JUDGMENT
Santosh Doggal, J.
(1) In this petition filed under the provisions of section 482 Cr.P.C., the legality of an order passed by the Metropolitan Magistrate. New Delhi, on 25th April, 1989 on the application moved by the Customs’ Department under section 110(1-A) of the Customs Act, 1962, is assailed on the plea that the order suffers from inherent defect as it has been passed without any notice to the petitioner, whose rights were likely to be prejudicially affected any without affording him an opportunity of being heard.
(2) The facts in so far as they have a bearing on the point in issue here, are that as per allegations made in the application moved on 20th April 1989 by the Special Public Prosecutor for Customs Department before Shri V.B. Gupta, Metropolitan Magistrate, New Delhi who is link magistrate to the Addl. Chief Metropolitan Magistrate, New Delhi, contraband goods consisting of V.C.Rs., VCPs, colour film rolls, photo papers, ete. all of foreign origin were seized from different places on 18th November, 1988. The seizure was effected in exercise of the powers under section 110 of the Customs Act 1962. These, inter alia, included 676 VCRs., 357 VCPs and 59,900 colour film rolls and 4 photo papers, all valued at Rs 1.66,80,000.00 recovered from 201, Sainik Farm, New Delhi, which premises were under the control and possession of Ishwar Parasram Punjabi (the petitioner herein).
(3) Pleading that these goods required immediate disposal and further that if these were not disposed of, the same would be destroyed and thus result in national wastage and that it was in the interest of Justice that the case property, namely, the goods which were notified for the purpose of the section 110(1-A) of the Customs Act are sold or disposed of; the magistrate was approached with the request to certify the correctness of the inventory, taking photographs, and certifying such photographs as true, allowing lo draw representative samples of the goods and certifying the correctness of the list of samples so drawn. The application concluded with the prayer that appropriate orders, as required by section 110(1-A) and 110(1-B) of the Customs Act be passed.
(4) This application was disposed of by the concerned magistrate, vide order dated 25th April 1988, after hearing Mr. Satish Aggarwal. appearing for the Customs Department, who had moved the application After reproducing the contents of the application in respect to the description, as well as, quantity of the goods, and taking note of the scheduled items, as per notification issued in exercise of the powers conferred by section 110(1-A) of the Customs Act, he allowed the application and directed that an inventory be prepared in respect to 676 VCRs, 357 VCPs and photographs could also be taken as also their representative samples, and thereby disposed of the application.
(5) Mr Harjinder Singh appearing for the petitioner raised a basic issue in respect to the impugned order contending that on all counts the property, which is the subject matter of the order is the case property inasmuch as the petitioner was arrested as a sequel to ihe recovery of these goods and he is being remanded to judicial custody on the applications made by Customs Department and was liable to face prosecution under section 135 of the Customs Act, and further that the adjudication proceedings with respect to the same seizure have already commenced, inasmuch as the petitioner has been served with a show cause notice and further that on same facts he was placed under detention, in exercise of powers under section 9(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act and was confined to Central Jail, Tihar at the time the present petition was filed.
(6) He contended that the implications of this order were very far reaching and that the direction for preparation of inventory, or other matters covered by the order, are steps towards disposal of this property under the provisions of section 110(1-A) of the Customs Act and that once it is done there shall be no case property left and the petitioner’s defense during trial as well as adjudication proceedings would be very seriously affected and that it was the requirement of fair trial and natural justice that application ought to have been disposed of by the Metropolitan Magistrate, after notice to the petitioner, and after hearing him.
(7) The argument in short is that the principle of natural justice has become ingrained in the judicial system and that one of the basic tenets is the well recognised rule of audi alteram i.e. hearing both the parties affected or likely to be affected by an order of any authority or court. The learned counsel argued that the principle has no been so well accepted that there has been insistence by the courts, as to the requirement of observance of principle of natural justice, which included right of notice and hearing of party, likely to be affected by an order or action, even in respect to administrative matters. He pleaded that the requirement was all the more compelling for a magistrate, who has passed the orders, as the order, though passed in any capacity, partakes the character of judicial orders, and that it is for this Court to ensure that no arbitrariness or unreasonableness is allowed to creep in, in the proceedings or orders passed by the subordinate courts.
(8) Mr. Harjinder Singh has placed reliance in support of this contention on the judgment in the case of Smt.Maneka Gandhi v.Union of India and another, , where it was held that the provisions of section 10(3)(c) of the Passport Act were void inasmuch as these conferred an arbitrary power, since it does not provide for hearing of the holder of the passport, before order of impounding the passport, in exercise of the power conferred by the said provision. It was further held in that case. that it was not enough to say that the order had been passed for good reasons because the petitioner in those proceedings bad no opportunity of showing that the ground for impounding the passport, as disclosed in the Supreme Court after filing of the writ petition either did not exist or had no bearing on public interest, and that the law was settled in that judgment to the effect that even in proceedings before administrative authorities the doctrine of natural justice must be held to be applicable, where orders involve civil consequences The learned counsel argued that this principle will apply with more rigour in the case of proceedings before a magistrate.
(9) He also placed reliance on another judgment of the Supreme Court Harbans Lal v. M.I. Wadhawan and others, where also while considering the provisions of section 8(b)(c) of the Cofeposa Act it was held that although the Statute does not provide for a right to the detenu to adduce evidence in rebuttal, before the Advisory Board, but such a right must be held implied, under the provisions of section 8(b) of the Cofeposa Act in the absence of an express prohibition.
(10) Mr. Harjinder Singh placed emphatic reliance only on this one argument, in so far as this petition is concerned, namely.. requirement of notice and hearing of the petitioner and has further buttressed his arguments, by reference to the judgment in the case of Olga Tellis and others v. Bombay Municipal Corporation and others, Mr. 1986 S.C. 180, where although the contentions of the petitioners, namely, pavement dwellers of Bombay, were rejected on other points; this principle was reiterated that giving opportunity of hearing was a normal rule and even when the Statute provided that notice could be dispensed with in special circumstances even then, ordinarily there should be no departure from the principle of hearing the other side. and that the requirements of justice and fair play demanded of necessity to invest the orders and actions of the authority, with reasonableness; that the party going to the affected by an order be heard.
(11) The learned counsel advanced his arguments further, by reference to another judgment of the Supreme Court in A.R. Antulay v. R.S. Nayak and another. , where it was held that violation of principles of natural justice would render the act a nullity.
(12) He summed up his arguments in this respect by contending that it is clear by now that the property, which was subject matter of the impugned order, was the case property inasmuch as the petitioner’s remand is being taken for his prosecution under section 135 of the Customs Act and that it now transpires that a criminal complaint has also been filed in the court of the Addl. Chief Metropolitan Magistrate. The petitioner had vested right to be heard in respect to any proposal for disposal of the case property even before the commencement of trail or before hearing in the adjudication proceedings and that failure on the part of the magistrate to give notice of the application to the petitioner shall vitiate any order passed thereon.
(13) I find great force in this plea. A plain reading of the provisions of section 110(1-A) of the Customs Act. makes it manifest that wherever any goods have been seized by a proper officer, under the reasonable belief that the goods were liable to confiscation under the Act then he, as soon as may be after the seizure dispose of the same in such manner as may be determined by the Central Government from time to time after following the prescribed procedure in regard to perishable or hazardous nature of the goods, depreciation in value of such goods with the passage of time, constraints of storage space for the goods or any other relevant consideration.
(14) The provisions that follow, namely, as contained in sub-section (1-B) of section 110 of the Customs Act require such a proper officer to prepare an inventory of such goods, containing details as to their description, quality quantity, mark, numbers, country of origin and other particulars as the proper officer may consider relevant to the identity of the goods in any proceedings under this Act and then he shall make an application to a Magistrate for the purpose of : “(A)certifying the correctness of the inventory so prepared; or (b) taking in the presence of the Magistrate photographs of such goods, and certifying such photographs as true; or (c) allowing to draw representative samples of such goods, in the presence of the Magistrate, and certifying the correctness of any list of samples so drawn”.
Sub-section (1-C) of section 110 of the Customs Act mandates that where such an application has been made, it shall be allowed by the magistrate as soon as possible.
(15) From a cumulative reading of these provisions it is clear that the preparation of inventory or other steps contemplated under sub-section (1-B), to be certified by the magistrate, such as taking of photographs or drawing of representative samples or certifying the correctness of the photographs. etc. related to the main object of disposal of the property in terms of section 110(1-A) of the Customs Act.
(16) Mr. Herjinder Singh has a valid argument when he contends, that the disposal of the case property can have very grave implications for an accused inasmuch as it may vitally affect his defense that might be open to him. on facts or law, on even as to identity or description of. the case property, or as in this case. he has urged, inter alia, that the seizing officer was not the proper officer within the meaning of relevant provisions of Customs Act, and that as such any proposal to to dispose it off or any order which has an implication of being a steps in aid towards that direction, carry the inherent obligation that the person from whom the property is alleged to have been seized is given notice of the application moved by the Customs Department and be heard before an order is passed thereon, and this would be so even if there is no express provision for a notice of hearing in the relevant provisions because on the authority of the Supreme Court judgments quoted above, such a requirement has to be read into the provisions of law.
(17) Mr. Satish Aggarwal, appearing for the respondents practically had no answer to these contentions except for reiterating that the terms of the Statute are very plain and there was no requirement of a notice of hearing and further in terms of sub-section (1-C) of section 110 of the Act, an application ought to be allowed by the magistrate on being made and as such there was no discretion left with him to follow any other procedure and that the order passed did not contemplate any judicial function and that the arguments based on requirement of fair trial or principle of natural justice were not applicable to cases such as the present one. He however interestingly enough conceded that in similar applications, now being made to the magistrate, the department is itself seeking issuance of notice. He could not give any satisfactory reply as to why in the present case there was insistence on a different practice being adopted by the department to the effect that no notice of hearing was required to be given.
(18) The arguments canvassed by Mr. Aggarwal based to the effect that the Statute does not provide for any notice of hearing, do not have any tenability in face of the judgment by Constitutional Bench of the Supreme Court in the case of Smt. Maneka Gandhi (supra) that even if the statutory provisions do not provide for hearing of notice; principles of natural justice enjoin upon the concerned authority to adopt a procedure for disposing of any matter, where any party is affected or is likely to be affected, after notice to show cause, and hearing. This principle has been extended by the Supreme Court even to the provisions of the Cofeposa Act in the case of Harbans Lal (supra) where it was held that even though there were no provisions for production of evidence by the detenu in rebuttal, before the Advisory Board, but such a right must be implied unless there was an express prohibition.
(19) Even in relation to the provisions of the Customs Act. there is a decision of a Division Bench of Calcutta High Court, , (Charandas Malhotra Assistant Collector of Customs and Superintendent Preventive Services and others,) with reference to the provisions of section 110(2) of the Customs Act, in respect of the notice issued under section 124 of the Act. providing that period of six months in issuing such a notice may be extended further by the Collector of Customs for a period up to 6 months, on sufficient cause being shown. It was held that since the extension of time for issuing show cause notice, affects vested rights of the person, from whom the goods were seized, in as much as in the absence of extension and no show cause notice having been issued within the original period, he is entitled to the release of goods; hearing to such a person is necessary before considering the request for extension of time.
(20) I am therefore of my firm view that it is not open to the Customs Department to contend that the application moved under section 110(1-B) of the Customs Act; with implicit object of disposal of goods in exercise of the powers under section 110(1-A) of the Customs Act can be disposed of by the magistrate without notice to the accused or any other person from whom goods may have been seized. The department itself seems to have realised this mistake, and in fresh matters notice are being issued at the instance of the department itself, as stated during hearing of this petition.
(21) I therefore hold that petitioner’s contention is justified to the effect that the order passed by the learned Metropolitan Magistrate without notice to him. on application under section 110(1-A) of the Customs Act, dated 20th April 1989, was not sustainable, because it stands vitiated owing to the lapse committed in not affording opportunity of hearing, or showing cause against such an application being allowed.
(22) I may, however, put on record that this does not mean that this Court endorses on merits, any of the points which Mr. Harjinder Singh stated as being open to an accused, in such a proceeding. These are left for consideration. and decision, by the concerned magistrate, after notice, and on hearing. They have been noted in judgment by way of illustration as to in what manner right of a given party could possibly be affected in the absence of notice and hearing.
(23) In view of the foregoing discussion, I allow the petition and set aside the order dated 25th April 1989 with direction that the application under section 110(1-A) of the Customs Act dated 20th April 1989 be taken up afresh by the concerned court, after notice to the petitioner.
(24) The file of the trial court be sent back immediately and the parties are directed to appear before the Metropolitan Magistrate on 18th October, 1989, who shall proceed further in the matter, in the light of the observations made in this order.