3 s.c.R.

SUPREME COURT REP(_)RTS 613

is oolonrable and not bona fide, s. 25G has no application and the respondents, therefore, are not entitled to any relief under that section. In the result the appeal is allow0d, the order of the Tribunal is set aside and the reference answered against the respondents. In the circumstances the parties will bear their own costs throughout.

Appeal allowed.

KEWAL Kl{ISHAN

STATE OF PUN.JAB

(J. L. KAPUR, P. B. GAJENDRAGADKAR and T. L.

VENKATARAMA AIYAR, JJ.)

Sea Customs-Goods eeized in reasonable . belief that they are smuggled-Burden of proof-If on person from whose possession goods are seized-Con8litntionality of statutory provision-

The Sea Custom; Act, 1878(8 of 1878),

88 . .167(81), 178A- Foreign Exchange Regu.lation Act, J.947(7 of 1947), 8. 23A.

The appellant was searched by a Customs Official .and some bars of gold were found tied round his walst.

Out. of those bars some were of base metal and the ret of pure g-old which bore foreign marks.

Th~ appellant had no permit from the Reserve Bank of India to import the gold.

He was prosecuted and convicted un.cler :;·. 23i\ of the FQrcign Exchange Regulation Act ands. 167(81) of the Sea Customs Act.

He brought an appeal to the Supreme Court by special leave.

Held, thats. l 78A of the Sea Customs Act, 1878, is constitutiona.1.

The contention that before the presumption under s. l 78A of the Sea Customs Act could he raised the prosecution had to prove that the gold was of foreign origin was rejected and it was held thats. l 78A provides that when the goods are seized in the reasonable belief that they are smuggled goods the onus is on the accused to show that they are not smuggled.

Collector of Customs, Madras v. Nat/iella Sampathu~Chetty \1962) 3 S.C.R. p. 786 followed. ·

1 he Managt111111I of

Indian Gabie Co., Ltd., Calcutta

Its Workmen

AVar J,

A1areh 6.

litu:al Krishan

v, Stale 11/ Punjab

614 SUPREf~ COURT REPORTS [1962) SUPP.

CRIMINAL APPELLATE .TURJSJJICTIOX : Criminal A p1wn 1 No. I '.!6 of l!J5!l.

Appeal by special leave from the judgment and order dated .June 19, l!J5!1, of the Punjab High Court in Criminal Reviion :No 144 of 195!1. ·

R. L. Kohli'., for the appellant.

G. C. Matlwr and P. D. Jfenon, for tho respondent.

l 9fi2. jfarch 6.

The .Judgment of the Court was deliverc>d by

KAPl'H, J.-This is ~.n appeal by special leave against the judgment and order of the High Court of the Punjab and raises tho constitutionality of s.l lliA of the Sc:1 Customs Act, 18iS (Act 8 of 1871'), which ha.H bellfi held by this Court to be constitutional in the Colleclor of Custom.~, Jfa.dra.~ v.

N at!u:lla Sarnpa.tl:n Chcll.1f ( 1).

At the time of arguments before us further point was raised that in order that s. J 78A of the

ea Customs Ac:t may become applicable, the prosecution must. further prove that the goods which wcrn sought to h" affeckd by the order of the Customs Offirer 1rnre goocls of foreign origin and them

must be evidence in Rupport of the reasonablcnes of thl' belief of thP Customs Officer that the goods were &mugglcd goods. The question now 8011ght. to he raised was not agitated in any of thn courts below.

The nppcllant on .February I I, I 958, whm1 he wa" sitting in a th ire! class compartment of the Amritsa Kalka train tanding on Platform No. ii of

the .Amrsar n~.ilway Rta t.ion, Wall searched hy a Customs Offidal anci' S(•mc b3rn of gold were fm; nd tied round his waist.

TheHe gold bars were sPized and a recovery memo was prepared. Out oftheRe gold

(!) [1%2~ 3. S.C..R. 786,

bars four were of base metal and the rest were of pure gold some bearing the stamp of Johmon Mathey & Co. Ltd., 999-10 tolas and 2-1/4 bars bore marks of N.M. Rothschild & Sons 10 tolas (990-0). No permit from the the Reserve Bank to import this gold was produced by the appellant. Under the Foreign Exchange Regulation Act, 11:147, the importation of gold witho11t such permit is prohibited and such contravention is punishable under s.23-A of the said Act read with s.167 (81) of the Sea Customs Act.

The app"llant was prosecuted under.s.23A of the Foreign Exchange Regulation Act and 167( 81) of the Sea Customs Act and his defence was that he was not in possession of the gold bars which were taken from an attache case left by a stranger under the seat where he (the appellant) was sitting. The Additional District Magistrate held the offence to be proved and convicted the appellant of the offence and sentenced him to one year's rigorous imprisonment. An appeal to the Sessions Judge 'resulted in the reduction of the sentence to 8 months' rigorous imprisonment. On revision to the High Court the sentence was reduced to six months' rigorous imprisonment. The appellant has come in appeal by special leave.

The trial court accepted the testimony of the Customs Officials and held that the defence of the appellant was false and that gold worth Rs. 14,000/-

was found in his possession. The learned Sessions Judge in appeal also accepted the testimony of the Cu; toms Officials and hld the defence to be false and canie to the conclusion that the gold was found in possession of the appellant. In the High Court the same plea was taken and was rejected.

For the first time in t.his Court it is contendod that before the presumption under s.178A can be made applicable, it must be proved by the prosecution that the goods were of foreign origin, i.e. had beeH

Kewal Eris/tan

Stol• of Punjab

Kapur J.

l~I

Kewol Kri1hcn

•• St•le of Punjei

616 SUPREME COURT REPORTS [1962] SUPP.

i mpoited from abroad and only then does the presumption under s. l i8A arise which relates only to tho question of Customs duty having been paid. In other words tho contention comes to this that th~ prosecution must first prove that the goods in dispute in a particular case have been imported from a foreign country and once that is proved the onus then will be on the person in whoso possession tho goods :ire found that he had paid the Customs duty. Apart from the fact that this question has never been raised, that is not the effect of s.178A of the Sea Customs Act which provides:-

" l 78A. (1) Where any g1; ods to which this section applies ar<> seized under thiR Act in the reasonable belief that they are smuggled goods, th.) burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.

(2) This section shall apply to gold, gold manufactures, diamonds and other precious

stons, cigaretters and cosmetics and any other goods which th" Central Government may, by notification in the Official Gazette,

sperify in this behalf.

(3) Every notification isgued under sub. section (2) shall he laid before both Houses of Parliament as soon as may be after it is iRBued".

Two Customs officers appeared a.s witnesses, Inspector Satnam Singh and Deputy Superintendent A.N.

Kapur, the former is an Inspector of Land Customs and the latter a Deputy Superintendent of Customs.

There is nothing to indicate in their cross-examination that the officern did not have a reasonable

belief that the goodH werti smuggled goodR and tho question that the officers di1! not have reaimna.- hle belief is not suggested either from the crossll; amina.tion of these witnesses of from the findings

of the courts below.

Even in his statement of case it is contended that the mere existence of stamp of foreign companies on gold does not necessarily prove that the gold is of foreign origin. It might be put on spurious gold which may be of Indian origin. In our opinion .apart from the fact that this question has not been raised, it is quite clear that what s. l 78A of the Sea Customs Act provides is that when the goods are seized in the reasonable belief that they are smuggled goods then the burden of proving that they are not smuggled goods is on the person from whose possession the goods are seized. The onus is on him to show that the goods are not smuggled; that is, not of foreign origin on which duty is not paid. The onus is not on the prosecution to Ehow that the goods are not of Indian origin. That appears to be the view taken in the Collector of OuBtoms, Madras v. Nathella Sampathu Ohetty (1) where at the learned Judges observed : - -

"We are therefore of opinion (1) that section l 78A was constitutionally valid, (2) that the rule as to the burden of proof enacted by that section applies to a contravention of a notification under section 8(1) of the Foreign Exchanges Regulation Act 1947 by virtue of its being deemed to be a contravention of a notification on under section l9 of the Sea Customs Act, ( 3) that the preliminary requirement of section l 78A that the officer seizing should entertain "a reasonable belief that the goods seized were smuggled" was satisfied in the present case." . I~ or opinion there is no merit in this appeal and it is d1sm1ssed.

The appellant will surrender to his bail-bonds.

Appeal dismissed,.

(!) [19G2] 3 S.C.R, 78~.

Kewal Krish1.1n

•• S ta/.1 of Punjab

KapurJ.