SHAH GUMMAN MAL v. THE STATE OF ANDHRA PRADESH

Citation: [1980] 2 S.C.R. 1005

Court: Supreme Court of India

Bench: S. MURTAZA FAZAL ALI, A.D. KOSHAL

Case summary

Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction.

Judgment text

SHAH GUMMAN MAL v. THE STATE OF ANDHRA PRADESH February 6, l 98U [S. MuRTAZA FAZAL ALI AND A. D. KosH,\L, JJ. ] Custoins Act I962, Section 135 (1) (b) & Erh'ence Act, 1872, Sections 106 and 114-Preniises searched-Gold 'biscuits with /oreign niarkings recovered- Accused not disclosing identity of person who guve the gold-Whether court can presume that the gold was smuggled and in1ported without permit. An offence under section 135(1)(b) of the Customs Act, 1962 is punish- . able if the offender, acquires possession of or is in any way concerned in carrying removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any other manner deaJ. ing \vith any goods which he kno\vs or has reason to believe are liable to confiscation under section 111. Section 111 enumerates the categories. of goods which are imported into India and are liable to confiscation.

The Central Excise officials searched the house of the appellant and found in a secret chamber of an iron safe, \vhich was opened by him \'i'ith the keys in his possession, a. bundle containing 28 gold biscuits and a half biscuit, all of which bore foreign markings. In another secret chamber were found gold earnings in plnstic boxes and a bundle of currency notes. When questioned in the presence of the witnesses he stated that he had been receiving gold biscuits from some unkno\vn person from Bombay and that the other artides belonged to him and his mother. He admitted that be had no general or special permit from either the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the appellant was recorded. Thereafter the appellant was prosecuted for offences under Section 135(1)(b)(ii) of the Customs Act. 1962 and Section 85(ii) read with Section 8(i) of the Gold Control Act, 1968.

The Magistrate convicted and sentenced the appellant to rigorous imprison~ ment for nine months under each count. On appeal, the Sessions Judge set aside the conviction and sentence under the Gold Control Act as the requisite sanction for prosecution was not accorded, but maintained the conviction and sentence nnder Section 135(i)(b){ii) of the Customs Act, which order was confirmed by the High Court in revision.

In appeal to this Court it was contended on behalf of the appellant :· ( 1) that if the presumption under Section 123 of the Customs Act is not available to the prosecution, then there is no legal evidence to show that the appellant bad any knowledge or had any reason to believe that the goods were imported or were smuggled without a lawful permit and (2) as the case had been going on for eight years, a lenient view on the question of sentence may be taken; while on behalf of the respondent-State it was submitted that the fact that the gold bore foreign markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs Officers that some unknown person had given it to him, ' 1006 SUPR1~i\1E C01JR r RLPORr~ [i 980] 2 s. c. R. A \Vould itself raise a suflicient presumption to attribute knov. ·ll:dge to the a. ppel11. nt that the gold i. vris s~nuggled wilhvut any permit. _Dismissing the appeal, HELD: (1) The prosecuti.

Jn has clearly proved the charge under Section 135(1) (b)(ii) of the Customs Act. [1014Dl B (2) The sentence being one only of rigorous imprisonment for nine month~. there i~ no room for any reduction thereof. [1014E-1 (3) The fact as to ho\v the appellant came into possession of the gold and whether it was import,~d or not being v,,·ithin the special knowledge of the appellant, if he frriled to disclose the identity of the person who gave him the gold, it Vias open to the Court to presume under sections 106 and 114 of the Evidence Act that the appellant kncv.. · that the gold in his possession c \vas srnnggled and in1po1te ving gold biscuits from some unknown person from Bombay and that the other articles belonged to him and his mother. On being questioned further, the accused admitted that he had no general or special permit from the Reserve Bank of India or the Gold Control Administrator to import or keep foreign gold. The statement of the accused was recorded and is marked Ext.

P4. Before launching a prosecution, the Collector of Central Excise issued a notice calling upon ·the appellant to show cause why M. Os. 1 to 51 be not confiscated and penalty levied. The accused gave his explanation, Ext. P-7. Thereafter, the Collector passed orders of adjudication confiscating the articles and imposed a penalty of Rs. 5,000/. On appeal, 10-138 SCI/80 1008 SUPREME COlJRT REPORTS [1980] 2 s. c. R. the confiscation of jewellery and cash was set aside. Subsequently, PW 5, the Assistant Collector of Customs filed a complaint for the prosecution of the appellant under the Customs Act. We have already mentioned that the prosecution and conviction under the Gold Control Act was set aside for lack of proper sanction. It is also admitted by the prosecution in the instant case that as no • seizure was made in accordance with the provisions of the Customs Act, the presumption under s. 123 thereof was not available to the prosecution.

Section 135(1) (b), under which the appellant has been convicted, runs thus:- "135 (1) Without prejudice to any action that may be taken under this Act, if any person- (b) acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111. " • Analysing the essential ingredients of clause (b), it is manifest that before a conviction can be recorded under it, the prosecution must prove that the accused has acquired possession of or is in any ·~ way concerned in depositing, keeping, etc. , any goods which he knows or has reason to believe are liable to confiscation under s. 111. Thus in the instant case, as no presumption under s.

123 was available, it was for the prosecution to prove affirmatively that the appellant was in possession of smuggled gold knowing full well that it was imported from outside the country so as to fall within the ambit of s. 111. Dr. Chitale, appearing for the ,appellant, contended that if the presumption under s. 123 is not available to the prosecution, then there is no legal evidence to show that the appellant had any knowledge or had any reason to believe that the gocds were imported or were smuggled without a lawful permit. The counsel appearing for the State, however, submitted that the fact that the gold bore fore;gn markings and was recovered from the possession of the appellant who had admitted in his statement before the Customs officers that some unknown person had given it to him, would itself raise a sufficient presumption to attribute knowledge to the appellant that the gold was smuggled without any permit.

Although the question raised by the counsel for the parties is not free from difficulty, an overall consideration of the special facts of the present case would show that there could no difficulty in holding that having regard to the admissions • ·made by the appellant and his subsequent conduct, the onus would A' shift to the appellant to show that the gold found (ram him with foreign markings was imported without any permit to his knowledge. This will be the combined effect of the provisions of ss. 106 and 114 of '! he Evidence Act. The matter was considered at great length in the • case of Berham Khurshed Pesikaka v. The State of Bombay(! ) where this Court holding that s.

106 could not be construed to place the 'Onus on the accused to prove the prosecution case, observed as follows:-- · ' "Section I06 of the Evidence Act cannot be construed to mean that the accused has by reason of the circumstance that the facts are especially within his own knowledge to prove that he has not committed the offence. (See Atiygalle v. The King-A. I. R. 1936 P. C. 169, also In re : Kanakasabai Pillai-A. I. R. 1940 Madras 1). It is for the prosecution to prove that he has committed the offence • and that burden is not in any manner whatsoever displaced by section 106 of the Evidence Act. " These observations were made wHh respect to the peculiar facts of that case. It appears that what had happened in that case was tha~ the appellant was found to be guilty of an offence under the Prohibition Act and the only evidence to prove his guilt was that he was smelling of alcohol. This Court held that it was for the prosecution to prove the.

contravention of the provisions of the Prohibitpn Act and to prove further that a particular intoxicant which was a liquor under the Act, was consumed by the accused and merely because the accused knew what he had taken (which was a matter within his know- ·~. 1edge) could not relieve the prosecution of the burden of proving • that the liquor consumed was an intoxicant as defined under the Act. It is, therefore, clear that the observations made by this Court regarding the interpretation of s. 106 of the Evidence Act would not apply to the facts of the present case. In the case of lssardas Dau/at Ram & Ors. v. The Union of. India & Ors. (') this Court, after discussing the admitted circumstances of the case, found that the rele- G. 'Vant pieces of evidence would prove the guilty knowledge of the ac- . rule relating to proof in all criminal or quasi-criminal proceedings, where there is no statutory provision to the contra- I rary.

But in appreciating its scope and the nature of the onus cost by it, we must pay due regard to other kindred principles, no less fundamental, of universal application. One of them is that the prosecution or the Department is not requir- • ed to prove its case with mathematical precision to a demonstrable degree ............ -All that it requires is the establishment of such a degree of probability that a prudent man • may, on its basis, believe in the existence of the fact in issue, Thus, legal proof is not necessarily perfect proof, often it is nothing more than a prudent man's estimate as to the ' probabilities of the case. " Similarly, while dealing with the merits of the case, this Court made the following observations :- ' "In the case before us, the circumstantial evidence sugges- . ting the inference that the goods were illicitly imported into India, was similar and reasonably pointed towards the conclusion drawn by the Collector..........

The Collector had • given the fullest opportunity to Bhoormull to establish the alleged acquisition of the goods in the normal course of business. In doing so, he was not throwing the burden of proving what the Department had to establish,_ on Bhoormull. He was simply giving him a fair opportunity of rebutting the first and the foremost presumption that arose out of the tell-tale circumstances in which the goods were found, regarding 'their being smuggled goods by disclosing facts within his special knowledge. " It was also pointed out that the broad effect of the application of the basic principles underlying s. 106 of the Evidence Act would be that onus is discharged if the prosecution adduces only so much evidence, circumstantial or direct, as is sufficient to raise a presumption in its favour with regard to the existence of the facts sought to be proved. In the case of Labchand Dhanpat Singh Jain v.

The State of Maharashtra, while this Court was again considering the extent and application of ss. 106 and 114 of the Evidence Act and in this connection, pbserved as follows :- \ "Even if we were to apply the ratio deddendi of Gian , Chand's case (supra) in the case before us, we find that the result would only be that no presumption uruder section 123 of the Act could be used against t4e appellant. We do not think that the High Court or the Magistrate had used this presumption. We fin n them and writing on the boxes were par\s of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import qiuld arise. The appellant's conduct, including his untruthful denial of their possession, indicated consciousness of their smuggled character or mens rea. " From the af0l'esaid case also it would apl"'ar that this Court was prepared to draw a presumption against the accused from the fac~ that (! ) [ 1976] 1S. C. R. 539.

1014 SUPREME C0URT REPORTS [1980] 2 S. C. R. the articles concerned were concealed and had particular markings and special features and from the nature of the unsatisfactory explanation given ·by the accused. While it is, therefore, true that in the instant case the seizure was not made under s. 111 of the C\Jstoms Act and the prosecution could not press into service the presumption arising from s. 123 of the Cus- • toms Act, that does not clinch the issue. It is proved that the appellant was in possession of gold with foreign markings which was found to be in the shape of biscuits or bars kept in a secret chamber of the safe, • \~--. and that the accused admitted that the gold was brought from outside the country and was given to him by somebody whose identity he was not prepared to disclose.

Thus, the appellant knew as to who was the person who had given him the gold and if he also knew, as he says, that the gold was smuggled, he must have known whether the person who delivered the gold to him brought it under a permit or without any permit because at the time of the occurrence the import of gold was banned excepting nnder special circumstances. Having regard to the totality of the situation, there is no reason why the prosecution would not be entitled to call into aid the combined effect of the presumptions under ss. 106 and 114 of the Evidence Act. We are, therefore, satisfied that the prosecution has clearly proved the charge under s. 135 (1) (b) (ii) of the Customs Act. • • It was also contended by Dr. Chitale that as the case had been going on for eight years, a lenient view on the question of sentence may be taken. The sentence being one only of rigorous imprisonment for nine months, we think there is no room for any reduction thereof.

For the reasons given above, the appeal fails and is accordingly dismissed. N. V. K. Appeal dismissed.