1966 (3) TMI 75 - SC - Customs

whether by disposing of the plant and machinery without permission an offence was committed and if so, by whom ? Held that - In our judgment both these questions must be answered in favour of the State of West Bengal. It was overlooked in the High Court that under the proviso to clause 12 of the Order of 1955 the licence, although granted before that Order was brought into force, came under its terms. The words of that proviso refer to a licence issued under any of the earlier orders as something done or action taken under the corresponding provision of the 1955 Order. The High Court erred in interfering with the conviction of the respondent. We accordingly allow the appeal, set aside the acquittal ordered by the High Court and restore the conviction under s. 5 of the Imports and Exports (Control) Act, recorded by the Presidency Magistrate together with the fine of ₹ 200 or simple imprisonment for one month.

Issues Involved:
1. Whether the disposal of plant and machinery without permission constituted an offence.
2. Whether the individual (Motilal Kanoria) or the company was responsible for the offence.

Issue-wise Detailed Analysis:

1. Whether the disposal of plant and machinery without permission constituted an offence:

The Supreme Court examined the ingredients of the offence under Section 5 of the Imports and Exports (Control) Act, 1947. The Court noted that the Act empowers the Central Government to prohibit or restrict imports and prescribes penalties for contraventions. The relevant section states: "If any person contravenes or attempts to contravene, or abets a contravention of, any order made or deemed to have been made under this Act or any condition of a licence granted under any such order, he shall... be punishable with imprisonment for a term which may extend to one year, or with fine, or with both."

The Court highlighted that the licence in question, issued before the 1955 Order, was subject to conditions that included the non-transferability of the imported goods without permission. The 1955 Order, which consolidated previous rules, included a provision that deemed certain conditions to be part of every licence. Specifically, clause 5(3) of the 1955 Order stated that goods covered by a licence shall not be disposed of without written permission from the licensing authority.

The High Court had acquitted the respondent on the grounds that the breach of a licence condition was not an offence under the Act as it stood before the 1960 amendment. However, the Supreme Court disagreed, stating that the proviso to clause 12 of the 1955 Order brought the licence under its terms, making the breach of its conditions an offence. The Court concluded that the disposal of the machinery without permission constituted a contravention of the 1955 Order and thus an offence under Section 5 of the Act.

2. Whether the individual (Motilal Kanoria) or the company was responsible for the offence:

The Supreme Court addressed the issue of responsibility for the offence. The High Court had raised doubts about whether the company or Motilal Kanoria was the actual accused. The complaint named Lachminarain Jute Manufacturing Company, represented by Motilal Kanoria, but also referred to Kanoria individually as the accused.

The Supreme Court found that Kanoria was principally responsible for the issuance of the licence and the transfer of the machinery. He was directly involved in all relevant transactions and communications. The Court stated, "Kanoria was responsible for the issuance of the licence and for the transfer of the goods covered by the licence. He wrote every document connected with these two matters."

The Court concluded that Kanoria's actions led to the contravention of the 1955 Order, making him liable as a principal offender. The section as amended in 1960, which included abetment of contravention as an offence, was not necessary to apply in this case because Kanoria was guilty as a principal offender under the original section.

The Supreme Court also addressed the procedural objection regarding the clarity of the complaint. The Court noted that Kanoria had entered a plea of not guilty and stood trial as an accused, indicating that he understood his position. Therefore, any irregularity in the complaint did not result in a failure of justice.

Conclusion:

The Supreme Court allowed the appeal, set aside the High Court's acquittal, and restored the conviction of Motilal Kanoria under Section 5 of the Imports and Exports (Control) Act, 1947, along with the fine of Rs. 200 or simple imprisonment for one month. The Court concluded that the disposal of the machinery without permission constituted an offence and that Kanoria was responsible for the contravention.

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