S. K. DAS, - (1.) THE following Judgment of the court was delivered by
(2.) THIS appeal has come to us on a certificate granted by the High court of Judicature at Calcutta that the case is a fit one for appeal to this court. The appellant is Shewpujanrai lndrasanrai Ltd., a private limited company incorporated under the Indian Companies Act, 1913 and carrying on business at 69, Manohar Das Street, Calcutta. Respondents 1 and 3 are the Customs authorities concerned; respondent 2 is the Union of India, and respondents 4 and 5 are two banks, called respectively Nationale Handels Bank N. V., a foreign company carrying On business at 1, Royal Exchange Place, Calcutta, and Bharat Bank Ltd., a company incorporated under the Indian Companies Act, 1913, and having its registered office at 143, Cotton Street, Calcutta. The material facts are these. The appellant Company carries on business as a bullion merchant and in that capacity used to buy gold and silver in the Calcutta and Bombay markets and sell the same either direct or through bankers at the aforesaid two places. It is stated that between 14/11/1950, and No 20/11/1950, the appellant Company, ill the usual course of its business, purchased about 9,478 tolas of gold, and in respect of the said purchases, borrowed money from respondents 4 and 5. The gold so purchased was deposited with the respondent banks as security for the loans taken, 7,044 tolas being deposited with respondent 4 and about 2,437 tolas with respondent 5. With the consent of the appellant Company, the two Banks respondents 4 and 5, sent the gold to the Calcutta Min for the purpose of assaying. On 20/11/1950, the Collector of Customs, Calcutta, asked the Mint authorities not to part with the gold, and on 21/11/1950, the gold was seized at the instance of the Customs authorities, Calcutta, in pursuance of a search warrant issued by the Chief Presidency Magistrate, Calcutta. On the same day, certain books of account of the appellant company were. also seized from its place of business at 69, Manohar Das Street. Oil 22/11/1950, the appellant Company received a letter signed by one Jasjit Singh of the Customs Department, requesting the presence of the appellant at the Customs House on 27/11/1950, for opening and checking the bags of bullion which had been seized from the Mint. Thereafter followed some correspondence, details whereof are not necessary for our purpose, between the Customs authorities and Messrs. Sawday and Co., acting on behalf of the appellant Company. On 19/12/1950, the appellant Company made an application in the High court of Calcutta under Art. 226 of the Constitution in which it asked for the issue of appropriate writs or orders quashing the orders of seizure and detention of its gold and books of account, and for a further direction that the Customs authorities be prohibited from giving effect to the said orders of detention and seizure or from taking any steps in connection with the gold or the books of account seized. This writ application was heard and disposed of by an order made by Bose J. of the Calcutta High court on 23/04/1951, the result of which was that the rule was made absolute to this extent only that the seizure of the books of account was declared to be illegal and a direction was made that the books be returned forthwith to the appellant Company. No order was made about the gold seized and detained. On 20/06/1951, the Customs authorities sent a notice to the appellant Company which was in these terms:- Subject :-Seizure of 9,478-19 tolas of gold at the government of India Mint, Strand Road, Calcutta. I have been directed by the Collector of Customs to inform you that the above case has been placed before him for adjudication by the Superintendent, Preventive Service. A copy of the note submitted by the latter together with copies of the assay reports therein referred to are enclosed herewith. 2. You are requested to show cause in writing within fourteen days from date hereof why penal action should not be taken against you and the 9,478.19 tolas of gold in question under the provisions of S. 167 clause 8 and 168 of the Sea Customs Act, 1878, for alleged violation of section 19 of the same Act read with section 8 of the Foreign Exchange Regulation Act, 1947. 3. You are also requested to send copies of all documentary evidence including all books of account, vouchers etc., along with your explanation. 4. On receipt of your explanation, the Collector has directed me to further inform you that in this case a date and time will be fixed for hearing at which you will be required to produce all oral evidence in support of your explanation and also to make your submissions.' This notice was issued on the strength of an information contained in a note which the Superintendent, Preventive Service of the Customs authorities, submitted and which said that the gold in question had been smuggled into India in violation of the provisions of the Sea Customs Act, 1878 (hereinafter referred to as the Sea Customs Act) and the Foreign Exchange Regulation Act, 1947 (hereinafter referred to as the Foreign Exchange Act) and that the gold had been sent to the Mint for processing; that is, for melting and casting the same into bars, weighing and stamping the same with the Mint Marks, and also assaying small portions thereof. On 3/07/1951, the appellant Company submitted its explanation in answer to the aforesaid notice. The -parties were then heard by the then Collector of Customs, Sri Raja Ram Rao; but before the hearing could conclude, Sri Raja Ram. Rao was transferred. His successor, Mr. J. W. Orr, heard the parties on some days; but on 11/10/1951, Mr. Orr was succeeded by Sri A. N. Puri. This latter officer heard the parties afresh and concluded the hearing on 8/02/1952. On 14/05/1952, Sri A. N. Puri passed the order impugned in this case, in which he came to the conclusion that the gold in question (9,478.19 tolas) was smuggled gold and that there was a contravention of the provisions of s. 19 of the Sea Customs Act read with s. 8 of the Foreign Exchange Act. The final order which he made was in these terms :- ' I accordingly order that the entire quantity of the gold seized on the 21/11/1950, amounting to 9,478.19 tolas be confiscated under section 167(8) of the Sea Customs Act. In lieu of confiscation, however, I give the owner of the said gold an option under section 183 ibid to pay a fine of Rs. 10,00,000.00 (Rupees ten lakhs only) in addition to the proper customs duty and other charge leviable thereon within four months from the date of the despatch of this order. The release of the gold will be further subject to the production of a permit from Reserve Bank of -India within the aforesaid period. ' On 19/06/1952, the appellant Company filed a second writ petition in the High court of Calcutta in which it asked that (a) a writ of certiorari do issue against respondents 1 to 3 calling upon them to produce the record of the proceeding resulting in the impugned order of 14/05/1952, and for quashing the same; (b) a writ of mandamus do issue requiring respondents 1 to 3 to forbear from giving effect to the orders of seizure, detention and confiscation of the appellant's gold and further requiring the said respondents to return the gold to the appellant; and (e) a writ of prohibition do issue restraining the said respondents from taking any further steps in pursuance of the order of confiscation etc. This second writ application was dealt with and disposed of by Bose J. by his order dated 5/08/1952. Broadly speaking, the two main grounds on which he held the impugned order to be bad ',ere these. The learned Judge held that by purporting to proceed under 182 of the Sea Customs Act in the present case, the Customs authorities had acted in prejudice to the provisions of s. 23 of the Foreign Exchange Act and this was in violation of s. 8(3) of the Foreign Exchange Act as it stood at the relevant time. He said: ' If the petitioners had not been implicated in the charge it might have been open to the Customs authorities to proceed under section 182 if steps were intended to be taken only against the offending goods but the notice to show cause makes it clear that that is not the case. Although I am not prepared to go to the length of holding that section 23 of the Foreign Exchange Regulation Act altogether excludes the operation of section 182 of the Sea Customs Act and although I have no doubt, that in appropriate cases where section 23 is not attracted, recourse can be had to section 182 of the Sea Customs Act, the present case is one in which adoption of the procedure under section 182 of the Sea Customs Act has prejudiced section 23 of the Foreign Exchange Regulation Act. The entire proceedings before the Customs authorities must therefore be held to be without jurisdiction. ' Secondly, he held that the conditions which the Collector of Customs had imposed in the impugned order for release of the confiscated gold were not warranted by the statute, and as the impugned order was one composite order, different parts whereof could not be severed one from the other, the entire order must be held to have been made without jurisdiction. On these findings, the rule was made absolute, the impugned order was quashed and respondents 1 to 3 were directed to forbear from giving effect to the order.
(3.) THEN there was an appeal which was heard by a division bench consisting of Das and Mookerjee JJ. That bench held that the proceeding under the Sea Customs Act was in the nature of a proceeding in rem and an order of confiscation or penalty passed in such a proceeding was not a quasi judicial act, but an administrative or executive act, in respect of which no application for the issue of a writ of certiorari under Art. 226 of the Constitution lay. On a construction of s. 8(3) of the Foreign Exchange Act, as it stood at the relevant time, it held that the restrictions mentioned therein had a double effect and the remedies available under s. 167(8) of the Sea Customs Act and under s. 23 of the Foreign Exchange Act were cumulative in nature. It said: ' The former remedy (meaning the remedy under the Sea Customs Act) is intended to levy the customs duties and is mainly directed against the goods; the latter is penal, intended to punish the person concerned in the act of smuggling. There is thus no question of the former proceeding prejudicing the latter proceeding. ' Accordingly the division bench held that the first ground on which Bose J. had held the impugned order to be bad was not sustainable. With regard to the conditions imposed in the impugned order for the release of the confiscated gold, it held that the invalidity, if any, of the imposition of such conditions did not affect the main order of confiscation. It said Section 183 casts an imerative duty on the officer adjudging confiscation to give the owner of the goods an option to party such a fine as the officer thinks fit in lieu of confiscation. The duty so cast is an exercise of jurisdiction by the officer concerned quite separate from the exercise of his jurisdiction under section 167(8) imposing confiscation and penalty. If any illegality has attached in the matter of exercise of his jurisdiction under section 183, the illegal condition may be set aside. ' In the result, it accepted the appeal and set aside the judgment and order of Bose J. The present appeal is from the aforesaid judgment and order of the division bench dated 3/07/1953. There are two preliminary points which we may conveniently dispose of here, before we go on to the main contentions urged on behalf of the appellant Company. In giving a certificate in this case the learned chief justice, with whom Das Gupta J. agreed, expressed the view that the question whether the proceeding in which the order appealed from was made was of a civil or crinlinal nature, or was, in the language of Art. 132 of the Constitution, other proceeding' was not free from difficulty; he added that, in any event, Art. 135 of the Constitution applied in the present case, because it was not disputed that certain questions of interpretation of the Constitution were involved and, therefore, the case was clearly one where an appeal would lie to the Federal court immediately before the commencement of the Constitution. The learned Solicitoreneral, who has appeared before us on behalf' of respondents 1 to 3, has not accepted as correct the view that Art. 135 justified the grant of a certificate in this case. He has not, however, pressed us to decide in this case the question of the competency of the certificate given by the High court, and has raised no objection to a decision of the appeal on merits. The question whether a proceeding on a writ application is of a civil or criminal nature within the meaning of those expressions in Arts. 133 and 134 of the Constitution has led to some divergence of opinion in the High courts, and we understand that it is one of the questions for decision in some cases which we have recently admitted. In the view which we have taken of the present case on merits and the further eircumstance that it is open to us to give special leave to the appellant under Art,. 136 of the Constitution, we do not think that it is necessary in the present case to decide the question mooted by the learned chief justice in his order dated 1/12/1953, and we prefer not to express any opinion thereon. ;