1960 (3) TMI 1 - HC - Customs

Summary

Issues Involved:
1. Confiscation of gold bars under Section 23 of the Foreign Exchange Regulation Act (FERA) and Section 167(81) of the Sea Customs Act.
2. Compliance with principles of natural justice.
3. Legality of the interrogation and treatment of the petitioner.
4. Validity of the criminal proceedings initiated against the petitioner.

Detailed Analysis:

1. Confiscation of Gold Bars under Section 23 of FERA and Section 167(81) of the Sea Customs Act:
The petitioner, a citizen of the United Arab Republic, arrived at Dum Dum Airport with 14 gold bars. The Customs authorities detained the gold, citing Government of India Notifications prohibiting the importation of gold without Reserve Bank of India (RBI) permission. The petitioner was asked to produce a permit from the RBI within four days or show cause why the gold should not be confiscated. The gold was ultimately confiscated under Section 167(8) of the Sea Customs Act, and the petitioner was prosecuted under Section 23 of FERA.

2. Compliance with Principles of Natural Justice:
The petitioner argued that he was not given a real opportunity to show cause against the confiscation and prosecution. He was detained and interrogated immediately upon arrival and subsequently remanded to jail, where he fell ill and was hospitalized until his release on bail. The court found that the petitioner had no adequate opportunity to present his case or seek legal advice, thus violating the principles of natural justice.

3. Legality of the Interrogation and Treatment of the Petitioner:
The petitioner alleged that he was subjected to severe questioning and physical assault by Customs officers. The court noted that while these allegations were denied in the affidavit by R.C. Misra, it would have been better if an affidavit had been affirmed by Parnham, the officer involved in the interrogation. The court did not express a view on the truth of these allegations but emphasized the need for the Customs authorities to investigate and ensure no such incidents occur.

4. Validity of the Criminal Proceedings Initiated Against the Petitioner:
The petitioner was prosecuted under Section 23 of FERA and Section 167(81) of the Sea Customs Act. The court held that the criminal proceedings were invalid because the petitioner was not given an opportunity to show that he had the necessary permission from the RBI, as required under the proviso to Section 23(3) of FERA. Consequently, the criminal proceedings were quashed.

Conclusion:
The court quashed the order of confiscation dated November 9, 1959, and the criminal proceedings initiated against the petitioner. The Customs authorities were directed to deal with the petitioner according to law, ensuring compliance with the principles of natural justice. The rule was made absolute without any order as to costs.