V.K. Gupta, J.
1. The petitioner .has been carrying on the business, inter alia of acting as a local ship agent of various ships calling at the Port of Calcutta. It has been rendering agency Services in respect of the ships calling at Calcutta Port on behalf of the respective owners and masters of such vessels. Vessel MV Optima was one of such vessels for which the petitioner had been acting as an Agent.
2. Vessel MV Optima had arrived at 4, MS Dock Calcutta from Singapore on 5-7-1995. On 6-7-1995 a batch of customs officers posted in the Rummaging (Discipline) Unit at Outram Ghat went on board this vessel for rummaging under the order of the Superintendent, Rummaging (Discipline). During the course of rummage, the officers on board the vessel noticed the movement of one Mr. Harnani B. Villanueva, Radio Officer of the vessel under suspicious circumstances. Afterwards, in presence of the master of the vessel and independent witnesses the officers searched the person of the said Harnani B. Villanueva which resulted in the recovery of one piece specially made cloth waist belt worn by him around his waist beneath the under-garments and one piece of hand written document from inside right leg shoe worn by him. One visiting card, one pocket telephone diary and one temporary permit issued in his favour by Calcutta Port Trust were also recovered. All these recoveries around the suspicion of the officers that this person was engaged in dealing with some contraband which he however denied any such dealings. On prolonged interrogation the above named Radio Officer admitted of having some gold biscuits kept concealed inside a space in the controller of Radio Transmitter fixed in the radio room which was under his control. Accordingly the customs officers after unscrewing the bottom part of the controller of the radio transmitter recovered seven packets wrapped with adhesive tapes kept concealed in the empty space inside the said controller. On opening the aforesaid recovered packets, the officers found seventy pieces of gold biscuits having foreign inscription, with their total weight being 8.2 kgs. (approx) and valued at Rs. 41,00,000/- (rupees forty one lakhs). The gold biscuits so recovered were neither declared in his private properties list nor were entered in the Vessel’s store list. The master of the vessel was not aware of the gold biscuits so kept concealed in the radio room of the vessel and being carried on board the ship. Mr. Hernani v. Villanueva, the radio officer could not produce any lists or any other documents be way of any evidence in support of any lawful acquisition, importation or transportation of the recovered gold biscuits of foreign origin. Accordingly these recovered 70 pieces of gold biscuits collectively weighing 8.2 kgs. and valued at Rs. 41,00,000/- (rupees forty one lakhs) were seized by the customs officers on the ground of alleged violation of the provisions of the Customs Act because of the reason and belief that these gold biscuits were smuggled into India and were being attempted to be unloaded from the vessel for disposing the same in the local market and therefore these were ultimately liable to confiscation under the Customs Act.
3. While the gold biscuits were seized and the proceedings had been initiated in consequence thereof, the petitioner being the agent of the owners and Master of the ship MV Optima executed on 12th July, 1995 a deed/bond for and on behalf of the owners and Master of the ship MV Optima whereby the petitioner, styling itself as the “grantor” in this bond, bound and obliged itself for a sum of Rs. 2 crores to be paid in accordance with the provisions of the Customs Act to the Government of India or to the Commissioner of Customs, if such a liability arose from any act with relation to the ship in question involving its owners or the master. We are not concerned with this stipulation regarding the liability to pay to Rs. 2 crores. We are concerned in this case with another stipulation in the bond whereby it was agreed by the grantor that the Commissioner of Customs or any other officer who may be incharge of the case of the grantor may appropriate any amount up to Rs. 5,00,000/- (rupees five lakhs) towards any penalty that may be imposed by the adjudicating officer and/are against any fine in lieu of confiscation and/are against all incidental charges that may be due and payable by the grantor in respect of the preservation or transport of the vessel etc. Actually in addition to the above referred liability of paying to Rs. 2 crores (with which we are not concerned in this case) the grantor had deposited with the Commissioner of Customs (Preventive) a sum of Rs. 2,00,000/- (rupees two lakhs) in cash and had furnished a bank guarantee of Rs. 3,00,000/-(rupees three lakhs) from the Standard Chartered Bank, Calcutta. The prescription regarding the appropriation of Rs. 5,00,000/-(rupees five lakhs) therefore was as a result of the aforesaid deposit of Rs. 5,00,000/-(rupees five lakhs) made by the grantor in favour of the respondents. We are concerned with the interpretation and application of two clauses in the bond, one relating to the deposit of Rs. 5,00,000/-(rupees five lakhs) and the other to the right of its appropriation by the customs authorities. The clause relating to the deposit reads as under :
“And whereas the said vessel used as Feeder Vessel between Singapore/Calcutta /Singapore, I / We have applied to the Commissioner of Customs, Calcutta for the release of the said Vessel pending investigation and have deposited with the Commissioner of Customs (Preventive) a sum of Rs. 2,00,000/-(Rupees two lakhs only) and a Bank Guarantee by Standard Chartered Bank, 4, N.S. Road, Calcutta-700 001, in favour of Commissioner of Customs, Calcutta, for a sum of Rs. 3,00,000/- (rupees three lakhs only) (hereinafter the Security Deposit amount ) to be applied for the purpose hereinafter mentioned.”
The clause relating to the right of appropriation reads thus :
“The said total deposit of Rs. 5,00,000/-(Rupees Five Lakhs) made by the Grantor as aforesaid may at any time be appropriated by the Commissioner of Customs or any other Officer who may be incharge of the case of the Grantor towards any penalty that may be imposed by the adjudicating officer and/or against any fine in lieu of confiscation and/or against all incidental charges that may be due and payable by the Grantor in respect of the preservation, transport of the Vessel, and the balance if any shall be refunded to the Grantor.”
4. Reverting to the stage of the seizure of the gold biscuits, a show cause notice was issued on 6-11-1995 by the Assistant Commissioner of Customs and ultimately an adjudicating order was passed by the Commissioner of Customs (Preventive) West Bengal, Calcutta on 6-5-1996. The operative portion of the final adjudication order read as under :
ORDER
“I accordingly pass the following order :-
The Gold numbering 70 biscuits is confiscated absolutely under various provisions of the Customs Act as invoked in the show cause notice.
Adhesive tapes, Waist Belt used for concealing the gold are also confiscated.
I also impose a penalty of Rs. 5,00,000/- (Five lacs) on Mr. Hernani B. Villanueva under Section 112 of the Customs Act.
For the reasons discussed in this order the charges against the order of the vessel and its Master are dropped. Bond executed stands discharged. Security deposited be adjusted against the penalty on the radio officer.
Penalty amount should be deposited at Customs House Treasury forthwith.”
5. In so far as the question relating to the liability of confiscation of the vessel and imposition of any penalty on the master of the ship was concerned, in the part immediately preceding the above quoted operative part, the Commissioner of Customs (Preventive) made the following observations :-
“As far as liability to confiscation of Vessel and penalty on master of the vessel is concerned, the thrust of Learned advocates plea had been that requirement of Section 115 of the Customs Act regarding the knowledge of the Master of the vessel about the concealment of gold has not been established. The Division Bench of Bombay High Court in the Nogul Lines Ltd. case (supra) had held that on a plan reading of Sub-section (2) of the Section 115 it is clear that what the owners of the vessel or a ship has to show in order to avoid confiscation is that it was used as means because of transport in the smuggling of goods without its knowledge or connivance or the knowledge and connivance of the master of the vessel. Single judge of the same High Court had held similar view in Indoceanic case cited above. Manner in which the gold had been concealed by the Radio Operator and also in view of his admission it can be concluded that both the Master and Owner of the vessel have demonstrated in the facts and circumstances of the case that neither of them had knowledge or connivance in the Ship being used for transporting smuggled gold.”
6. The dispute in this petition is with regard to the adjustment of the penalty of Rs. 5,00,000/- (rupees five lakhs only) by its appropriation from the amount secured in the bond executed on 12th July, 1995 by the petitioner. The petitioner says that it never made itself liable or obliged to pay any penalty or fine which was imposed upon the radio officer Mr. Hernani B. Villanueva. The argument of petitioner is that the bond is executed by it only in respect of any liability that may have arisen against the owner or the master of the vessel.
7. The respondents on the other hand submit that the terms and conditions of the bond should be interpreted in such manner as to fasten the liability upon the petitioner to pay the penalty of Rs. 5,00,000/- (rupees five lakhs only) imposed upon the Radio Officer because such was the intention of the parties when the bond was executed on 12th July, 1995.
8. The ultimate decision in this case would depend upon a careful reading and understanding of the bond, which is the subject matter at the centre of the controversy between the parties. In order to properly understand the contents of the bond and appreciate its various terms and conditions, it shall be appropriate and desirable if the bond is read as a whole and understood in the perspective in which it was executed, rather than reading a particular clause or a sentence in the bond in isolation. To properly understand such a document, reading a particular clause in isolation does not reflect either the intention of the contracting parties to the bond or the underlying purpose for which the bond was executed.
9. The learned advocate for the respondents wanted me to read clause 3 of the bond, which I have extracted earlier in this judgment so as to decide the issue about the liability of the petitioner for appropriation of the amount of Rs. 5,00,000/- (rupees five lakhs only). A great emphasis was laid at the words “towards any penalty that may be imposed by the adjudicating officer”. It was argued by the learned advocate for the respondents that the expression ‘any penalty’ occurring in the aforesaid words forming a part of clause 3 of the bond were sufficient to indicate that the appropriation of Rs. 5,00,000/- (rupees five lakhs only) could be made from out of the bond money if the adjudicating officer levied ‘any penalty’ in the matter. Perhaps it could have been possible to return such an interpretation if one could read clause 3 in isolation. Yes, if clause 3 is read in total isolation, one could say, even if not surely, that the amount could be appropriated if “any penalty” was levied by the adjudicating officer even upon the radio officer because the words “any penalty” occurring in clause 3 are indeed of wide amplitude and could cover the penalty, even it was imposed upon the radio officer. Such of course, however, is not the position in this case.
10. If the bond is read as a whole, it will clearly transpire and it will be very apparent on the face of the bond itself that the grantor had executed the bond for and on behalf of the owner and the master of the ship and not for anybody else. Every single clause forming the recital part of the bond or its preamble clearly suggests that the grantor had executed the bond only for and on behalf of the owner and the master of the ship and that the amount deposited was to be applied only for the purposes which were mentioned in the bond. A very important part of the bond is constituted by three clauses, namely (a), (b) and (c) which have also been extracted in the earlier part of the judgment. All these clauses clearly suggest that the bond was executed only if any liability was fastened upon the master or the owner for any act that they might have done and for which the adjudicating officer would have found them liable or if liability would have been fastened in respect of the movement of the ship or its entry into Indian waters. Liability could also have been fastened with regard to the confiscation of the ship and its subsequent release upon payment of fine or penalty or even incidental charges. Therefore, grantor apparently made itself liable to pay the amount of up to Rs. 2 crores and permitted the appropriation of the amount of Rs. 5,00,000/-. (five lakhs only) if any of the following eventualities could have been taken place :
(a) Adjudication of any liability against the persons of either the owner or the master of ship.
(b) Imposition of any fine or penalty, consequent upon the aforesaid adjudication of liability, against the master or the owner of the ship.
(c) Confiscation of the ship or imposition of any penalty or fine for the release of the ship consequent upon any order for its confiscation or in lieu thereof, or for adjudication of any liability for payment of incidental charges either with respect to the ship or the owner or master thereof.
(d) The liability to produce the vessel, if called upon to do so by the Commissioner of Customs or any person duly authorised by him, failure whereof also resulting in the bond being brought into execution.
11. There is no doubt therefore that the parties never intended that the bond was meant for any purpose relating to the personal liability of the radio officer, Learned advocate for the respondents could not point out any provision in the Customs Act whereby the customs authorities are empowered to obtain any bond from any person in respect of anticipated liability of a person from whom any contraband has been recovered. I am saying so because in the absence of any such provision in the Customs Act also, it can safely be presumed that the bond was obtained by the customs authorities for indemnification only in respect of the liabilities of the master and owner of the ship. That is understandably so also because the master and the owner of the ship had clearly stated that they had nothing to do with the recovery of the gold biscuits and that this smuggling of the gold biscuits was the personal act of the radio officer, without the knowledge of the master or the owner of the ship.
12. Right from the very beginning, right from the date when the search was undertaken, the case of the owner and master of the ship was that they had nothing to do with the smuggling of the gold biscuits and its recovery from the radio officer. Everyone, directly or indirectly related to the ship had totally disowned their liability or their being involved in the act of smuggling. The radio officer was apprehended for smuggling of gold biscuits in his individual capacity. The final adjudication order also has clearly and unequivocally held the radio officer to be guilty of smuggling. By adopting a detailed reasoning process, the adjudicating officer has totally absolved the owner or the master of the vessel with anything to do with the smuggling in question. If in this background, for some reasons or the other, the ship was detained for sometime and later on released by the custom authorities, because the gold biscuits was recovered from the ship, even though from the person of the radio officer on board the ship, the owner and the master of the vessel of the ship naturally were asked to furnish a bond, if ultimately it was ever found that the ship, its owner or the master were involved in any manner with the smuggling activity. After all a ship was allowed to be released, after being detained because gold was recovered from the ship and if for such release a bond was executed, the purpose was only to ensure that if any liability was ultimately fastened upon the owner or the master of the ship, the person executing the bond should pay the amount in question.
13. Every document has to be construed and interpreted not only in the background of surroundings and circumstances in which it was executed but also on the basis of the language employed in the document. If the language of the terms and conditions of the bond is clear, and categorical and does not contain any uncertainty or ambiguity, the court has no difficulty in interpreting the bond so as to fix the extent of responsibility upon the person executing the bond. As I have already noticed, in the bond before us the language unmistakebly reflects the intention of the contracting parties which admittedly did not cover any liability in respect of the radio officer.
14. Alternatively I may say, if the respondents had intended that the bond to be executed by the petitioner should include the liability, if imposed with respect to radio officer as well, its exclusion from the terms and conditions of the bond, its preamble and the recital part has only the respondents to be blamed because it was their duty and obligation to have made sure that the terms and conditions of the bond corresponded with the intention of the contracting parties. In a case like this where the terms and conditions should be exact, precise and clear, the court cannot venture into any enquiry with regard to the intention of one of the parties as was argued by the Learned advocate for the respondents. I am adopting this reasoning only to deal with the argument of the Learned advocate for the respondents that the intention of the respondents was to fasten the liability upon the grantor also if any penalty was imposed upon the radio officer. The least that I can say is that such an intention cannot be gathered from the terms and conditions of the bond. Once a document is reduced into writing, defining truly and precisely the rights and obligation of the parties, without there being any vagueness or uncertainty with regard to the text of the document, it is not permissible for the court to go beyond the document or behind the text thereof to gather the intention of the parties which are best reflected in the text of the document, and the language employed therein.
15. If therefore the adjudicating officer absolved the master and the owner of the ship from any liability, was it was proper for him to have appropriated the amount of Rs. 5,00,000/- for satisfying the liability of the radio officer towards payment of the penalty which was imposed upon him. The answer has to be in the negative.
16. For the aforesaid reasons therefore I allow this petition and quash and set aside the impugned order dated 6-5-1996 to the extent of its appropriating the amount of Rs. 5,00,000/- from out of the money deposited by the petitioner under the bond in question for satisfying the liability of the payment of the penalty amount imposed upon Shri Hernani B. Villanueva, Radio Officer. Consequently the bond executed by the petitioners shall stand discharged.
17. The Bank Guarantee furnished by the petitioner shall stand discharged. The amount deposited by the petitioner shall be returned to it by the respondents within three months from today.
18. No order as to costs.