PETITIONER:
TRIVENI PRASAD RAMKARAN VERMA
Vs.
RESPONDENT:
THE STATE OF MAHARASHTRA
DATE OF JUDGMENT07/09/1976
BENCH:
BHAGWATI, P.N.
FAZALALI, SYED MURTAZA
CITATION:
1976 AIR 2156 1977 SCR (1) 519
1977 SCC (1) 114
ACT
Gold Control Rules, 1963, whether includes smuggled gold
within their ambit.
HEADNOTE
The appellant was found carrying smuggled gold with foreign
markings, concealed on his person. He was convicted by the
Presidency Magistrate under Section 135(b) read with Section
135(ii) of the Customs Act, 1962, and Rule 126H (2)(d) read
with Rule. 126 P(2)(iv) of the. Gold Control Rules, 1965.
The High Court upheld the convictions. The appellant con-
tended that the gold, allegedly recovered from him was smug-
gled gold, and hence not covered by the Gold Control Rules,
1963.
Dismissing the appeal the Court.
HELD: The Gold Control Rules, 1963, seek to control and
regulate dealings in gold, and are applicable alike to
smuggled gold as to non-smuggled gold, and the inhibition of
Rule 126 H(2)(d) that no person other than a licensed
dealer shall acquire gold except in accordancee with a
permit or authorisation granted by the Administrator, is not
confined in its operation to nonsmuggled gold but applies
equally in relation to smuggled gold. The object and pur-
pose of the restrictions imposed by the Gold Control Rules,
1963, would be frustrated by excluding from their
abmit and coverage, smuggled gold. [523 A-D; 524 B-C]
Aravinda Mohan Sinha v. Prohlad Chand Samenta AIR 1970 Cal
437 overruled.
JUDGMENT
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 264
of 1971
(Appeal by Special Leave from the Judgment and Order
dated 19/20th August, 1971 of the Bombay High Court in Cr.A.
No. 650 of 1970 with Crl. Rev. No. 886/70).
B.R. Agarwala and P.B. Agarwal, for the appellant.
H.R. Khanna and M.N. Shroff, for the respondent.
The Judgment of the Court was delivered by
BHAGWATI, J.--The appellant was tried before the Presi-
dency Magistrate, 25th Court, Mazgaon, Bombay for offence
under clauses (a) and (b) of section 135 read with section
135(ii) of the Customs Act, 1962 and Rule 126H(2)(d) read
with Rule 126P(2)(iv) of the Gold Control Rules 1963. The
prosecution case against the appellant was that on 7th
September, 1965 about 3.45 p.m. Inspector Tilwe, who was at
the material time Senior Grade Inspector of Customs attached
to Gold Circle, Central Excise, Bombay, received information
that two persons would be coming down from a building known
as Hira Mahal, situated at Kalbadevi Road, and they will be
carrying gold in the handle, of a cane basket and also in
their shoes 17--1104SC1176
520
Inspector Tilwe, on receipt of this information, sent for
Inspector Nichani and both of them kept guard outside Hira
Mahal building from about 8.00 p.m. Around 8.45 p.m., the
appellant accompanied by his material uncle’s son Dwarkapra-
sad, his son Dalip aged 9 years and his servant by the name
of Mahadev, came out of Hira Mahal building. The appellant
was carrying a basket in his hand and after coming out of
the building, the appellant and his companions got into a
Victoria and proceeded towards Victoria Terminus Station.
Inspector Tilwe and Inspector Nichani followed these persons
and when the appellant and his companions got down from the
Victoria and entered the platform, Inspector Tilwe accosted
them and took them to the office of the Assistant Station
Master and searched them there in the presence of three
panchas. Two of the panchas were selected by Inspector
Tilwe while the third volunteered to act as Pancha. On
taking search, it was found that the shoes worn by the
appellant and Dwarkaprasad had specially made cavities and
four gold biscuits with foreign markings were found in the
shoes of each of these two persons. The basket carried by
the appellant also contained 27 gold biscuits with foreign
markings concealed in the handle which was made of brass and
which had a specially made cavity in it for concealing gold
biscuits. While the search was going on, one Ticket Collec-
tor called Tharandas Bhatia arrived on the scene and he also
witnessed the search. Inspector Tilwe seized the gold
biscuits which were recovered from the appeIIant and Dwar-
kaprasad, in the reasonable belief that they were smuggled
and hence liable to confiscation under section 111 of the
Customs Act, 1962. This search and seizure was recorded in
a Panchanama Ex. X, which was witnessed by the three pan-
chas. Inspector Tilwe also seized from the appellant two
first class Railway Tickets for the journey from Bombay to
Kanpur, one Reservation Card and two Platform Tickets and so
also were the basket and the shoes seized under the same
Panchanama Ex.X. Inspector Tilwe then took the appellant
and Dwarkaprasad to the Central Excise Office and recorded
their statements in the presence of Inspector Nichani under
section 107 of the Customs Act, 1962. The statement of the
appellant which is marked Ex. W was written by Dwarkaprasad
in Hindi and was signed by the appellant. The appellant
admitted in his statement that he was carrying smuggled
gold concealed in the handle of the basket and shoes for
being handed over to a firm called M/s Pannalal Durgaprasad
at Kanpur and that he had been doing this work for the last
six months ever since his business as a goldsmith was
closed down. Another statement of the appellant was also
subsequently recorded by Inspector Tilwe on 22nd November,
1966 at the shop of the appellant and this statement was
written by one MaganIal, an employee of the appellant, in
Gujarati and was signed by the appellant. Both the appel-
lant and Dwarkaprasad were thereafter prosecuted for of-
fences under clauses (1) and (b) of section 135 read with
section 135(ii) of the Customs Act, 1962, and Rule
126H(2)(d) read with Rule 126P(2)(iv) of the Gold Control
Rules, 1963. Dwarkaprasad pleaded guilty to the charge
and was convicted and we are not concerned in this appeal
with the conviction and sentence recorded against him. The
appel-
521
lant denied the charge and hence he was tried before the
leraned Presidency Magistrate. The only evidence led on
behalf of the prosecution against the appellant was that of
Inspector Tilwe and Tharandas Bhatia. None of the panchas
was examined as a witness to prove the search and seizure.
The learned Presidency Magistrate observed that in view of
the fact that Tharandas Bhatia had not signed the Panchanama
Ex.X nor his statement had been recorded by the Customs
Authorities or the Railway Police, and his name had also not
been shown as a witness in the complaint, it would not be
desirable to rely on his evidence against the appellant.
But the learned Presidency Magistrate found the evidence of
Inspector Tilwe satisfactory and convincing and on the
strength of this evidence, he held the charge proved against
the appellant and convicted. the appellant of the offence
under clause (b) of section 135 read with section 135(ii) of
the Customs Act, 1962 and Rule 126H(2)(d) read with Rule
126P(2) (iv) of the Gold Control Rules, 1963 and sentenced
him to suffer rigorous imprisonment for two months and to
pay a fine of Rs. 500/- or in default to suffer rigorous
imprisonment for two months for each of these two offences.
Since there was no evidence to show that the appellant
himself had smuggled the seized gold into India, he was
acquitted of the charge under clause (a) of section 135 read
with section 135(ii) of the Customs Act, 1962.
The appellant preferred an appeal against his convic-
tion and sentence but the High Court agreed with the view
taken by the learned Presidency Magistrate and dismissed the
appeal of the appellant. Hence the present appeal with
special leave obtained from this Court.
It is true that the conviction of the appellant rests solely
on the evidence of Inspector Tilwe. There were three pan-
chas who witnessed the Panchanama Ex. X regarding search and
seizure of gold from the appellant but unfortunately none of
the three panchas could be examined, as they were not trace-
able in spite of efforts made by the prosecution. Two of
the panchas undoubtedly remained present in the course of
the adjudication proceedings but that was in December 1967.
The trial before the learned Presidency Magistrate commenced
in April 1969 and evidence was given by Inspector Tilwe in
December 1969 and at that time none of the three panchas
could be traced and brought for the purpose of giving evi-
dence. The statement of Inspector Tilwe that "all the three
panchas are now not traceable in spite of great efforts"
was not challenged in cross-examination and we must, there-
fore, proceed on the basis that none of the three panchas
was available and if that be so, no adverse inference can be
drawn against the prosecution for not examining any of the
three panchas. Tharandas Bhatia was no doubt examined but
the learned Presidency Magistrate preferred not to rely on
his evidence and we think, he was right in doing so. In-
spector Nichani could, of course, have been examined as a
witness, since he was present at the time of search and
seizure, but his non-examination cannot help the appellant,
since he was also an Inspector in. the Customs Department
like Inspector Tilwe and once Inspector Tilwe gave evidence,
it would not have added to the weight of prosecution evi-
dence by also examin
522
ing him. The prosecution case against the appellant must,
therefore, in the ultimate analysis stand or fall by the
evidence of Inspector Tilwe. The learned Presidency
Magistrate as well as the High Court accepted the evidence
of Inspector Tilwe and we do not see any reason to interfere
with the concurrent view taken by both these courts as
regards the appreciation of his evidence. It was not the
case of the appellant that he and Dwarkaprasad along with
Dalip and Mahadev did not proceed from Hira Mahal building
to Victoria Terminus or that they were not taken by Inspec-
tor Tilwe to the office of the Assistant Station Master for
purpose of search or that gold was not found as a result of
the search, but his defence was that the seized gold was
found from Dwarkaprasad and not from him and that both the
basket and the shoes belonged to Dwarkaprasad and he had
nothing to do with the same. Now, it is difficult to see
why Inspector Tilwe should have falsely implicated the
appellant if, in fact, the seized gold was found only from
the person of Dwarkaprasad and the appellant was completely
innocent. It may also be noticed that the case of the
appellant was that Mahadev was the servant of Dwarkaprasad
and it was Dwarkaprasad who was going from Bombay to Kanpur
along with his servant Mahadev and the two Railway Tickets
from Bombay to Kanpur were meant for Dwarkaprasad. But it
is difficult to understand why in that event there should
have been two first class Railway Tickets. Mahadev could
not possibly be travelling by first class along with his
master. The fact that there were two first class Railway
Tickets shows that the appellant and Dwarkaprasad were going
to travel from Bombay to Kanpur. This is also. borne out
from the statement Ex. H given by the appellant to Inspector
Tilwe. The appellant tried to wriggle out of the statement
Ex. H by showing that it was taken from him under threat and
was not a voluntary statement containing the true facts.
But it is evident from the contents of the statement Ex. H
that it is a genuine document. There are several details
in the statement Ex. H which could never have been dictated
by Inspector Tilwe. There is inherent evidence in the
contents of the statement Ex. H showing that the statement
is true. It was admitted in the statement Ex. H, that the
appellant was carrying gold from Bombay to M/s Pannalal
Durgaprasad at Kanpur and this statement is clearly support-
ed by the seizure of two First Class Railway Tickets from
Bombay to Kanpur. It is true that the reservation card
seized at the time of search did not show in whose name the
reservations were made and it would have been better, if the
prosecution had summoned the railway authorities to produce
the Reservation Chart of the train for the purpose of show-
ing in whose name the reservations were made. But even so,
the fact that the reservation card was seized from the
appellant shows that the appellant was travelling from
Bombay to Kanpur. We do not see any cogent reasons for
taking a different view from that taken concurrently by the
learned Presidency Magistrate and the High Court in regard
to the evidence of Inspector Tilwe and we think this evi-
dence is sufficient to found the conviction of the appel-
lant.
The appellant, however, contended that even if it be
held that gold was found from the person of the appellant,
as alleged by the
523
prosecution, it was smuggled gold and hence not covered by
the Gold Control Rules, 1963 and, in the circumstances, no
offence under Rule 126H(2)(d) read with Rule 126P(2)(iv)
could be said to have been committed by the appellant in
acquiring such gold. The argument of the appellant was that
the Gold Control Rules, 1963 apply only in relation to what
may be called legal gold or non-smuggled gold and smuggled
gold is outside their scope and ambit and hence acquisition
of smuggled gold would not constitute an offence under the
Gold Control Rules, 1963. This is an argument of despair
and cannot be sustained even for a moment. Rule 126H(2)(d)
provides, inter alia, that no person other than a licensed
dealer shall buy or otherwise acquire or agree to buy or
acquire gold, not being ornaments, except in accordance with
a permit granted by the Administrator or in accordance with
such authoriation as the Administrator may make in this
behalf. The word ’gold’ is defined in clause (c) of the
Explanation to Rule 126A to mean gold, including its alloy,
whether virgin, melted, remelted, wrought or unwrought, in
any shape or form, of a purity of not less than nine carats
and include any gold coin (whether legal tender or not), any
ornament and any other article of gold". This definition
does not restrict the meaning of the word ’gold’ to legal or
non-smuggled gold. It is wide enough to include any kind of
gold, whether smuggled or non-smuggled. The restrictions
imposed by the Gold Control Rules, 1963 could not have been
intended merely to apply to legal gold. The object and
purpose of the restrictions. would be frustrated by exclud-
ing from their ambit and coverage smuggled gold. The Gold
Control Rules, 1963 seek to control and regulate dealings in
gold and ’gold’ within the meaning of these rules must
include not only non-smuggled gold but also smuggled gold,
We fail to see on what principle of construction can smug-
gled gold. which is ’gold’ within the meaning of the defini-
tion, be excluded from the operation of these Rules. There
is no scope for inferring any such exclusion nor is there
anything in the Rules which supports such exclusion. Take,
for example, Rule 126 B which says that a dealer shall not
make or manufacture any article of gold other than ornament.
Can it be suggested for a moment that this Rule does not
prohibit a dealer from making or manufacturing articles out
of smuggled gold? Then again, look at Rule 126 C. It
provides, inter alia, that no dealer shall make, manufacture
or prepare any ornament having gold of a purity exceeding
fourteen carats. Can a dealer make an ornament of smuggled
gold having purity exceeding fourteen carats without commit-
ting a breach of this Rule? Rule 126-1 provides that every
person shall make a declaration to the Administrator as to
the quantity, description and other prescribed particulars
of gold owned by him. How can a person, who has smuggled
gold, say that he is not bound to make a declaration under
this Rule? The object of requiring a declaration is that
the Government should know what is the gold possessed by
each person, so that dealings in gold can be controlled and
regulated and this object would be thwarted if smuggled were
not subject to the requirement of declaration. Then consid-
er Rule 126 D which says that no person shall make advance
or grant any loan to any other person on the hypothecation,
pledge, mortgage or charge of any gold other than ornament,
unless such gold
524
has been included in a declaration. If smuggled gold were
outside the scope of this rule, it would be open to a person
to advance moneys on the security of smuggled gold without
involving any violation of this rule. That surely could not
have been the intention of the Government in making the Gold
Control Rules, 1963. We are aware that there is a decision
of the Calcutta High Court in Aravinda Mohan Sinha v. Proh-
lad Chand Samenta(1) where a Division Bench has taken the
view that "declaration under Rule 126. P is in respect of
legal gold as opposed to smuggled gold and no question of
declaration in respect of smuggled gold can arise under Gold
Control Rules, 1963," but we do not think this decision
represents the correct law on the point. We are of the
view that the Gold Control Rules 1963 are applicable alike
to smuggled gold as to non-smuggled gold, and the inhibition
of Rule 126H(2) (d) that no person other than a licensed
dealer shall acquire gold except in accordance with a permit
or authorisation granted by the Administrator is not con-
fined in its operation to non-smuggled gold but applies
equally in relation to smuggled gold. The learned Presiden-
cy Magistrate and the High Court were, therefore, right in
convicting the appellant under Rule 126 H(2)(d) read with
Rule 126 P(2) (iv) of the Gold Control Rules, 1963.
Since the appellant is convicted of the offence under
Rule 126P (2) (iv) of the Gold Control Rules, 1963, the
sentence of imprisonment to be imposed on him cannot be less
than .six months and the High Court was right in enhancing
the sentence to six months imprisonment. But so far as the
sentence of fine is concerned, we do not think that the
facts and circumstances of the case justify a heavy fine of
Rs. 3,000/- for each of the two offences for which the
appellant is convicted. It appears from the statement of
the appellant Ex. H that he was a carrier of gold for M/s
Pannalal Durgaprasad of Kanpur and the purchase price of
Gold was provided substantially by this Kanpur firm and the
appellant was merely to receive some commission. The appel-
lant was a goldsmith who had lost his business for the last
six months and perhaps economic necessity drove him to carry
on this nefarious activity. The sentence of imprisonment
which has been imposed on the appellant would be sufficient
deterrent to him and many others who indulge in this anti-
social activity which is calculated to disrupt the economy
of the country. We feel that in the circumstances, the
ends of justice would be met if the sentence of fine is
reduced from Rs. 3,000/- to Rs. 500/- for each of the two
offences.
We accordingly confirm the conviction of the appellant
as also the sentence of imprisonment imposed on him but
reduce the sentence of fine from Rs. 3,000/- to Rs. 500/-
for each of the two offences for which the appellant is
convicted with a direction that in default of payment of
fine, the appellant will suffer rigorous imprisonment for a
period of two months. The appeal is allowed to this limited
extent.
M.R. Appeal partly allowed.
(1) A.I.R. 1970 Cal 437
525