1979 (12) TMI 78 - SC - Customs

Whether the High Court was in error in acquitting the appellant of the charges under Section 135(1),(a) and (b) of the Customs Act? Held that - In the instant case, while holding that the respondent was in conscious possession of the gold bars in question, the High Court has acquitted him only on the ground that the porsecution had failed to prove that the gold in question had been imported after 1947 without the necessary permission of the Reserve Bank, or without payment of duty and that the further question as to whether the accused knew that it was smuggled gold does not really arise . With this reasoning the High Court acquitted the respondent on the first two charges under Section 135 of the Customs Act. The High Court overlooked several tell-tale circumstances appearing in evidence which unerringly pointed to the conclusion that the gold in question was smuggled gold. These circumstances are (a) The gold biscuits in question bore foreign markings which proclaimed their foreign origin. (b) This gold was of 24 carat purity which was not available in India at the material time. This circumstance reinforces the inference of its being smuggled gold. (c) These gold biscuits were found concealed and stitched in the folds of a jacket specially prepared for this purpose. (d) The gold, was in the shape of gold biscuits and was of huge value, which at the then prevailing market rate, was ₹ 1,85,000. (e) After the seizure of this gold the accused absconded and continued to be a fugitive from justice till March 14, 1962. Thus the High Court was in error in acquitting the appellant of the charges under Section 135(1),(a) and (b) of the Customs Act - allow this appeal, set aside the acquittal of the accused, Natwarlal Damodardas Soni, and convict him under Section 135(1)(a) & (b)

Issues Involved:
1. Legality of the search and seizure.
2. Applicability of Section 123 of the Customs Act, 1962.
3. Establishment of the charges under Section 135(a) and (b) of the Customs Act, 1962.
4. Interpretation of Rule 126-H(2)(d) read with Rule 126-P(2)(iv) of the Defence of India Rules, 1962.
5. Mitigation of the sentence due to the delay in prosecution.

Issue-wise Detailed Analysis:

1. Legality of the Search and Seizure:
The respondent contended that the search and seizure by the police were illegal and that the information on which the search was based was not produced, thus vitiating the trial. The court observed that even if the search was illegal, it would not affect the validity of the seizure and subsequent investigation by the Customs Authorities or the validity of the trial. The court referenced Radhakishan v. State of U.P., Shyam Lal v. State of Madhya Pradesh, and State of Kerala v. Alasserry Mohammed to emphasize that an illegal search does not necessarily invalidate the seizure or the trial.

2. Applicability of Section 123 of the Customs Act, 1962:
The respondent argued that Section 123, which places the burden on the accused to prove that the seized goods are not smuggled, was not applicable as the seizure was made by the police, not the Customs Authorities. The court held that even if Section 123 was not applicable, there was sufficient circumstantial evidence to establish that the gold was smuggled. The court noted that the prosecution could discharge its burden by establishing circumstances from which it could be inferred that the goods were smuggled.

3. Establishment of the Charges under Section 135(a) and (b) of the Customs Act, 1962:
The High Court acquitted the respondent on the grounds that the prosecution failed to prove that the gold was smuggled. The Supreme Court, however, found several circumstantial evidences indicating that the gold was smuggled:
- The gold biscuits bore foreign markings and were of 24-carat purity, not available in India at the time.
- The gold was concealed in a specially stitched jacket.
- The respondent absconded after the seizure.
The court concluded that these circumstances unerringly pointed to the conclusion that the gold was smuggled, and the respondent had the requisite guilty knowledge.

4. Interpretation of Rule 126-H(2)(d) read with Rule 126-P(2)(iv) of the Defence of India Rules, 1962:
The High Court held that the prosecution failed to establish that the respondent acquired the gold without being a licensed dealer. The Supreme Court disagreed, stating that the narrow interpretation of the High Court would render the provisions ineffective. The court emphasized that the rules should be construed to suppress the mischief and advance the legislative intent. The respondent's possession of the gold was in contravention of the rules, and thus, the charge was fully established.

5. Mitigation of the Sentence Due to Delay in Prosecution:
The respondent's counsel argued for leniency due to the long delay in prosecution and the fact that the respondent was a first offender. The court acknowledged the delay but noted the serious nature of gold smuggling, which affects public revenue and economy. Consequently, the court sentenced the respondent to six months' imprisonment and a fine of Rs. 2,000 under Section 135(1)(a) & (b) of the Customs Act, and six months' rigorous imprisonment under Rule 126-P(2) of the Defence of India Rules, with sentences to run concurrently.

Conclusion:
The Supreme Court allowed the appeal, set aside the acquittal, and convicted the respondent under Section 135(1)(a) & (b) of the Customs Act and Rule 126-P(2) of the Defence of India Rules. The respondent was sentenced to six months' imprisonment and a fine of Rs. 2,000, with an additional four months' imprisonment in default of payment, and six months' rigorous imprisonment, with all sentences to run concurrently. The bail was canceled, and the respondent was ordered to surrender to serve the sentence.

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