INDO-CHINA STEAM NAVIGATION CO. LID. versus JASJIT SINGH, ADDITIONAL COLLECTOR OF CUSTOM & ORS.

INDO-CffiNA STEAM NAVIGATION CO. LID.

JASJIT SINGH, ADDITIONAL COLLECTOR OF CUSTOMS & ORS.

(P. B. GAJBNDRAGADKAR, c. J., K. N. WANCHOO, K. c. DAS GUPTA, J.C. SHAH AND N. RAJAGOPALA AYYANGAR, JJ.)

Sea Customs-Prohibitr"on of entry of certain types of ships in India-Section S2A when applicable-Whether mens rea necessary-Nature of liability under s. 167(12A)--Section 167(12A) and s. 183-Petition under Art. 136 when competent-When is body or authority Court-Whether the Central Board of Revenue or Central Government Tribunal under Art. 136---Whether penalty of Rs. 25 lacs excessive-Whether s. 52A ultra vires Arts. 14, 19 and 31 (I) and hence invalid-Constitution of India, Art. 13~ea Customs Act, 1878, ss. 52A, 167(12A), 183, 188, 190A and 191.

The appellant carries on the business of carriage of goods and passengers by sea and own• fleet of ships for that purpose. One of its ships named Eastern Saga arrived at Calcutta and was rummaged by the Calcutta Customs Officers. In the sailors' accommodation, hole measuring 2i"X5t" was found in the wall panelling behind the back batton of wooden seat which had been screwed to the wall. The bole was covered with piece of wood and over-painted. The hole opened into space and in that space, Customs Officers found 1,4S8 bars of gold valued at more than Rs. 23 lacs. Notices were duly served and after hearing the parties, the AJditional Collector of Customs came to the conclusion that the vessel had rendered itself liable to confiscation under s. !67(12A) because it had infringed the provisions of s. S2A. He ordered the confiscation of the ship but gave the owners thereof an option to pay fine of Rs. 25 lacs in lieu of confiscation. The appellant went in appeal to the Central Board of Revenue but that appeal was rejected. The appellant went in revision to the Central Government but the revision petition was also dismissed. The appellant then came to this Court for special leave and obtained the same. Dismissing the appeal,

Held: (i) The Custom• authorities were right in holding that the facts proved in the case showed that the "Eastern Saga" nor contravened the provisions of s. 52A when it entered the port of Calcutta and hence had incurred the liability prescribed by s. !67(12A) of the Sea Customs Act.

(ii) The fine of Rs. 25 13cs was not excessive. IDegal importation of gold had assumed the proportions of major problem facing the country and it was open to the Customs authorities to take the view that the best way to check smuggling was to impose deterrent fines whenever those offences were discovered and proved.

(iii) Section 52A was not ultra vires Arts. 14, 19 and 31(1) and beace was not unconstitutional or invalid. The appellant was not only

company but also foreign company and as such was not entitled to 1964 claim the benefits of Art. 19. The plea under Art. 31(!) as well as -.-1 under s. 14 could not be sustained for the simple reason that in support· lndoN Ch!~-.-1 ing the said two pleas, the appellant had inevitably to fall back upon ""'~~ the fundamental right guaranteed by Art. 19( I )(fl. Jtujit

Ch!~-.-1 [Steam ]""'~~ on Jtujit Sing~

Before an appeal can be entertained under Art. 136, two conditions have to be satisfied. The order impugned must be an order of judicial or quasi~juOicial character and should not be purely an administrative or evecutive order. The sid order should have been passed either by Court or Tribunal in the territory of India. It is difficult to lay down any definite test to determine whether body is court/tribunal or not. Sometimes, courts enquire whether that body or authority is clothed with the trappings of court. whether it can compel witnesses to appear before it and administer oath to them, whether it was required to follow certain rules of procedure, whether it was bound to comply with the rules of natural justice whether it was etpected to tieal with the matters before it fairly, justly and on merits and. not be guided by subjective considerations and whether it was required to adopt judicial or quasi-judicial approach. If all or some of the important tests are satisfied the proceeding"S can be characterised as judicial proceedings and the test of "trappings" is satisfied. Likewise, if it appears that such body or authority has been constitute'd by the legislature and on it has been conferred the inherent judicial power of the State, that is significant, if not decisive indication. that the said body or authority is Tribunal.

The scheme of the Sea Customs Act, 1878, the nature of the prc:>-ceeding brought before the appellate and revisional authorities, the extent of the clain1 involved, the nature of the penalties imposed and the kind of enquiry which the Act contemplates, all indicate that both the Central Board of Revenue and the Central Government, while acting as appellate or revisional authorities, constitute Tribunals under Art. 136 of the Constitution because they are invested with the judicial power of the State and are required to act judicially.

In order to prove the offence of s. 52A agaj1181 vessel, what is to be moved is that there has been construction. adaptation, alteration of fitting and the said construction, adaptation, alteration or fitting had been made for the purpose of concealing goods. The section prohibits absolutely the entry of vessels which show that there has been construe· tion, adaptafon, alteration or fitting made in them for the purpose of concealing goods in them. It is not necessary for the purpose of s. S2A to prove mens rea against the person responsible for the contravention of s. 52A. It is impossible to prove such mens rea or guilty mind. The knowledge of the owners or even of the masters is entirely irrelevant.

Section 167(12A) and s. 183 have to be read together. Though confiscation is statutory corollary of the contravention of s. 52A, s. 183 expressly require1' the adjudicating officer to give an option to the owners of the offending vessel to pay fine in lieu of confiscation. Confiscation is

1964 no doubt authorised and required by s. 167( 12A) but the statutory obligation ,.makes it necessary for the officer to give an option to the 1 [tJd ]0Navi':iio~eam [Ch-.-S ]owner. The result is that the ultimate penalty which can be imposed •· on the owners falls to be determined by the adjudicating officer in his Ja.s;it Singh discretion.

Shewpujanrai lndrasanrai Ltd. v. Collector of Customs [1959] S.C.R. 821, F. N. Roy v. Collector of Customs, Calcutta, [1957] S.C.R. 1151, Leo Roy Frey v. Superintendent, District .Tail, Amritsar and Anr., [1958] S.C.R. 822, Thomas Dana v. State of P1111jab, [1959] Supp. (4) S.C.R. 274, Maqboo/ Hussain v. Stare of Bombay, [1953] S.C.R. 730, Harinagar Sugar Mills Ltd. v. Shyam Sundar Jhunjhunwala and Ors., [1962] 2 S.C.R. 339, Shivii Nathubhai v. Union of India, [1960] 2 S.C.R. 115, Jaswant Sugar Mills Ltd., Meerut v. Lakshmi Chand, [1963] Supp. I S.C.R. 242, Engineering Mazdoor Sabha v. Hind Cycles Ltd. [1963] Supp. I ·s.C.R. 625, Ravula Hariprasada Rao v. The State, [1951] S.C.R. 322, Brend v. Wood, (1946) 110 J.P. 317 and Sherra.s v. De Rutzen, (1895) I Q.B. 918, referred to.

CML APPELLATE JURISDICTION: Civil Appeal No. 770 of 1962.

Appeal by special leave from order No. 17 42 of 1960

of the Government of India Ministry of Finance (Depart-ment of Revenue) dated December 17, 1960 in Custom Revision Application No. 1631 of 1959 and/or from the order dated May 12, 1959 of the Central Board of Revenue in Customs Appeal No. 151 of 1959 and

Petition No. 138 of 1961

Petition under Art. 32 of the Constitution of India for the enforcement of Fundamental Rights.

Sachin Chaudhury, B. Sen and S. N. Mukherjee, for the appellant (in C.A. No. 770/62) and the petitioner (in peti-tion No. 138/1961).

S. V. Gupte, Additional Solicitor-General, D. R. Prem

and R.H. Dhebar, for the respondents (in C.A. No. 770/62 and petition No. 138 of 1961).

February 3, 1964.

The Judgment of the Court was

delivered by

GAJENDRAGADKAR C.J .-This appeal by special leave raises short question about the true scope and effect of section 52A of the Sea Customs Act, 1878 (No. 8 of 1878)

6[1]S.C.R.

(hereinafter called 'the Act'). The appellant, the Indo-1964 China Steam Navigation Co. Ltd., which carries on the Indo c;;;;;;; s .. am business of carriage of goods and passengers by sea, owns Navigation fleet of ships, and has been carrying on its business for Jasi{ Singh over 80 years. One of the routes plied by its ships is the Calcutta-Japan-Calcutta route. An order has been passed Gajendragadkar C.I. by the Customs Authorities confiscating the appellant's motor vessel "Eastern Saga" under section 167(12A) of the Act, and giving the appellant the option under s. 183 of paying fine of Rs. 25 lakhs in lieu of confiscation. The appellant contends that this order has been based upon misconstruction of the provisions of s. 52A.The vessel "Eastern Saga" has 6,631 gross registered tons, and 4,441 net registered tons. It has an overall length of 475'-2-l/2" breadth of 59'-3" and summer draft of 24'-7". It carries crew of 14 officers and 56 seamen. It appears that the vessel has 119 separate rooms, including 34 crews' cabins, 8 passengers' cabins, sailor's mess, fireman's mess, comprador's office, hospital, boys' mess, ship's office, an engineer's office, saloon, lounge, pantry, chart-room, radio officer's cabin, captain's cabin, wheel house, alleyways, and stairways. It is clear that the vessel is well equipped big vessel. It has also domestic refrigeration compartments which are lined by insulated walls. All crew accommodation in the vessel has been in-sulated as required by statutory regulations. Such insula• tion consists of sheathing or panelling of fibre board or similar material tacked to wooden frames inserted between the stiffeners jutting out from the steel bulkheads or walls of the said vessel, in consequence of which hollow spaces are left between the panelling and the walls of the vessel. The said panelling or sheathing formed removable feature or furnishing of the said vessel.

The 'Eastern Saga' arrived at Calcutta from the Far East on October 29, 1957. In the course of its ordinary voyage, as cargo vessel carrying legitimate cargo of 24,815 packages of general merchandise weighing 1,506 tons, it was rummaged by Calcutta Customs Officers on the 30th aud 31st October and on the 12th November, 1957.

1~ On search being made of the vessel's domestic refrigeration tndo c;;;;; Sttam compartments, two-tier white painted shelf was found Navigation fixed to the insulated wall of the handling room. The ltuJit•Singh screws which seemed like holding the shelf to the wall, in fact, did not do so they had been hammered flat and could Gai•ndragadkar C.J. not be turned by screw driver; the shelf was held by some wooden plugs which had been hidden below coat of paint; below the shelf, there was hole in the panelling closed with plug; this hole gave access to the insulation space of the compartment; it was of the size 7"X4-l/2". Nothing was found hidden in that space.

cabin on the forecastle of the vessel was then search-ed and two rectangular openings in the cabin wall panel-ling were discovered behind steel clothes locker which was screwed to the wall. One of these was closed with wooden cover. They measured S"X 13" and 5"X5" res-pectively. Nothing was found hidden in either of these two spaces. The cabin marked "Compradores" was also searched, and when wooden bench which was screwed to the wall panelling was removed, two rectangular holes were found in the panelling behind the bench. These holes which were covered with wooden plugs and overpainted, measured 5"X4-l/2" and 8"X2-l/2". Nothing was found in these spaces either. The cabin of No. 1 Fitter was then searched and two rectanglllar holes were found in the visible part of the wall panelling which had been filled in and over-painted; they were. respectively 7-1/2"Xl0-1/2" and 12"X 12" in size. Nothing was found hidden in these spaces. That took the searching party to the sailors' accom-modation where hole measuring 2-1/2"X5-1/2" was found in the wall panelling behind the back batten of wooden seat which had been screwed to the wall. This hole was covered with piece of wood and over painted. The hole opened into space and in that space, the Customs Officers found large quantity of gold in bars. Further search in the sailors' accommodation led to the discovery of hole in the wall panelling behind steel clothes locker which was closed with wooden plug. Nothing was found in it. That is how search was made by the customs ol!lcers on Easteni Saga and in one of the holes large quantity of gold in bars was dilCOVercd.

6 S.C.R.

On November 12, 1957, notices were served on the 1964 owners' Agents at Calcutta, M / s. Jardine Henderson 11nd Inda c;;;;;; s1 .. m Co. Ltd., and on the master of the vessel, Captain Kiunear, Navigation v respectively to show cause why the vessel should not be con-]Ol/il Sinrh fiscated under s. 167(12A) since it had contravened s. 52A Ga/endragadkar of the Act and penal action should not be taken against the C.1. agents and the master in that behalf. On the same day, notice in similar terms was issued to Kwok Cho, member of the crew of the Eastern Saga who had <ome forward to claim the gold which was discovered as result of the search. On November 13, 1957, further notice to show cause was served on the master in regard to another hole which had been discovered after the issue of the first notice.

The agents and the master thereupon sent elaborate replies setting forth their pleas that, in law, no action could be taken against them. The master pleaded that he had no knowledge of the presence of gold or unauthorised_ holes in the ship and had taken all reasonable precautions in accordance with the Company's instructions. He fully adopted the other pleas made by the agents. The agents substantially relied on report by M/s. Norman Stewart and Co., Marine Surveyors, Naval Architects and Consult-ing Engineers, and urged tbat unless special, extensive, time-consuming and uneconomic detailed searches were carried out, it was impossible to discover special hiding places like the ones discovered on the search made by the customs authorities. They also urged that they had no knowledge about the holes or about the gold which was dis-covered from one of them. They referred to the statement made by Kwok Cho and alleged that the said statement showed that gold could be smuggled by smuggler without the knowledge of the master and the owners of the ship. The ship moves on High-seas from place to place during the course of business, and it was impossible that the master, though in the ship, would know anything about the crimi-nal activities of smuggler carried on in nooks and comers of the ship, and it was inconceivable that the owners of the ship would ever know what was happening on the ship dur-ing its travel on the High-seas. They also relied on the fact that they had taken all the precautions which could be taken reasonably and had issued express and definite instructions

1964 to their crew against committing any offence like smuggling. Ir.do China Steam On receiving the replies sent by t)le agents, the master, Navigation and Kwok Cho, the Additional Collector of Customs heard ... Jasiit Singh the appellant, and on November 23, 1957, he passed the Gajendragadkar impugned order. He held that having carefully considered c.1. the written explanations tendered and oral arguments urged before him, he was satisfied that the preventive measures taken by the owners, the agents, and the master proved to be hopelessly inadequate and ineffective. He accepted their plea that they need not be regarded as persons concerned in the illegal importation of gold into India within the meaning of s. 167 ( 8) of the Act. He also upheld their plea that the openings found in the cabin of No. 1 Fitter did not attract the provisions of s. 167 (12A). In regard to other matters, the explanations offered appeared to him to be unsatisfac-tory and unacceptable. His conclusion, therefore, was that the vessel had clearly rendered itself liable to confiscation under s. 167(12A) because it had infringed the provisions of s. 52A. The quantity of gold found on the vessel was approximately of the value of Rs. 23,79,490/80 nP. ® Rs. 109 /24 nP. per to/a, and he noticed the fact that this was the recovery made in one of the several cavities found on the ship. He was, therefore, inclined to infer several holes discovered in the vessel indicating the extent to which the hiding places were used for contravening s. 52A. That is why he confiscated 1,358 gold bars discovered as result of the search absolutely under s. 167 ( 8) read with s. 23A of the Foreign Exchange Regulation Act. He also imposed personal penalty of Rs. 10,000 on the sailor Kwok Cho. In regard to the ship, he directed that Eastern Saga be confiscated under s. 167(12A) and in lieu thereof, he gave the owners of the ship an option to pay fine of Rs. 25 lacs which he directed should be paid within 30 days of the date of the despatch of the order, or such extended time as may be allowed. In passing this order, the Additional Col-lector observed that he had taken into consideration the fact that the agents had already suffered some loss due to the vessel's detention at the port.

The appellant then preferred an appeal before the Cen-tral Board of Revenue. The Board considered the matter and came to the conclusion that none of the contentions

6 S.C.R.

rafsed by the appellant was either warranted or supported by the law as it stands. The Board expressed its concur-rence with the conclusions of the Additional Collector that the offence under s. 52A of the Act had been proved, and the appellant was liable to be dealt with under s. 167(12A) of the Act. In regard to the grievance made by the appel-!ant that the fine imposed by way of option was excessive, the Board observed that having regard to the quantity and value of the smuggled gold and other relevant facts, it was not inclined to make any change in the said order. The penalty imposed on the master, s"aid the Board, was also not so large as to need any revision. It is not disputed that the value of the ship is very much more than the amount of Rs. 25 lacs imposed by way of fine under s. 183. This order was pronounced on May 12, 1959. The appellant's attempt to move the Government of India in its revisional jurisdication failed and its application was dismissed on December 20, 1960. The appellant then moved this Court for special leave and it is with the special leave granted by this Court that the present appeal has come before us.

The Board expressed its concur- Indo China Steam

NaviRation Jasgir· Singh Gajendragadkar C. I.

At the hearing of this appeal, the learned Additional Solicitor-General has urged preliminary objection. He contends that none of the Customs Authorities which had dealt with the appellant's case is tribunal under Art. 136 (1) of the Constitution, and so, the appeal preferred by the appellant is incompetent. It is true that special leave has been granted to the appellant by this Court, but there can be little doubt that even in cases where special leave has been granted at the ex parte hearing of the matter on the petition of the appellant for special leave, the respond-ent can at the final hearing, raise preliminary contention that special leave should not have been granted, since the decision, judgment, or order appealed against, has not been pronounced either by Court or Tribunal within the mean-ing of Art. 136(1). The Additional Solicitor-General argues that neither the Customs Collector, nor the Central Board of Revenue, nor the Central Government is Tribu-nal, and so, special leave granted to the appellant should 1:>e revoked on that ground.

It is settled by decisions of this Court that the Customs Officer who initially acts under s. 167(12A) is not Court

or Tribunal, though it is also settled that in adjudicating upon the question as to whether s. s. 52A has been contraven-ed by any ship and by such contravention the said ship has made itself liable to ~nfiscation under s. 167(12A), the Customs Officer has to act in quasi-J"udicial manner. In Shewpujanrai Indrasanarai Ltd. v. Collector of Customs and Customs and Other11(') this Court has held that an order of confiscation or penalty passed under the Sea Customs Act is not mere administrative or executive act, but is really quasi-judicial act, and, therefore, an application for writ of certiorari lies in respect of such order under Art. 226 of the Consti-tution. In expressing this conclusion, S. K. Das J. who 1poke for the Court, has referred to two earlier decisions where this point had been considered and it was held that in holding his proceedings under the Sea Customs Act, the Collector acts judicially, vide F. N. Roy v. Collector of Customs, Calcutta,([2 ]) and Leo Roy Frey v. The Superin-tendent, District Jail, Amritsar and Anr.('). Similarly, in Thomas Dana v. State of Punjab,(') this Court has observed that the Collector and other Officers in the hierar-chy mentioned by the Sea Customs Aot may have to act judicially in the sense of having to consider evidence and. hear arguments in an informal way; even so, the Act does not contemplate that in doing so, the said authorities are functioning as Court.

lndo China Steam upon the question as to whether s. s. 52A has been contraven-Navigation ed by any ship and by such contravention the said ship has Ja,,;{s;ngh made itself liable to ~nfiscation under s. 167(12A), the Customs Officer has to act in quasi-J"udicial manner. Gajendragadkar c. J. Shewpujanrai Indrasanarai Ltd. v. Collector of Customs and Customs and

In Maqbool Hussain v. The State of Bombay etc.,(') while dealing with .the impact of the confiscation of goods under the relevant provisions of s. 167 of the Act on the question as to the constitutionality of subsequent prosecu-tion launched against person whose goods had been con-fiscated, this Court had occasion to consider the effect of the order of confiscation in relation to the provisions of Art. 20 of the Constitution, and it was held that the proceeding before the Sea Customs Authorities under the Act was not prosecution and the order of confiscation was not punishment inflicted by Court or Judicial Tribunal with-in the meaning of Art. 20(2), and so, the impugned prose-

(!) [1959) S.C.R. 821. (2) [1957] S.C.R. WH.

(3) [1958) S.C.R. 822.

(4) [1959) Supp. (I) S.C.R. 274.

(5) [1953] s.c.R. 7'0. at p. 742.

6 S.C.R.

cution was not incompetent or invalid. It would thus be 1964 seen that one of the points which this Court had to consider lndo c;;;;;; Steam in that case was whether the Collector who had passed the Navigarion order of confiscation, was Judicial Tribunal within the JasJ{singh meaning of Art. 20, and the answer rendered by this Court was m t negative. · It 1s · true that m · g1V1ng · · t h" 1s answer t h" 1s Gajendragadkar c. J. Court has observed that the Customs Officers are not required to act judicially on legal evidence tendered on oath and they are not authorised to administer oath to any wit-ness. The appeals, if any, lie before the Chief Customs Authority which is the Central Board of Revenue and the power of revision is given to the Central Government which certainly is not judicial authority. It would be noticed that the last observation is purely in the nature of an obiter observation because the status of the Central Board· of Reve-nue or the Central Government is dealing with the appeals or revision applications under section 190 and 191 of the Act did not fall to be considered in that case, was not argued, and naturally has not been examined; and so, this observa-tion cannot be treated as decision on the question which has been argued before us in the present appeal. The result, therefore, is that it is no longer open to doubt that the Customs Officer is not Court or Tribunal, though in adjudicating upon matters under s. 167 of the Act, he has to act in judicial manner. It may be conceded that neither the Central Board of Revenue, nor the Central Govern-ment is Court within the meaning of Art. 136.

The question which then arises is, can the Central Board of Revenue exercising its appellate power under s. 190 of the Act, or the Central Government exercising its revisional jurisdiction under s. 191, be held to be Tribunal under Art. 1367 It is clear that before an appeal can be enter-tained in this Court under Art. 136, two conditions have to be satisfied; the order impugned must be an order of judi-cial or quasi-judicial character and should not be purely an administrative or executive order; and the said order should have been passed either by Court or Tribunal in the territory of India. It is difficult to lay down any definite or precise test for determining the character of body which is called upon to adjudicate upon matters brought before it. Sometimes in deciding such question, courts enquire

1964 whether the body or authority whose siatus or character is /ndo China Steam the subject-matter of the enquiry, is clothed with the trap-Navigation pings of court. Can it compel witnesses to appear before Ja.•ii;''singil it and administer oath to them, is it required to follow cer-tain rules of procedure, is it bound to comply with the rules Gajendragadkar c. J. of natural justice, is it expected to deal with the matters before it fairly, justly and on the merits and not be guided by subjective considerations; in other words, is the approach which it is required to adopt judicial or quasi-judicial ap-proach? If all or some of the important tests in that behalf are satisfied, the proceedings can be characterised as judi-cial proceedings and the test of trappings may be said to be satisfied. But apart from the test of trappings, another test of importance is whether the body or authority had been constituted by the State and the State has conferred on it its inherent judicial power. If it appears that such body or authority has been constituted by the legislature and on it has been conferred the State's inherent judicial power, that would be significant, if not decisive, indication that the said body or authority is Tribunal. It is in the light of these considerations that we have to examine the question as to whether the Central Board of Revenue and the Cen-tral Government is Tribunal or not under Art. 136.

Before doing so, however, we may refer to ·some of the decisions which were cited at the Bar on this point. In M/s. Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhun-jhunwala and Others(') the question raised before this Court was whether the Central Government while exercis-ing its powers under section 111 (3) of the Companies Act, 1956 (No. I of 1956) is Tribunal within the meaning of Art. 136, or not. In dealing with this question, this Court first enquired whether, while exercising its powers under s. 111 of the Companies Act, the Central Government was required to act judicially or not. The scheme of s. 111 was then analysed and it was observed th~t in an appeal prefer-red under s. 111, there was /is or dispute between the con-testing parties relating to their civil rights, and the Central Government was invested with the power to determine that dispute according to law. This dispute was in regard to the claim made by transferee of Company's shares to have

(1) [1962] 2 S.C.R. 339.

6 S.C.K

his transfer registered in the Company's register, and the 1964 view which this Court took was that when such dispute lndo China Steam goes before the Central Government under s. 111, it has to Navi~ation consider and decide the proposal and the objections in the Jasiit.,Sin.;h light of the evidence, and not on grounds of policy or expe-diency. That is why this Court came to the conclusion that Gajendragadkar c. J. th entral Government was Tribunal under Art. 136 of the Constitution.

In support of the view taken on this point, this Court referred to an earlier decision in Shivji Nathubhai v. The Union of India and Ors., (1) where it was held that the Central Government exercising power of review under r. 54 of the Mineral Concession Rules, 1949 against an adminis-trative order of the State Government granting mining lease was subject to the appellate jurisdiction of this Court, because the power to review was judicial and not adminis-trative. Thus, these, two decisions. show how the character of the adjudication made by the Central Government either under s. 111 (3) of the Companies Act, or under r. 54 of the Mineral Concession Rules, 1949, was determined by this Court. As illustrations of cases where the application of the said tests leads to the conclusion that certain authori-ties cannot be held to be tribunals, we· may refer to the decisions of this Court in Jaswant Sugar Mills Ltd., Meerut v. Lakshmi Chand and Ors.(2) and Engineering Mazdoor Sabha and Anr. v. Hind Cycles Ltd.([3]). It is in the light of these decisions that we will proceed to consider whether the Central Board of Revenue and the Central Government can be said to be Tribunal under Art. 136 of the Constitution.

In considering this matter, let us briefly examine the procedure prescribed by the Act in relation to the adjudica-tions made under its provisions. Before we do so, however, we ought to refer to the authorities that function under the Act. Section 3 of the Act refers inter a/ia, to three autho-rities which function under it. The Chief Customs Author-ity is the Central Board of Revenue constituted under the Central Board of Revenue Act, 1924. The Chief Customs Officer is the Chief Executive Officer of Sea-customs for any

(1) [1960] 2 S C.R. 775.

(2) [1963] Supp. l S.C.R. 242.

(3) (1963] Supp. I S.C.R. 625.

1964 port to which the Act applies; and the Customs Collector lndo China Steam includes every officer of Customs for the time being in Navigation separate charge of custom-house, or duly authorised t<i • · perform all, or any special duties of an officer so in charge. Gajendragadkar It is by reference to these three categories of officers that the c. J. procedure prescribed by the Act has to be considered. Chapter XVII of the Act deals with the procedure relating to offences, appeals, etc. Section 169 confers on the Cus-toms Officers power to search on reasonable suspicion. Sec-tion 170A confers power on the Customs Officer to screen or X-ray bodies of persons for detecting secreted goods. Sec-tion 171 prescribes the powers of Customs Officer for board-ing and searching such vessels. Section 171-A lays down the powers of Officers of Customs to summon persons to give evidence and produce documents. The power to sum-mon person to give evidence would include the power to administer oath to him under s. 4 of Act I of 1873. An enquiry held by the Officer of Customs under s. 17 lA is by sub-section (4) of s. 171-A deemed to be judicial pro-ceeding within the meaning of sections 193 and 228 of the Indian Penal Code. Under s. 183, the officer adjudging the matter brought before him under s. 167 of the Act is empowered to give an option to oerson to pay fine in lieu of confiscation.Having thus broadly referred to the provisions rdating to adjudication by the Customs Officer, we would now exa-mine the provisions in regard to appeals and revisions made by the Act. Section 18 8 provides for an appeal against any decision or order passed by any officer of Customs, and it requires that the said appeal must be filed within three months from the date of the orde"t or decision challenged. This appeal lies to the Chief Customs Authority, or in such cases as the Central Government directs, to any Officer of Customs not inferior in rank to Customs Collector and empowered in that behalf by name or in virtue of his office by the Central Government. The section further provides that the appellate authority may make such enquiry and pass such order as it thinks fit, confirming, altering or annulling the decision or order under appeal. The proviso to this section makes it clear that no order passed in appeal can impose upon the person any greater confiscation, penalty or

rate of duty than has been adjudged against him in the original decision or order. The section adds that every order passed in appeal shall be final, subject to the power of revision conferred by s. 191. It is thus clear that the orders passed by the Officers of Customs are made appeal-bl e, an the appellate authority is required to reconsider the matter, hold additional enquiry if thought necessary and decide the contentions raised by the appellant on the merits.

1964 Inda ch;;;; Navigation JasiitvSingh Gajendragadkar c. J.

The section adds that every Inda ch;;;; Steam·

Section 189 refers to the requirement of the deposit of duty demanded which has to be made by the appellant pending the appeal, and it naturally provides that if as result of the decision of the appeal, the whole or any portion of tlie amount deposited is not leviable, the Customs Col-lector shall return such amount or portion, as the case may be, to the owner of such goods on demand by such owner.

Section 190 confers upon the Chief Customs Authority the power to remit penalty or confiscation. Section l 90A deals with the revisional powers of the Chief Customs Authority and the Chief Customs Officer; and s. 191 pres-cribes for the revisional powers of the Central Government. Both the revisional powers specified bys. 190A ands. 191 can be exercised either suo motu by the revisional authority, or on an application made by an aggrieved party in that behalf. That, briefly, is the scheme of appeals and revisions contemplated by the Act. There is regular hierarchy of authorities beginning with the Customs Officer who deals with the problems of adjudication initially and ending with the Central Government which is the final revisional autho-rity. We may also incidentally refer to Rule 49 of the Rules framed by the Central Government in exercise of powers conferred on it by s. 9 ( c) of the Aot. This Rule provides that every appeal presented to the Chief Customs Authority under s. 18 8 and every application made to the Governor-General-in-Council under s. 191 shall be accompanied by copy of the decision or order by which the appellant or the applicant is aggrieved. The question which we are consider-ing at this stage is whether the appellate authority acting under s. 188 and the revisional authorities acting under sec-tions l 90A and 191 can be said to be tribunals within the meaning of Art. 136.

1964 It is thus clear that after the order of confiscation is /ndo China Steam made under s. 167 (12A) and an option is given to the Navi~ation ?wner of the offending ship under s. 183, the inifial proceed-lwditvSin~h ings taken 'under the Act come to an end and stage is Gajendragadkar reached for making an appeal against the order of confisca-c. [1]· tion or the imposition of fine. In the present appeal, we are concerned with the subsequent stage of the proceedings, because what we have to decide on the preliminary objec-tion raised by the Additional Solicitor-General is the status or character of the appellate authority or the Central Gov-ernment which exercises its revisional jurisdiction. In our opinion, having regard to the scheme of the sections which we have just cited, there is no difficulty in holding that the Central Board of Revenue which functions as an appellate authority, and the Central Government which exercises revi-sional powers are both Tribunals within the meaning of Art. 136 of the Constitution. dispute is raised either by way of appeal or revision by the party aggrieved by the order passed by the Customs Officers, and that dispute has to be tried by the appellate or the revisional authority in the light of the facts adduced in the proceedings and according to law. All the proceedings under the. Act, whether before the Customs Officer, or whether in appeal or revision, have to be conducted in accordance with the principles of natural justice and they are in that sense judicial or quasi-judicial proceedings. The fact that the status of the Customs Offi-cer who adjudicates under s. 167(12A) ands. 183 of the Act is not that of tribunal, does not make any difference when we reach the stage of appeal or revision. period of limitation is prescribed for the appeal, procedure is prescribed by Rule 49 that the appeal or revision must be accompanied by copy of the decision or order complained against, and the obvious scheme is that both the appellate and the revisional authorities must consider the matter judicially on the evidence and determine it in accordance with law. It is obvious that heavy fines are imposed in these proceedings and the confiscation orders passed may affect ships of very large value. By his appeal or revisional appli-cation the ship-owner naturally contends that the order of confiscation is improper or invalid and he sometimes urges that the fine imposed is unreasonable and excessive. Where disputes of this character are raised before the appellate or

6 S.C.R.

the revisional authority, it would be difficult to accede to ~964 the argument that the authority which deals with these dis· llldo Chiu s1111111 putes in its appellate or revisional jurisdiction is not tribu-N••igatw11 nal under Art. 136. These' authorilies are constituted by 1[u;;;'s11fg/11 ]the legislature and they are empowered to deal with the dis-putes brought before them by aggrieved persons. Thus. the ™1"1J.1':""" scheme of the Act, the nature of tne proceedings 11rou~ht before the appellate and the revisional authonues. the extent of the claim involved, the nature of tne oenames 1mnosed and the kind of enquiry which the Act contemplates, all indicate that both the appellate and the revisional authori-ties acting under the relevant provisions of the Act consti-tute Tribunals under Art. 136 of thr- Constitution, because they are invested with the judicial power of the State, and are required to act judicially. Therefore, we must over-rule the preliminary objection raised by the Additional Solicitor-General and iproceed to deal with the appeal on the merits.That takes us to the principal question as to the c0ns-truction of s. 52A of the Act which has been elaborately argued before us by Mr. Sachin Choudhury. Section 52A provides that no vessel constructed, adapted, altered, or fitted for the purpose of concealing goods shall enter, or be within the limits of any port in India, or the Indian customs waters. This section is the only section included in Chapter VIA and it was inserted by Act 10 of 1957. The plain construc-tion of this section appears to be that whenever ship answering the description contained in its first part enters or is within the limits of any port in India, or the Indian customs waters, it contravenes the prohibition prescribed by it. The prohibition is against the construction, adaptation, alteration or fitting for the purpose of concealing goods. What has to be proved against vessel which is charged with having contravened s. 52A is that there has been construction, adaptation, alteration or fitting, and that the said construction, adaptation, alteration or fitting has been made for the purpose of concealing goods. Therefore, if an alteration in vessel made for the purpose of concealing goods is proved, the contravention of s. 52A must be inferred. In other words, the section prohibits absolutely the entry of vessels which show that there has been any IM-159 S.C.-!9.

610 SUPREME, rou~T .REPORTS

.construction, adapta,tion, alteration or fitting made in them

"'4o. chi;" ~t•om for the purpose qf concealin_g goods.

Jlt1Pltotion !qRIJ''sinth · -' --·

!qRIJ''sinth Mr. Choudhury contends that the contravention. of s. 52A · -' --cannot be established _unless ~ IJJens. rea is proved against ~"(!_oj:ii~r the persons responsible J'or the iilleged contravention. In · that connection he has ri:lieQ, on the fact that the sectio,n ma)ces no difference between conceafed goods, which are .not .~ontraband and those ' which are. c0ntraband. in oih~_r woras. the argument is that if ,an ·alteration is proved to .have been made for the purpose of concealing goods which .11.re legitimately carried by the v<;_ssel, ey~n so the contraven-tion would attract the provisions of s. 167(!2A) of the Act: That being so if the sweep of the prohjbition prescribed by s. 52A is so-wide,-it--is pecessary to import the requirement .of mrns rea in deterdijning. 'its. ~cqpi:.' He has also relied ou the well-rec,ognised principle of criminal' jurisprude9ce that unless statute creating an offence and providing for its punishment clearly, or by necessary lmplication, rules out_~ __ mens rea as aii essel).tial part of the offence, no person should be found guilty of the said offerice unless his guilty miiid is proved, There is no doubt that in Ravula Hariprasada. /?.ao v,. The State(')', this Courl speaking through Faz! Ali/., bl!S accepteg the 'ollser.vations ,1)1.ade by the Lord Chief 1ustice of England in Brend v. Wood(') that "it is of the utmost importance fdr the protection of the liberty of the subject that Court should al)>;ays bear' in mind fuat uni~ the statute, either clearly or by necessary implication, rul~ out mens rea as ·a constitu'ent part of ,crime, defendan~ shoµ)d not b~ found guilty of an offence against the .:riminal il!w uiiless he has ,g'ot guilty mind". ( 1·ide also :;herras v. f>e J?.utzen ( [8]).

It may also be conceded that offences in respect of which m,ens rea is not required to be established, are usuaily oJ comparatively minor cliaracter and sentences impo,se4 11gainst the 'offenders are, therefore, not of s~verp typ!',; and in the present case, it cannot be disputed tj:iat the coµ-fiscation of th!' ship may mean serious los5 to the OF/JI~

(I) [1951) S.G.R. 322. Ci)'(-1946) 110 J.P. 317, 318.

(3) (1895) I Q.B. 918, 921.

bf the ship, or imposing fine against him by way of giving 1164 • him option in lieu of the confiscation of his ship 1.11ay also '""" cM;; s-involve the payment of very large amount; and so,-prima Ntni~ facie, there is some force in Mr. Cboudhary's argument that l...Ji;'"Slsa& the 'element of mens rea should not be excluded in consider-ing the scope and effect of s. 52A of the Act Go/8n4cragad/ra

Ntni~ l...Ji;'"Slsa& Go/8n4cragad/ra . I.

On· the other band, the scheme of s. l67 supports the contention of the Additional Solicitor·G1<neral that if \ve reads. 52A along witli s. 167(1'ZA), it would be clear that the legislature intends, 'by necessary implication, the exclu-sion of mens rea in dealing with "the contrav_c;.ntiori of ~· 52A: Section 167(12A) provides that if vessel .constructed. adapted, altered or fitted for the purpose of concealing goods under s. 52A, enters ·or is within t_he limits ·of .any porr in India or within the Indian Customs waters such vessel sliall be liable to confiscation and the master of such vessel -shall be liable to penalty not exceeding Rs. 1,000. It would be noticed that·in column 1, s. 167(12A) repro-duces the material words of s. S2A and does not add the words· "knowingly or wilfully". It is significant .that the words. "knowingly ur wilfully" are used in ~several other provisions contained in: s. 167. Section 16704) and s. 167 (61) use the word "wilfully" in .respect of the commission of the offences there specified. Similarly s. 167(3) and s. 167(81) use'the word "knowingly" and s. 1.67(78) uses the word "intentionally". Similarly, ih s. 167(8), though the words "knowingly or wilfully" l!re,.not used, ·we have the expression "concerned in", and that may introduce con-siderations .of mens rea. Thus. where the' legislature wanted to inttoduce the knowledge or intention actuating the com-mission of the offence as an essential element of the offence, it has used appropriate words to indicate that intention. The failure to use similar word in s. 167(12A) .cannot, therefore, be regarded as accidental, but must be held to be deliberate. In our opinion, there. is some force in this argu-ment as well.

Besides, tl).ere can be po doubt that in cbnstruing

section, it would be relc;vant for the Court to consider whether. the construction for which[1]Mr. Chouahary· contends would not make the provisions of s. S2i\ read with s. 167 (12A) substantially nugatory: If it appears that the adoption

of the said construction would substantially defeat the very purpose and intention of the legislature in enacting the said section, that would be legitimate reason for rejecting the said construction. U the words used in s. 52A are capable of only one construction and no other, and that construction is the one suggested by Mr. Choudhary, the fact that by adopting the said construction the section would be rendered nugatory, would not be of any material significance. If, on the other hand, two constructions are reasonably possible one of which leads to the anomaly just indicated, while the other does not and helps the effectuation of the intention of the legislature, it would be the duty of the Court to accept the. latter construction.

lPH of the said construction would substantially defeat the very ""° c;;;;;; St•am purpose and intention of the legislature in enacting the said

Navigation 1 .. 1;,''s;n11t

O./indragadkar t;, 1.

The intention of the legislature in providing for the prohibition prescribed by s. 52A is, inter alia. to put an end to illegal smuggling which has the effect of disturbing very rudely the national economy of the country. It is well-k:nown, for example, that smuggling of gold has become serious problem in this country and operations of smuggling are conducted by operators who work on an international basis. The persons who actually carry out the physical part of smuggling gold by one means or another are generally no more than agents and presumably, behind them stands well-knit organisation which, for motives of profit making, undertakes this activity. That is why s. 52A makes an absolute prohibition against the entry of vessel which contains, inter alia any alteration made for the purpose of concealing goods. Entry of contraband gold with the help of ships has thus become serious problem and is intended to be checked by this absolute prohibition. If it was held that the knowledge of the owners of the offending vessel or of its master should be proved before s. 52A is held to be contravened, in majority of cases, the offending vessels will escape punishment. It is not difficult to imagine that mens rea or guilty mind could rarely be established against the owners of vessels which are travelling on the High-seas and it may not be always easy to prove the guilty knowledge even of the master of the ship. If the guilty mind is made an essential constituent of the section, it would be very easy both for the owners and the master of the ship to plead that the alleged alteration, adaptation or fitting was made with-

6 S.C.R.

out their knowledge and even contrary to their instructions. J'6f It is not difficult to realise in this connection that it would lndo c;;;; st-be almost impossible for the customs authorities to establish Navi1atio11 mens rea in the manner suggested by the appellant. Section 1..;;rsingll 52A refers to the construction for the purpose of concealing · Ga/tndragadktr goods, but it is obvious that no vessel would ordinarily be c. J. constructed initially for the purpose of concealing goods. Like the adaptation, alteration or fitting, the construction also would be made in such manner as would not be easily detected or discovered. Therefore, it seems to us plain that if we are to accept the construction suggested by Mr. Choudhary, mens rea would rarely be proved against the owners of the vessel, or even its master and the section, in substance, would remain dead letter on the statute.book.

In this connection, it is necessary to bear in mind that as the heading of the Chapter shows, what s. 52A aims at is the entry of the vessels and that, in fact, is the manner deliberately adopted by the legislature in prescribing the prohibition. It is the entry of the vessel that is prohibited and the use of the negative form adopted by the legislature in enacting s. 52A is intended to show that the prohibition is not concerned with the owner of the vessel or the master; the prohibition is concerned with the vessel itself and it provides that vessel is prohibited from entering the limits of any port in India or the Indian Customs Waters. or ro-maining there, provided it answers the description mentioned in the iirst part of s. 52A.The only safeguard which is legitimately available to the vessel in resisting the charge that it has contravened s. 52A is provided by the requirement that the alleged altera-tion, for instance, must be shown to have been initially made for the purpose of concealing goods. If the alteration is shown to serve any operational or functional purpose in the ship, that would clearly justify the plea that it was not made for the purpose of concealing goods. It may be that if the alleged alteration, adaptation or construction is proved to have been initially made for functional or operational purpo;e, and it is shown that subsequently it has been used witho11t the knowledge of t!le master or the owners for the

illegal purpose, that may raise triable issue as to whether the alteration falls within the description of s. 52A; but where thc- alteration is not shown to serve any functional or operational purpose and its very nature suggests that it was intended to serve some secret purpose, it would be easy to draw the inference that its purpose was to conceal goods. Therefore, in our opinion, there is no doubt that the Customs Authorities were right in holding that the mere fact that the owners of the vessel or the master were not shown to have been privy to the alteration etc. or the concealment of gold bars recovered from the offending ship would not take the case of appellant outside the purview of s. 52A. The knowledge of the owners, or even of the master is, in the context of s. 52A, entirely irrelevant. What is relevant is the proof of the fact that the vessel answering the descrip-tion prescribed by s. 52A entered within the limits of Cal-cutta which is port in India.

illegal purpose, that may raise triable issue as to whether lltdo c;;;; Strt11tt the alteration falls within the description of s. 52A; but

lflW;,.ttmi i.11t'su.111 <hifruha6Wll/ulr c. 1.

Mr. Choudhary further argued that the alteration on which the case against the appellant is based in the present case cannot be said to be an alteration contemplated by s. 52A. because it is not an alteration of the vessel. He suggests that the construction, adaptation. alteration or fitting must be of the vessel as wh,.le, or, at any rate, of any part of the vessel which can be regarded as its integral or essential part; the panelling wall in which the apertures were made, cannot be treated as part of the vessel, and so, the alteration in question cannot be said to attract s. 52A. That, in substance, is another argument which has been pressed before u~ on behalf of the appellant. In support of this argument, Mr. Choudhary referred us to the certificate issued by Mr. B. Hill who is Surveyor to Lloyds Register of Shipping united with the British Corporation Regfr•er. In this certificate Mr. Hill purports to say that in his opinion the panelling and lining constitute no part of the vessel & the expression "vessel" is understood for the purpose of its being assigned the notation 100 AI or any other class notation in the Register Book of Lloyds Register of Shipping or for the purpose of the issue" of Loadline Certificate under the Merchant Shipping Acts and that such panelling or lining is not required to be shown in the ship's official

6 S.C.R.

plans submitted to Lloyds Register of Shipping in connection with the above purposes. He adds that such panelling is cpstomarily installed in British Vessels for the health and comfort of crew as methoo of insulating accommodation.

He adds that such panelling is 11146 c;;;;; siil/M

Navlta/f(nj l11Ji/lts1nt/I G'af~lldraRlf<(IM c. J.

We are not prepared to accept Mr. Choudhary's argu-ment that there is any material on the record to show that the panelling is not part of the vessel. vessel is defined by s. 3 ( f) of the Act as including anything made for the con-veyance by water of human beings or prnperty; and there seems to be no reason to hold that the panelling is not its integral part. Mr. Hill who has purported to give this certi-ficate has not given evidence in the present proceedings and the statements made by him in his certificate have, there-fore. not been tested. Besides, his opinion that the panelling does not form part of the vessel as understood for the two purposes mentioned by him in his certificate cannot assist us in determining whether it can be held to be part of the vessel under s. 52A. For whatever purpose panelling may be constructed, once it is constructed it becomes part of the vessel and as such, any alteration made in the panelling would attract the provisions of s. 52A. We must therefore, reject Mr. Choudhary"s argument 1hat even if an alterat10n is proved to have been made in the panels of the vessel, s. 52A could not be applied. The contention which Mr. Choudhary faintly urged before us, that the holes made in the panelling walls do not constitute an alteration at all is, clearly ill-founded, because the manner in which the holes were made and the use which was obviously intended to be made of the said holes, leave no doubt that they constitute alteration within the meaning of s. 52A. · Thus, our ~on­clusion is that the Customs Authorities were right in holding that the facts proved in the case showed that the appellant's vessel Eastern Saga contravened the provisions of s. 52A when it entered the port of Calcutta and as such, incurred !!ability prescribed by s. 197 ( 12A) of the Act.

What is the nature of the liability prescribed by s. 167 'l2A) is the next question which calls for an answer in the present appeal. We have already seen that s. 16702A) llf<>Vides that if vesoel contravenes s. 52A, it shall be liable

1964 to confiscation and the master of such vessel shall be liable . (ndo ci.;;;; St•om to penalty not exceeding Rs. LOOO. Can it be said that N11Vigation the penalty prescribed by s. 167(12A) may in any given case 1'uptsint/I not be imposed against the ship on the ground that the con-travention proved against it is of very trivial ~haracter, or GaJ•ndragadk• . C,J. has been the result of an act on the part of criminal who acted on his own contrary to the instructions of the master of the ship? The words used in the third column of cl. 12A are that "such vessel shall be liable to confiscation". The context seems to require that it is not open to the Customs Authority to refuse to confiscate the vessel on the ground that there are any extenuating circumstances surrounding the contravention of s. 52A in given case and that it would be unfair to impose the penalty of confiscation. Two penalties are prescribed, one is the confiscation of the ship, and the other is tine against the master. In regard to the latter penalty, it is within the discretion of the Customs Authority to decide what amount of penalty should be imposed; just as in the case of the first penalty it is not open to it to say that it would not impose the penalty of confisca-tion against the offending ship, so in the case of the second penalty it is not open to it to say that it will not levy any penalty against the master. In its discretion, it may impose very small fine against the master if it is satisfied that the master was innocent and despite his best efforts, he could not prevent the contravention of s. 52A. If the two penalties prescribed by clause 12A had been alternative, the position may have been different; but they are independent penalties. one is against the ship and the other is against the master: and so, there is no scope for contending that the Customs Authority may refuse to impose one penalty and impose the other, or may refuse to impose either of the two prnalties. It must be regarded as an elementary requirement of clause 12A that as soon as the offence referred to in column I of the said clause is proved, some penalty has to be imposed and cl. 12A indicates that two penalties have to be imposed and not one, there being discretion in regard to the penalty imposable against the master as regards the amount of tlie said penalty. Therefore. we do not think it would b~ ,?ossible to take the view that if there are extenuating circumstances attending tho contravention of 1. 52A in given case the

6 S.C.R.

Customs Authority can refrain from confiscating the vesse1. i964 Confiscation of the vessel is the immediate statutory conse- Indo Ch;,;;; Steam, quence of the finding that an offence under clause 12A is Navigation established, just as the imposition of some penalty against lasii:·Singh the master is another statutory consequence of the same -contravention. In fairness, we ought to add that Mr. Ga/endc_g~~kar Choudhary did not support the view which appears to have been taken by Sinha J. in the case taken before him under Art. 226 by the Everett Orient Line Incorporated (vi de W.P. No. 121/ 1959 and C.A. No. 374/1961 which have been heard along wi:h this appeal and will be dealt with separa-tely). It an:i~ars !hat in that case Sinha J., held that there was discretion in the Customs Authority in the exercise of which it may, in proper case refuse to confiscate the offending vessel. In our opinion, this view is not justified by the words of clause 12A of s. 167.But the confiscation of the offending vessel under clause 12A is not the end of the matter. In dealing with the ""ence adjudicated under cl. 12A of s. 167. the Customs Officer has also to exercise his jurisdiction under s. 183 of the Act. In fact, s. 167(12A) and s. 183 have to be read together ancl the adiudication proceedings have to be dealt with in the li3ht of the provisions of the said two sections. Section 18 3 lays down that whenever confiscation is autho-rised by this Act, the officer adjudicating it shall give the owner of the goods an option to pay in lieu of confiscation such fine as the officer >hinks fit. It is thus clear that in dealing with offences under s. 167(12A), an obligation is imposed upon the Customs Officer to give the owner of the goods an option to pay fine in lieu of confiscation. It is not disnuted, and rightly. that the word "goods" used in s. 183 includes vessels, and so. when the adjudicating officer was dealing wi · the present case, it was his duty to indicate the fine which the owners of the ship can, in their option, choose to pay. That is why the construction of clause 12A of s. 167 which leaves no discretion in the adjudicating officer in the matter of confiscating the ship, does not finally determine the ma'ter. . Though confiscation is statutory corollarv of the contravention of s. 52A, the legislature realised that confiscation of the vesrel may cause unnecessary hardship to the owners of the vessel, and so s. 183 expressly

requires the adjudicating officer to give an option to tho owners of the offending vessel. Confiscation is no doubt authorised and required bys. 167(12A), but the statutory obligation makes it necessary for the officer to give an option to the owners, and so, in substance, the ultimate penalty which may be imposed on the owners does fall to be deter-mined in the discretion of the said officer. Section 183 confers discretion on the officer to determine what amount of fine should be imposed in lieu of confiscation, and in doing so, he will undoubtedly have to take into account all relevant and material circumstances, including the extenuat-ing factors on which the owners may rely. Tb us, the confis-cation of the offending vessel which has been taken out of the domain of the Customs Officer's discretion under clause 12A, is indirectly brought within his discretion under s. 183. Indeed, the scheme of s. 183 shows that the only penalty which in law, the officer can impose is one of confiscation. Having done that, he gives an option to the owners of the vessel to pay fine in lieu of confiscation. There is little doubt that this scheme has been adopted, because if the imposition of fine was made an alternative penalty, difficul-ties would have arisen in the way of recovering the fine; and so, the legis ature has provided that the offending ship should be detained; if the offence is proved, it should be confiscated and the owner of the vessel 5hould be given an option to get his vessel released by paying the fine which may be im;iosed on him under s. 183. The very fact that an option has to be given to the owner shows that the fine imposed under s. 18 3 is not matter of penalty imposed by the officer as such, but is only an option given to the owner. Therefore, we are satisfied that on fair reading of s. 167( 12A) ands. 183 of the Act, the course adopted by the Customs Authorities is not ov •.n to any challenge.

.lrtdo China Steam owners of the offending vessel.

Navigation 1111/i,V-Singh · Gajendragadkar C, /.

Mr. Choudhary then attempted to argue that on the merits, the Centra I Board of Revenue was in error in holding that s. 52A had been contravened by the appellant's vessel Eastern Saga. We have already indicated in brief the find-ings recorded by the customs authorities. It is true that the Additional Collector of Customs accepted the plea of the appellant that the owners of the vessel were not concerned with the illegal importation of gold into India within the

',meaning of s. 167 ( 8) of the Act; but he has also found that -----1951 · the preventive measures taken by the owners, the agents and Indo chl;;; Steam, the master for stopping smuggling on board th,eir vessel Na•iga!Wn proved hop;;lessly in:idequate and ineffective. He has also. JasfitvSlngh examined the na!nre of the alterations made and -he has cone u I ti at l'..e i, alterations were made for the purpose o <lajendragadkar c. 1. concealing goods. In fact, the presence of so many altera-tions on this vessel itself would justify the conclusion thal they were made for the illegal purpose prohibited by s .. 52A. But when gold bars 1,358 in numbers were actually re-· covered from one of the holes made in the panelling wall, it is impossible to resist the conclusion that the said alteration had been made for the purpose of concealing the said gold. It is clear that the said alterations serve no operational or functional purpose in the ship and the manner in which the said alterations have been made unmistakably indicates the design for concealing goods. If the goods intended tO be concealed were not contraband,_ this elaborate designing of the alteration would be wholly unnecessary. Therefore, we see no substance in the argument that t):J.e Customs Authori-ties-were in error in finding that s. 52A had been contravened in the present case. Besides, there is no doubt that the question as to whether s. 52A had been contravened is sub- -stantially question of fact and this Court would not ordi-narily reconsider the matter on evidence with view to decide whether the said finding is right or .not.

Mr. Choudhary has then argued that the imposition of fine of Rs. 25 lacs is excessive and should be modified by us. He suggests that if such heavy fine is imposed against vessel, it may indirectly and eventually affect the trade of the country. Besides, he urges that the fine appears to be so unreasonable that it may be characterised- as vindicative. Incidentally, he has argued that in impo~ing the fine, the Additional Collector of Customs took into consideration an irrelevant fact inasmuch as he bore in mind the loss_ suffered by the a;:ipellant during the period that the vessel was detained. There is no difficulty in rejecting the last argument, because if the consideration in question was irrelevant, it has operated in favour of the appellant and not against it. If that consideration -had not weighed in the mind of the Additional Collector,

1964'· he would-obviously have imposed--a··higher fine. Then. c;;;;;; si .. m .. m m as to the. extent of the fine, we are nbt prepared to hold N111i1atic11 that the ·fine is unreasonable or excessive. We have Jas/itsingh already noticed the value of the gold illegally imported and we have seen the presence of many suspicious alterations in-Gajendragadlar the panelling walls and other parts of the vessel. It is not c.1;. easy to detect the illegal importation of gold, and so, if the Customs Authorities took the view that having regard to the value of the gold imported, the presence of· large number of alterations and the value of the ship, Rs. 25 lacs should be imposed as fine, we cannot entertain the argument that case is made out for our interference under Art: 136 of the Constitution. After all, the imposition of the fine merely gives an option to the appellant to pay the fine and secure the release of the vessel. Since the amount of the fine im-posed is very much less than the yalue of the vessel,. it is in the interests of the appellant to get the vessel released. Besides, the question as to the propriety of the fine imposed' by the Additional Collector of Customs has been examined by the appellate and the revisional authorities and they have ' seen no reason to interfere with the amount of fine. In such case, the appellant cannot be heard to complain against the impugned order of fine in an appeal under Art. 136, when no question or principle of law is involved.

Indo c;;;;;; si .. m .. m m as to the. extent of the fine, we are nbt prepared to hold

In this connection, we may mention one consideration which has ·weighed in our mind~ It is true. that modem · criminology does not encourage the imposition of severe or savage sentences against criminals, because the deterrent or punitive aspect of punishment is no longer treated as valid consideration in the administration 'of criminal law. But - it -must be remembered that ordinary offences with which the normal criminal law of the country deals are commit-ted by persons either under the pressure of provoked and unbalanced emotions; or as result of adverse environments and circumstances, and so, while dealing with these crimi-nals who, in many cases, deserve sympathetic treatment and in few cases, are more sinned against than sinners, criminal law treats punishment more as reformative or corrective than as deterrent or punitive measure. But it may not be appropriate to adopt the s=e approach in deal-

6 S.C.R.

Ing with every offence committed by vessel which contra-19U venes s. 52A. Illegal importation of gold has assumed the lndo c;;;;;;; s1.,.,.. proportions of major problem faced by the country, and Na¥igatlon the manifold, clever and ingenious devices adopted in carry-1u;{s;ngh ing out these illegal operations tend to show that the orga-nisation which is responsible for them is inspired merely by Galtn'JI.i~ cupidity because it conducts its operations solely for the purpose of making profit, and so, it would be open to the Customs Authorities to take the view that the best way to check the spread of these illegal operations is to impose deterrent fines whenever these offences are discovered and proved. Having regard to this aspect of the matter, if the Customs Authorities took the view that the fine of Rs. 25 lakhs was called for in the present case, we see no reason whatever to entertain the plea made by Mr. Choudbry that the said fine should be reduced. The argument that the impact of such heavy fines may adversely affect the trade of the country, seems to us to be wholly misconceived and ill-founded.There is one more point which must be mentioned before we part with this appeal. Mr. Choudhary attempted to argue that if mens rea was not regarded as an essential element of t. 52A, the said section would be ultra vires of Articles 14, 19 and 31 ( 1) and as such, unconstitutional and invalid. We do not propose to consider the merits of this argument, be-cause the appellant is not only company, but also foreign company, and as such, is not entitled to claim the benefits of Art. 19. It is only citizens of India who have been guaranteed the right to freedom enshrined in the said article. If that is so, the plea under Art. 31 ( l) as well as under Art. 14 cannot be sustained for the simple reason that in supporting the said two pleas, inevitably the appellant has to fall back upon the fundamental right guaranteed by Art. 19 ( 1) ( f). The whole argument is that the appellant is deprived of its property by operation of the relevant provi-sions of the Act and these provisions are invalid. All that Art. 31 (1 ) provides is that no person shall be deprived of his property save by authority of law. As soon as this plea is raised, it is met by the obvious answer that the appellant has been deprived of its property by authority of the provisions

1964 of the Act and that would be the end of the plea under Art. 1114 Ch_i"". s11- 31 ( 1) unless the appellant is able to ta1ce the further step Nav':."'"'" ~f challenging the validity of the Act, and that necessarily IMiil Si1181t 1mports_Art. 19(l)(f). Similarly, when plea is raised GpJ.,.dragadur under Art. 14, we face the same position. It may be that c, J. if s. 52A contravenes Art. 19(1 )(f), citizen of India may contend that his vessel cannot be confiscated even if it has contravened s. 52A, and in that sense, there would be inequality between the citizen and the foreigner, but that in-equality is the necessary consequence of the basic fact that Art. 19 is confined to citizens of India, and so, tl:ie r;ilea that Art. 14 is contravened also must take in Art. 19 if it has to succeed. The plain truth is that certain rights guaranteed to thr citizens of Ind!a under Art. 19 are not available to foreigners and pleas which may successfully be raised by the citizens on the strength of the said rights guaranteed under Art. 19 would, therefore, not be available to foreigners. That being so, we see no substance in the argument that if s. 52A is construed against the appellant, it would be in-valid, and so, the appellant would be able to resist the con-fiscation of its vessel under Art. 31 ( 1). W ought to make it clear that we are expressing no opinion on the validity of s. 52A under Art. 19(l)(f). If the said question were to arise for our decision in any case, we would have to consider whether the provisions of s. 52A are not justified by Art. 19 ( 5). That Is matter which is foreign to the rr.quiry in the present appeal.

The result is the appeal fails and is dismissed with costs.

The appellant has also filed W.P. No. 138 of 1961 chai-Jenging the validity of the order passed by the Central Gov-ernment in the same matter. Since the appeal preferred hJ the appellant against the said order is dismissed, the writ petition also fails and is dismissed. There would be no order as to costs in the writ petition.

Appeal and petition dismissed.