{"id":79601,"date":"1960-07-25T00:00:00","date_gmt":"1960-07-24T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/yasvadan-and-bros-vs-c-t-a-pillai-and-ors-on-25-july-1960"},"modified":"2017-08-02T08:55:07","modified_gmt":"2017-08-02T03:25:07","slug":"yasvadan-and-bros-vs-c-t-a-pillai-and-ors-on-25-july-1960","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/yasvadan-and-bros-vs-c-t-a-pillai-and-ors-on-25-july-1960","title":{"rendered":"Yasvadan And Bros. vs C.T.A. Pillai And Ors. on 25 July, 1960"},"content":{"rendered":"
Bombay High Court<\/div>\n
Yasvadan And Bros. vs C.T.A. Pillai And Ors. on 25 July, 1960<\/div>\n
Equivalent citations: AIR 1962 Bom 249, (1961) 63 BOMLR 897<\/div>\n
Bench: K Desai<\/div>\n<\/p>\n
<\/pre>\n
ORDER<\/p>\n
 (1) This is a petition under Art. 226 of the Constitution  challenging the  validity of an order  dated May  15,  1959  whereby  the 1st Respondent as Additional Collector of Customs  ordered  52 cases of  wired glass belonging to the petitioners  to be confiscated under Section  167(8) of the Sea Customs  Act read with Section 3(2) of the Imports and Exports  (Control) Act, 1947.<\/p>\n
 (2) The relevant facts are as follows:-\n<\/p>\n
  The  petitioners  are a partnership firm carrying  on business as importers and dealers in glass.  By a contract dated march 31,  1958 the petitioners agreed to purchase from  Messrs. B. H.  Mehta and co., 140  cases of wired  glass on  the  terms and conditions   recorded in the  contract.  Rs. 25,000\/- were agreed to be paid as advance and  were paid on  March 31st,  1958. The contract was a forward  contract and the shipment  was “end of  July 1958”.  In the first  week of  September  1958 the  52 cases of the goods  arrived  at Bombay per S. S.  Byton. The bill of lading  in  respect of the goods was in favour of the shipper  or  “order” and  appears to have been  negotiated in  favour of one  P.  Bhagvandas,  proprietor of Hindustan  Engineering   and Trading Company.  A letter of credit in  respect of the price of the goods  of the consignment  was also opened on or  about  April  26, 1958 by P. Bhagvandas  as proprietor  of Hindustan  Engineering  and Trading Company  through  the  Meercantile  Bank of India Ltd.  The goods were accordingly  imported into India  by P.  Bhagvandas  of Hindustan Engineering  and Trading Co.\n<\/p>\n
 (3) P. Bhagvandas tendered to the Customs  authority the bill of  entry “cash No.  981”  dated  3rd September  1958  towards  clearance of one consignment.  The licence referred to in  the bill of entry  was “No. 973117\/57\/CCI\/HQ\/NQQ dated March  19, 1958”  issued in favour of  “Messrs.  Hindustan Engineering  and Trading Co., carrying  on business at  80  Kavel Cross Lane No.  3,  Bombay.”\n<\/p>\n
 (4) The goods  were allowed clearance through clearing  agents. One  Pyarelal  J. Munchi  attended to the work of clearance of these goods.  All the  52  cases were delivered to the Petitioners who paid  over the whole of the balance of the price due to sellers  Messrs.  B.H.  Mehta  and  Co.\n<\/p>\n
 (5) It was upon  enquiries  discovered  that there was no  concern of that name of  Messrs. Hindustan Engineering  and Trading  Co,  carrying  on business at the address contained in the licence.  Now, it is necessary to  note in this connection that the application for  licence was made on behalf of a partnership  carrying  on business  in  the firm  name  of Messrs Hindustan Engineering  and Trading Co.,  at  the above address. The  partners of the  firm  as  stated in the  application  for licence  were “Shri R. L.  Sachdev” and “Shri J. M.  Mehta”.  The application for licence was signed by J. M.  Mehta  as a partner of the firm. The application  for  licence  appears to  have been forwarded to the Ministry of  Steel, Mines  and Fuel  (Department  of Iron and Steel)  by a limited company  of the name of Hindustan  Steel Private Ltd. That  application was forwarded by the Dy. Secretary  to the Government  of India  to the Chief Controller of Imports and Exports  with a recommendation for a grant  of licence.  Ultimately  the   above referred licence was issued in  favour of  “Messrs.   Hindustan  Engineering  and Trading Co.,  80   Kavel Cross Lane  No.3,  Bombay-2” which  firm  it   must be held was a partnership firm belonging to two partners ,  viz.,   R. L.  Sachdev and  J. M.  Mehta. A copy of the licence  together with  annexure thereto  is annexed  as Ex. 2 to the  affidavit in  reply  made  by Shri  V.  Maneklal.\n<\/p>\n
 (6) It became  obvious to the Customs  authority that P. Bhagvandas who had imported the  goods was in  no manner connected with  the  licence and that P.  Bhagvandas had imported  the goods unauthorisedly and contrary to law.\n<\/p>\n
 (7) In the  circumstances  a show cause  memo dated January  20, 1950 was served on the Petitioners calling  upon them to submit their written explanation in regard to the diverse  facts as  mentioned in the  show  cause memo. Prior to the service of the show cause memo the goods  were seized from the  Petitioners’  godown.  In the show cause  memo reference  was made to the preliminary enquiry made and also inter alia to the statement  made by one  Ram  Pyarelal  J.  Munshi,  who had attended to the clearing of the goods  as also  several other statements  made by other parties. Copies of the statements  made by several persons were furnished  to the Petitioners. The  Petitioners  gave their  written explanation   dated March 5,1959 as regards  the contents of the  show cause  memo and stated the  whole of their case in the  explanation.  Personal hearing  was given to the petitioners on May  11, 1959. Ultimately  by the impugned order dated May  15,1959 and  served on  the Petitioners  on  June 24, 1959  the  goods  were ordered to be  confiscated  as already mentioned above.\n<\/p>\n
 (8) The Petitioners  have challenged the order inter alia on the ground that the goods  were validly imported under the import licence (copy  whereof is annexed as Ex.  2 to the affidavit in  reply), dated March 19,  1958.  According  to the  Petitioners  the clearance of these goods  by P.  Bhagvandas  after importation thereof   under the licence did not  constitute violation of any of the  restrictions and prohibitions  imposed under the Import Trade Control Order, 1955, or the Imports and Exports (Control) Act, 1947.  According  to  the  Petitioners  at the Highest  the  clearance of the goods by P. Bhagvandas constituted a breach of  one of the conditions of a valid  licence and accordingly  did not constitute any breach of the provisions of the order, or the Act.  According to the Petitioners in the  circumstances there was no jurisdiction in  the 1st  Respondent  to  confiscate the goods  as  he purported  to do under the provisions  of  “Section 167(8) of the Sea Customs  Act read  with  Section  3(2) of the Imports and Exports  (Control) Act,  1947”.  The  Petitioners  also rely upon the  fact that in  spite  of requests made on their behalf  the 1st Respondent failed to tender for  cross-examination  by the Petitioners  Ram  Payarelal  J.  Munshi,  who had  given his  statement at the  preliminary enquiry  stage.  The Petitioners  also complain that  reliance is placed in the impugned order about the  illegal  activities  of Shri Mehta (of  Messrs. B.H.  Mehta  and Co.,) and  contended that  the Petitioners were at no stage informed  about the alleged  illegal activities of  Mehta  and had  no opportunity  to put forward their  case in respect of that allegation. For these  reasons  the  Petitioners have  submitted before me that the impugned order is entirely invalid.\n<\/p>\n
 (9) The Petitioners  made two further grounds which  they have not been able to prove before me having regard to the decisions  of this Court   which bind  me. These two  contentions  are as follows:\n<\/p>\n
 (1) The Petitioners purchased the goods in  question for valuable  consideration without notice and knowledge of facts mentioned  in the show cause memo  and the findings in the   impugned order. On  a true construction  of the provisions  of the Sea Customs  Act mens  area  was  an  essential ingredient for contravention of Section 1 67 (8) of the Act. As there was no evidence  of the Petitioners  being  guilty of any knowledge of  relevant facts and mens  rea  being absent,  a  finding  could not  be made against  the Petitioners  as was done  by the impugned order.\n<\/p>\n
 (2) The provision  in Section 167(8)  of the Sea Customs  Act  vesting  power of confiscation  in  the  Customs authority  was bad and  unreasonable,  for  the  Petitioners’ fundamental rights to hold  property and carry on  business are guaranteed under Arts. 19(1)(f) and 19(1)(g) of the Constitution.\n<\/p>\n
 (10) These two  last contentions  could not be pressed in this Court and have  for that reason only  not been pressed.\n<\/p>\n
 (11) In developing  his contentions  Mr.  Sorabjee for the Petitioners  has  relied upon  the  language  of Section 5  of the Imports and Exports (Control) Act, 1947 and Cls.  3 and  5 of the Import Trade Control  Order,  1955. The  relevant part of  section 5 of the Act runs as follows:\n<\/p>\n
  “5.  If any person contravenes, or attempts to contravene or  . . . . . . any order made or demand to have been  made under this Act, be shall, without prejudice  to any confiscation or penalty to which  he  may be liable under the provisions  of the Sea Customs  Act, 1878, as applied by sub-section  (2) of  Section  3,  be punishable with  . . . . . . . . .”\n<\/p>\n
 (12) The relevant parts of clauses  3 and 5 of the Order run as follows:\n<\/p>\n
 “(3) . . . .. . . . no person shall import any goods of the description specified in  Schedule I, except under, and  in  accordance with, a licence or  . . . . . . . .\n<\/p>\n
 “(5) Conditions  of licence:- (1) The licensing authority  issuing  a licence under this Order may issue the same subject to one or more of the  conditions  stated below:\n<\/p>\n
 (I) that the goods covered by the licence shall not be  disposed of, except  in  the manner prescribed by  the licensing authority, or otherwise  dealt with without the written permission of  the  licensing  authority  or any person  duly  authorised by it;\n<\/p>\n
 (ii) that the goods covered by the licence  on  importation shall not be sold or distributed  at a price exceeding  that which may be specified in any directions  attached to the licence;\n<\/p>\n
 (iii) that the applicant  for  a licence  shall execute a bond for  complying  with the  terms subject to which a licence  may be granted.\n<\/p>\n
 (2) x   x   x   x   x   x   x<\/p>\n
 (3) It shall be  deemed to be a condition of  every such  licence, that:\n<\/p>\n
 (I) x x x x x x x <\/p>\n
 (ii) that the goods  for the import of which  a licence is granted shall be  the property of the licensee at the time of clearance  through  customs; unless the said  licence is covered by a letter of   authority  issued by  the licensing authority.\n<\/p>\n
 (4) The licensee shall comply with  all conditions  imposed  or deemed to be imposed under this clause.”\n<\/p>\n
 (13) Mr.  Sorabjee has argued that under Clause 3 of the Order importation is sanctioned in respect of the goods as  specified in  the licence. Once a licence in  respect of the goods of the import is produced  it must be held that the goods  were validly imported under the licence.  Clearance of the goods  has nothing  to do  with  importation  or licence.  Importation  is complete upon  the landing  in the goods into India.  Clearance is altogether  different from  the landing  of the goods and\/or importation  thereof  into India.  According to Mr.  Sorabjee the words “in  accordance with a licence” as mentioned in  clause 3 are not   synonimous with the terms and conditions of  licence.  He has argued   that breach of a   term or a condition  of a licence cannot make  any person subject to  penalty under Section  5 of the Act. The breach of  a condition or  a term of a licence  will not  amount  to contravention of any order made or deemed to have  been made under the Act. He contends that the importation of the goods  was complete before  P. Bhagvandas  cleared the goods. The   specification of the goods in the licence is the same as the  goods  under import and\/or  imported  and it must  therefore be held  that the goods  were imported under a licence as mentioned  in  clause 3 of the Order.\n<\/p>\n
 (14) The condition  No (iii) is the same as  contained in  sub-clause (ii) of clase 5(3) of the order, viz.,
\n  “it shall be  deemed to be a condition  of every licence that the goods for the import  of which the licence  is granted shall  be the property of  the licensee at the time of the imports.”\n<\/p>\n
 (15) According to Mr. Sorabjee even  if there was a breach of this condition that breach does not  amount  to contravention  of the order  as referred to in  Section  5 of the Act and accordingly penalty of confiscation  could not  be levied  against  the Petitioners.\n<\/p>\n
 (16) In this connection it is necessary to  refer to Section 167(8) of the Sea Customs Act and the contents of the licence. Admittedly the  provisions of Section 167(8) of the Sea Customs Act are applied to the goods  specified in  Schedule  1 to the Control Order import whereof  without  a licence  is  not permissible. Under Section 167(8) the  offence  is mentioned as follows:\n<\/p>\n
  “167(8) If any  goods  the importation  . . . . . .of which  is for the time being . . . .  restricted  . . . . . .be imported into . . . . . India  contrary to such   . . . . . .restriction.”  The penalty prescribed  in  respect of such offence is that “the goods shall be liable to confiscation”.  The finding  in  the impugned order is that   in  this case the goods have been  imported  contrary  to  restrictions. The restrictions  are as mentioned in section 3 of the Act and Cls.  3 and  5 of the Order.\n<\/p>\n
 (17) Under Clause  3 and 5 of the Order it is clearly provided that “no person shall import any goods of the description  specified in Schedule I, except  under and in  accordance with a license. In the context  the words “no person” (must be held to) refer to an  importer and mean  “no importer”. It  would  accordingly be  necessary for an  importer  to hold a licence  for importation  of goods  specified in  Schedule I of the Order.  The act of  import of such goods by an importer without a licence  would directly contravene the provisions  of Clause  3 of the Order.  The goods, of the description  specified in Schedule I,  imported by an importer who  does not hold a licence, must be held to have been imported  in contravention of  Clause  3 of the Order. For making such a finding it would  be  entirely  unnecessary to rely upon the  conditions  contained in a licence. Even an  importer is prohibited from importing  goods mentioned in Schedule  except  in accordance with a licence. The licence itself also contains  conditions  so that importation  by an importer holding  a licence after committing breach of  conditions would  necessarily  be in  contravention of  Clause  3 of the Order.\n<\/p>\n
 (18) Apparently the Condition No. 3 in the licence now relied upon  by the Petitioners  is as contained in  Clause 5(3) (ii) of the Control Order. That condition accordingly is a provision of an  “order made” within the meaning  of Section 5 of the Act and breach of  that condition would necessarily  amount  to breach of the provisions  of “an order made under the Act.”\n<\/p>\n
 (19) It is at this stage relevant to refer to some parts of the licence relied upon. It is issued to the licensee by use of the following phrases:\n<\/p>\n
“(Not transferable)”\n<\/p>\n
 “Messrs. Hindustan Engineering and Trading  Co., 80 Kavel Cross lane No.  3,  Bombay-2” (are)<\/p>\n
 “hereby authorised to import the goods of which particulars  are given below;-”\n<\/p>\n
Under this licence authority to import is accordingly given  to the  firm mentioned in the licence. By the very  terms of the licence no one  else can import any  goods under this licence. If  any permission was to be  granted for any other party to import goods under this licence, the same would have to be authorised  under the provisions  of Clause 5 of the Control Order.  There was no other method of  permitting and\/or  allowing  any party   other  than  the firm mentioned  in this licence  to import the goods under this licence.\n<\/p>\n
 (20) As there is no doubt  about the facts  mentioned as regards the import of these   52 cases of  wired glass I must make a finding that  P. Bhagvandas imported these goods under the bill of  lading  which  has already been  mentioned  above and  he also cleared  these goods under the bill of entry and the licence  referred to above. P.  Bhagvandas  is  not referred to in the  licence at  all. The firm of Messrs. Hindustan Engineering  and Trading Co.,  as mentioned in  the licence had  no connection with P.  Bhagvandas. That firm  belonged to two  partners.  Viz.,  R. Sachdev and  J. M.  Mehta. It was  having regard to the provisions of S.  3 of the Act and Cls. 3 and 5 of the Control Order, illegal  for P. Bhagvandas to import goods of and\/or  under this licence. P.  Bhagvandas  was not  vested with any permission under this licence to  import the goods  which  were ultimately  found in possession of the Petitioners. There has been a  complete and clear violation of the provisions  of  Section 3 of the Act and Cls.  3 and 5 of the Order in  this matter. The Petitioner’s  case accordingly  suffers  from  no injustice at all and does not call for  any intravention   by the Court on  any  other grounds in this matter.\n<\/p>\n
 (21) In this connection Mr. Sorabjee has relied upon the  decision  of the Calcutta High Court in the case of C. T. A.  Pillai v. H. P. Lohia, . That was a revisional application against  an  order of discharge of an accused  in respect of a prosecution for an  offence under Section 5 of the Imports and Exports (Control) Act, 1947.  The  case of the prosecution  was that the importer and  the licence  holder in that case was violating the  conditions  of the licence and was selling the goods  in  contravention  of conditions  mentioned in that  behalf in  his  licence.  In construing  the  provisions of  Section 5 of the Act it was held that the section  penalises only contravention of  any  order made or deemed to have been made under the Act. It was further held that  it was difficult  to hold that  the  licence or the conditions in the licence  amounted to  an order as mentioned in the section.  A  contravention of  conditions  imposed by the licensing  officer could not prima  facie  be regarded as contravention of  the notified order itself. Having regard to that  finding  the  order of discharge was upheld and the rule  given in revision was  discharged. I  do not  see how this decision supports  the contentions  made on behalf of the Petitioners in  this case.\n<\/p>\n
 (22) It is apparent on reading of the provisions of Section 5 of the Act that what is  penalised thereunder is contravention of  “any order made or deemed to have been  made under the Act”. A licence or conditions in licence can never be equated with an order made under the Act. The case of the Respondents before me is not that the licence or conditions of the licence should be  equated with any order made under the Act.” This however does not justify the contention that importation without  a licence  of the goods mentioned in  schedule I  to the Control Order or importation  of goods in  breach of conditions  of a licence does not constitute an offence as mentioned in  Section  167(8) of the Sea Customs Act.  The scope and effect of the section 167(8) is much wider than that of Section 5 of the Import and Export (Control) Act. It is not illegal  nor impossible to make a finding that contravention of compulsory conditions  as mentioned in  Clause 5(3) of the Control Order as reproduced in a licence  constitutes an offence as mentioned in  Section 167(8) of the Sea Customs Act. Importation  of goods  mentioned in Schedule I of the Control Order without  a licence or by a person  who himself is not authorised to import the goods or in breach of conditions  in  a licence would directly constitute such an offence.\n<\/p>\n
 (23) As regards the contention that the Petitioners were not afforded any opportunity  to cross-examine Munshi,  it is sufficient to point out that  in connection with the relevant  facts as mentioned above no dispute  has been  made on  behalf of the Petitioners. In the impugned order reliance has not been placed on any facts stated by Munshi  which are now  disputed on  behalf of the Petitioners.  The result is that the grievance that  opportunity to cross-examine Munshi was  not afforded is merely technical. In  fact the Petitioners  were furnished with a copy of the statement made by Munshi. The 1st respondent has  in the  impugned order not relied upon any facts mentioned by Munshi  which are  now disputed by the Petitioners.  It is unnecessary therefore on this ground to interfere with the order  made by the 1st Respondents.\n<\/p>\n
 (24) As regards the contention that in the impugned Order the 1st Respondent has relied upon  the information  regarding  the illegal activities of Mehta,  there is no dount that the 1st  Respondent has referred to that fact  in the impugned order. The relevant  facts however on which  the finding  as mentioned in  the impugned  order could  be arrived at are all not disputed on  behalf of the Petitioners  as I have already  mentioned. The result in the impugned order could  not have been different  even  if reference was  not made  therein to the illegal activities of Mehta. On  this ground  also it is in  the circumstances unnecessary  to interfere with the decision arrived at by the 1st Respondent.\n<\/p>\n
 (25) In the result the petition  is dismissed with costs.\n<\/p>\n
(26) Petition dismissed.<\/p>\n","protected":false},"excerpt":{"rendered":"
Bombay High Court Yasvadan And Bros. vs C.T.A. Pillai And Ors. on 25 July, 1960 Equivalent citations: AIR 1962 Bom 249, (1961) 63 BOMLR 897 Bench: K Desai ORDER (1) This is a petition under Art. 226 of the Constitution challenging the validity of an order dated May 15, 1959 whereby the 1st Respondent as […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11,8],"tags":[],"class_list":["post-79601","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"\nYasvadan And Bros. vs C.T.A. 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