# [1959] 1 S.C.R. 821

- **Citation:** [1959] 1 S.C.R. 821
- **Court:** Supreme Court of India
- **Decided:** 1959
- **Case number:** Civil Appeal No. 256 of 1954
- **Bench:** S. R. Das C. J, Bhagwati, S. K. DAs, SuBBA RAo, VIVIAN BosE
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1959-1-s-c-r-821-1554
- **Pages:** 27

## Headnote

Smuggled Goods-Violation of provisions of Sea Customs Act
and Foreign Exchange Regulation Act-Power of Collector. of Customs to take action under Sea Customs Act-Confiscation-Fine in
lieu of confiscation-Order of confiscation coupled with conditions for
release of the smuggled goods-Legality of the order-Sea Customs
Act, z878 (8 of z878), ss. I9, z67(8), z82, z83-Foreign Exchange
Regulation Act, z947 (7 of z947), ss. 8, 23.
The appellant company was carrying on business as a bullion
merchant and in that capacity purchased about 9478 tolas of
gold. On information that the gold in question was smuggled,
the customs authorities issued a notice to the appellant to the
effect that the case had been placed before the Collector of Customs for adjudication by the Superintendent, Preventive Service.
The notice stated inter aJia :-" You are requested to show
cause ... why penal action should not be taken against you and
the 9478·19 tolas of gold in question under the provisions of
ss. 167(8) and 168 of the Sea Customs Act, 1878, for alleged violation of s. 19 of the same Act read with s. 8 of the Foreign ··
Exchange Regulation Act, 1947 ". The Collector of Customs,
after hearing the parties, came to the conclusion that the gold in
question 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 Regulation Act, and made an order in
these terms:. "I accordingly order that the entire quantity of
the gold seized on the 21st November, 1950, amounting to 9478·19
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 (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 tht< Reserve Bank of India within the afo1esaid period".
The appellant challenged the validity of the order and contended
(r) that on a proper construction of s. 8(3) of. the Foreign
Exchange Regulation Act read with s. 19 of the Sea Customs
Act, it was not legally open to the .customs authorities to take
an.)! action. again.st it under the .Sea Customs Act, as such action
would prejudice the provisions of s. 23 of the Foreign Exchange
Regulation Act, and (2) that, in any case, the conditions whicn
' ' the Collector of Customs had imposed in the impugned order for
•
· release of the confiscated gold were not warranted ~y the statute,
May 9.
Shewpujanrai
. .lndrasanrai Ltd.
v.
The Collector of
Customs
822
SUPREME COURT REPORTS
[1959]
and that as the order was a composite and integrated one it was
not severable and, therefore, should be quashed:
Held, (1) that the scope of s. 167(8) of the Sea Customs Act,
1878, is different from that of s. 23 of the Foreign Exchange
Regulation Act, 1947· Whereas under s. 23 of the Foreign
Exchange Regulation Act proceedings are taken in pcrsonam
against the offender for the purpose of penalising him for the
contravention of the provisions of the Act,. an order for confiscation of the smuggled goods under s. 167(8) of the Sea Customs
Act is one in rem.
There is a difference between the expression " any person
concerned in any such offence " occurring in the third column of
s. 167(8) of the Sea Customs Act and the expression "whoever
contravenes any of the provisions of this.Act" occurring in s. 23
of the Foreign Exchange Regulation Act. A person may be
concerned in the importation of• smuggled goods, without being a
smuggler himself or without himself contravening any of the
provisions of the Foreign Exchange Regulation Act.
In this case, the only penalty imposed under s. 167(8) of the
Sea Customs Act was confiscation of the gold, which indicated
that the customs authorities had dropped the proceedings in personam; consequently, the

## Text

_Characters 0–39,983 of 60,854. This is a partial read: ask again with offset=39983 for what follows._

•
S.C.R.
SUPREME COURT ·REPORTS
SHEWPUJANRAI INDRASANRAI LTD.
v.
821
THE COLLECTOR OF CUSTOMS.& OTHERS
(S. R. DAS C. J., BHAGWATI, S. K. DAs, SuBBA RAo
and VIVIAN BosE JJ.)
Smuggled Goods-Violation of provisions of Sea Customs Act
and Foreign Exchange Regulation Act-Power of Collector. of Customs to take action under Sea Customs Act-Confiscation-Fine in
lieu of confiscation-Order of confiscation coupled with conditions for
release of the smuggled goods-Legality of the order-Sea Customs
Act, z878 (8 of z878), ss. I9, z67(8), z82, z83-Foreign Exchange
Regulation Act, z947 (7 of z947), ss. 8, 23.
The appellant company was carrying on business as a bullion
merchant and in that capacity purchased about 9478 tolas of
gold. On information that the gold in question was smuggled,
the customs authorities issued a notice to the appellant to the
effect that the case had been placed before the Collector of Customs for adjudication by the Superintendent, Preventive Service.
The notice stated inter aJia :-" You are requested to show
cause ... why penal action should not be taken against you and
the 9478·19 tolas of gold in question under the provisions of
ss. 167(8) and 168 of the Sea Customs Act, 1878, for alleged violation of s. 19 of the same Act read with s. 8 of the Foreign ··
Exchange Regulation Act, 1947 ". The Collector of Customs,
after hearing the parties, came to the conclusion that the gold in
question 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 Regulation Act, and made an order in
these terms:. "I accordingly order that the entire quantity of
the gold seized on the 21st November, 1950, amounting to 9478·19
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 (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 tht< Reserve Bank of India within the afo1esaid period".
The appellant challenged the validity of the order and contended
(r) that on a proper construction of s. 8(3) of. the Foreign
Exchange Regulation Act read with s. 19 of the Sea Customs
Act, it was not legally open to the .customs authorities to take
an.)! action. again.st it under the .Sea Customs Act, as such action
would prejudice the provisions of s. 23 of the Foreign Exchange
Regulation Act, and (2) that, in any case, the conditions whicn
' ' the Collector of Customs had imposed in the impugned order for
•
· release of the confiscated gold were not warranted ~y the statute,
May 9.
Shewpujanrai
. .lndrasanrai Ltd.
v.
The Collector of
Customs
822
SUPREME COURT REPORTS
[1959]
and that as the order was a composite and integrated one it was
not severable and, therefore, should be quashed:
Held, (1) that the scope of s. 167(8) of the Sea Customs Act,
1878, is different from that of s. 23 of the Foreign Exchange
Regulation Act, 1947· Whereas under s. 23 of the Foreign
Exchange Regulation Act proceedings are taken in pcrsonam
against the offender for the purpose of penalising him for the
contravention of the provisions of the Act,. an order for confiscation of the smuggled goods under s. 167(8) of the Sea Customs
Act is one in rem.
There is a difference between the expression " any person
concerned in any such offence " occurring in the third column of
s. 167(8) of the Sea Customs Act and the expression "whoever
contravenes any of the provisions of this.Act" occurring in s. 23
of the Foreign Exchange Regulation Act. A person may be
concerned in the importation of• smuggled goods, without being a
smuggler himself or without himself contravening any of the
provisions of the Foreign Exchange Regulation Act.
In this case, the only penalty imposed under s. 167(8) of the
Sea Customs Act was confiscation of the gold, which indicated
that the customs authorities had dropped the proceedings in personam; consequently, the adoption of the procedure under the
Sea Customs Act did not prejudice in any manner the provisions
of s. 23 of the Foreign Exchange Regulation Act. The question
whether two remedies are available to the authorities concerned
in respect of a contravention which comes both under the Sea
Customs Act and the Foreign Exchange Act was left open.
(2) The Collector of Customs had no jurisdiction to i~pose
the two conditions for the release of the confiscated gold; But,
as the aforesaid conditions are severable from the rest of the
impugned order, the latter is valid as to the confiscation of the
gold and the payment of fine in lieu thereof.
R. M. D. Chamarbau.gwalla v. Union of India, [1957) S.C.R.
930 and Shri Ram Krishna Dalmia v. Shri Justice S. R. Tendolkar and others, [1959] S.C.R. 279, applied.
The relevant sections of the Sea Customs Act, 1878, and
the Foreign Exchange Regulation Act, 1947, are set out in the
judgment.
CIVIL APPELLATE JURISDICTION: Civil Appeal No.
256 of 1954.
Appeal from the judgment and decree dated July 3,
1953, of the Calcutta High Court in Appeal from Original Order No. 7 of 1953, arising out of the judgment
•
-
• a.nd decree dated August 5, 1952, of the said High
Court in Matter No. 84 of 1952.
1- •
S.C.R.
SUPREME COURT REPORTS
823
N. C. Chatterjee, S. K. Kapur and I. N. Shroff, for
the appellant.
·
.
C. K. Daphtary, Solicitor-General of India, H. J.
Umrigar and R. H. Dhebar, for respondents Nos. I
to 3.
B. Sen, S. N. Mukherjee and B. N. Ghosh, for respondent No. 4.
Veda Vyasa and B. P. JY!aheshwari, for respondent
No. 5.
1958. May 9.
The Judgment of the Court was
delive'eed by
Shewpujanrai
Indrasanrai Ltd.
v.
The Collector of
Customs
S. K. DAS J-.-This appeal has come to us on a
s. ]{,Das J.
certificate granted by the High Court of Judicature
at Cal.cutta that the case is a fit one for appeal to
this Court.
The appellant is Shewpujanrai Indrasanrai 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 Ban!r N. V., a foreign company carrying on
business at 1, Royal Exchange PlacE), Calcutta, and
B4arat 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
Qo!llpany carries on busmess as a bullion merc.han,~
and in that capacity used to buy. gold and .. silver in\
the Calcut~a and_ Bombay lliarkets and sell the same
either direct or through 1Jank_E)rS atJh~ aforesaid _t_.yq
places. It is stated that between November 14, 1950,
and November 20, 1950, the appellant Company, in
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 tofas being· •
deposited with respondent 4 and abput 2,437 tolas
824
SUPREME COURT REPOitTS
[1959]
r958
with respondent 5.
With the consent of the appellant Company, the two Banks respondents 4 and 5,
Shawpujanrai
h
ld t
1
C 1 tt
M"
c
h
Jnd,asan,ai Ltd. sent t e go
o t ie
a cu a
mt ;Or t e purpose
v.
of assaying. On November 20, 1950, the Collector
The Colleclo' of of Customs, Calcutta, asked the Mint authorities not
Customs
to part with the gold, and on November 21, 1950, the
gold was seized at the instance of the Customs authos. K. Das J.
rities, 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 se.ized from its place of
business at 69, Manohar Das Street. On November 22,
1950, the appellant Company received a letter signed
by one Ja8jit Singh of the Customs Department,
requesting the presence of the appellant at the
Customs House on November 27, 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 & Co., acting on behalf of the appellant Company. On December 19, 1950, the appellant
Company made an application in the High Court of
Calcutta nuder 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 April 23,
1951, the result of which was that the rule was made
absolute to t!otis extent only that the sei~ure 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 June 20, 1951, the Customs authorities sent a
• ·notice to the appellant Company which was in these
terms:-
·-•
•
I•
..
S.C.R.
SUPREME COURT REPORTS
825
.-
"Subject:-· Seizure of 9,478·19 tolas of gold at the
Government of India Mint, Strand Road, Calcutta.
I h
b
d.
d b
h C ll
f C
Shewpujanrai
ave een lrecte
y t e o . ector o
ustoms lndrasanrai Ltd.
to inform you that the above case has been placed
v.
before him for adjudication by the Superintendent, The Collector of
Preventive Service. A copy of the note submitted by
c .. stoms
the latter together with copies of the assay reports
therein referred to are enclosed herewith.
5· K. Das f.
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 sections 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
]'oreign Exchange Act) and that the gold had been
sent to the Mint for processing; that isr for melting
and casting the same into bars, weighing and stamping the same with the Mint Marks, and also assaying
small portions thereof. On July 3, 1951, the appellant Company submitted its explanation in answer to
the aforei:laid notice. The parties were then heard by
the then Collector of Customs, Sri Raja Ifam Rao; •
but before the hearing could concluds, Srf Raja Ram
826
SUPREME COURT REPORTS
[1959]
r958
Rao wa.s transferred. His successor, Mr. J. W. Orr,
heard the parties on some days; but on October 11,
r::.:7!:!:;•r~;d. 1951, Mr. Orr was succeeded by Sri A. N. Puri. This
v.
latter officer heard the parties afresh and concluded
The Collector of the hearing on February 8, 1952. On May 14, 1952,
Customs
Sri A. N. Puri passed the order impugned in this case,
in which he came to the conclusion that the gold in
5· I<. Das J.
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 21st November, 1950, amount-
( ing to 9,478•19 tolas be confiscated under section
167(8) of the Sea Customs Act. In lieu of confisoation,
however, I give the owner of the said gold an option
under section 183 ibid to pay a fine of Rs. 10,00,000
( (Rupees ten lakhs only) in addition to the proper
I customs duty and other charge leviable thereon with-
\
in 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 June 19, 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 May 14, 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 Peturn the gold to the appellant; and (c) 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 August 5, 1952. Broadly speaking,
• "the two inain grounds on which he held the impugned
order to be bad.were these. The learned Judge held
'
•
-
•
s.2:¥.
SUPREME COURT REPORTS
827
that by purporting to proceed under s. 182_ of the Sea
r958
Customs Act in the present case, the Customs a uthoh
.
.
rities had acted in prejudice to the :i;>rovisi?ns ?f s .. 23 lt~dr::~;;;;·~;d.
ofthe Foreign Exchange Act and this was m v1olat10n
v.
of s. 8(3) of the Foreign Exchange Act as it stood at The Collector of
the relevant time. He said :
Customs
"If the petitioners had not been implicated in
the charge it might have been open to the Customs
s. K. Das j.
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
alth()ugh 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.
•
Then there was an appeal which was heard by a
Division Bench consisting of Das and Mookerjee J J.
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 res:pect of which no •
application for the issue of a writ of certiorari under
828
SUPREl\IE COURT REPORTS
[1959]
·.~-... .,
'958
Art. 226 of the Constitution lay. On a construction of
s. 8(3) of the Foreign Exchange Act, as it stood at the
Shewpujanrai
l
I ld h
h
. .
Indrasanrai ua. re evant time, it le
t at t e restnct10ns mentioned
v.
therein had a double effect and the remedies available
The Collector of under s. 167(8) of the Sea Customs Act and under s. 23
Cnstoms
of the .Foreign Exchange Act were cumulative in
nature. It said:
S. J(. Das ] .
Tl
,.
d (
.
l
1
d
"
le 10rmer reme y meanmg t ie remec y un er
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 impl'lgned
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 imperative duty on the
officer adjudging confiscation to give the owner of the
goods an option to pay 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 Aection 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 July 3, 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
.]earned ·Chief Justice, with whom Das Gupta J.
•
agreed, expressed the view that the question w beth er
the proceeding in which the order appealed from wu,s
•
..
-
. '
S.O.R.
SUPREME COUH.T REPORTS
829
mad~ was of a civil or criminal nature, or was, in the
I958
language of Art. 132 of the Constitution, ' other proSh
.
.
d.
'
f
f
d'ffi It
h
dd d th t
.ewpujal!Y(Jt
cee mg was not ree rom
I cu y;
e a
e
a , Indrasanrai Ltd.
in any event, Art. 135 of the Constitution applied in
v.
the present case, because it was not disputed that The Collector of
certain questions of interpretation of the Constitution
Customs
were· involved and, therefore, the case was clearly
one where an appeal would lie to the Federal Court s. Jc Das f.
immediately before the commencement of the Constitution. The learned Solicitor-General, 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, preased 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 circumstance that it is open to us to give
special leave to the appellant undt;lr 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 December 1,
1953, and we prefer not to express any opinion thereon.
The other point relates to the view expressed by the
Hjgh Court in the order under appeal that an order of
confiscation or penalty under the Sea Customs Act is
a mere administrative or executive act, "in respect of
which no application for a writ of certiorari lies. It is
necessary to state that the point is now concluded by
two recent decisions of this Court. In F. N. Roy v.
Collector of Customs, Calcutta (1), this Court held that
the imposition of a fine under s. 167(8) of the.Sea Cus-.
toms Act was i'eally a quasi-judicial act and in the
•
(r) [1957] S.C.R. II51.
830
SUPREME COURT REPORTS
[1959]
z958
later decision of Leo Roy Frey v. The Superintendent,
S,
•
. ·District Jail, Amritsar and another (1),' it has been held
,.,wpu;anrai th t . .
.
fi
.
d
1 .
d
h
Indrasanrai Ltd.
· a m imposmg con scat10n an pena ties un er t e
v.
Sea Customs Act, the Collector acts judicially. ThereH• Coll"tor of fore, the view that an order of confiscation or penalty
Custom•
under the Sea Customs Act is a mere administrative
or executive act is no longer tenable.
5· K. Das l~
Now, we proceed to a consideration of the two main
"'
points urged on behalf of the appellant Company. It
has been argued before us that on a proper construction of s. 8 (3) of the Foreign Exchange Act (as it stood
at the relevant time) read with s. 19 of ·the Sea Customs Act, it was not legally open to the customs
authorities in the present case to take any action
against the appellant Company under the Sea Customs
Act, as such action prejudiced the provisions o:& s. 23
of the Foreign Exchange Act. To appreciate this
point it is necessary to read some of the relevant sections
of the Foreign Exchange AcL and the Sea Customs
Act.
Sub-sections (1) and (2) of s. 8 of the Foreign Exchange Act impose restrictions on import and export
of currency and bullion. Sub-section (1) states, inter
alia, that the Central Government may, by notification
in the official gazette, order that, subject to such
exemption, if any, as may be contained in the notification, no person shall, except with the general or special
permission of the Reserve Bank, bring or send into
the States any gold or silver. Such a notification was
published on August 25, 1948, which said in substance
that except with the permission of the Reserve Bank,
no person shall bring into the States from any place
outside India any gold, bullion, etc.. Sub-section (3)
was at the relevant time in these terms-
" 8 (3) The restrictions imposed by sub-sections
(1) and (2) shall be deemed to have been imposed under
J section 19 of the Se11 Customs Act, 1878, without prejudice to the provisions of section 23 of this Act, and
all the provisions of that Act shall have effect accordjngly." .
'
The aforesaid sub-section was later deleted by Act
(1) [1958] S.C.R. S2z.
•
..
> .
•
S.C.R.
SUPREME COURT REPORTS
831·
VIII of 1952, and a new section, namely, s. 23A, was
r9j8
introduced which provided inter alia that the restric51
. .
.
tions imposed by sub-ss. (1) and (2) of s. 8 shall be Ind;:~::~;inr~~d
deemed to have been imposed under s. 19 of the Sea
v.
·
Customs Act and all the provisions of that Act shall The Collec1or of
have effect accordingly except thats. 183 thereof shall
Customs
· have effect as if for the word "shall" therein, the
word "may" were substituted. At the time relevant
s. K. Das f.
for the purpose of the present case, sub-s. (3) of s. 8
was in full force and effect and the question under our
consideration has to be decided with reference to that
sub-section.
We then come to s. 23 of the Foreign
Exchange Act which at the relevant time was in these
terll1s:-
,
"23. "Penalty and Procedure.-(!) Whoever contra veaes any of the provisions of this Act or of any
rule, direction or order made thereunder shall be
punishable with imprisonll1ent for a term which may
extend to two years .or with fine or with both, and any
Court trying any such contravention may, if it thinks
fit and in addition to any sentence which it may impose for such contravention, direct that any currency,
security, gold or silver, or goods. or other property in
respect of which the contravention has taken place
shall be confiscated.
(2)
.
(3) No Court shall take cognisance of any offence
punishable under this section ...... except upon a complaint in writing made by a person authorised in this·
behalf by the Central Government or the Reserve
Bank by a general or special order :
.
Provided that where any such offence is the coAtravention of any of the provisions of this Act or any
rule, direction or order made thereunder which prohibits the doing of an act without permission, no such
complaint shall be made unless the person accused of
the offence has been given an opportunity of showing
that he had such permission.
(4) If the person committing an offence punishable under this section is a company or other bodv
corporate, every director, manager, secretary, ·or other· •
I06
832
SUPREME COURT REPOR'l'S
[1959]
officer thereof shall, unless he proves that the offence
was committed without his knowledge or that he exerShewpujanrai
· cised all due diligence to 1Jrevent its commission,
Indrasanrai Ltd.
.t
v.
be deemed to be guilty of such offence."
The Collector of Turning now to the Sea Customs Act, we start with
s. 19 which is in Chapter IV. It saysCustoms
S. K. Das].
" 19.
The Central Government may, from time to
time, by notification in the Official Gazette, prohibit or
restrict the bringing or taking by sea or by land goods
of any specified description into or out of India across
any customs frontier as defined by the Central Government."
•
Section 167 occurs in Chapter XVI of the Sea Customs
Act and in so far as it is relevant for our purpose, it
states-
" 167. The offences mentioned in the first oolumn
of the following schedule shall be punishable to the
;
extent mentioned in the third column of the same with
reference to such offences respectively:-
---·---
Offences.
8. If any goods,
the importation or
exportation of
which is for the time
being prohibited or
restricted
by
or·
under Chapter IV
of this A ct, be imported into or exported from· India
.contrary to such
prohibition or restriction;
Section of
this Act to
which offence
has reference.
Penalties.
Such goods shall
be lia hie to confiscation; and any
person concerned in
any such offence
18 & 19.
shall be liable to a
penalty not exceeding three times the
value of the goods,
or
not exceeding
one thousand rupees.
. Section 182 of the Sea Customs Act deals with adjudication of confiscation and penalties referred to in s. 167
aforesaid. . It states-
•
r

..
•
S.C.R .
SUPREME COURT REPORTS
833
" 182.
rn:every case, except the cases mentioned
in section 167, Nos 26, 72 and 74 to 76, both inclusive,
in which, under this Act, anything is liable to confiscation or to increased rates of duty ; or any person is
liable to a penalty, such confiscation, increased rate of
duty or penalty may be adjudged-
( a) without limit, by a Deputy Commissioner or
Deputy Collector of Customs, or a Customs.collector;
(b) up to confiscation of goods not exceeding two
hundred and fifty rupees· in value, and imposition of
penalty or increased duty, not exceeding one hundred
rupees, by an Assistant Commissioner or Assistant
Collector of Custorris ;
.
(c) up to confiscation of goods not exceeding fifty
rupees in value, and imposition of penalty or increased
duty not exceeding ten rupees, by such other subordinate officers of Customs as the Chief Customs-authority
may, from time to time, empower in that behalf in
virtue of their office :
Provided that the Chief Customs-authority may,
in the case of any officer performing the duties of a
Customs-collector, limit his powers to those indicated
in, clause (b) or in clause (c) of this section, and may
confer on any officer, by name or iff virtue of his
office, the powers indicated in clauses (a), (b) or (c) bf
this section."
Section 183 has an important bearing on one bf the
questions urged before us and is in these terms:
..
" 183.
Whenever confiscation is authorised. by
this Act, the officer adjudging it shall give the owner
of the goods an option to pay in lieu of confiscation
such fine as the officer thinks fit."
Section 184 of the Sea Customs Act states that whenever anything is confiscated und.er s. 18~, such thing
shall theri:mpon vest in Government, and the officer
adjudging oonfisca ti on shall take and hold possession of
the thing confiscated and every officer of police, on the
requisition of such officer, shall assist in taking and
holding such possession.
Section 186 of the Sea
Customs Act states, inter alia, that the award of any.
c<m~scation, penalty or increased rate of duty under
the Act by an officer of Customs shall bot prevent the
Shewpujiznrai
I ndrasanrai Ltd.
v.
The Collector of
Ct« I oms
S. K. Das].
\
•
834
SUPREME COURT REPORTS
[1959]
,1958
inflict.ion of any punishment to which the person
affected thereby is liable under any other law.
Shewpujanrai
'1\.T
h
d
b h jf f h
j
lndrasanrai Ltd.
l,ow, t e argument urge
on
e a o t e appe _
v.
!ant arising as it does out of s. 8(3) of the Foreign
The Collec1oi· of Exchange Act ands. 19 of the Sea Customs Act is this.
Custonis
Under sub-s. (3) of s. 8 a restriction imposed by a not.ification made under sub-s. (1) of the section shall be
5· K. Das J.
deemed to have been imposed under s. 19 of the Sea
Customs Act and all the provisions of the Sea Customs
Act shall have effect accordingly ; but the argument is
that this deeming provision is subject to an important
qualification contained in the words 'without prejudice
to the provisions of s. 23 of this Act ', meaning there.
by the Foreign Exchange Act. The contention is that
though the restriction imposed under sub-s. (1) of s. 8
is to be deemed to have been imposed under&. 19 of
the Sea Customs Act, such deeming is to be without
prejudice to, that is, subject to the provisions of s. 23
I
of the Foreign Exchange Act; therefore, where a contravention of any of the provisions of the Foreign
Exchange Act has taken place such as is punishable
under s. 23 thereof, the only remedy available in such
a case is the one under s. 23 and it is not open to the
Customs authorities to take action against the offender
under ss. 167 (8), 182 and 183 of the Sea Customs A ct.
It is contended that this is the true scope and effect
of sub-s. (3) of s. 8 of the Foreign Exchange Act, if
due regard is paid to the clause 'without prejudice to
the provisions of s. 23 of this Act' occurring therein.
It is further pointed out that there is power under
s. 23 itself to confiscate the goods in respect of which
the contravention has taken place.
On behalf of respondents 1 to 3, however, it is contended that the clause " without prejudice to the provisions of ii. 23 " does not mean " subject to the
provisions of s. 23 " and its true effect is merely this :
when there is contravention of the restrictions imposed
by sub-s. (1) and (2) of s. 8, which restrictions are
deemed to have been imposed under s. 19 of the Sea
Customs Act, the contravention may have a double
• ·effect; it.involves a violation of the provisions of the
Sea Customs Act and may at the same time involve
•
•
S.C.R.
SUPREME COURT REPORTS
835
a violation of the provisions of the Foreign Ex"
change Act and, if the offender is known, two
l
h
Shewpujamai
remedies may be availab e to t e authorities conIndrasamai Ltd.
cerned; one remedy is to proceed under the relevant
v ..
provisions of the Sea Customs Act and the other under The Collector of
Custonzs
the relevant provisions of the Foreign Exchange Act.
These two are concurrent remedies, which are not
mutually exclusive, though in the matter of punish5· .J<. Das f.
ment the question may arise whether a person can be
punished twice for the same act or offence.
On a careful consideration of these rival contentions
we have come to the conclusion that it is not necessary
on the facts of the present case to decide the larger
question as to whether two remedies are available to
the authorities concerned in respect of a contravention which comes both under the Sea Customs Act and
the Foreign Exchange Act and if so, to what extent
the two remedies are concurrent, cumulative or otherwise. Let us confine ourselves to the application of
sub-s. (3) of s. 8 of the Foreign Exchange Act to the
facts of this case. That sub-section states .firstly, that
the restrictions imposed by sub-ss. (1) and (2) shall be
deemed to have been imposed under s. 19 of the Sea·
Customs Act; secondly, it states that the aforesaid
deeming provision shall be without prejudice to the
provisions of s. 23 of the Foreign Exchange Act ; and
thirdly, it states that all the provisions of the Sea
Customs Act shall have 6lffect accordingly. The construction put forward o_n behalf of the appellant Company is that wheres. 23 of the :Foreign Exchange Act
is applicable, any other remedy under the Sea Customs
Act is barred; because that is the effect of the second
part of the sub-section which says that the deeming
provision shall be without prejudice to the provisions
of s. 23 and the concluding part of the sub-section
which says that all the provisions of the Sea Customs
Act shall have effect accordingly is controlled by the
second part, as is indicated by the use of the word
' accordingly ' therein. The learned Solicitor-General
has put forward a different construction. :A.ccording
to him, the second part of the sub-section when it says •
'without prejudice to the provisions ef s. 23 ' merely
836
SUPREME COURT REPORTS
[1959]
r95s
means that the remedy under s. 23 is also available in
an appropriate case, but it does not bar the reniedy
Skewpujanrai
l
lnd•asanrni Ltd. availab e under the Sea Customs Act; otherwise, the
v.
third and concluding part of tbe sub-section is render.
The Coll"'" of ed otiose.
He has further supported his contention
Customs
by a reference to s. 23A, inserted in 1952, which
repeats the phraseology of deleted sub-s. (3) of s. 8 but
S . . I\.. Das ].
makes it sufficiently clear what the meaning of the
clause 'without prejudice to the provisions of s. 23 ' is.
'Ve do not so decide, but let us assume that the construction put forward on behalf of the appellant is the
one that should be accepted in this case. The question
then is-does s. 23 of the Foreign Exchange Act apply
to the facts of this case and could the appellant Company be proceeded against under that section? A
distinction must at once be drawn between an action in
rem and a proceeding in personam.
Section 23 of the
Foreign Exchange Act is a proceeding against the
offender, and is applicable to the person who contravenes any of the provisions of that Act, even though
on a conviction for such contravention, the Court
may, if it thinks fit and in addition to any sentence
which it may impose for such contravention, direct
that the goods in respect of which the contravention
has taken place be confiscated. In substance it is a
proceeding against a person for the purpose of penalising him for a contravention of the provisions of the
]'oreign Exchange Act, and such a proceeding is
available when the offender is known. Take, however,
a case where the offender (the smuggler, for example)
is not known, but the goods in respect of which the
contravention has taken place are known and have
been seized.
Section 167(8) of the Sea Customs Act
contemplates a case of this nature, when it describes
the offence in •col. l in the following words-
" If any goods, the importation or exportation of
which is ............ prohibited or restricted be imported
into or exported from India contrary to such prohibition or restriction."
'J'he penalty provided is that the goods shall be liable
• to confiscation. There is a further provision in the
penalty colqmn that any person concerned in any such
•
S.C.:R.
SUPREME COURT REPORTS
837
offence 8hall be liable to a penalty not exceeding three
r958
, times the value of the goods etc. The point to note
Sh
P .
.
is that so far as the confiscation of the goods is conIndr::a:;:;'~:d.
cerned, it is a ·proceeding in rem and the penalty is
v.
enforced against the goods whether the offender is The Collector of
known or not known; the order of confiscation under
Customs
s. 182, Sea Customs Act, operates directly upon the
status of the property, and under s. 184 transfers s. K. Das 1·
an absolute title to Government. Therefore, in a
case where the Customs authorities can proceed only
against the goods, there can be no question of·
applying s. 23 of the Foreign Exchange Act and even
on the eonstru ction put forward on behalf of the a ppellant Company as respects s. 8(3), the remedy under
the Sea Customs Act against the smuggled goods cannot be barred; when on the facts of the case s. 23 can
have no application, no question of prejudieing its
provisions by the adoption of the procedure under
the Sea Customs Act can at all arise.
·Bose J. was fully aware of this distinction between
s. 23 of the Foreign Exchange Aet ands. 167(8) of the
Sea Customs Act.
Indeed, he expressly said th11t he
had no doubt that in appropriate eases where s. 23 is
not attracted, recourse can be had to s. 182 of the Sea
Customs Act; but he thought that •the notice which
was issued to the appellant Company in this case on
June 20, 1951, showed that the 'intention was to proceed against the offender also, and this, according to
him, made a difference and brought in s. 23.
\Ve are
unable to agree.
We have quoted the notice in an
earlier part of this judgment. The notice asked the
appellant to show cause why penal action should not
be taken against it and the gold under the provisions
of s. 167(8) for alleged violation of s. 19, Sea· Customs
Act, and s. 8, Foreign Exchange
Act~ Neither the
notice, nor the note of the Superintendent, Preventive
Service (enclosed with the notice) suggested that the
appellant was the smuggler and, therefore, liable to
penalty under s. 23 of the Foreign Exchange Act. Section 167(8) of the Sea Customs Act provide.s for two
kinds of penalties when contraband goods are imported •
into or exported from India; one is confisc!ttion·of the
S38
SUPREME COURT REPORTS
[1959]
z958
goods which is an order in rem and the other is a
penalty on the person concerned in any such offence ;
b~;:~::::t'~:d. that is, the offence described in column 1 of item (8).
v.
Taking the view most favourable to the appellant, it
The Collector of may be said that the notice contemplated both kinds
Customs
of proceedings namely one in rem and the other in
personam and asked the appellant to show cause
5• K. Das f.
against the imposition. of both penalties mentioned in
the third column of s. 167(8}; but the notice did not
show any intention, nor did it suggest even a possibility, of proceeding against the appellant under s. 23
of the Foreign Exchange Act. There is, we think, an
appreciable difference between the expression 'any
person concerned in any such offence' occurring in
the third column of s. 167(8) of the Sea Customs Act
and the expression 'whoever contravenes any Qf the
provisions of this Act ' occurring ins. 23 of the Foreign
Exchange Act.
A person may be concerned in the
importation of smuggled gold, without being a smuggler
himself or without himself contravening any of the
provisions of the Foreign Exchange Act. In this
sense, the scope of s. 167(8), Sea Customs Act, is different from that of s. 23 of the l~oreign Exchange Act.
Moreover, in the case under our consideration, the
only penalty imposed under s. 167(8) was the confisca.
tion of the gold which indicates that the authorities
proceeded with the proceeding in rem and dropped the
proceeding in personam ; therefore, no question of
prejudicing the provisions of s.