iminal Appeal No 12 of 1957
Appeal from the judgment and order dated September 5 1956 of the Calcutta High Court in Government Appeal No 7 of 1954 arising out of the judgment and order dated April 3 1954 of the Court of 1st Class Magistrate at Alipore
Ishwar Lal C Dalal and 1
N Shroff for the appellant
H J Umrigar and R H Dhebar for the respondent
May 7
This is an appeal on a certificate granted by the Calcutta High Court
Two points have been urged before the Bench of the High Court which granted the certificate
The first was that the search conducted by the Customs officials which had resulted in the detection of the currency notes on the person of the appellant had not been a legal search and consequently no proceedings could be based on the purported detection made
This point was rejected by the Bench
The second point urged on behalf of the appellant was that on September 16 1952 when the 95 Magistrate issued the warrant of arrest against the appellant he could not have done so without having previously taken cognizance of the offence
Since however the authorization required under section 233 of the Foreign Exchange Regulation Act VII of 1947 was not obtained till January 27 1953 the cognizance taken by the Magistrate on September 16 1952 was without jurisdiction
If the initiation of the proceedings was without jurisdiction the conviction could not stand
The High Court thought that the contention of the appellant raised a question of law and granted the requisite certificate for appeal to this Court
The prosecution case was that on September 7 1952 the appellant went to Dum Dum Aerodrome with a view to boarding a plane for Hong Kong
The plane was due to leave the airport at 8 30 am
The appellant had to go through the customs formalities before he could board the plane
On an enquiry by the Customs Officers as to whether he had any other articles besides what he had declared in the declara tion form the appellant answered in the negative
His baggage was then examined but no objectionable article was detected therein
The Customs Officers however noticed a pouch of somewhat unusual size which aroused their suspicion
Thereafter the appellant was subjected to personal search
When they were about to search his person he let drop his trousers
The appellant was requested to lift up the trousers and wear them again which he did
On the search of the trousers a sum of Rs 25000 in Indian currency notes was discovered in two secret pockets
They were concealed from below the surface and opened from the inside
On September 11 1952 the Reserve Bank of India authorized Inspector section B Mitra of the Special Police Establishment Calcutta to make a representation to the Additional District Magistrate 24 Parganas hereinafter referred to as the Additional District Magistrate for permission to proceed against the appellant as required under section 193 of the Foreign Exchange Regulation Act 1947
Mitra thereupon applied to the Additional District Magistrate on September 16 1952 for a search warrant 96 to be issued which was allowed
Mitra on the same date also applied to the same Magistrate that a warrant of arrest might be issued against the appellant
This was also allowed and a warrant of arrest was issued by the Additional District Magistrate and appellant was thereafter arrested and released on bail with a direction to appear before the Additional District Magistrate on September 19
On September 19 he was released on bail by the Additional District Magistrate in the sum of Rs 50000 with 10 sureties of Rs 5000 each
On November 19 the appellant asked for exemption from attending the court on the succes sive dates fixed for the case but the application was refused
On January 27 1953 the Reserve Bank of India authorized Mitra to file a complaint against the appellant
On February 21953 a complaint was filed against the appellant charging him with an offence under section 82 of the Foreign Exchange Regulation Act read with section 19 of the Sea Customs Act and notification No FERA 10555 RB dated February 27 1951
Thereafter the appellant was tried by another Magistrate Mr Sinha who acquitted him under section 258 of the Code of Criminal Procedure
The currency notes which had been seized by the Customs Officials were directed to be relassed
Against the appellant s acquittal the State of West Bengal preferred an appeal to the High Court
The High Court allowed the appeal and convicted the appellant of the offence with which he had been charged
He was sentenced to pay a fine of Rs 1000 in default to suffer rigorous imprisonment for three months
The order of the Magistrate directing the release of the currency notes was set aside
The main submission made on behalf of the appellant before us has been that the Additional District Magistrate having taken cognizance of the offence on September 16 1952 and as the provisions of section 233 of the Foreign Exchange Regulation Act had not been complied with the entire proceedings before him and the Magistrate who tried the case were without jurisdiction
The subsequent authorization by the Reserve Bank on January 27 1953 and the filing of 97 the complaint on February 21953 could not make legal proceedings which had already commenced without jurisdiction
It was also urged that the facts found did not attract the provisions of section 19 of the Sea Customs Act 8 of 1878 as it could not be said that at the moment the appellant was searched by the Customs Officials he was taking out of India across any customs frontier as defined by the Central Government the currency notes in question
It was also urged that explanation offered by the appellant was accepted by the trying Magistrate and the High Court ought not to have set aside the acquittal of the appellant there being no good ground why his explanation should not have been accepted
The version of the appellant as to how the sum of Rs 25000 in currency notes was with him was that he was not searched at all at the Customs barrier
had taken out the currency notes in question from his trouser pocket and handed over the same to the Customs Officers stating the circumstances under which he was carrying the same on his person and asked for a receipt
The Customs Officers instead of giving him a receipt falsely charged him with smuggling the currency notes out of India without any permit
According to the appellant he had applied to the Reserve Bank of India at Calcutta for a permit and had sent an application for that purpose to one Joshi in Calcutta
He failed to receive the permit upto the last moment
His intention was to hand over the money to the Customs Officers for safe custody
In other words the appellant s version in substance was that as he had failed to get the permit upto the last moment he voluntarily handed over the currency notes in question to the Customs Officers at the customs barrier for safe keeping
He had at no time any intention to carry out of India the said currency notes without a permit
This version of the appellant was accepted by the trying Magistrate who acquitted him
The High Court however did not accept his version
It was urged that the appeal is before us on a certificate and as the High Court had come to a different 13 98 finding on a question of fact to what the trying Magistrate had found it was open to the appellant to urge that he was entitled to question the findings of the High Court
It is true that the High Court has taken a different view to that taken by the trying Magistrate and has rejected the appellant s case that he had voluntarily handed over the currency notes in question to the Customs Officers in the circumstances mentioned by him and that he had no intention to take that money out of India without a permit
Nonetheless the finding of the High Court is on a question of fact
We can see no particular reason in this case to go be
hind the findings of fact arrived at by the High Court
The High Court gave very good reasons for accepting the evidence of the prosecution witnesses as to the circumstances in which the currency notes in question were recovered from the appellant when his person was searched
An important circumstance which might have supported the appellant s case namely whether he had applied to the Reserve Bank of India for a permit to take out of India currency notes to the extent of Rs 25000 was considered by the High Court
It found on the evidence of the Superintendent of the Reserve Bank that the Reserve Bank received no application from the appellant before September 7 1952 nor had the Reserve Bank granted the permission to the appellant to take any currency notes out of India
It was on September 16 that the Reserve Bank had received an application of the appellant forwarded by one GC Joshi by his letter dated September 15 1952
The application of the appellant bore the date September 2 1952
The High Court thought that there were grounds for suspecting that this application was antedated
The High Court came to the conclusion that there was no evidence to show that any such application was written or submitted on September 2 1952
It does seem extraordinary that if the appellant had sent the application to Joshi on September 2 1952 that Joshi should not have sent on that application to the Reserve Bank till September 15 1952
It is to be remembered that the incident had already taken place on September 7 1952 and in that 99 connection on September 15 and 16 1952 Inspector Mitra of the Special Police Establishment Calcutta had applied for a search warrant and a warrant of arrest respectively against the appellant
On arrest under the terms of that warrant he was released on bail by the police with a direction to appear before the court on September 19
The appellant had therefore ample opportunity to concoct an application for a permit after September 7 and to antedate it getting Joshi on September 15 1952 to forward the same to the Reserve Bank
It is inconceivable that a person who was leaving for Hong Kong and wished to carry such a large sum of money as Rs 25000 in currency notes would have applied on September 2 when he was actually to fly on September 7 1952
Further it would not be unreasonable to suppose that the appellant would have so timed his arrival at Calcutta as would have enabled him to make the necessary enquiries from Joshi or the Reserve Bank whether the permit asked for had been granted
It is impossible to believe that he had arrived at Calcutta and had gone direct to the Dum Dum Aero drome without making any enquiry from Joshi at least whether the permit asked for had been granted
Normally one would expect the appellant to reach Calcutta in sufficient time to make the necessary enquiries and in the absence of a permit having been granted to have left the currency notes for safe custody with Joshi or some other trusted person
It is an entirely unacceptable story which the appellant put forward that he waited upto the last moment at the aerodrome for the necessary permit and not having got it requested the Customs Officers to keep the currency notes for safe custody
It is significant that the appellant did not examine Joshi as a witness in support of his case
It is not unlikely that if he had done so some inconvenient results would have followed in consequence of close questioning of Joshi regarding the entire transaction
We have therefore no reason to think that the High Court had erred in suspecting that the application to the Reserve Bank was antedated
On this finding it is apparent that the very foundation of the defence of the appellant is false
That the appellant did not hand 100 over the currency notes of Rs 25000 at the customs barrier but was searched when the customs formalities were gone through is not only deposed to by a number of Witnesses holding responsible positions but is deposed to by PW 4 Panna Lal Dey Money Exchanger of Dum Dum Airport
Panna Lal Dey s evidence was accepted by the High Court and after having examined his evidence we are satisfied that there is no reason to distrust his testimony
Reference has been made to some of the evidence on a question of fact in order to  satisfy ourselves whether the finding of the High Court was correct
We are satisfied that the finding of the High Court is the only view which could reasonably be taken in a case like this
It is true that the appellant had not taken the currency notes in question out of India across any customs frontier as defined by the Central Government
He had however clearly attempted to take the same out of India
In such a case no question of his crossing the customs frontier arises
That an attempt to take out the currency notes in question is an offence punishable under the Sea Customs Act is clear from the provisions of section 167 Item 8
The Foreign Exchange Regulation Amendment Act 1952 VIII of 1952 came into force in February 1952
By this Act section 23B was introduced into the Foreign Exchange Regulation Act
Section 23B makes punishable an attempt to contravene the provisions of the Foreign Exchange Regulation Act or any rule direction or order made thereunder
Furthermore this point was not taken before the Bench which granted the certificate of fitness for appeal to this Court
Be that as it may the facts found clearly established that the appellant attempted to take out of India the currency notes in question
He had entered the customs enclosure and had signed the declaration form
He had been questioned as to whether he had any other article than those mentioned in the declaration form which he wished to declare and he had answered in the negative
On his personal search he dropped his trousers on the ground
He was asked to pick up his trousers and wear them again
On search of the trousers Rs 25000 101 in currency notes were found concealed in the inner pockets
The appellant had his ticket to proceed to Hong Kong by a plane which was due to leave Dum Dum Airport at 8 30 am and the customs formalities were done in connection with that flight
If the appellant had successfully cleared himself from the customs formalities all that was left for him to do was to board the plane which would take him out of India
These circumstances establish beyond all reasonable doubt that the act of the appellant had gone beyond the stage of preparation and was clearly an attempt to carry the sum of Rs 25000 in currency notes out of India without a permit from the Reserve Bank
We cannot accept the argument made on his behalf that the act of the appellant on the facts found amounted merely to preparation and not an attempt
The main submission on behalf of the appellant was directed towards establishing that the entire proceedings before the Additional District Magistrate and the trying Magistrate were without jurisdiction as cognizance of the offence had been taken on September 16 1952 in contravention of the provisions of section 233 of the Foreign Exchange Regulation Act there being on that date no complaint in writing made by an officer authorised in that behalf by the Central Government or the Reserve Bank of India by a general or a special order
It is therefore necessary to see in the circumstances of the present case on what date cognizance of the offence was taken
In order to ascertain this certain provisions of the Foreign Exchange Regulation Act and the Code of Criminal Procedure will require con sideration
Under section 193 of the Foreign Exchange Regulation Act a District Magistrate or Magistrate of the first class may on a representation in writing made by a person authorized in this behalf by the Central Government or the Reserve Bank and having reasons to believe that there had been contravention of any of the revisions of that Act issue a search warrant
Inspector Mitra was so authorized by the Reserve Bank on September 11 1952 and in pursuance of that authorization applied to the Additional District Magistrate for the issue of a search warrant
Under 102 this section the search warrant is issued for the purposes of conducting investigation under that Act
On September 16 Mitra applied for a warrant of arrest against the appellant
This application was obviously made under the Criminal Procedure Code The offence which the appellant is alleged to have committed was a non cognizable offence
Under section 1552 of the Code of Criminal Procedure no police officer shall investigate a non cognizable offence without the order of a Magistrate of the first or second class having power to try such a case or commit the same for trial or of a Presidency Magistrate
Inspector Mitra s application definitely states that he in asking for permission to investigate a non cognizable offence under section 155 Cr
The order of the Additional District Magistrate directing the issue of a search warrant and the word  permitted  contained therein we consider in the context of the application to mean that he granted the sanction for investigation as asked for
Under section 1553 of the Code a police officer being permitted to investigate a non cognizable offence may exercise the same powers in respect of the investigation as an officer incharge of a police station may exercise in a cognizable case except that he has not the power to arrest without a warrant
It was necessary therefore for Inspector Mitra to obtain from the Additional District Magistrate a warrant of arrest
It is clear therefore that upto September 16 1952 the Additional District Magistrate had not taken cognizance of any offence
On September 19 1952 the appellant appeared before the Additional District Magistrate who recorded the following order  He is to give bail of Rs 50000 with ten sureties of Rs 5000 each
Seen Police report
Time allowed till 19th November 1952 for completing investigation
 On November 19 1952 on perusal of the police report the Magistrate allowed further time for investigation until January 2 1953 and on that date time was further extended to February 2 1953
in the meantime on January 27 1953 Inspector Mitra had been authorized under section 233b of the Foreign Exchange Regulation Act to file a complaint
Accordingly a 103 complaint was filed on February 21953
The Additional District Magistrate thereon recorded the following order  Seen the complaint filed to day against the accused Narayandas Bhagwandas Madhavdas under section 82 of the Foreign Exchange Regulation Act read with Section 23B thereof read with Section 19 of the Sea Customs Act and Notification No FERA 10551 dated the 27th February 1951 as amended issued by the Reserve Bank of India under Section 82 of the Foreign Exchange Regulation Act
Seen the letter of authority
To Sri M N Sinha SDM Sadar Magistrate 1st class spl
empowered for favour of disposal according to law
Accused to appear before him
 Accordingly on the same date Mr Sinha then recorded the following order  Accused present
Petition filed for reduction of bail
Considering all facts bail granted for Rs 25000 with 5 sureties
To 26th March 1952 and 27th March 1952 for evidence
 It is clear from these orders that on September 19 1952 the Additional District Magistrate had not taken cognizance of the offence because he had allowed the police time till November 19 1952 for completing the investigation
By his subsequent orders time for investigation was further extended until February 2 1953
On that date the complaint was filed and the order of the Additional District Magistrate clearly indicated that he took cognizance of the offence and sent the case for trial to Mr Sinha
It would also appear from the order of Mr Sinha that if the Ad ditional District Magistrate did not take cognizance he certainly did because he considered whether the bail should be reduced and fixed the 26th and 27th of March for evidence
It was however argued that when Mitra applied for a search warrant on September 16 1952 the Additional District Magistrate had recorded an order thereon  Permitted
Issue search warrant
 It was on this date that the Additional District Magistrate took cognizance of the offence
We cannot agree with this submission because the petition of Inspector Mitra clearly states that  As this is non cognizable offence I pray that you will kindly permit 104 me to investigate the case under section 155 Cr P C That is to say that the Additional District Magistrate was not being asked to take cognizance of the offence
He was merely requested to grant permission to the police officer to investigate a non cognizable offence
The petition requesting the Additional District Magistrate to issue a warrant of arrest and his order directing the issue of such a warrant cannot also be regarded as orders which indicate that the Additional District Magistrate thereby took cognizance of the offence
It was clearly stated in the petition that for the purposes of investigation his presence was necessary
The step taken by Inspector Mitra was merely a step in the investigation of the case
He had not himself the power to make an arrest having regard to the provisions of section 1553 of the Code of Criminal Procedure
In order to facilitate his investigation it was necessary for him to arrest the appellant and that he could not do without a warrant of arrest from the Additional District Magistrate
As already stated the order of the Additional District Magistrate of September 19 1952 makes it quite clear that he was still regarding the matter as one under investigation
It could not be said with any good reason that the Additional District Magistrate had either on September 16 or at any subsequent date upto February 2 1953 applied his mind to the case with a view to issuing a process against the appellant
The appellant had appeared before the Magistrate on February 2 1953 and the question of issuing summons to him did not arise
The Additional District Magistrate however must be regarded as having taken cognizance on this date because he sent the case to Mr Sinha for trial
There was no legal bar to the Additional District Magistrate taking cognizance of the offence on February 2 1953 as on that date Inspector Mitra s complaint was one which he was authorized to make by the Reserve Bank under section 233b of the Foreign Exchange Regulation Act
It is thus clear to us that on a proper reading of the various orders made by the Additional District Magistrate no cognizance of the offence was taken until February 2 1953
The argument that he took cogniz ance of the offence on September 16 1952 is without 105 foundation
The orders passed by the Additional District Magistrate on September 16 1952 September 19 1952 November 19 1952 and January 2 1953 were orders passed while the investigation by the police into a non cognizable offence was in progress
If at the end of the investigation no complaint had been filed against the appellant the police could have under the provisions of section 169 of the Code released him on his executing a bond with or without sureties to appear if and when so required before the Additional District Magistrate empowered to take cognizance of the offence on a police report and to try the accused or commit him for trial
The Magistrate would not be required to pass any further orders in the matter
If on the other hand after completing the investigation a complaint was filed as in this case it would be the duty of the Additional District Magistrate then to enquire whether the complaint had been filed with the requisite authority of the Reserve Bank as required by section 233b of the Foreign Exchange Regulation Act
It is only at this stage that the Additional District Magistrate would be called upon to make up his mind whether he would take cognizance of the offence
If the complaint Was filed with the authority of the Reserve Bank as aforesaid there would be no legal bar to the Magistrate taking cognizance
On the other hand if there was no proper authorization to file the complaint as required by section 23 the Magistrate concerned would be prohibited from taking cognizance
In the present case as the requisite authority had been granted by the Reserve Bank on January 27 1953 to file a complaint the complaint filed on February 2 was one which complied with the provisions of section 23 of the Foreign Exchange Regulation Act and the Additional District Magistrate could take cognizance of the offence which indeed he did on that date
The following observation by Das Gupta J in the case of Superintendent and Remembrancer of Legal Affairs West Bengal vs Abani Kumar Banerji 1 was approved by this Court in the case of R R Chari vs The State of Uttar Pradesh 2  1 AIR 1950 Cal 437
14 2  106 What is taking cognizance has not been defined in the Criminal Procedure Code and I have no desire to attempt to define it
It seems to me clear however that before it can be said that any magistrate has taken cognizance of any offence under section 1901a Criminal Procedure Code he must not only have applied his mind to the contents of the petition but must have done so for the purpose of proceeding in a particular way as indicated in the subsequent provi sions of this Chapter proceeding under section 200 and thereafter sending it for inquiry and report under section 202
When the magistrate applies his mind not for the purpose of proceeding under the subsequent sections of this Chapter but for taking action of some other kind eg ordering investigation under section  1563 or issuing a search warrant for the purpose of the investigation he cannot be said to have taken cognizance of the offence
 It is however argued that in Chari s case this Court was dealing with a matter which came under the Prevention of Corruption Act
It seems to us however that makes no difference
It is the principle which was enunciated by Das Gupta J which was approved
As to when cognizance is taken of an offence will depend upon the facts and circumstances of each case and it is impossible to attempt to define what is meant by taking cognizance
Issuing of a search warrant for the purpose of an investigation or of a warrant of arrest for that purpose cannot by themselves be regarded as acts by which cognizance was taken of an offence
Obviously it is only when a Magistrate applies his mind for the purpose of proceeding under section 200 and subsequent sections of Chapter XVI of the Code of Criminal Procedure or under section 204 of Chapter XVII of the Code that it can be positively stated that he had applied his mind and therefore had taken cognizance
In our opinion the proceedings before the Additional District Magistrate and the trying Magistrate were with jurisdiction and the trial of the appellant was legal
The appeal is accordingly dismissed


Summary:
The appellant had been paying puja bonus to its workmen continuously from 1940 to 1952 at the rate of one month s wages
From 1948 to 1952 the appellant whenever it paid this bonus made it clear that it was ex gratia payment and would not constitute any precedent in future years
The dispute arose regarding the payment of bonus in 1953
The workmen claimed that the sole object of bonus which had been granted to them upto that year was to meet puja expenses and that the payment of this bonus had become customary and a term of employment
The appellant contended that payments in the past years had been entirely ex gratia and as there was loss in 1953 no ex gratia payment could be made in that year
Held that the workmen were not entitled to puja bonus as an implied term of employment for an implied agreement could not be inferred when the appellant had made it clear that the payments from 1948 to 1952 were ex gratia but they were entitled to puja bonus on the basis that it was a customary and traditional payment
In determining whether the payment was customary and traditional the following circumstances have to be established  i that the payment has been made over an unbroken series of years  ii that it has been for a sufficiently long period the period has to be longer than in the case of an implied term of employment iii that it has been paid even in years of loss and did not depend on the earning of profits and iv that the payment has been made at a uniform rate throughout
The fact that the employer made the payment ex gratia made no difference nor did unilateral declarations of one party inconsistent with the course of conduct adopted by it matter