BALKRISHNA CHHAGANLAL SONI versus STATE OF WEST BENGAL

BALK.RISH.NA CHHAGANLAL SONI

STATE OF WEST BENGAL

October 22, 1973

[H. R. KHANNA, V. R. KRISHNA !YER AND R. S, SARKARIA, JJ.J

C11ston1s Act 1878 (8 of 1878)-S. 107-"rtny p£>rso11s" and "r111y p/ure''"' 111eanf11g of-Scctlori wheth~r i!PPlies to e.mndnation o/ ac~'sed only.

Defence of I11dia Rule:; 1962-r. 126 P. (2)(ii) if applies to smuggled gold ..

The appellant was prosecuted. f~r possessio~ ,of _gold _bars ~f foreign orisin: in his shop and gold bar of 1nd1genous ong1n 1n hts fes1dence. He was; charged under r. 126 1(10) re•d witl> r. 126 P(2)(ii). and r. 126 l(il and r. 126P(i)(i) of the Defence of India Rules, 1962. The Customs authorities had recorded statement of the appellant in which he said that the gold rc--cov~red from his house represented ornaments given to his wife by his mother. mehe<l. by her into bar and kept without his knowledge in the almirnb, the: key of which v;as wilh him. ·

The appellant was convicted by the trial court. On appeal he was acquitteJ.. on one charge but the senteiice was sustained on o:her charges ..

It w3.!. contended in this Court that -(i) r .126P(2) (ii) could not apply to ~n1ugglcd gold consistently with the .~iew that declaration of non-ornamr;:n~ gold: <lid not cover smuggled gold, and (n) that s. 107 of the Customs .-'\ct did not appl}· to examination of the accused but only to o:her witnesses to be ques~­tioni::d and hence his statement (Ex. 9) should be excluded.

Dismissing the appeal, and confirming the :-;ente"iice.

HELD: (Per Krishna Iyer and Sarkaria JI) Rule 126P (2) (ii) penalises person who had in his p(lssesion or under his control any quantity of gold in contravention of any provision of Part XII-A of the RuLs. 'It is not po~sible to cut back on the width of the language used bearing in mind the purpose of plenary contri ·I the State wanted to impose on gold and exempt smuggled gold from th~ exp1C1sion "any qunntity of gold" in that sub~rulc. That construction.· would stultify the law. There was no doubt that the accustd was in control of the indigenous gold recovered from his residence and there was no case that declaration had b!en made regarding it. It is clear from r.126P(2)\li) that domestic gold was also subject t'"'l the declaration under this rule. Its possession· was dearly an offence. [113B-C]

Section 107 of the Customs Act is wide in its terms-and is-·cle:irty designed to facilitate the investigatory process by examination without restriction on person, place or time. "Any person" in the section covers every person, including suspect and po~ential acct.ised. These__ words of the statute have to be inter· oreteJ in the light of the policy and purpose of the law. The object of s. 107· indicates that while the normal process of enquiry is facilitated by s. 108, investigatory emergencies are taken care of by s. 107. Situations may arise where the failure to qu!stion ,.,,;itness quickly may mean irretrievable loss of valuable material and s. 107 meets this need. The context in which the words ''any pers".ln" occur, the objtct of the provision and the policy underlying-ch. Xl!I assume relevance and become material in the construction of the text. Nor does the section exclude the Customs House as venue for such examina-tion. "Any place'' in the iection obviously means anv place and cnntrarY view is untenab[1]e. This provision is plain,hat an authorised customs official is entitled to examin(" any person at any time, at any place in the course of enquiry. [1130-G]

Soch1I and economic offences stand on graver f~oting in respect of punish-ment. The new horizons in penal treatment with hopeful hues o[ correct=o11 and rehabilitation are statutorily embodied in Tndia in some special enactments:·

but crimes professionaly committed by deceptively· respectable 1nembers of the com.n1unity by inflicting severe trauma QD. the health and wealth of the nation-.and the members of this neo-crimirial tribe arc rapidly escalating-form deterrent exemption to hu1nane softness in sente·ncing. [l 14B; DJ

The penal strategy must be informed by social circumstances. individual factors and the character of the crime .. Smugglers, hoard rs, ad\llterators and -0thers of their ilk have been busy in their unticnvorld bcc ... U3C the leµ! rd-W:lre has not been able to halt the ..jnvisible economic aggressor inside. While penal trea!nl!nt should be tailored to the individual, in the eXtrem category of professional economic offenders, incaracera!ion is peculiarly potent The off nces ior which the appellant has been convicted are typical of respectable rack teers v.·ho, tempted b/ the heavy pay-off, face the perils of the law and hop~ that th~y .c:ould smuggle on large scale and even if struck. by the covrt they could .Ret away with light blow. [114-EFI

To the extent to which gold smugglers and other anti~social operators in the field. of crime can be given an unhappy holiday .in jail, the courts must b~lp the pi"ocess en conviction if judicial institu:ions are not to be cynically viewed by :the community. [115B]

Per Khanna J : There is nothing in the language of s. "107 to !ndicate that ·the words "any person" do not include. person who is subsequently ~rraigncd .as an accuscJ. The exami'n;ttion contemplated bv cl. (b) is of person ac-quainted with th:.": facts and circum3tances of case. Where person is found i" possession of smuggled gold he would obviously b! person who ca~ be '.con~idered to be acquainted with the facts and circumstances of the case. Jn nwst of the cases be would. indeed be the best person 10 throw light with TC$ftrd .to tbe ~muggled gold found in his possession. No valid. r~ason ·can be ·dis· ccrned for excluding the examination ·of such person from the purview of ·s. ICl7 of the Customs Act. [1098-C]

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 73 of 1970.

Appeal from the judgment and order dated th.e 10th December, 1969 of the Calcutta High Court in Criminal Appeal No. 518 of 1969.

D. Mookherjee and D. N. Mukherjee, for the appellant.

P. K. Chatterjee and G. S. Challerjee, for the respondent.

The Judgments of the Court were delivered by Khanna J. and Krish(la Iyer J.-

KHANNA, J.-The facts of the case have been set out in the judg-ment of my learned brother Krishna Iyer J. and need not be r<peat-.ed.

Two principal contentions have been raised on behalf of the appel-!ant. It is urged in the first instance that the finding that the appe !ant was in possession of the gold bars with foreign markings reoovered from his shop and of indigenous gold recovered from his residential premises cannot be sustained. In tl1is respect J fiad that the trial -court and the High Court on consideration of the ev'd,nce br>'ug'1t on record have arrived at the conclusion that the appellant was in posses-sion of the go~d bars and in<ligenous gold in question. Nothing cogent has been brought to our notice as may justify interferenoe with this concurrent finding of fact based upon appreciation of evidence. I, .therefore reject the first contention.

Equally devoid of force is the second contention that the Customs Officer cannot· under section 107 of the Customs Act, 1962 examine any person who iS' subsequently arraigned as an accused in respect of the possession of smuggled gold. According to clause (b) of section I 07, any officer of customs empowered in this behalf by general or special order of the Collector of Customs may, during the course of any enquiry in connection with the smuggling of any goods, cxanline any person acquainted with the facts and circumstances of the case. There is nothing in the language of section I 07 to Indicate that the words "any person" do not include person who is subsequently ar· raigned as an accused. The language of section 107 is clear and unambiguous and I find it difficult to place restricted meaning on the word> "any person" and to exclude from their ambit persons who may subsequently be put· up for trial. The examination ·contemplated by clause (b) is of person acquainted with the facts and circumstances of case. Where person is found in possession of smuggled gold he would obvious,ly be person who can be considered to be acquainted with the facts and circumstances of the case. In most of the cases he would indeed be the best person to throw light with regard to the smuggl~d gold found in his possession. I have not been able to disoern any valid reason for excluding the examination of such person from the purview of section 107 of the Customs Act.

There is no sufficient ground for interference with the sentence. The appeal fails and is dismissed.

KRtSHNA IYER, J.-A white collar crime committed and detected in January 1965 took demoralisingly leisurely course spread over 3 years in the trial court although only 21 witnesses were examined and · the case was simple and supported by nearly clinching statement of the ortly accused recorded fresh after the detection, the very day.

An imp:>rtant component of fair trial is speedy hearing, and the deterrence of judicial punishment is diluted to the pre.iudice of public justice if, through dilatory hearings and ineffectual revisions, unfortu-nate delays, such as mar this case, corrode the system and put the courts on trial before the community.

The criminal story here is short and the evidence adduocd straight. The findings of fact are concurrent and the points of law frai!le. The case has reached the Supreme Court on certificate of fitness granted by the High Court.

One Shri Soni, the appellant herein, was· engagged in bullion busi-ness, perhaps of dubious character, ··because he appears to have attracted the attention of the customs authorities, who, undaunted by failure in one raid kept, track of the dealer. Several months before the episode which materialised in the present case fruitless search 0f the flat of Shri Soni had been made. But on May 10, 1965 better luck smiled on P.W. J, preventive officer of the Departmeqt,. thanks to

timely and accurate intelligence received, pursuant to which the officer, to the due accompaniment of the fonnalities of the law, movtd into 59, Manohar Das Street, Calcutta, where the jewellery shop of the accused was located. Armed with the authorization for search. P.W. l surprised the accused who was reclining on pi~ow, laid on mattress, underneath which slept two gold bars with foreign markings. P.W. I, with uner.ring precision asked the accused to rise in his seat and the truth was out be£ause the guilty gold bars, bJried beneJth the innocent pillows and mattress, revealed themselves and were promptly seized in the presence of independent witnesses, according to the pres· criptions of the law. The search list (Ex. 2) set• out the transaction of recovery. There is evidence to show that the shop was of the ac· cused. The search and seizure, the presene<> of the accused in the premises, the preparation of the sea'rch mahazar and the foreign origin of the gold b3rs as betrayed by the tell-tale Q9?0 mark. are not disputed before us.

The next target of the customs authorities "·as the residential fiat of the accused. P.W. 3, preventive officer of Calcutta Customs. with the usual retinue of search witnesses, entered the house of the accused and there met Mrs. Soni, who contacted her husband on the telephone. Thereupon, the accused arrived, h:uided over the key of the almirah from which gold bar of indigenous origin (Mat. Ex. I I) was recovered. These circumstances also are virtually .admitted. Later in the day, the same afternoon, the accused was taken to the Customs House foe interrogation. What that examination yielded was recorded in Ex. 7. Close upon the search and caught almost red·hande<l, the accused, with little opportunity to invent and left to fall back upon bis unncrvl.'.'d im:igination. made clumsy cs:apisJ stntement which cont1ins damaging implications. The complaint based on these facts k:d tu charge. under Rule 126 1(10) of the Defence of India Rules, 1962 read with Rule 126 P(2)(ii) of the said Rules as also one under Rule 126 I(!) read with Rule 126 P(l)(i}. Since contravention of s. 135(b) of the Customs Act, I 962, was also prima facie mado out charge there· under was framed. The case ended in conviction before the Magis· trate. but in appeal there was acquittal on one charge, but the sen-tence was sustained on the other charges, the net benefit to • the accused being the elimination of flea·bite fine of Rs. 1000/.. The courts below concurrently relied upon the statement under s. I 07 of the Cmtoms Act recorded from the accuserl (Ex. 9) and consider.1blc argun1cnt turned on it in this Court.

Finding Ex. 9 fatuous exercise in cxio:ulpl:ition but containing sonic vital facts of incrimination, Shri D. Mukherjea. learned counsel for the appellant. inevitably but in~cnuously staked !Jog argument on the unrealiability of material elicited under environs of testimonial pressure and 11crscinal duress and the ina<lmissib;lity of qu'5i-confes-sions elicited from de facto detainees by investigating offic<'l's who exer· ciscd powers sub,tantially similar to those of police officers from Cus· toms House premises. Confronted by the cliiwt rulings on the point

[ 1974] ·2/s.C.R.

and has been properly done. . T1'ere is other evidell"..e also which justi· fies the conclusions of facts arn, cd at in tne judgment under appedL The shop from where the gold was got belongs to the accused's business and there is evidence for it. The bars "themselves bear on their ·bosom evidence of smuggled source in the shape of foregin markings. The circumstances of the recovery not merely deepen the suspicorn1 but clinch the conclusion. The guiltless pillows on which the appellant confidently sat, hid the offending gold and the ·pre-knowing officers un-covered the contraband with sure instinct and these facts over-power the case of licit possession feigned by the accused. The disin-genous explanation regarding the domestic discovery ·of gold· also is · hardly plausible. We aflirm. the findings of fact ..Appellant's counsel put forward two legal points before he wound up with the submission for merciful sentence. According to him s. I 07 of the Customs Act does not apply to examination of the delin-quent but only to other witnesses emergently to be questioned. This, if valid, will exclude Ex. 9 statement, he argues: Substantively, he contends that r. 126 P(2) (ii) of the Defence of India Rules, 1962, cannot apply . to smuggled gold, consistently with the High Court's view that Rule 126 I relating to declaration of non-ornament gold does not cover smuggled gold. To appreciate this part of the ari;u-ment, we must have broad understanding of the scheme of Chapter 14-A of the Defence of India Rules which in 1965, when the alleged offence was committed, regulated the possession, use and sale of~ gold. (Now these functions are performed by the Gold Control Act). The procedural provisions of the Customs Act also come into play in this case and the contcntiuu regarding s. 107 of that Act, under which Ex. 9 statement was recorded, needs some attention in the background of Chapter 13 of the Customs Act itself. Since after careful considera-. tion we find no substan.:e in any of these points, our survey of the statutory schemes need not be elaborate.

For long years the national economy has been under great stress and strain and gold racket on any considerable scale particularly dur-ing the dangerous years around 1965, was fraught with cripp[1]ing con-sequences. And so the Defence of India Rules, in Part XII A, in-sisted on severe 'gold' discipline. Rule 126 I direct every-one.· other than licensed refiner and licensed or licensable dealer, to make declaration of all non-ornament gold owned by him. Such persons shall not in future acquire any such gold without permit or . save as provided in sub-rule (3). ·Many other ~estraints on acquisition and possession exist. There are many regulat:ons and prohibitions with which we are not concerned here. Dealers have to make returns of gold in their possession to the concerned authority (Rule 126F). Th~y have also to keep account of gold bought and sold (R I 26G). Except as laid down in Rule 126H dealers are prohibited from b~ing in possession of gold. Indeed even person, other than dealer; . shall ·not acquire non-ornament gold except as indicated iii Rule 126 (2 )( d). Certain rebuttable presumptions also are statutorily raised (vide Rule 126 I(ll)) and large powers of search and seizure ve<ted in officers to make this restriction effective (Rule 126L). Rule J26P

aod hls been properly don~. There is other evidence also which justi· iic.s tnc con..:lJs1...-n:.; of tacts arr1ved at in tnc juU~1ncnt unJcr af):--ie-.1. Th~ shop fro1n \\"here the ~:d was get tx!longs tJ t:1e zccuscj~s bus!ncs·:.; and there is evidence for jt. '"!he bars themselves bear en tl1~ir boso111 <Vidonce of smuggled source in the shape of forcgin mark mg;, lhe cir=wnstanccs ot the recovery not merely_ deepen th~ SU".pic:on but clinch the conciusiOil. The guiltless pillows on which tho oppcJa11t confidently sat, hid the offending go!d and the pre-knowing onicers un-covered the contraband with sure instinct and thcso . facts over• power the case of licit possession feigned by the accused. The disi11-gcnous explanation regardi.ng the domestic discovery of gold also is hardly pllusible. We affirm· the findings of f~ct.Appellant's counsel put forward two legal points bcrore he wcund up with the submission for merciful sentence. According te> him s. 107 of the Customs Act does not apply to examination of the delin-quent but only to other witnesses emergontly to be questioned. This, if valid, will exclude Ex. 9 statement; h• a:gu~. Substantively, he. contends that r. 126 P(2)(ii) of the Defence of India Rules, 1962, cannot apply to smu!!glcd gold, c;Jnsistcntly \-Vith the High Co~rt's view that Rule 126 I relating to declaration of con-ornament gold does not cover smuggled gold. To apprccioto this po.rt of th.o ar£U-ment, ·..vc n1us! have broad u;1dcrstanding of the sch.:111;: of Chapter 14A of th~ Defence of India Rules which in 1965; when th6 al[1]cgcd oifCnce w:i.s committed,. · regulated the possession, USi! and sale of ·. gold. (Now these functions are performed by the Gold Control Act). The procedural provL,ions of the Cmtoms Act also come into play in this case and the contentio.n regarding s. 107 of that Act, under which Ex: 9 statement was recorded, needs some attontion in the background of Chapter 13 of the Customs Act itself. Since after careful considera-tion we find no substance in any of these points. our survey of the · statu!ory schemes need not be elaborate.

For long years the natiO"nal economy has been u:id~r great stress .am! strain and gold racket on any considerab'e scale particularly dur-ing the dangerous yean around 1965, was fraught with cripp!ing CQD-sequcnccs. And so the Defonce 'Of India Rules, in Part XU. A, in-sisted on severe 'gold' · discipline. Rule 126 I ·direct every-. one. other than liccr.sed refiner and licensed or licensable dealer, to make declaration. of all non-ornament gold owned by him. Such persons shall not in future acquire any such gold without permit or save as provided in sub:rule (3). Many 9t!Jer restraints on acqu!sition and _possession exist. There. are many r;.'gulat:ons and prohibition<; with which \Ve are not concerned here. Dealers have to make returns of gold in their possession to the concerned authority <Rule 12£,F). They have also to keep account of gold bought and sold (R 12~G). Except as laid down in Rule 126H dealers arc prnhibited from boing in pessession. of gold; Indeed even person,. other than deoler, shall not acquire non-ornament gold except as indicated in Rule 126 H(2)(d). Certain rebuttable presumpt!ons also are statutor'ly raised (vidc Rulo 126 I( I \2 ) and large powers of search and seizure ve<ted in offi:ers to mab~this restriCtion effective (Rule 126L). Rule 126P

creates penalities for many acts and ommissions, inter alia for failure to make declaration as laid down. in Rule 126 I. The High Court has taken the view that the obligation to declare does not cover smuggkd gold. Even so, Rule 126 P(2)(ii) penalises peroon who has in his possession or under his control any quantity of gold in contraven· tion of any provision of this Part. We cannot cut back on the width of the language used, ·bearing in mind the purpose of plenary control 8 the State wanted to impose on gold, and exempt smuggled gold from the expression 'any quantity of gold' in that sub-rule. That construc-tion will stultify the law. There is no manner of doubt that the accused was in control of the indigenous gold recovered from his resi-dence and there is no case that declaration has been made regarding it. That at least this domestic gold was subject to the d,eclaration of Rule 126 P(2) (ii) can be spelt out without straining language. Its possession is clearly an offence, as held by the courts below. But proof of this depends in good measure on the statement given by the_ appellant to the Customs Officers the same day under s. 107 of the Customs Act This provision is wide in its terms and is clearly designed to facilitate the investigatory process by examination without restriction on person, place or time. Lest it should be misused the Jaw is choosy and requires the empowerment of customs officers by general or special order of the Collector to exercise these larger powers. Does s. 107 enable the interrogation of even the potential delinquent or must it~ confined only to witness who throw light oh the delinquent's contravention of the Jaw 'Any person' in the section certaiuly covers every person including suspect and potential accused. These words of the statute have to be interpreted in the light of the policy and purpose of the law. "The object of s. 107, located in the neighbour· hood of s. 108, indicates that while the normal process of enquiry is facilitated by s. 108, investigatory emergencies are taken care of by s. 107. May be situations arise where the failure to question witness quickly may mean irretrivable loss of valuable material and s. 107 meets this need. The context in which the words "any person" occur, the objr.ct of the provision and the policy underlying Ch. XIII of the Customs Act assume relevance and become material in the construction of the text. Nor are we faced with any difficulty on account of art. 20(3) of the Constitution since the examination is not of an accused person. Nor is there any warrant for saying that the section excludes, as legal limitation, the Customs House as venue for such examina, lion. 'Any place' in the SCftion obviously means any place and con-G trary view is so untenable !ha< counsel did not seriously urge it, Indeed, often times it is more convenient for all concerned to move to the quiet and convenience of an office for recording statements. businessman may be wantonly humiliated if he is arrested and kept in the bazaar and interrogated at length in the presence of crowd which is sure to collect. The pmvision is plain that an authorised Customs official is entitled to examine •ny person at any time, at any place, .. in the course of an enquiry. Whether the statement was extracted by threat of harm, hope of advantage or improper inducement does not concern us as no such case is made out. Ex. 9 has been found by the High . Court to be free from taint. We are not disposed to differ. 9-L447Sur.CI/74

On the proved facts the gold bar is caught in the criminal coils of s. 135, read with ss. Ill and 123, Customs Act, as the High Court has found and little has been made out before us to hold to the contrary.

Guilt being e;tablished, the fifth act of the tragedy is reached. Social and economic offences stand on graver footin; in respect of punishment. The appellant's advocate pleads in elimination of the imprisonment that gold of considerable value has been confiscated, that his client has gone out of business (his licence having been cancelled) and the possibility of further mischief is absent, seven years of criminal proceedings have been long ordeal deterrent enough to inhibit future anti-social adventures, '1td some jail term he has already undergone. Counsel submits that bis client will now turn new leaf if he is not returned to prison. We decline to be moved by this dubious pros-pect. .

The new bariums in penal treatment with hopeful Imes of correc-tion and rehabilitation are statutorily embodied -in India in some special enactments; but crimes professionally committed by decepti-vely respectable members of the community by inflicting severe trauma on the health and wealth of the nation-and the members of this neo-criminal tribe are rapidly escalating-from deterrent exemption to huma~e softness in sentencing.

The penal strategy must be informed by social circumstances, individual factors and the character of the crime. India has been facing an economic crisis and gold smuggling has had disastrous impact on the State's efforts to stabilize the country's economy. Smugglers hoarders, adulterators and others of their ilk have !Jcen busy in their under-world because tlte legal hardware has not been able to halt the invisible economic aggressor inside. The ineffectiveness of prose-cutions in arresting the wave of white-collar crime must disturb the judges' conscience. While we agree that penal treatment should be tailored to the individaal, in the extreme category of professional ?conomic offenders, incarceration is peculiarly potent. When all is said and done, the offences for which the appellant has been con-victed are typical of respectable racketeers who, tempted by the heavy pay:uff face the perils of the law and hope that they could. smuggle on large scale and even if struck by the court they could get away with light blow.

Mr. Justice Abhyankar observed in Bombay case

(State v.

Drupadi([1]) under s .. 5, Imports and Exports Control Act :-

serious view must therefore be taken of such offences which show distressingly growing tendency. The ar~ument that the accused comes from respectabJ, or high family rather emphasise the seriousness of the malady. I( members belonging to high status in life should show scant regard for the laws of this country which are for public good, for .protecting our foreign trade or exchange position of currency

(I) A.1.R. 1965 Born. 6, para 11.

difficultie~, the consequential punishment for the violation of such laws must be equally deterrent. The offences against Export and Import restrictions and customs are of the species of 'economi~' crimes which must be curbed effectively."

We endorse this approach. It may not be out of· place to notice in this context the observations of the Central Law Commission( [1]) against light se11tences on the score that; (i) the case is one of first conviction; (ii) that the matter has been already dealt with by severe departmental penalty; (iii) that the convicted person is young man. To the extent to which gold smugglers and other anti-social operators in the field of crime can be given an unhappy holiday in jail, the courts must help the process on conviction, if judicial institutions are not to be cynically viewed by the community. We confirm the sentence. The appeal fails and is dismissed.

Appeal dismissed.