he had no
general or special permit from the Reserve Bank of India or
the Gold Control Administrator to import or keep foreign
gold. The statement of the accused was recorded and is
marked Ext. P4. Before launching a prosecution, the
Collector of Central Excise issued a notice calling upon the
appellant to show cause why M. Os. 1 to 51 be not
confiscated and penalty levied. The accused gave his
explanation, Ext. P-7. Thereafter, the Collector passed
orders of adjudication confiscating the articles and imposed
a penalty of Rs. 5,000/. On appeal,
1008
the confiscation of jewellery and cash was set aside.
Subsequently, PW 5, the Assistant Collector of Customs filed
a complaint for the prosecution of the appellant under the
Customs Act. We have already mentioned that the prosecution
and conviction under the Gold Control Act was set aside for
lack of proper sanction. It is also admitted by the
prosecution in the instant case that as no seizure was made
in accordance with the provisions of the Customs Act, the
presumption under s. 123 thereof was not available to the
prosecution.
Section 135(1) (b), under which the appellant has been
convicted, runs thus :-
“135(1) Without prejudice to any action that may
be taken under this Act, if any person-
(b) acquires possession of or is in any way
concerned in carrying, removing, depositing,
harbouring, keeping, concealing, selling or purchasing
or in any other manner dealing with any goods which he
knows or has reason to believe are liable to
confiscation under section 111.”
Analysing the essential ingredients of clause (b), it
is manifest that before a conviction can be recorded under
it, the prosecution must prove that the accused has acquired
possession of or is in any way concerned in depositing,
keeping, etc., any goods which he knows or has reason to
believe are liable to confiscation under s. 111. Thus in the
instant case, as no presumption under s. 123 was available,
it was for the prosecution to prove affirmatively that the
appellant was in possession of smuggled gold knowing full
well that it was imported from outside the country so as to
fall within the ambit of s. 111. Dr. Chitale, appearing for
the appellant, contended that if the presumption under s.
123 is not available to the prosecution, then there is no
legal evidence to show that the appellant had any knowledge
or had any reason to believe that the goods were imported or
were smuggled without a lawful permit. The counsel appearing
for the State, however, submitted that the fact that the
gold bore foreign markings and was recovered from the
possession of the appellant who had admitted in his
statement before the Customs officers that some unknown
person had given it to him, would itself raise a sufficient
presumption to attribute knowledge to the appellant that the
gold was smuggled without any permit. Although the question
raised by the counsel for the parties is not free from
difficulty, an overall consideration of the special facts of
the present case would show that there could no difficulty
in holding that having regard to the admissions
1009
made by the appellant and his subsequent conduct, the onus
would shift to the appellant to show that the gold found
from him with foreign markings was imported without any
permit to his knowledge. This will be the combined effect of
the provisions of ss. 106 and 114 of the Evidence Act. The
matter was considered at great length in the case of Berham
Khurshed Pesikaka v. The State of Bombay(1) where this Court
holding that s. 106 could not be construed to place the onus
on the accused to prove the prosecution case, observed as
follows :-
“Section 106 of the Evidence Act cannot be
construed to mean that the accused has by reason of the
circumstance that the facts are especially within his
own knowledge to prove that he has not committed the
offence. (See Attygalle v. The King-A.I.R. 1936 P.C.
169, also In re: Kanakasabai Pillai-A. I. R. 1940
Madras 1). It is for the prosecution to prove that he
has committed the offence and that burden is not in any
manner whatsoever displaced by section 106 of the
Evidence Act.”
These observations were made with respect to the peculiar
facts of that case. It appears that what had happened in
that case was that the appellant was found to be guilty of
an offence under the Prohibition Act and the only evidence
to prove his guilt was that he was smelling of alcohol. This
Court held that it was for the prosecution to prove the
contravention of the provisions of the Prohibition Act and
to prove further that a particular intoxicant which was a
liquor under the Act, was consumed by the accused and merely
because the accused knew what he had taken (which was a
matter within his knowledge) could not relieve the
prosecution of the burden of proving that the liquor
consumed was an intoxicant as defined under the Act. It is,
therefore, clear that the observations made by this Court
regarding the interpretation of s. 106 of the Evidence Act
would not apply to the facts of the present case. In the
case of Issardas Daulat Ram & Ors. v. The Union of India &
Ors.(2) this Court, after discussing the admitted
circumstances of the case, found that the relevant pieces of
evidence would prove the guilty knowledge of the accused.
That was a case which arose under s. 178 (A) of the Sea
Customs Act and this Court observed as follows :-
“If the gold now in question had been imported
earlier it would be extremely improbable that the gold
would remain in the same shape of bars and with the
same fineness
1010
as when imported after the passage of this length of
time. It was precisely for this reason that at the
stage of the enquiry before the Collector the principal
point which was urged on behalf of the appellants was
to deny that the seized gold was of foreign origin and
it is the nature of the defence that accounts for the
order of the Collector dealing almost wholly with the
consideration of that question. In order to reach his
finding about the gold being smuggled, the Collector
has referred to the conduct of the appellants ……
These were undoubtedly relevant pieces of evidence
which bore on the question regarding the character of
the gold, whether it was licit or illicit. Learned
counsel is, therefore, not right in his submission
regarding the absence of material before the Collector
to justify the finding recorded in paragraph 6 we have
set out earlier.”
The facts of the present case appear to us to be almost
on all fours with the facts of the case mentioned above.
Here, also, the facts are that gold with foreign marking in
the shape of biscuits without indicating any change was
recovered from the possession of the appellant. Secondly,
the appellant admitted that the gold was brought from
outside the country. The appellant further admitted that he
did not hold any permit for importing the gold and the plea
taken by him was that some unknown person had delivered the
gold to him. In view of these circumstances and the fact as
to how the accused came into possession of the gold and
whether it was imported or not being within the special
knowledge of the accused, if he failed to disclose the
identity of the person who gave him the gold, then it was
open to the Court to presume under ss. 106 and 114 of the
Evidence Act that the appellant knew that the gold in his
possession was smuggled and imported without permit.
In The State of Punjab v. Gian Chand & Ors. (Criminal
Appeal No. 195 of 1962 disposed of on 2-4-1968), while
examining the validity of conviction and sentence under s.
167(81) of the Sea Customs Act, 1878, this Court held that
as the accused did not claim any ownership over the gold and
was a bullion merchant, the mere fact that the gold had
foreign markings would not be sufficient to prove that the
accused had knowledge that the gold was smuggled. In this
connection, this Court observed as follows :-
“In our view, the High Court was right in its
conclusion because the fact that none of the
respondents claimed ownership over the said gold could
not necessarily mean either that the gold was smuggled
gold or that the respondents were
1011
in possession thereof with the knowledge that it was
so. The fact that the gold has foreign marks stamped on
it can only mean that the gold was foreign. But since
such foreign gold used to be imported before the
present restrictions were imposed on its importation,
it could have been imported without any violation of
law. Consequently, that fact alone would not establish
either of the two ingredients of s. 167(81).”
The facts of this case are, however, clearly
distinguishable from those of the present case. In the first
place, in the case mentioned above, the accused was a
bullion merchant and it was in the very nature of
circumstances and as a part of his profession, natural for
him to be in possession of gold. Secondly, the Court clearly
held that during those days foreign gold used to be freely
imported in our country and therefore the mere presence of
foreign markings would not be sufficient to raise a
presumption under s. 106 of the Evidence Act so as to
attribute knowledge to the accused that the gold was
smuggled. In the instant case, the facts are quite different
and so is the nature of the admission made by the appellant.
In a later decision of this Court in the case of
Commissioner of Income Tax, Madras v. Messrs Best & Co.(1)
this Court observed as follows |-
“When sufficient evidence, either direct or
circumstantial, in respect of its contention was
disclosed by the Revenue, adverse inference could be
drawn against the assessee if he failed to put before
the Department material which was in his exclusive
possession. The process is described in the law of
evidence as shifting of the onus in the course of a
proceeding from one party to the other.”
It is true that case arose under the provisions of the
income Tax Act but the principles laid down by this Court
would apply equally to the facts of the present case. In the
case of Collector of Customs, Madras & Ors. v.
D.Bhoormull(2) a case under the Customs Act, while dwelling
on the nature and purport of the onus which lay on the
prosecution, this Court observed as follows:-
“It cannot be disputed that in proceeding for
imposing penalties under clause (8) of s. 167 to which
s. 178-A does not apply, the burden of proving that the
goods are smuggled goods, is on the Department. This is
a fundamental
1012
rule relating to proof in all criminal or quasi-
criminal proceedings, where there is no statutory
provision to the contrary. But in appreciating its
scope and the nature of the onus cost by it, we must
pay due regard to other kindred principles, no less
fundamental, of universal application. One of them is
that the prosecution or the Department is not required
to prove its case with mathematical precision to a
demonstrable degree…….. -All that it requires is
the establishment of such a degree of probability that
a prudent man may, on its basis, believe in the
existence of the fact in issue, Thus, legal proof is
not necessarily perfect proof, often it is nothing more
than a prudent man’s estimate as to the probabilities
of the case.”
Similarly, while dealing with the merits of the case, this
Court made the following observations :-
“In the case before us, the circumstantial
evidence suggesting the inference that the goods were
illicitly imported into India, was similar and
reasonably pointed towards the conclusion drawn by the
Collector………. The Collector had given the fullest
opportunity to Bhoormull to establish the alleged
acquisition of the goods in the normal course of
business. In doing so, he was not throwing the burden
of proving what the Department had to establish, on
Bhoormull. He was simply giving him a fair opportunity
of rebutting the first and the foremost presumption
that arose out of the tell-tale circumstances in which
the goods were found, regarding their being smuggled
goods by disclosing facts within his special
knowledge.”
It was also pointed out that the broad effect of the
application of the basic principles underlying s. 106 of the
Evidence Act would be that onus is discharged if the
prosecution adduces only so much evidence, circumstantial or
direct, as is sufficient to raise a presumption in its
favour with regard to the existence of the facts sought to
be proved. In the case of Labchand Dhanpat Singh Jain v. The
State of Maharashtra, while this Court was again considering
the extent and application of ss. 106 and 114 of the
Evidence Act and in this connection, observed as follows:-
“Even if we were to apply the ratio decidendi of
Gian Chand’s case (supra) in the case before us, we
find that the
1013
result would only be that no presumption under section
123 of the Act could be used against the appellant. We
do not think that the High Court or the Magistrate had
used this presumption. We find that they had relied
upon circumstantial evidence in the case to infer the
character of the gold recovered and the accused’s
guilty knowledge………. A reference to Issardas
Daulat Ram & Ors. v. Union of India & Ors. [(1962)
Supp. (1) S.C.R. 358] is enough to show that the
conduct of the accused and the incredible version set
up by him were enough to saddle the accused with the
necessary knowledge of the character of the goods found
in his possession.
…. …. ……. …. …. …. …. …. ….
Atleast, the burden of proving an innocent receipt of
gold lay upon the appellant under section 106 Evidence
Act. The totality of facts proved was enough, in our
opinion, to raise a presumption under section 114
Evidence Act that the gold had been illegally imported
into the country so as to (be) covered by section
111(d) of the Act. The appellant had not offered any
other reasonable explanation of the manner in which it
was being carried.”
The facts in this case appear to be very similar to the
facts in the present case. Furthermore, the case of Balumal
Jamnadas Batra v. State of Maharashtra(1) was also a case
under the Customs Act and there also the presumption under
section 123 was not applicable. It was held therein that
having regard to the conduct of the accused and nature of
the articles mens rea was established. In this connection,
this Court observed as follows :-
“The very appearance of the goods and the manner
in which they were packed indicated that they were
newly manufactured and brought into this country very
recently from another country. The inscriptions on them
and writing on the boxes were parts of the state in
which the goods in unopened boxes were found from which
inferences about their origin and recent import could
arise. The appellant’s conduct, including his
untruthful denial of their possession, indicated
consciousness of their smuggled character or mens rea.”
From the aforesaid case also it would appear that this
Court was prepared to draw a presumption against the accused
from the fact that
1014
the articles concerned were concealed and had particular
markings and special features and from the nature of the
unsatisfactory explanation given by the accused.
While it is, therefore, true that in the instant case
the seizure was not made under s. 111 of the Customs Act and
the prosecution could not press into service the presumption
arising from s. 123 of the Customs Act, that does not clinch
the issue. It is proved that the appellant was in possession
of gold with foreign markings which was found to be in the
shape of biscuits or bars kept in a secret chamber of the
safe, and that the accused admitted that the gold was
brought from outside the country and was given to him by
somebody whose identity he was not prepared to disclose.
Thus, the appellant knew as to who was the person who had
given him the gold and if he also knew, as he says, that the
gold was smuggled, he must have known whether the person who
delivered the gold to him brought it under a permit or
without any permit because at the time of the occurrence the
import of gold was banned excepting under special
circumstances. Having regard to the totality of the
situation, there is no reason why the prosecution would not
be entitled to call into aid the combined effect of the
presumptions under ss. 106 and 114 of the Evidence Act. We
are, therefore, satisfied that the prosecution has clearly
proved the charge under s. 135(1) (b) (ii) of the Customs
Act.
It was also contended by Dr. Chitale that as the case
had been going on for eight years, a lenient view on the
question of sentence may be taken. The sentence being one
only of rigorous imprisonment for nine months, we think
there is no room for any reduction thereof.
For the reasons given above, the appeal fails and is
accordingly dismissed.
N.V.K. Appeal dismissed.
1015