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TMI Blog1962 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... tion herein below given, was seized by them as smuggled gold namely. (a) gold leaves weighing 44 tolas 13 annas 6 pies. (b) gold coins bearing inscription (i) Habib Bank, 6 pieces (ii) Murshidabad coins, 58 pieces (iii) S. L. Sen 502 pieces (iv) Sovereigns 6 pieces (v) gold mohurs, 4 pieces in all weighing 321 tolas 9 annas 6 pies. (c) gold bullion weighing 306 tolas 8 annas. The petitioners characterise the said search and seizure as wrongful and illegal. They also say that at the time when the gold was seized from the petitioners, the respondent No. 2, S.K. Srivastava, who at that time was an Assistant Collector and Preventive Inspector, was personally present at the premises. The name of respondent No. 2 figures prominently in the petition and the grievance of the petitioners principally directed against the part which he played in passing the impugned order. 3.On the night of December 29, 1954, the petitioners Nos. 2 to 4 were arrested by the respondent No. 2 S. K. Srivastava, and a Rumaging Inspector of the name of D. G. Banerjee. They were detained over night in the Customs House by the said respondent No. 2. They were produced before the Chief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r company each time in one or two boxes full of gold bars and that in this way delivered an "assumed" quantity of 3000 tolas of smuggled gold prior to December 29, 1954. The aforesaid admission was said to have been obtained from Zadkar by respondent No. 2. S. K. Srivastava. 7.In the cause shown by the petitioners on July 7, 1955, they denied having received smuggled gold as alleged. They also stated that they did not know any person of the name Zadkar and denied having had any arrangement with him for carriage and delivery of smuggled gold. They called upon the respondent No. 2 S. K. Srivastava to produce Zadkar and allow to the petitioners opportunity to cross-examine him. They emphasised to have lawfully acquired the gold, seized by the Customs authorities, in the ordinary course of business and stated that the entries regarding acquisition of gold were to be found in their books of accounts. The cause aforementioned was shown to S. K. Srivastava above named. 8.The opportunity prayed for by the petitioners to examine Zadkar was not allowed to the petitioners. Nevertheless, one Rangaswami, who at the material time, was the Additional Collector of Customs, and did the adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. (3) A fortnight after the examination and assaying of the gold aforesaid, the Collector of Customs would give the petitioners, a hearing and allow the petitioners to cross-examine Zadkar, if possible. (4) Gold coins etc. which have been ordered to be released under Order No. 60 by the Customs authorities and are to be returned to the petitioners if the same had not already been returned. (5) The petitioners will not be entitled to challenge or raise any objection to the various notices to show cause served on the petitioners and in particular will not be entitled to take any objection regarding the omission of the Export Import Control Act being mentioned in the said Show Cause Notices. (6) No order as to costs". 11.Thus ended the first chapter of the attempt on the part of the Customs authorities to penalise the petitioners for large-scale smuggling of foreign gold into India. Pursuant to the order made by this Court, and Assistant Collector of Customs forwarded to the petitioners copies of :— (a) two statements dated December 29, 1954 and January, 7, 1955, alleged to have been made by Zadkar and recorded by the respondent No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o by consent on January 9, 1961, inter alia, on the following terms :- (i) the gold which was the subject matter of the adjudication would remain with the Customs authorities until the adjudication was completed. But the remaining quantities of gold must be returned to the petitioners within 3 weeks from the date of the order. (ii) The personal hearing to be given to the petitioners must be completed by March 31, 1961. 14. The Solicitors for the petitioners, however, did not remain idle while these things were happening. By their letter, dated January 31, 1961, they called upon the Customs authorities to comply with the terms of the order, dated the January 9, 1961, and also recorded their objection to the use of the alleged further statements by Zadkar, which they characterised as concepted and procured as a result of afterthought. It was also emphasised in the said letter that the petitioners would object to the use of the same by the Customs authorities. By a separate letter, bearing the same date, the Solicitors for the petitioners demanded return of the gold in terms of the order, dated January 9, 1961. 15. Matter No. 20, 1960 thereafter came up for rehe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w :- ***** (2) It was pointed out to you that Shri W. B. Zadkar had turned up in the Custom House on 15th February, 1961 at 11 A.M. when the personal hearing was fixed for the first time in connection with the present case. You were also informed that Shri Zadkar had been informed to be present in the Customs House in connection with hearing. I would like to know if you want to dispense with Shri Zadkar's presence. In the alternative we shall make one more effort to have Shri Zadkar present on another date which will be communicated to you shortly. (3) A reference about the informer in the present case also came up. I offered to present the informer and you were eager to examine him. I am arranging to present the informer as well before your clients on the next date of hearing. (4) In the course of the hearing, a statement was made that at 164, Cotton Street, only the Bengali employees of your clients firm were residing at the material time. Kindly confirm if this was so. I would also like to know the names of the Bengali employees who were residing in the premises and also of the non-Bengalees, if any, who were residing therein. (5) At the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the effect that, (1) Respondent No. 2 S. K. Srivastava, having acted as the prosecutor in the matter would not adjudicate upon the matter and decide the same and (2) The informers should not be examined at that stage, firstly, because it was beyond the scope of the order of the High Court and secondly, because the endeavour to examine the informers was a new thing which was being tried at that late stage. 21. Respondent No. 2 S.K. Srivastava overruled both the objections. Thereupon, Mr. Dey asked for an adjournment of the enquiry so as to enable the petitioner to move the High Court. That prayer was also refused by S.K. Srivastava. Thereafter, the respondent No. 2 S.K. Srivastava, examined two persons, one of whom was named S.K. Sen an employee in the Customs department and the other was the alleged informer, Bira Singh. Curiously enough, Zadkar was not produced for cross-examination by the petitioners on that date. The objections made on behalf of the petitioners as above-stated were recorded by the Solicitor for the petitioners in their letter, dated April 29, 1961. To that letter Srivastava gave a reply, dated May, 1, 1961, denying the statement made in the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following penalties severally on the petitioners: "1. I impose under section 167(8) of the Sea Customs Act as read with section 23A of the Foreign Exchange Regulation Act as personal penalty of Rs. 5,00,000/- (Rupees Five lakh) only on Messrs.. Shamlal Sen (Private) Limited for being the persons concerned in the illegal importation of not less than 3,000 tolas of gold in association with Shri W.B. Zadkar and others; 2. I impose a personal penalty of Rs. 3,00,000/- (Rupees three lakh only) each on Messrs. Sitanath Sen, Janaki Nath Sen, Sankar Lal Sen and Tarak Nath Sen for being the persons concerned in the illegal importation of the aforesaid not less than 3,000 tolas of gold; and 3. I confiscate the gold leaves and the gold coins bearing the inscription "S.L. Sen" absolutely under section 167(8) of the Sea Customs Act read with section 23A of the Foreign Exchange Regulation Act." 23.The propriety of the order is being disputed in this Rule by the petitioners, who have asked for a writ of Certiorari for quashing the order and for a consequential writ of mandamus for the return of the confiscated gold. 24.Mr. Meyer learned Advocate for the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an accuser, he must not be Judge." 26. Also there is the observation of Lord Esher in Allinsen v. General Council of Medical Education and Registration (1894) 1 Q.B. 750 at p.758, which is set out below :- "The question is not, whether in fact he was or was not biased. The Court cannot enquire into that. There is something between these two propositions. In the administration of justice, whether by a recognised legal Court or by persons who, although not a legal public court, are acting in a similar capacity, public policy requires that in order that there should be no doubt about the purity of the administration, any person who is to take part in it should not be in such a position that he might be suspected of being biased." 27. Eve, J., in the case of Law v. Chartered Institute of Patent Agents (1919 2 Ch. 276 at 289), made a similar observation: - "If he has a bias which renders him otherwise than an impartial Judge he is disqualified from performing his duty. Nay, more (so jealous is the policy of our law of the purity of administration of justice), if there are circumstances so affecting a person acting in a judicial capacity as to be calculated to create in the mind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal'; and that 'any direct pecuniary interest, however small, in the subject-matter of inquiry will disqualify, a judge, and any interest, though not pecuniary, will have the same effect, if it be sufficiently substantial to create a reasonable suspicion of bias'. The said principles are usually applicable to authorities, though they are not courts of justice or judicial tribunals, who have to act judicially in deciding the rights of others, i.e., authorities who are empowered to discharge quasi-judicial functions. The said principles are accepted by the learned Counsel on both sides' namely :- (i) when statute confers a power on an authority to be a judge of his own cause or to decide a dispute in which he has an official bias, the doctrine of bias is qualified to the extent of the statutory authorisation. (ii) A judge who would otherwise be disqualified may act in a case of necessity, where no other judge has jurisdiction. (iii) when there has been a waiver of the objection to the jurisdiction. 30. The first of the exceptions, hereinbefore referred to, finds some support from certain observations of the English Court of Appeal in Rex. v. Bath Compensa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be violated. In Rex. v. Liecster Justices, 1927 I.K.B. 557, a case also arising under the Licensing (Consolidation) Act, 1910, the Kings Bench Division held that the mere fact that the licensing justice has originated an objection to renewal of a licence does not disqualify him by reason of interest from sitting and adjudicating as a member of that authority upon the matter of that licence. Salter J. brought out the distinction between the Rex. v. Bath Compensation Authority's case 1925 - I.K.B. 685 and the case before him in the following terms, at p. 565: "The distinction is that, in that case, Parliament had not sanctioned what was done; in this case it has. Dealing with the arguments that there was some risk of bias if the statutory duty was discharged, the learned Judge rejected it with the observation that 'some risk of bias is inseparable from the machinery which Parliament has set up'. At first sight this judgment appears to be inconsistent with the decision of the House of Lords in Rex. v. Bath Compensation Authority's case, 1925—I.K.B. 685 (Reported as Forme United Breweries Co. Ltd. v. Bath Justices, in 1926 A. C. 586), but a scrutiny of the latter case shows that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficers of Sea Customs and Customs Collector for the post or posts specified against the name in the corresponding entry in the third column thereof, and to exercise the powers conferred and perform the duties imposed by the said Act on such Officers." SCHEDULE Serial No. Description of Officer Port or Ports 1 ** ** The Collector and Additional Collector of Customs, Calcutta *** *** The port of Calcutta and the ports of Port Blair and Nicobar in the Island of Anda man and Nicobar. *** *** 34.Further there is another notification being No. 75-Cus., dated August 19, 1950, as amended by notification No. 1-Cus., dated January 9, 1954 which reads as follows :- "In exercise of the powers conferred by section 6 of the Sea Customs Act, 1878 (VIII of 1878), the Central Government is pleased to appoint all Appraisers and Examining Officers of the Appraising Department, all Inspectors, Preventive Inspectors, Preventive Officer, Women Searchers and Peons of the Preventive Department and Ministerial Officers borne on the establishment of the Customs Department in Calcutta to be officers of Customs and to exercise the powers confer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been made by Zadkar and recorded by respondent No. 2 S. K. Srivastava, were sent to the petitioners also copy of a letter of reply given by Zadkar, dated January 7, 1955. The letter further informed the petitioners that at the personal hearing certain informers would be produced for the purpose of identifying Zadkar, who would be present at the hearing and the said informers would be examined in the presence of the Directors of the petitioner No. 1 company, who would also be given an opportunity to cross-examine them. Thereafter, on January, 13, 1961, the Solicitors for the Customs authorities wrote to the Solicitors for the petitioners that the 3068 tolas of gold, directed to be returned to the petitioners by the order, dated January 9, 1961 were not outside the subject matter of adjudication but did form subject matter thereof and that the Solicitors for the Customs authorities would have the matter mentioned before Ray, J., on February 2, 1961, for the purpose of clarification of the order, dated January 9, 1961. On the matter being mentioned before Ray, J., his Lordship expressed the desire to hear matter No. 20 of 1960 afresh. All Customs Collector and other Officers of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so much relied and also nowhere else in the said Act which clearly and expressly provide that an officer may be the judge or the adjudicator in a cause in which he is himself the prosecutor or the accuser. The afore-quoted provisions of the Act are merely enabling provisions authorising different officers of the Customs to exercise the powers conferred and perform the duties imposed by the Act. That by itself does not indicate that an officer of the Customs, although he may adjudicate upon any other matter, may also be a judge in a matter in which he had or has been acting either as the prosecutor or as the accuser. The first of the exceptions to the rule that an accuser may be the judge in his own cause, if statutorily authorized, is not statutorily recognised under the scheme of the Sea Customs Act. 40.I turn now to the second of the exceptions to the rule argued by Mr. Kar. The rule that a judge, who would otherwise be disqualified, may act in a case of necessity where no other judge has jurisdiction is a rule of common law which has been several times defended but the occasions in which it has been put into operation are few. In Marshall's book on 'Natural Justice' there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beginning 1613 to 1864 in which great judges refused to recognise the aforesaid exceptions to the principle of natural justice. Hereinbelow I set out the material passage from the book: "(a) The Earl of Derby's case ***(1613) 12 Co. Rep. 114 decided that the Chamberlain of Chester could not give a decision in a case in which he was involved but in such a case the suit should be heard in the Court of Chancery. This was a decision on the particular court. The judges, however, laid down a general principle when they added: 'Where the particular courts cannot do justice they shall sue in the King's general court at Westminister.' (b) In Wood v. Commonalty of London in 1701 (1701) 1 Salk, 397 it was held by Holt, C.J. to which the rest agreed: '1st, That the Mayor and commonalty might have a bye law and limit the penalty to be forfeited to themselves : 2nd, That it might be sued for in the Court of the Mayor and Alderman if the Mayor could be served and the Court held before the aldermen; thus the Chief Justice of the Common Peas may bring an action in the C. B. but then there must be a special entry, viz. Placita Coram Jehanne Blencowa milite etc., omitting the Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... knows no law but it is equally true that necessity is the mother of invention. 43.In a recent case before the Andhra Pradesh High Court reported in (10) 1961 (1) Gr. L. J. 619 (Nagamunaiah Chetty v. State Transport Authority, Andhra Pradesh) Seshachalapati, J. recognised the existence of the exception based on the ground of necessity in the following language. - "The rule that 'no man should be Judge in his own cause' is so well established and so often reiterated by the wisdom of Judges that it is unnecessary to cite authorities. The principle enshrined in the maxim 'Nemo Debet Esse Judjes in Casus Propria 3 ua is of the highest importance and any infraction of it would render the proceedings wholly unsustainable. But this Rule has certain exceptions such as (1) necessity (2) statutory provision removing the disqualification or making the investigator himself the Judge, (3) Waiver". 44.The ultimate decision of the case, however, was founded on waiver and his Lordship did not rely on the ground of necessity. 45.In the instant case, there is nothing to indicate that S.K. Srivastava, who is only an additional Collector of the Calcutta Customs, must as of necessity have to det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of cross-examination but Customs were doing their duty alright. This statement cannot be lightly treated especially as it comes from a man who was not shown any consideration by the Customs authorities and who had at no time any illusion about being leniently treated by the said authorities. As expressed by him his mind is still disturbed since his troubles with the Customs Department have not yet ended. The propriety of a Customs Officer adjudicating a case after having participated in the investigation earlier was agitated in the Calcutta High Court in the Matter No. 140 of 1956. My action in not refraining from adjudicating the personal penalties and confiscation in the present case is in conformity with the judgment in the above case." 48.There is a sort of special pleading in the order in his own favour which must not be over-looked. He goes to the extent of relying upon a certificate given by Zadkar who is himself not a highly meritorious person, to the effect that the Customs Officers are doing their duties all right. If the acts and conduct of respondent No. 2, S. K. Srivastava, are judged in the light of the principles of law governing the rule of natural justice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is evident that the supply of the smuggled gold was adequate and perhaps even more than what the accused could sell them day-to-day. It is well known that the smuggled gold is sold in the market at price much below the price of non-smuggled gold. A businessman who could obtain adequate supplies of smuggled gold to meet his day-to-day requirements is not like to go in for buying costlier stuff. In the circumstances it will only be just to presume unless the contrary is established that the gold contents of the seized goods are smuggled. The irregularities noted in the accounts book, the omission of the names of the sellers therein, the absence of the vouchers in the premises of the accused all got explained only by the above presumption and also lend support and lead to such presumption." 50.The observations are certainly founded on presumption and conjectures and the finding that the petitioners were concerned in the illegal importation of not less than 3000 tolas of gold is unsupported by evidence. That is an additional infirmity in the adjudication order and must be condemned on the principle of law laid down in Lalchand Bhagat v. Commissioner of Income-tax (A.I.R. 1959 S. C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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