Appeal No 357 of 1967
Appeal from the judgment and order dated December 9 1963 of the Calcutta High Court in Appeal from Original Order No 110 of 1960
B Sen Sadhu Singh Jagmohan Khanna R N Kapoor and section K Dholakia for the appellants
G L Sanghi B Dutta and section P Nayar for the respondents
87 The Judgment of the Court was delivered by P Jaganmoban Reddy J
This is an appeal by certificate under Article 1 3 3  1  b of the Constitution against the judgment of the Calcutta High Court which dismissed an appeal from an order of the single Judge of that Court discharging a rule granted by it to the appellants calling on the respondents the Collector of Customs and others to show cause why certain orders under various sections of the Sea Customs Act and the Foreign Exchange Regulation Act should not be quashed and why a written complaint made by the respondents under the Foreign Exchange Regulation Act and the case pending in the Court of the Presidency Magis trate Calcutta should not be stayed
The appellant is a registered partnership firm carrying on business of importers exporters commission agents brokers and general merchants
It consists of two partners Girdhari Lal Gupta and Pooran Mal Jain
On the 25th October 1958
the Cashier of the appellant Bhagwandeo Tiwari handed over a consignment of wooden case to the Swiss Airways at Dum Dum Airport for being sent by air freight to Hongkong
According to the consignment note the consignment was being sent by one Ramghawan Singh of Karnani Mansions Park Street Calcutta who in fact was a fictitious person
The Shipping Bill showed that the consignment purported to contain Rassoglla Achar Papar and dried vegetables and it was being sent to one Ishwar Lal 41 Wyndham St Hongkong who is also alleged to be a fictitious person
After the consignment was accepted and when The Customs examined it for clearance on 25th October 1958 before its onward despatch to Hongkong there was found concealed in a specially made secret cavity on the battens nailed to the inner sides of the case Indian currency notes of Rs 51000 
An investigation was set on foot and on 22nd January 1959 a search warrant was issued by the Presidency Magistrate pursuant to which the Customs Officers caused a search to be made of the office of the firm and the residences of the appellant s partners
In the course of search account books and other documents were seized
This investigation revealed that the Cashier Bhagwandeo Tiwari had signed the consignment note as Ramchandra which as the subsequent writings showed were in his hand
Even the consignment note appears to have been typed on the typewriter of the appellant firm
It was further alleged that from a comparison of the consignment note with a letter admittedly sent out by the appellant firm and signed by one of its partners Girdhari Lal Gupta it became evident that the slip seized from the office of the appellant firm had contained entries to show that Bhagwandeo Tiwari was the person who actually transported and booked the offending consignment in question and that he made an entry 88 of Rs 12373 being the Air freight paid for its transport to Hongkong which was the exact amount shown on the consignmer the account slip was in his handwriting and that the expense note
Bhagwandeo Tiwari it was said had in fact admitted the and charges shown therein were also found in the books of account of the appellant firm
In view of this evidence the customer authorities served a notice on the appellant firm on April 2 1959 by which after setting out in detail the aforesaid facts and after pointing out that the exportation of Indian currency out of India was in contravention of section 8 2 of the Foreign Exchange Regulations Act 1947 read with the Reserve Bank of India Notification dated 27 2 1951 as specified therein it was asked to show cause and to produce within four days of the receipts of the notice the permit if any of the Reserve Bank of India for export of the Indian currency and if it did not do so it would be liable for prosecution under section 231 read with section 82 of the Foreign Exchange Regulations Act
On 13 4 1959 the appellant firm replied to the notice denying that the firm had anything to do with the despatch of the box containing currency notes that it was not aware of any person by the name of Ramghawan Singh or Ishwar Lal or that Bhagwandeo Tiwari had ever despatched the consignment in question or visited any Air office in connection therewith
It may be mentioned en passant that in the High Court in the reply affidavit affirmed on 11 1 1960 to the affidavit in opposition Girdhari Lal Gupta one of the partners of the firm went even to extent of denying that Bhagwandeo Tiwari was the Cashier of the firm notwith standing the fact that in the earlier reply to the show cause notice as also in the Writ Petition it was tacitly assumed that he was the Cashier
Apart from the criminal prosecutions that were launched against the partners in the penalty proceedings which were initiated by the aforesaid show cause notice the firm was held to be knowingly concerned in the offence and accordingly a fine of Rs 1000 was imposed on it under section 1673 of the Sea Customs Act with a further personal liability of Rs 1000under section 16737 of the said Act
It was further fined Rs 510001 under section 1678 of the Act read with section 23 1 of the Foreign Exchange Regulations Act
Apart from these fines the currency notes of Rs 51000 which were seized were confiscated
This order was challenged before the single Judge of the Calcutta High Court who as already stated had issued a rule but later discharged it
Against that order an appeal was filed 89 Reddy J but that also was dismissed
Of the four points that were urged in that appeal the first three have been reiterated before us on behalf of the appellant viz  1 Currency notes are not goods  and there fore the provisions of section 1673 8 and 37 of the Sea Customs Act are not attracted 2 A firm  is not a legal entity and therefore it cannot be a person within the meaning of any of the above provisions of law 3 Even if a firm be a person within the meaning of the said provisions no penalty can be imposed on the firm or any of its members unless it appears from the evidence that the members of the firm had consciously taken any steps to violate the provisions of law even so only the particular member against whom there is evidence of guilt can be held liable
Before dealing with the above contentions it will be necessary to consider the relevant provisions of the Foreign Exchange Regulations Act as also those under the Sea Customs Act Sections 81 23a b 1A 23A 23B and 23C of the Foreign Exchange Regulations Act and section 19 1673
8 and 37 of the Sea Customs Act are relevant for the purpose of this appeal
These are given below  8 1
The Central Government may by notification in the Official Gazette order that subject o such exemptions if any as may be contained in the notification no person shall except with the general or special permission of the Reserve Bank and on payment of the fee if any prescribed bring or send into India any gold or silver or any currency notes or bank notes or coin whether Indian or foreign
Explanation The bringing or sending into any port or place in India of any such article is aforesaid intended to be taken out of India without being removed from the ship or conveyance in which it is being carried shall nonetheless be deemed to be a bringing L864SupCI72 90 or as the case may be sending into India of that article for the purposes of this section
2 231 If any person contravenes the provisions of section 4 section 5 section 9 or sub section 2 of section 12 or of any rule direction or order made thereunder he shall a be liable to such penalty not exceeding three time  the value of the foreign ex change in respect of which the contravention has taken place or five thousand rupees whichever is more as may be adjudged by the Director of Enforcement in the manner hereinafter provided or b upon conviction by a Court be punish able with imprisonment for a term which may extend to two years or with fine or with both
231A Whoever contravenes a any of the provisions of this Act or of any rule direction or order made thereunder other than those referred to in subsection 1 of this section and section 19 shall upon conviction by a court be punishable with imprisonment for a term which may extend to two years or with fine or with both b any direction or order made under sec tion 19 shall upon conviction by a court be punishable with fine which may extend to two thousand rupees
23A Without prejudice to the provisions of section 23 or to any other provision contained in this Act the restrictions imposed by sub sections 1 and 2 of section 8 sub section 1 of section 12 and clause a of subsection 1 of section 13 shall be deemed to have been imposed under section 19 of the 8 of 1878 and all the provisions of that Act shall have effect accordingly except that section 183 thereof shall have effect as if for the word shall  therein the word may  were substituted
23B Whoever attempts to contravene any of the provisions of this Act or of any rule direction or order made thereunder shall be deemed to have contravened that provision rule direction or order as the case may be
23C1 If the person committing a contravention is a company every person who at the time the contravention was committed was incharge of and was responsible to the company for the conduct of the business of the Company as well as the company shall be deemed to be guilty of the contravention and Shall be liable to be proceeded against and punished accordingly Provided that nothing contained in this sub section shall render any such person liable to punishment it  he proves that the contraven tion took place without his knowledge or that he exercised ill due diligence to prevent such contravention
2 Notwithstanding anything contained in subsection 1 where a contravention tinder this Act has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of or is attributable to any neglect on the part of any director manager secretary or other officer of the company such director manager secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly
 19
The Central Government may from time to time by notification in the official Gazette prohibit or restrict the bringing or taking by sea or by land goods of any specified descrip tion into or out of India across any customs frontier as defined by the Central Government
The offences mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the 9 2 same with reference to such offences respectively Offences Section of Penalties
this Act to which offence has reference
1 2 3 3
If any person ship or General such person shall be aid on the shipment or lan liable to a penalty ding of goods or knowing not exceeding one keep or conceal or knowingly thousand rupees
permit or procure to be kept or concealed to be shipped or landed or intended to be shipped or landed contrary to provision of this Act or if any person be found to have 11 been on board of any vessel liable to confiscation on account of the commission of an offence under No 4 of this section while such vessel is within any bay river creek or arm of the sea which is not a port for the shipment and landing of goods
If any goods the importation 18  19 such good shall or exportation of which is for be liable to the time being prohibited or rest to confiscation restricted by or under Chapter IV of this and Act be imported into or exported from India contrary to such prohibition any person conc or restriction or erned in any such offence shall be liable to a pena lty not exceedig three times the value of the goods or not exceeding one thousand rupees
if any attempt be made so to import or export any such goods or if any such goods be found in any package produced to any officer of Customs as containing no such goods or if any such goods or any dutiable goods be found either before or after landing or shipment to have been concealed in any manner on board of any vessel within the limits of any port in India or if any goods the exportation of which is prohibited or restricted as aforesaid be brought to any wharf in order to be put on board of any vessel for exportation contrary to such prohibition or restriction
93 37
If it be found when any 86  137 such package tog goods are entered at or brought ether with the to be passed through a whole of the good custom house either for contained therein importation or exportation that shall be liable to confiscation and every person concerned in any such offence shall liable to a pen lty not exceeding one thousand rupees
athe packages in which they are contained differ widely from the description given in the bill of entry or application for passing them or b the contents thereof have been wrongly described in such bill or application as regards the denominations characters or conditions according to which such goods are chargeable with duty or are being imported or exported or c the contents of such packages have been misstated in regard to sort quality quantity or value or dgoods not stated in the bill of entry or application have been concealed in or mixed with the articles specified therein or have apparently been packed so as to deceive the officers of Customs
and such circumstance is not accounted for to the satisfaction of the Customs Collector
 A perusal of these provisions would show that no gold or silver or any currency notes or Bank notes or coin whether Indian or foreign can be sent to or brought into India nor can any gold precious stones or Indian currency or foreign exchange other than foreign exchange obtained from an authorised dealer can be sent out of India without the general or special permission of the Reserve Bank of India
These restrictions by virtue of section 23A of the Foreign Exchange Regulation Act are deemed to have been imposed under section 19 of the and all the provisions of the latter Act shall have effect accordingly except section 183 thereof shall have the effect as if for the word shall  therein the word may  were substituted
What section 23A does is to incorporate by reference the provisions of the by deeming the restrictions under section 8 of the Foreign Exchange Regulation Act to be prohibitions and restrictions under section 19 of the 
The contention is that since section 19 restricts the bringing or taking by sea or by land goods of my specified description into or out of India these restrictions are not applicable to the bringing in or taking out the currency notes which are not goods 94 within the meaning of that section and therefore the appellant is not guilty of any contravention of section 19 of the and cannot be subjected to the penal provisions of the said Act
This argument in our view is misconceived because firstly it is a well accepted Legislative practice to incorporate by reference if the Legislature so chooses the provisions of some other Act in so far as they are relevant for the purposes of and in furtherance of the scheme and objects of that Act and secondly that merely because the restrictions specified in section 8 of the Foreign Exchange Regulation Act are deemed to be prohibitions and restrictions under section 19 of the  those prohibitions and restrictions are not necessarily confined to goods alone but must be deemed for the purposes of the Foreign Exchange Regulation Act to include therein restrictions in respect of the articles specified in section 8 thereof including currency notes as well
The High Court thought that there is no definition of goods in the and that contained in the Sale of Goods Act which excludes money is inapplicable inasmuch as that Act was a much later statute than the 
It is however unnecessary to consider this aspect because even if the currency notes are not goods the restrictions prescribed in section 8 of the Foreign Exchange Act cannot be nullified by section 23A thereof which incorporates section 19 of the 
We cannot attribute to the Legislature the intention to obliterate one provision by another provision of the same Act
On the other hand we construe it as furthering die object of the Act which is to restrict the import into or export out of India of currency notes and to punish contravention of such restrictions
The second contention that because the firm is not a legal entity it cannot be a person within the meaning of Section 8 of the Foreign Exchange Regulation Act or of section 167 3 8 and 37 of the  is equally untenable
There is of course no definition of person  in either of these Acts but the definition in section 2 42 of the  or section 23 of the Act of 1868 would be applicable to the said Acts in both of which person  has been defined as including any company or association or body of individual whether incorporated or not
It is of course contended that this definition does not apply to a firm which is not a natural person and has no legal existence as such clauses 3 8 and 37 of section 167 of the are inapplicable to the appellant firm
In our view the explanation to section 23C clearly negatives this contention in that a company for the purposes of that section is defined to mean any body corporate and includes a firm or other association of individuals and a Director in relation to a firm 9 5 means a partner in the firm
The High Court was clearly right in holding that once it is found that there has been a contravention of any of thee provisions of the Foreign Exchange Regulation Act read with by a firm the partners of it who are in charge of its business or are responsible for the conduct of the same cannot escape liability unless it is proved by them that he contravention took place without their knowledge or the exercised all due diligence to prevent such contravention
There is also no warrant for the third submission that unless it appears from the evidence that members of the firm had consciously taken any steps to violate the provisions of law and even then only the particular members against whom there is evidence of guilt can alone be held liable
This contention was said to be based on a decision of this Court in Radha Krishan Bhatia vs Union of India and others1 that as the person concerned  specified in section 1678 of the is the person actually involved or engaged or mixed up in contravening the restrictions imposed under the Foreign Exchange Act or the  he must be the person who must be shown to be actually concerned
That was also a case under section 1678 of the where in fact a number of gold bars held to be smuggled were recovered from the person of the appellant
The single Bench of the Punjab High Court ha allowed the Writ Petition of the appellant on he ground that the Collector had not recorded a finding that the appellant was connected with the act of smuggling gold into the country
This finding was set aside on a Letters Patent Appeal and the writ petition was dismissed
This Court held that the concern of the appellant in the commission of the offence must be at a stage prior to the completion of the offence of illegal importation of gold into the country
The mere finding of fact recorded by the Collector of Customs about the smuggled old being recovered from the person of he appellant was not sufficient to conclude that the appellant was concerned in the illegal importation of gold into the country and therefore liable for penalty under section 1678 of the Act
What the order of the Collector of Customs must show is that be had considered the question of the person being concerned in the commission of the offence of illegal importation of the goods
It should further indicate that the matters he had considered had a bearing on the question and the reasons for his arriving at that conclusion
This has really no bearing on the question before us because under section 23B even an attempt to contravene any of the provisions of the Act or of any rule direction or order made thereunder shall be deemed to have contravened that provision rule direction or order as the 1 96 case may be
in respect of this very incident where the petitioners were prosecuted it was held by this Court in Girdhari Lal Gupta and another vs D N Mehta Assistant Collector of Customs and another1 that Girdhari Lal Gupta one of the two partners and Bhagwandeo Tiwari Cashier have been rightly convicted under the provisions of the Foreign Exchange Regulation Act for contravention of the restrictions imposed under section 82 read with section 231A of the Foreign Exchange Regulation Act
In that case it was contended that there is no evidence to show that the contravention took place with the knowledge of Girdhari Lai Gupta or that he did not exercise due diligence to prevent such contravention
That contention was negatived because he had not only stated under section 342 that he alone looks after the affairs of the firm but it had been found that there were entries in his account books
It is true that the relevant provisions of the are penal in character and the burden of proof is on the Customs authorities to bring home the guilt to the person alleged to have committed a particular offence under the said Act by adducing satisfactory evidence
But that is not to say that the absence of direct evidence to connect a person with the offence will not attract the penal provisions to establish the guilt in a criminal proceeding of the type which the customs authorities have to take
The evidence of the kind which has been adduced in this case would be sufficient to lead to the conclusion that the partner of the firm was interested in or involved in attempting to export Indian currency notes out of India
As observed by this Court in Thomas Dana vs The State of Punjab2 while dealing with section 167 of the  that All criminal offences are offences but all offences in the sense of infringement of law are not criminal offences
Likewise the other expressions have bean used in their generic sense and not as they are understood in the Indian Penal Code or other laws relating to criminal offences 
Out of more than 82 entries in the schedule to section 167 it is only about a dozen entries which contemplate prosecution in the criminal sense the remaining entries contemplate penalties other than punishments for a criminal offence
In the Additional Collector of Customs vs Sita Ran Agarwal3 to which the High Court has referred while dis missing the appeal from the judgment of the Calcutta High Court this Court had stated that the High Court was right when it observed that if any one is interested or consciously takes any step whatever to promote the object of illegally bringing bullion into the country then even if no physical connection is established between him and the thing brought he will be guilty
 In that case the respondent Sita Ram Agarwal who was seen moving 1  3 Civil Appeal No 492162 decided on 14 9 62
2 1959 Suppl
1 SCR 274 97 in the company of one Bhola Nath Gupta on the western Pavement of Jatindra Mohan Avenue Calcutta had proceeded in the direction of a taxi which had come to the place where they were and on a signal being flashed a Chinese national alighted therefrom shook hands with the respondent after which all the three boarded the taxi
A police constable who was on the spot raised an alarm and secured the respondent and his companion with the help of the members of the public
All of them were taken to the police station for the purpose of interrogation but the Chinese national tried to get away and started to run
He was chased and eventually secured
Before his apprehension
however he was seen to drop three packets which were found to contain 23 bars of illicit gold
The respondent was charged as a person concerned in the offence of attempting to import contraband gold under section 1678 of the 
The High Court while holding that there was no evidence to establish that he was in conscious relation with the gold observed in order that a person may be said to be so concerned some facts have to be proved which will establish that he was in conscious relation with the gold in one or other of the several successive steps preceding its actual receipt into the country
In order that he was concerned in the offence the High Court further pointed out that there need be no physical connection between the gold and the person charged and if the offence did not relate to his being concerned in the importation of the gold
but related to his having something to do with smuggled gold the position might have been different
The facts of the instant case clearly disclosed as was observed by the High Court  a well laid plain
We have earlier stated that the currency notes were secreted in a cavity and were sought to be despatched out of the country in a package which ostensibly looked inocuous
containing eatables
The manner in which the attempt was made was to hood wink the Customs officials and escape their detection
Further the consignor and the consignee were not shown as real persons but were fictitious so that even if the attempt to smuggle out of the country the currency notes was detected the real persons could not be traced
The charges and expenses incurred in connection with the despatch found in the entries in the books of account of the firm were the same a those relating to the offending package which was being despatched to Hongkong
The freight mentioned in the account slip the exact amount which appears on the consignment note in respect of that offending package
The amount sought to be sent is half a lakh of rupees which can hardly be within the means of the Cashier
leading to the inescapable inference that the firm through its partners was concerned in the attempt to transgress the restrictions under section 8 of the Foreign Exchange Regulation Act and liable to penal action by virtue of section 23A 98 under the provisions of the 
On these facts as established the High Court came to the conclusion and in our view rightly that it was not unreasonable to infer that it was the firm which was interested in sending the currency notes out of India in a clandestine manner
In this view the appeal has no merits and it is dismissed with costs
SN Appeal dismissed


Summary:
The appellant a partnership firm having 2 partners carried on business of importers and exporters etc
The Cashier of the firm handed over a wooden case to the Swiss Airways at Dum Dum for being sent to Hong Kong by air
According to the consignment note the consignment was being sent by one R of Karnani mansions Calcutta who was a fictitious person
The shipping bill showed that the consignment purported to contain food and dried vegetables and was sent to 1 of Hong Kong also a fictitious person
After the consignment was accepted and when customs examined it for clearance it was found that it contained Rs 51000 in Indian currency
On investigation a search warrant was issued by the Presidency Magistrate and the office of the firm and the residence of partners were searched
In the course of search accounts books and other documents were seized
Investigation revealed that the Cashier had signed the consignment note as Rs which as the subsequent writings showed were in his hand
Even the consignment note appears to have been typed on the type writer of the appellant firm
Thereafter Customs authorities served a notice on the appellant pointing out that exportation of Indian currency out of India was in contravention of section 8 2 of the Foreign Exchange Regulations Act 1947 read with Reserve Bank Notification dated 27 2 1951 as specified therein and it was asked to show cause and to produce within 4 days the permit if any of the Reserve Bank of India failing which it would be liable for prosecution under Section 231 read with section 82 of the Foreign Exchange Regulations Act
The appellant denied that the firm bad anything to do with the case
Apart from criminal prosecutions against the partners a fine of Rs 1000 under section 1673 of the Sea Customs Act with a further personal liability of Rs 1000 section 16737 of the Act was imposed against the firm
It was further fined Rs 51000 section 1678 of the Act read with section 231 of the Foreign Exchange Regulations Act
Apart from these the currency notes of Rs 51000 which were seized were also confiscated
This order was challenged before the single judge of the Calcutta High Court who issued a rule but later discharged it
An appeal against that order was also dismissed
In appeal to this Court three points raised before the Appellate Court were also reiterated  1 Currency Notes are not goods  and therefore the provisions of section 1673 8 and 37 of the Sea Customs Act are not attracted
2 A firm is not a legal entity and therefore it cannot be a person  within the meaning of any of the above provisions of law
3 Even if a firm  be a person no penalty can be imposed on the firm or any of its members unless the members have consciously taken any step to violate the provisions of law 8 6 even so only the partner member against whom there is evidence of guilt can be held liable
Dismissing the appeal HELD P i section 23A of the Foreign Exchange Regulations Act incorporates by reference the provisions of the Sea Customs Act by deeming the restrictions under section 8 of the Foreign Exchange Regulations Act to be prohibiting and restricting under section 19 of the Sea Customs Act
The legislature can always incorporate by reference the provisions of some other Act if they are relevant for the purposes of the scheme and object of that Act
Restrictions specified in section 8 of the Foreign Exchange Regulations Act are deemed to be prohibitions and restrictions mentioned under section 19 of the Sea Customs Act
The prohibitions mentioned under section 8 are not necessarily confined to goods alone but must be deemed for the purposes of Foreign Exchange Regulations Act to include therein restrictions in respect of the articles specified in section 8 thereof including currency notes as well
94 B ii Although there is no definition of the word person  in either of
the Acts the definition in section 242 of the or Section 23 of the Act of 1863 would be applicable to the present Acts
in both of which person has been defined as including any Company or association or body of individuals whether incorporated or not
Further the explanation to section 23C clearly envisages that a company for the purposes of that Section is defined to mean any body corporate and includes a firm or other association of individuals and a Director in relation to a firm also means a partner of the firm
Therefore for he purposes of Foreign Exchange Regulations Act and Sea Customs Act
a registered partnership firm L is a legal entity 
94G iii From the evidence it was clear that the appellant attempted to hoodwink the customs officials currency notes secreted in a cavity that the consigner and consignee were not shown as real persons the charges and expenses incurred
in connection with the despatch were found in the entry in the books of account of the firm that the amount sought to be sent was half a lakh of rupees which could hardly be within the mean  of the Cashier and the High Court was right in holding that it was the firm which was interested in sending the currency notes out of India II a clandestine manner198 A Radha Krishna Bliatia vs Union of India  Ors Thomas Dana vs The State of Punjab 1959 Supp 1 SCR 274 and Additional Collector of Custo is vs Sita Ram Agarwal CA No 492 of 1962 decided on 14 9 1962 referred to and distinguished