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TMI Blog1960 (3) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... ese: The petitioner was a passenger bound for Ceylon. He came to the Customs baggage shed at Danushkadipier on 5-2-1958 for embarkation. He made a declaration in Ex. P-1 that he had only ₹ 10 in Indian currency notes. P.W. 1, the Inspector, Central Excise, Dhanushkodi examined the baggage and found that he had no dutiable articles. But P.W. 2, the Deputy Superintendent of Police, who had information that the accused was carrying currency notes, followed him and question him. He gave the Deputy Superintendent of Police the same reply as he gave to P.W. 1. The accused was then wearing a cap and chapels. P.W. 2 cut open one of the chapels and found two packets rolled in white paper inserted in the chapel. He found 35 notes of ₹ 100 denomination in one packet and 30 notes of similar denomination in the other packet. Similarly he cut open the other chappal (M.O.2), and he found therein also two packets containing in all 65 notes of ₹ 100 denomination. There were thus 130 notes of ₹ 100 denomination found hidden in the two chappals. The cap of the accused was then cut open and P.W. 2 found in the cap (M. O.3) 130 currency notes of ₹ 100/- denomination conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Foreign Exchange Regulation Act 1947 is as follows: 8. Restrictions on import and export of certain currency and bullion: (1) The Central Government may, by notification in the official Gazette, order that, subject to such exemptions, if any, as may be contained in the notification, no person shall, except with the general or special permission of the Reserve Bank and on payment of the fee, if any, prescribed, bring or send into the States any gold or silver or any currency notes or bank notes or coin whether Indian or Foreign. Explanation : The bringing or sending into any port or place in the States of any such articles as aforesaid intended to be taken out of the States without being removed from the ship or conveyance in which it is being carried shall nonetheless be deemed to be a bringing, or as the case may be sending, into the States of that article for the purpose of this section. 2. No person shall, except with the general or special permission of the Reserve Bank or the written permission of a person authorised in this behalf by the Reserve Bank, take or send out of the States any gold, jewellery or precious stones or Indian currency notes bank notes or coin or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or attempt at evasion of any duty chargeable thereon or of any such prohibition or restriction as aforesaid or of any provision of this Act applicable to those goods. Nothing in the second column of the above schedule shall be deemed to have the force of law. This Sec. 167(81) was introduced by was of amendment by Sec. 10 of Act XXI of 1955. It is the contention of Mr. Mohan Kumaramangalam that Sec. 19 must be considered to have been incorporated by virtue of Sec. 23-A in S. 8 of the Foreign Exchange Regulation Act : and this having been incorporated in the year 1952, any subsequent amendment of the Sea Customs Act-as in the present case S. 167(81)-cannot be read into the Foreign Exchange Regulation Act and in this view the conviction for the offence under Sec. 167(81) is unsustainable. In support of his contention he relies upon the decision of a Bench of this Court reported in Sampathu v. Collector of Customs, AIR 1959 Mad 142 . The Bench consisting of Rajagopalan and Balakrishna Aiyar, JJ., has observed as follows at p. 242 (of ILR, Mad) : (at p. 150 of AIR): The language of Sec. 23-A of the Foreign Exchange Regulation Act bars in our opinion, acceptance of the plea of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne of the question raised arises on the construction of Sec. 186 of the Sea Customs Act. Section 186 reads as follows: The award of any confiscation, penalty or increased rate of duty under this Act by an officer of Customs shall not prevent the infliction of any punishment to which the person affected thereby is liable under 'any other law'. (Underlining (here into ' ') is mine). What is meant by 'any other law? Does it mean law other than what is contained in the Sea Customs Act or whether it includes any other provisions of the Act? 12. In two decisions of the Supreme Court, one Leo Roy v. Superintendent, District Jail, Amritsar, 1958 Cri LJ 260 and the other in Thomas Dana v. State of Punjab, 1959 Cri LJ 392 without the point being raised and discussed their Lordships simply confirmed the conviction under the Sea Customs Act after the goods were confiscated and penalty was levied. In as much as the point was never raised and decided and as the question is raised before me, it is contended by the learned Advocate-General that this question also being an important question of law may be referred for decision by the Full Bench. I would therefore formulate t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 81) of the Sea Customs Act does not apply to the contravention of section 8(2) of the Foreign Exchange Regulation Act. The second question is: Whether Sec. 186 of the Sea Customs Act precludes proceedings under section 167(81) of the Sea Custom Act in cases where goods have been confiscated and penalty has been levied. The two questions, though arising from the facts of the particular case are distinct, and have to be kept apart. It is not necessary to recapitulate the facts, for they have been sufficiently set forth in the order of reference of our learned brother, and, further, they are not essentially related to the problems which concern us in the reference, which are largely problems of law. I shall immediately proceed to the first question of the reference. 15. Upon this aspect, we have had the considerable advantage of arguments by the learned Advocate-General based upon a research into the law and precedents relating to the topic of statutory incorporating by reference which is involved in the question. The main basis of the learned Advocate-General's argument in this. Referential legislation is a very wide subject, of increasing importance in the proliferation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gn Exchange Regulation Act, referred to above. It is not necessary to set forth these provisions in extenso. But we may observe that under section 8 sub-sec. (1), the Central Government is empowered to impose restrictions of the import and export of certain currency and bullion (Gold and Silver) "by notification in the official Gazette". Next, turning to sub-sec. (2) of section 8, it indicates that no person shall, except with the permission of the Reserve Bank, "take or send out of India any gold or precious stones of Indian Currency or Foreign Exchange." In other words, sub-sec. (1) requires a notification of its taking effect, while sub-sec. (2) of section 8 operates proprio vigore. Similarly, sub-sec. (1) of section 12 indicates that the Central Government may by notification in the Official Gazette, prohibit the export of certain class of goods specified in such notification, except upon a declaration etc. Subsection (1) (a) of section 13 indicates that no person shall, except with the general or special permission of the Reserve Bank "take or send any security to any place outside India". Here again, there is a contrast between section 12(1) whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -A and more particularly of sec. 19 of that Act section 167(81) could not be read into the Foreign Exchange Regulation Act at all, being subsequent to the incorporation. I may further note sequent to the incorporation. I may further note in this same context that, under section 19 of the Sea Customs Act, the Central Government is empowered, by notification in the Official Gazette to "prohibit or restrict the brining or taking by sea or by land goods of any specified description into or out of India......." 19. It is now time that the problem should be clearly set forth and discussed. A very similar situation arose in the Bench decision of this Court in AIR 1959 Mad 142 . That related to section 178-A(1) of the Sea Customs Act, which was incorporated in 1955, In other words, the situation and argument were both identical. The learned Judge observed (p. 242 (of ILR Mad) : (at p. 150 of AIR): The language of section 23-A of the Foreign Exchange Regulation Act, bars, in our opinion, acceptance of the plea of the learned Advocate-General, that the provision o f Sec. 8(1) among others of that Act were incorporated into the Sea Custom Act. It was really the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on this would be evidence of a different intention, for it is the rule of law that "where a statute is incorporated by reference into a second statute, the repeal of the first statute by a third does not affect the second." (Per Brett, L. J., in Clarke v. Bradlaugh, (1881) 8 QBD 63). Also see Craies 'On Statute law" 5th Edn. P. 385. While on the General Clauses Act, I might further refer to section 28, which deals with the wide case of citation of enactment. 21. It may be of some interest and significance, before I proceed to, and the circumstances of that decision, to assume that the question before us is one of incorporation and not one of reference or application of one law by means of another, and then to discover whether the effect of section 23-A is not to incorporate section 8(1) and (2) etc., of the Foreign Exchange Regulation Act into the Sea Customs Act, as was actually contended before Somasundaram, J. The argument for this interpretation could be put in the following form. The legislature states, in substance, by the enactment of section 23-A, that certain restrictions under section 8(1) and (2) etc., of the Foreign Exchange Regulation Act, are to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Land Acquisition Act itself was amended by Act 19 of 1921, giving in terms a right of appeal to the Privy Council. The question was whether this later amendment of the General Act affected the rights of appeal under the Local Act. It is very important to note, with reference to the ratio decidendi of this case, which was really an appeal from Hindustan Co-operative Insurance Society Ltd., v. Secy., of State AIR 1930 Cal 230 that the Judicial Committee observed (p. 65 (of ILR Cal) : (p. 153 of AIR)): Even if their Lordships had been forced to hold that the sub-section was incorporated in the Local Act, they would, on the well recognised principle of generalia specialibus non derogant have come to the conclusion that the provision of the local Code must prevail and that this appeal was barred. But the Judicial Committee also proceeded to rest their decision upon what they relate to be a more cogent objection to the contention of the Secretary of State. They pointed out (p. 63 (of ILR Cal) : (p. 152 of AIR)) that the sub-section was not part of the Land Acquisition Act, when the local Act was passed. When the Bengal legislature adopted the provision of the Land Acquisition Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applies incorporates or refers to the amending Act. The earlier Act could not incorporate the later Act, but it could only be amended by it. We have to note two matters here, before we proceed further. Section 8(1) of the General Clauses Act which I set forth earlier, will only apply to save a reference in the case of a repeal and a re-enactment. For an instance of this, I might cite the State of U. P., v. M. P. Singh, C. A. Nos. 157, 158 of 1957 and 5 of 1958 : 1960 Cri LJ 750 , wherein their Lordships held that a reference in the definition was to the Factories Act of 1934, but by virtue of S. 8 of the General Clauses Act, it had to be construed as a reference to the provisions of the Factories Act 63 of 1948. Secondly, the actual doctrine in Craies and Maxwell appears to be limited to an instance of repeal of the earlier statue. But it is true that the Judicial Committee observed in, that where, certain provisions from an existing Act have been incorporated into a subsequent Act, no addition to the former Act, which is not expressly made applicable to the subsequent Act can be deemed to be incorporated in it(per Lord Westbury in Ex parte St. Sepulchre, (1864) 33 LJ Ch. 372. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous case of In reCherry's Settled Estates, (1862) 31 LJ Ch 351. This was a case in which lands taken under 9 and 10 Vict. C 39 were, in all respects, to be treated and considered as if they had been taken under 3 and 4 Vict. 37, an instance of retrospective incorporation. The question was whether the Land Clauses Act of 1845 which came in between must be held incorporated with the later Act, and we find that the correctness of the decision in this case has been a fertile source of dissenting opinions in the later cases. It is a remarkable instance of the difficulties arising from the interpretation of incorporation or incorporated statutes. I shall, for a moment, leave aside, 1873 8 QB 146, which is really somewhat away from the main line of these decisions. In RE Mills Estate, (1886) 34 Ch. D. 24 again is an instance in which a very specific and unmistakable formula of incorporation is used with regard to the provisions of 3 and 4 Vict. Ch. 87 (1840). Here we find the dictum of Lord Ether M. R., in Re Woods' Estate, (1886) 31 Ch D 607 disapproving of the rule in Re Cherry's Settled Estates, (1862) 31 LJ Ch 351 expressly dissented from. IN Jenkins v. Great Central Rly. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion at all. (1873) 8 QB 146 only comes into the picture to this extent; though in every other case, we have an almost unvarying or rigid formula of incorporation, this case does suggest that the orders of reference might be more oblique, but still that the same effect of incorporation might be achieved. 26. The learned Advocate-General has further drawn our attention to the actual words of incorporation in a series of statues in the United Kingdom. He desires to contrast them with other words of mere reference or application. A clear formula will be found in the following enactment : (1) 1890-53 and 54 Vict. C. 70 " as if there were re-enacted in the body thereof." (2) 1891-54 and 55 Vict. C. 19 "as if herein re-enacted". (3) 1947-10 and 11 Geo. 6 Ch. 51 "S. 40(2)... shall be incorporated". Similarly, in 6 and 7 Eliz. (1958) Ch. 63, Sec. 5 of the Park Lane Improvement Act is to the effect that "the land clauses.... are hereby incorporated with this Act." ON the contrary, when we look at 10 and 11 Geo. 6 Ch. 51, Town and Country Planning Act, 1947, we find instances of both incorporated and mere reference. A good example of this is S. 16 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poration at all, as I have earlier pointed out, it would be more logical and consistent with the intention evident from the language to hold that S. 8(1) and (2) etc., were being incorporated by means of S. 23-A with S. 19 of the Sea Customs Act, so that the structure of that Act might thereby apply to those restrictions. 28. With reference to the interpretation to be placed on such words as "deemed to be" and the effect of legal fictions in general, it is sufficient to note the following authorities : Cave J., observed in R., v. Nrfolk County Council, 1891 60 LJ QB 379, that when the words "deemed to be" were used, it was an admission that a thing is distinct from another and not identical with it, but that nevertheless an identity was created by means of the legal fiction. In giving effect to legal fictions, the courts have necessarily to consider as real the consequences flowing from the imaginary assumption, and the well-known and of quoted observations of Lord Asquith in East End Dwellings Co., Ltd., v. Finsbury Borough Council, 1952 AC 109 exemplify this with pointed emphasis. Of the decisions of the Supreme Court upon this mater I might refer to Bengal I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, further modifications of the Sea Customs Act would certainly be applicable to instances of the restrictions under the incorporated sections. Consequently, I am of the view that the Bench decision of this Court in AIR 1959 Mad 142 will have to be dissented from, upon its interpretation of section 23-A of the Foreign Exchange Regulation Act. With the greatest respect to the learned Judges who decided that case, I think that it could be contended, with even greater plausibility and force, that the provisions of section 8(21) and (2) of the Foreign Exchange Regulation Act were really incorporated into the Sea Custom Act, particularly with section 19, reading the section (23-A) as one of incorporation by reference. But it seems to me to be, more accurately, an instance of the application of the provisions of another law by means of a legal fiction, not amounting to incorporation proper, as the language employed falls short of the justification for such an inference. 29. In result, therefore, I would answer this reference of Somasundaram, J., by holding that section 167(81) of the Sea Customs Act, though introduced by an amendment later than section 23-A of the Foreign Exchange ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered this reasoning which really depends upon a schematic analysis of the schedule to Sec. 167, in the light of the language of section 186 and under Sec. 187. I have no doubt whatever that the argument is unsustainable, and it is clearly opposed to the scheme of the provisions themselves, and to the general principles of law applicable. The matter is quite unambiguous and simple, and it is sufficient to refer to a very few of the authorities, apart from the sections themselves. 32. When we scrutinise section 167 of the Sea Customs Act, and the schedule thereto, two matters are immediately apparent. Firstly, certain sub-sections alone relate to what might he termed infringements involving criminal proceedings before a magistrate, and consequential penalties. The other offences specified all involve the civil proceedings of confiscation, civil penalty or forfeiture, to be levied by officers of the customs themselves. It is distinctly unfortunate that the expression "offence" has been used in a loose sense through out. Section 167(81) which was introduced by Act 21 of 1955, is a comprehensive clause dealing with various infringements for which a magistrate may try the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le jeopardy" as applicable in this context. A very few citations will be sufficient to indicate this. 35. Both in the United States and in the United Kingdom it appears to have been generally held that the imposition of a civil penalty, such as confiscation or seizure or a penal tax, b the administrative agencies employed to implement the law relating to Income Tax, customs etc., will not thereby absolve the transgressor from liability to criminal prosecution, if he is liable upon those identical facts. In other words, such imposition of civil penalties will not amount to a conviction and sentence under the criminal law in any sense, so as to attract the application of the doctrine of "double jeopardy". Reference might be made here to Ragazzoni v. K. C. Sethia (1944) Ltd., 1957 3 All ER 286, and to the case of Bowes, R., v. London Quarter Sessions. Ex parte Bowes, 1950 2 All ER 1043. In the United States, we have the Helvering case, Helvering v. Mitchell, (1938) 82 LED 917, where the Court specifically stated that the penalties imposed by congress to enforce the tax laws included both civil and criminal sanctions, and that "invocation of one does not exclude re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reference, but which might be commented upon here, for the sake of completeness. Would it constitute 'double jeopardy' if a person is prosecuted both before a magistrate under Sec. 167(81), in respect of a certain alleged offence or offences, and also under the Indian Penal Code, for instance, in respect of the same transaction under Sec. 186? The answer of this would appear to lie in section 26 of the General Clauses Act (10 of 1897) which lays down that, Where an act or omission constitutes an offence under two or more enactment's then the offender shall be liable to be prosecuted and punished under either or any of those enactment's, but shall not be liable to be punished for the same offence. It may be also pertinent to observe here, with reference to Art. 20(2) of the Constitution, that, as pointed out by the Supreme Court in Venkataraman v. Union of India, 1954 Cri LJ 993 , the provision under Art. 20(2) differs from the American doctrine of 'double jeopardy" which is wider in its ambit as, according to that doctrine, there may be jeopardy even though the person was not actually punished in the previous proceeding. 38. I hence conclude that thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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