# INDO-CffiNA STEAM NAVIGATION CO. LID v. JASJIT SINGH, ADDITIONAL COLLECTOR OF CUSTOMS & ORS

- **Citation:** [1964] 6 S.C.R. 594
- **Court:** Supreme Court of India
- **Decided:** 1964
- **Bench:** P. B. Gajbndragadkar, K. N. Wanchoo, K. c. DAS GUPTA, J.C. Shah, N. Rajagopala Ayyangar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/indo-cffina-steam-navigation-co-lid-v-jasjit-singh-additional-collector-of-3207
- **Pages:** 29

## Headnote

Sea Customs-Prohibitr"on of entry of certain types of ships in IndiaSection
S2A
when
applicable-Whether mens rea necessaryNature of liability under s. 167(12A)--Section 167(12A) and
s. 183-Petition under Art. 136 when competent-When is a body
or authority a Court-Whether the Central Board of Revenue or
Central Government a Tribunal under Art. 136---Whether penalty
of Rs. 25 lacs excessive-Whether s. 52A ultra vires Arts. 14, 19
and 31 (I) and hence invalid-Constitution of India, Art. 13~ea
Customs Act, 1878, ss. 52A, 167(12A), 183, 188, 190A and 191.
The appellant carries on the business of carriage of goods and
passengers by sea and own• a fleet of ships for that purpose. One of
its ships named Eastern Saga arrived at Calcutta and was rummaged
by the Calcutta Customs Officers. In the sailors' accommodation, a hole
measuring 2i"X5t" was found in the wall panelling behind the back
batton of a wooden seat which had been screwed to the wall. The bole
was covered with a piece of wood and over-painted. The hole opened
into a space and in that space, Customs Officers found 1,4S8 bars of
gold valued at more than Rs. 23 lacs. Notices were duly served and
after hearing the parties, the AJditional Collector of Customs came to
the conclusion that the vessel had rendered itself liable to confiscation
under s. !67(12A) because it had infringed the provisions of s. S2A.
He ordered the confiscation of the ship but gave the owners thereof an
option to pay a fine of Rs. 25 lacs in lieu of confiscation. The appellant
went in appeal to the Central Board of Revenue but that appeal was
rejected. The appellant went in revision to the Central Government
but the revision petition was also dismissed.
The appellant then came
to this Court for special leave and obtained the same.
Dismissing the
appeal,
Held: (i) The Custom• authorities were right in holding that the
facts proved in the case showed that the "Eastern Saga" nor contravened
the provisions of s. 52A when it entered the port of Calcutta and hence
had incurred the liability prescribed by s. !67(12A) of the Sea Customs
Act.
(ii) The fine of Rs. 25 13cs was not excessive.
IDegal importation
of gold had assumed the proportions of a major problem facing the
country and it was open to the Customs authorities to take the view
that the best way to check smuggling was to impose deterrent fines
whenever those offences were discovered and proved.
(iii) Section 52A was not ultra vires Arts. 14, 19 and 31(1) and
beace was not unconstitutional or invalid.
The appellant was not only
'
6 s.c R.
SUPREME COURT REPORTS
595
a company but also a foreign company and as such was not entitled to
1964
claim the benefits of Art. 19. The plea under Art. 31(!) as well as
-.-
under s. 14 could not be sustained for the simple reason that in support· lndoN Ch!~
1 Steam
ing the said two pleas, the appellant had inevitably to fall back upon
""'~~ on
the fundamental right guaranteed by Art. 19( I )(fl.
Jtujit Sing~
Before an appeal can be entertained under Art. 136, two conditions
have to be satisfied. The order impugned must be an order of a judicial
or quasi~juOicial character and should not be purely an administrative
or evecutive order. The sid order should have been passed either by
a Court or Tribunal in the territory of India. It is difficult to lay
down any definite test to determine whether a body is a court/tribunal
or not. Sometimes, courts enquire whether that body or authority is
clothed with the trappings of a court. whether it can compel witnesses
to appear before it and administer oath to them, whether it was required
to follow certain rules of procedure, whether it was bound to comply
with the rules of natural justice whether it was etpected to tieal with
the matters before it fairly, justly and on merits and. not be guided by
subjective considerations and whether it was required to adopt judicial
or quasi-judicial approach.
If all or some of the important tests are
satisfied the proceeding"S can be
characte

## Text

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1964
594
SUPREME COURT REPORTS
INDO-CffiNA STEAM NAVIGATION CO. LID.
v.
JASJIT SINGH, ADDITIONAL COLLECTOR OF
CUSTOMS & ORS.
(P. B. GAJBNDRAGADKAR, c. J., K. N. WANCHOO, K. c.
DAS GUPTA, J.C. SHAH AND N. RAJAGOPALA AYYANGAR, JJ.)
Sea Customs-Prohibitr"on of entry of certain types of ships in IndiaSection
S2A
when
applicable-Whether mens rea necessaryNature of liability under s. 167(12A)--Section 167(12A) and
s. 183-Petition under Art. 136 when competent-When is a body
or authority a Court-Whether the Central Board of Revenue or
Central Government a Tribunal under Art. 136---Whether penalty
of Rs. 25 lacs excessive-Whether s. 52A ultra vires Arts. 14, 19
and 31 (I) and hence invalid-Constitution of India, Art. 13~ea
Customs Act, 1878, ss. 52A, 167(12A), 183, 188, 190A and 191.
The appellant carries on the business of carriage of goods and
passengers by sea and own• a fleet of ships for that purpose. One of
its ships named Eastern Saga arrived at Calcutta and was rummaged
by the Calcutta Customs Officers. In the sailors' accommodation, a hole
measuring 2i"X5t" was found in the wall panelling behind the back
batton of a wooden seat which had been screwed to the wall. The bole
was covered with a piece of wood and over-painted. The hole opened
into a space and in that space, Customs Officers found 1,4S8 bars of
gold valued at more than Rs. 23 lacs. Notices were duly served and
after hearing the parties, the AJditional Collector of Customs came to
the conclusion that the vessel had rendered itself liable to confiscation
under s. !67(12A) because it had infringed the provisions of s. S2A.
He ordered the confiscation of the ship but gave the owners thereof an
option to pay a fine of Rs. 25 lacs in lieu of confiscation. The appellant
went in appeal to the Central Board of Revenue but that appeal was
rejected. The appellant went in revision to the Central Government
but the revision petition was also dismissed.
The appellant then came
to this Court for special leave and obtained the same.
Dismissing the
appeal,
Held: (i) The Custom• authorities were right in holding that the
facts proved in the case showed that the "Eastern Saga" nor contravened
the provisions of s. 52A when it entered the port of Calcutta and hence
had incurred the liability prescribed by s. !67(12A) of the Sea Customs
Act.
(ii) The fine of Rs. 25 13cs was not excessive.
IDegal importation
of gold had assumed the proportions of a major problem facing the
country and it was open to the Customs authorities to take the view
that the best way to check smuggling was to impose deterrent fines
whenever those offences were discovered and proved.
(iii) Section 52A was not ultra vires Arts. 14, 19 and 31(1) and
beace was not unconstitutional or invalid.
The appellant was not only
'
6 s.c R.
SUPREME COURT REPORTS
595
a company but also a foreign company and as such was not entitled to
1964
claim the benefits of Art. 19. The plea under Art. 31(!) as well as
-.-
under s. 14 could not be sustained for the simple reason that in support· lndoN Ch!~
1 Steam
ing the said two pleas, the appellant had inevitably to fall back upon
""'~~ on
the fundamental right guaranteed by Art. 19( I )(fl.
Jtujit Sing~
Before an appeal can be entertained under Art. 136, two conditions
have to be satisfied. The order impugned must be an order of a judicial
or quasi~juOicial character and should not be purely an administrative
or evecutive order. The sid order should have been passed either by
a Court or Tribunal in the territory of India. It is difficult to lay
down any definite test to determine whether a body is a court/tribunal
or not. Sometimes, courts enquire whether that body or authority is
clothed with the trappings of a court. whether it can compel witnesses
to appear before it and administer oath to them, whether it was required
to follow certain rules of procedure, whether it was bound to comply
with the rules of natural justice whether it was etpected to tieal with
the matters before it fairly, justly and on merits and. not be guided by
subjective considerations and whether it was required to adopt judicial
or quasi-judicial approach.
If all or some of the important tests are
satisfied the proceeding"S can be
characterised as judicial proceedings
and the test of "trappings" is satisfied. Likewise, if it appears that
such a body or authority has been constitute'd by the legislature and
on it has been conferred the inherent judicial power of the State, that
is significant, if not a decisive indication. that the said body or authority
is a Tribunal.
The scheme of the Sea Customs Act, 1878, the nature of the prc:>-
ceeding brought before the appellate and revisional authorities, the
extent of the clain1 involved, the nature of the penalties imposed and
the kind of enquiry which the Act contemplates, all indicate that both
the Central Board of Revenue and the Central Government, while acting
as appellate or revisional authorities, constitute Tribunals under Art. 136
of the Constitution because they are invested with the judicial power of
the State and are required to act judicially.
In order to prove the offence of s. 52A agaj1181 a vessel, what is
to be moved is that there has been a construction. adaptation, alteration
of fitting and the said construction, adaptation, alteration or fitting had
been made for the purpose of concealing goods. The section prohibits
absolutely the entry of vessels which show that there has been construe·
tion, adaptafon, alteration or fitting made in them for the purpose of
concealing goods in them.
It is not necessary for the purpose of s. S2A
to prove mens rea against the person responsible for the contravention
of s. 52A. It is impossible to prove such mens rea or guilty mind.
The knowledge of the owners or even of the masters is entirely irrelevant.
Section 167(12A) and s. 183 have to be
read
together. Though
confiscation is a statutory corollary of the contravention of s. 52A, s. 183
expressly require1' the adjudicating officer to give an option to the owners
of the offending vessel to pay fine in lieu of confiscation. Confiscation is
596
SUPREME COURT REPORTS
1964
no doubt authorised and required by s. 167( 12A) but the statutory
1 tJd Ch-.-S
obligation ,.makes it necessary for the officer to give an option to the
0Navi':iio~eam owner. The result is that the ultimate penalty which can be imposed
•·
on the owners falls to be determined by the adjudicating officer in his
Ja.s;it Singh
discretion.
Shewpujanrai
lndrasanrai
Ltd. v. Collector
of
Customs [1959]
S.C.R. 821, F. N. Roy v. Collector of Customs, Calcutta, [1957]
S.C.R. 1151, Leo Roy Frey v. Superintendent, District .Tail, Amritsar and
Anr., [1958] S.C.R. 822, Thomas Dana v. State of P1111jab, [1959] Supp.
(4) S.C.R. 274, Maqboo/ Hussain v. Stare of Bombay, [1953] S.C.R. 730,
Harinagar Sugar Mills Ltd. v. Shyam Sundar Jhunjhunwala and Ors.,
[1962] 2 S.C.R. 339, Shivii Nathubhai v. Union of India, [1960] 2 S.C.R.
115, Jaswant Sugar Mills Ltd., Meerut v. Lakshmi Chand, [1963] Supp. I
S.C.R. 242, Engineering Mazdoor Sabha v. Hind Cycles Ltd. [1963] Supp.
I ·s.C.R. 625, Ravula Hariprasada Rao v. The State, [1951] S.C.R. 322,
Brend v. Wood, (1946) 110 J.P. 317 and Sherra.s v. De Rutzen, (1895)
I Q.B. 918, referred to.
CML APPELLATE JURISDICTION: Civil Appeal No. 770
of 1962.
Appeal by special leave from order No. 17 42 of 1960
of the Government of India Ministry of Finance (Department of Revenue) dated December 17, 1960 in Custom
Revision Application No. 1631 of 1959 and/or from the
order dated May 12, 1959 of the Central Board of Revenue
in Customs Appeal No. 151 of 1959 and
Petition No. 138 of 1961
Petition under Art. 32 of the Constitution of India for
the enforcement of Fundamental Rights.
Sachin Chaudhury, B. Sen and S. N. Mukherjee, for the
appellant (in C.A. No. 770/62) and the petitioner (in petition No. 138/1961).
S. V. Gupte, Additional Solicitor-General, D. R. Prem
and R.H. Dhebar, for the respondents (in C.A. No. 770/62
and petition No. 138 of 1961).
February 3, 1964.
The Judgment of the Court was
delivered by
. GoJindragadkar
GAJENDRAGADKAR C.J .-This appeal by special leave
C. l.
raises a short question about the true scope and effect of
section 52A of the Sea Customs Act, 1878 (No. 8 of 1878)
61S.C.R.
SUPREME COURT REJ:'ORTS
597
(hereinafter called 'the Act').
The appellant, the Indo1964
China Steam Navigation Co. Ltd., which carries on the Indo c;;;;;;; s .. am
business of carriage of goods and passengers by sea, owns
Navigation
a fleet of ships, and has been carrying on its business for
Jasi{ Singh
over 80 years. One of the routes plied by its ships is the
Calcutta-Japan-Calcutta route.
An order has been passed
Gajendragadkar
by the Customs Authorities confiscating the
appellant's
motor vessel "Eastern Saga" under section 167(12A) of
the Act, and giving the appellant the option under s. 183 of
paying a fine of Rs. 25 lakhs in lieu of confiscation. The
appellant contends that this order has been based upon a
misconstruction of the provisions of s. 52A.
The vessel "Eastern Saga" has 6,631 gross registered
tons, and 4,441 net registered tons. It has an overall length
of 475'-2-l/2" a breadth of 59'-3" and a summer draft of
24'-7". It carries a crew of 14 officers and 56 seamen. It
appears that the vessel has 119 separate rooms, including
34 crews' cabins, 8 passengers' cabins, a sailor's mess, a
fireman's mess, a comprador's office, a hospital,
a boys'
mess, a ship's office, an engineer's office, a saloon, lounge,
pantry, chart-room, radio officer's cabin, captain's cabin,
wheel house, alleyways, and stairways. It is clear that the
vessel is a well equipped big vessel. It has also domestic
refrigeration compartments which are lined by
insulated
walls.
All crew accommodation in the vessel has been insulated as required by statutory regulations.
Such insula•
tion consists of a sheathing or panelling of fibre board or
similar material tacked to wooden frames inserted between
the stiffeners jutting out from the steel bulkheads or walls
of the said vessel, in consequence of which hollow spaces
are left between the panelling and the walls of the vessel.
The said panelling or sheathing formed a removable feature
or furnishing of the said vessel.
The 'Eastern Saga' arrived at Calcutta from the Far
East on October 29, 1957. In the course of its ordinary
voyage, as a cargo vessel carrying a legitimate
cargo of
24,815 packages of general merchandise weighing 1,506
tons, it was rummaged by Calcutta Customs Officers on the
30th aud 31st October and on the 12th November, 1957.
C.I.
SUPREME COURT REPORTS
1~
On search being made of the vessel's domestic refrigeration
tndo c;;;;; Sttam compartments, a two-tier white painted shelf was found
Navigation
fixed to the insulated wall of the handling room.
The
ltuJit•Singh
screws which seemed like holding the shelf to the wall, in
fact, did not do so they had been hammered flat and could
Gai•ndragadkar not be turned by a screw driver; the shelf was held by some
C.J.
wooden plugs which had been hidden below a coat of paint;
below the shelf, there was a hole in the panelling closed with
a plug; this hole gave access to the insulation space of the
compartment; it was of the size 7"X4-l/2". Nothing was
found hidden in that space.
A cabin on the forecastle of the vessel was then searched and two rectangular openings in the cabin wall panelling were discovered behind a steel clothes locker which
was screwed to the wall. One of these was closed with a
wooden cover.
They measured S"X 13" and 5"X5" respectively.
Nothing was found hidden in either of these
two spaces.
The cabin marked "Compradores" was also
searched, and when a wooden bench which was screwed to
the wall panelling was removed, two rectangular holes were
found in the panelling behind the bench.
These
holes
which were covered with wooden plugs and overpainted,
measured 5"X4-l/2" and 8"X2-l/2". Nothing was found
in these spaces either. The cabin of No. 1 Fitter was then
searched and two rectanglllar holes were found in the visible
part of the wall panelling which had been filled in and overpainted;
they
were. respectively 7-1/2"Xl0-1/2" and
12"X 12" in size.
Nothing was found hidden in these
spaces. That took the searching party to the sailors' accommodation where a hole measuring 2-1/2"X5-1/2" was
found in the wall panelling behind the back batten of a
wooden seat which had been screwed to the wall.
This
hole was covered with a piece of wood and over painted.
The hole opened into a space and in that space, the Customs
Officers found a large quantity of gold in bars.
Further
search in the sailors' accommodation led to the discovery
of a hole in the wall panelling behind a steel clothes locker
which was closed with a wooden plug. Nothing was found
in it.
That is how a search was made by the customs
ol!lcers on Easteni Saga and in one of the holes a large
quantity of gold in bars was dilCOVercd.
6 S.C.R.
SUPREME COURT REPORTS
599
On November 12, 1957, notices were served on the
1964
owners' Agents at Calcutta, M / s. Jardine Henderson 11nd Inda c;;;;;; s1 .. m
Co. Ltd., and on the master of the vessel, Captain Kiunear,
respectively to show cause why the vessel should not be confiscated under s. 167(12A) since it had contravened s. 52A
of the Act and penal action should not be taken against the
agents and the master in that behalf. On the same day, a
notice in similar terms was issued to Kwok Cho, a member
of the crew of the Eastern Saga who had <ome forward to
claim the gold which was
discovered as a result of the
search. On November 13, 1957, a further notice to show
cause was served on the master in regard to another hole
which had been discovered after the issue of the first notice.
The agents and the master thereupon sent elaborate
replies setting forth their pleas that, in law, no action could
be taken against them.
The master pleaded that he had
no knowledge of the presence of gold or unauthorised_ holes
in the ship and had taken all reasonable precautions in
accordance with the Company's
instructions.
He
fully
adopted the other pleas made by the agents.
The agents
substantially relied on a report by M/s. Norman Stewart
and Co., Marine Surveyors, Naval Architects and Consulting Engineers, and urged tbat unless special,
extensive,
time-consuming and uneconomic detailed
searches
were
carried out, it was impossible to discover special hiding
places like the ones discovered on the search made by the
customs authorities.
They also urged that they had no
knowledge about the holes or about the gold which was discovered from one of them. They referred to the statement
made by Kwok Cho and alleged that the said statement
showed that gold could be smuggled by a smuggler without
the knowledge of the master and the owners of the ship.
The ship moves on High-seas from place to place during
the course of business, and it was impossible that the master,
though in the ship, would know anything about the criminal activities of a smuggler carried on in nooks and comers
of the ship, and it was inconceivable that the owners of the
ship would ever know what was happening on the ship during its travel on the High-seas. They also relied on the fact
that they had taken all the precautions which could be taken
reasonably and had issued express and definite instructions
Navigation
v
]Ol/il Sinrh
Ga/endragadkar
C.1.
600
SUPREME COURT REPORTS
1964
to their crew against committing any offence like smuggling.
Ir.do China Steam
On receiving the replies sent by t)le agents, the master,
Navigation
and Kwok Cho, the Additional Collector of Customs heard
...
Jasiit Singh
the appellant, and on November 23, 1957, he passed the
Gajendragadkar impugned order. He held that having carefully considered
c.1.
the written explanations tendered and oral arguments urged
before him, he was satisfied that the preventive measures
taken by the owners, the agents, and the master proved to
be hopelessly inadequate and ineffective. He accepted their
plea that they need not be regarded as persons concerned in
the illegal importation of gold into India within the meaning
of s. 167 ( 8) of the Act. He also upheld their plea that the
openings found in the cabin of No. 1 Fitter did not attract
the provisions of s. 167 (12A). In regard to other matters,
the explanations offered appeared to him to be unsatisfactory and unacceptable. His conclusion, therefore, was that
the vessel had clearly rendered itself liable to confiscation
under s. 167(12A) because it had infringed the provisions
of s. 52A. The quantity of gold found on the vessel was
approximately of the value of Rs. 23,79,490/80 nP. ®
Rs. 109 /24 nP. per to/a, and he noticed the fact that this
was the recovery made in one of the several cavities found
on the ship.
He was, therefore, inclined to infer several
holes discovered in the vessel indicating the extent to which
the hiding places were used for contravening s. 52A. That
is why he confiscated 1,358 gold bars discovered as a result
of the search absolutely under s. 167 ( 8) read with s. 23A
of the Foreign Exchange Regulation Act. He also imposed
a personal penalty of Rs. 10,000 on the sailor Kwok Cho.
In regard to the ship, he directed that Eastern Saga be
confiscated under s. 167(12A) and in lieu thereof, he gave
the owners of the ship an option to pay a fine of Rs. 25
lacs which he directed should be paid within 30 days of the
date of the despatch of the order, or such extended time as
may be allowed. In passing this order, the Additional Collector observed that he had taken into consideration the fact
that the agents had already suffered some loss due to the
vessel's detention at the port.
The appellant then preferred an appeal before the Central Board of Revenue.
The Board considered the matter
and came to the conclusion that none of the contentions
6 S.C.R.
SUPREME COURT REPORTS
601
rafsed by the appellant was either warranted or supported
1964
by the law as it stands.
The Board expressed its concur- Indo China Steam
rence with the conclusions of the Additional Collector that
NaviRation
the offence under s. 52A of the Act had been proved, and
Jasgir· Singh
the appellant was liable to be dealt with under s. 167(12A)
of the Act. In regard to the grievance made by the appelGajendragadkar
C. I.
!ant that the fine imposed by way of option was excessive,
the Board observed that having regard to the quantity and
value of the smuggled gold and other relevant facts, it was
not inclined to make any change in the said order.
The
penalty imposed on the master, s"aid the Board, was also not
so large as to need any revision. It is not disputed that the
value of the ship is very much more than the amount of
Rs. 25 lacs imposed by way of fine under s. 183. This
order was pronounced on May 12, 1959. The appellant's
attempt to move the Government of India in its revisional
jurisdication failed and its application was dismissed on
December 20, 1960. The appellant then moved this Court
for special leave and it is with the special leave granted by
this Court that the present appeal has come before us.
At the hearing of this appeal, the learned Additional
Solicitor-General has urged a preliminary objection. He
contends that none of the Customs Authorities which had
dealt with the appellant's case is a tribunal under Art.
136 (1) of the Constitution, and so, the appeal preferred by
the appellant is incompetent.
It is true that special leave
has been granted to the appellant by this Court, but there
can be little doubt that even in cases where special leave
has been granted at the ex parte hearing of the matter on
the petition of the appellant for special leave, the respondent can at the final hearing, raise a preliminary contention
that special leave should not have been granted, since the
decision, judgment, or order appealed against, has not been
pronounced either by a Court or Tribunal within the meaning of Art. 136(1). The Additional Solicitor-General
argues that neither the Customs Collector, nor the Central
Board of Revenue, nor the Central Government is a Tribunal, and so, special leave granted to the appellant should
1:>e revoked on that ground.
It is settled by decisions of this Court that the Customs
Officer who initially acts under s. 167(12A) is not a Court
SUPREME COURT REPORTS
1964
or Tribunal, though it is also settled that in adjudicating
lndo China Steam upon the question as to whether s. 52A has been contravenNavigation
ed by any ship and by such contravention the said ship has
Ja,,;{s;ngh
made itself liable to ~nfiscation under s. 167(12A), the
Customs Officer has to act in a quasi-J"udicial manner. In
Gajendragadkar
c. J.
Shewpujanrai Indrasanarai Ltd. v. Collector of Customs and
Other11(') this Court has held that an order of confiscation
or penalty passed under the Sea Customs Act is not a mere
administrative or executive act, but is really a quasi-judicial
act, and, therefore, an application for a writ of certiorari
lies in respect of such order under Art. 226 of the Constitution.
In expressing this conclusion, S. K. Das J. who
1poke for the Court, has referred to two earlier decisions
where this point had been considered and it was held that in
holding his proceedings under the Sea Customs Act, the
Collector acts judicially, vide F. N. Roy v. Collector of
Customs, Calcutta,( 2 ) and Leo Roy Frey v. The Superintendent, District Jail, Amritsar and Anr.(').
Similarly,
in Thomas Dana v. State of Punjab,(') this Court has
observed that the Collector and other Officers in the hierarchy mentioned by the Sea Customs Aot may have to act
judicially in the sense of having to consider evidence and.
hear arguments in an informal way; even so, the Act does
not contemplate that in doing so, the said authorities are
functioning as a Court.
In Maqbool Hussain v. The State of Bombay etc.,(')
while dealing with .the impact of the confiscation of goods
under the relevant provisions of s. 167 of the Act on the
question as to the constitutionality of a subsequent prosecution launched against a person whose goods had been confiscated, this Court had occasion to consider the effect of the
order of confiscation in relation to the provisions of Art. 20
of the Constitution, and it was held that the
proceeding
before the Sea Customs Authorities under the Act was not
a prosecution and the order of confiscation was not
a
punishment inflicted by a Court or Judicial Tribunal within the meaning of Art. 20(2), and so, the impugned prose-
(!) [1959) S.C.R. 821.
(2) [1957] S.C.R. WH.
(3) [1958) S.C.R. 822.
(4) [1959) Supp. (I) S.C.R. 274.
(5) [1953] s.c.R. 7'0. at p. 742.
6 S.C.R.
SUPREME COURT REPORTS
cution was not incompetent or invalid. It would thus be
1964
seen that one of the points which this Court had to consider lndo c;;;;;; Steam
in that case was whether the Collector who had passed the
Navigarion
order of confiscation, was a Judicial Tribunal within the
JasJ{singh
meaning of Art. 20, and the answer rendered by this Court
·
h
·
·
· ·
h"
h"
Gajendragadkar
was m t e negative. It 1s true that m g1V1ng t 1s answer t 1s
c. J.
Court has observed that the Customs
Officers are not
required to act judicially on legal evidence tendered on oath
and they are not authorised to administer oath to any witness.
The appeals, if any, lie before the Chief Customs
Authority which is the Central Board of Revenue and the
power of revision is given to the Central Government which
certainly is not a judicial authority. It would be noticed that
the last observation is purely in the nature of an obiter
observation because the status of the Central Board· of Revenue or the Central Government is dealing with the appeals
or revision applications under section 190 and 191 of the
Act did not fall to be considered in that case, was not argued,
and naturally has not been examined; and so, this observation cannot be treated as a decision on the question which
has been argued before us in the present appeal.
The result,
therefore, is that it is no longer open to doubt that the
Customs Officer is not a Court or Tribunal, though in
adjudicating upon matters under s. 167 of the Act, he has to
act in a judicial manner. It may be conceded that neither
the Central Board of Revenue, nor the
Central Government is a Court within the meaning of Art. 136.
The question which then arises is, can the Central Board
of Revenue exercising its appellate power under s. 190 of
the Act, or the Central Government exercising its revisional
jurisdiction under s. 191, be held to be a Tribunal under
Art. 1367 It is clear that before an appeal can be entertained in this Court under Art. 136, two conditions have to
be satisfied; the order impugned must be an order of a judicial or quasi-judicial character and should not be purely an
administrative or executive order; and the said order should
have been passed either by a Court or a Tribunal in the
territory of India. It is difficult to lay down any definite or
precise test for determining the character of a body which is
called upon to adjudicate upon matters brought before it.
Sometimes in deciding such a question, courts enquire
SUPREME COURT REPORTS
1964
whether the body or authority whose siatus or character is
/ndo China Steam the subject-matter of the enquiry, is clothed with the trapNavigation
pings of a court. Can it compel witnesses to appear before
Ja.•ii;''singil
it and administer oath to them, is it required to follow certain rules of procedure, is it bound to comply with the rules
Gajendragadkar
c. J.
of natural justice, is it expected to deal with the matters
before it fairly, justly and on the merits and not be guided
by subjective considerations; in other words, is the approach
which it is required to adopt judicial or quasi-judicial approach? If all or some of the important tests in that behalf
are satisfied, the proceedings can be characterised as judicial proceedings and the test of trappings may be said to be
satisfied. But apart from the test of trappings, another test
of importance is whether the body or authority had been
constituted by the State and the State has conferred on it
its inherent judicial power. If it appears that such a body
or authority has been constituted by the legislature and on it
has been conferred the State's inherent judicial power, that
would be a significant, if not a decisive, indication that the
said body or authority is a Tribunal. It is in the light of
these considerations that we have to examine the question
as to whether the Central Board of Revenue and the Central Government is a Tribunal or not under Art. 136.
Before doing so, however, we may refer to ·some of the
decisions which were cited at the Bar on this point.
In
M/s. Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala and Others(') the
question raised before
this
Court was whether the Central Government while exercising its powers under section 111 (3) of the Companies Act,
1956 (No. I of 1956) is a Tribunal within the meaning of
Art. 136, or not. In dealing with this question, this Court
first enquired whether, while exercising its
powers under
s. 111 of the Companies Act, the Central Government was
required to act judicially or not. The scheme of s. 111 was
then analysed and it was observed th~t in an appeal preferred under s. 111, there was a /is or dispute between the contesting parties relating to their civil rights, and the Central
Government was invested with the power to determine that
dispute according to law. This dispute was in regard to the
claim made by a transferee of a Company's shares to have
(1) [1962] 2 S.C.R. 339.
6 S.C.K
SUPREME COURT REPORTS
605
his transfer registered in the Company's register, and the
1964
view which this Court took was that when such a dispute lndo China Steam
goes before the Central Government under s. 111, it has to
Navi~ation
consider and decide the proposal and the objections in the
Jasiit.,Sin.;h
light of the evidence, and not on grounds of policy or expediency. That is why this Court came to the conclusion that Gajendragadkar
th C
c. J.
e entral Government was a Tribunal under Art. 136 of
the Constitution.
In support of the view taken on this point, this Court
referred to an earlier decision in Shivji Nathubhai v. The
Union of India and Ors., (1) where it
was held that the
Central Government exercising power of review under r. 54
of the Mineral Concession Rules, 1949 against an administrative order of the State Government granting
a mining
lease was subject to the appellate jurisdiction of this Court,
because the power to review was judicial and not administrative. Thus, these, two decisions. show how the character
of the adjudication made by the Central Government either
under s. 111 (3) of the Companies Act, or under r. 54 of
the Mineral Concession Rules, 1949, was determined by
this Court.
As illustrations of cases where the application
of the said tests leads to the conclusion that certain authorities cannot be held to be tribunals, we· may refer to the
decisions of this Court in Jaswant Sugar Mills Ltd., Meerut
v. Lakshmi Chand and Ors.(2) and Engineering Mazdoor
Sabha and Anr. v. Hind Cycles Ltd.( 3 ). It is in the light of
these decisions that we will proceed to consider whether the
Central Board of Revenue and the Central Government can
be said to be a Tribunal under Art. 136 of the Constitution.
-
In considering this matter, let us briefly examine the
procedure prescribed by the Act in relation to the adjudications made under its provisions. Before we do so, however,
we ought to refer to the authorities that function under
the Act. Section 3 of the Act refers inter a/ia, to three authorities which function under it. The Chief Customs Authority is the Central Board of Revenue constituted under the
Central Board of Revenue Act, 1924. The Chief Customs
Officer is the Chief Executive Officer of Sea-customs for any
(1) [1960] 2 S C.R. 775.
(2) [1963] Supp. l S.C.R. 242.
(3) (1963] Supp. I S.C.R. 625.
606
SUPREME COURT REPORTS
1964
port to which the Act applies; and the Customs Collector
lndo China Steam includes every officer of Customs for
the time being in
Navigation
separate charge of a custom-house, or duly authorised t<i
• ·
perform all, or any special duties of an officer so in charge.
Gajendragadkar It is by reference to these three categories of officers that the
c. J.
procedure prescribed by the Act
has to be considered.
Chapter XVII of the Act deals with the procedure relating
to offences, appeals, etc.
Section 169 confers on the Customs Officers power to search on reasonable suspicion. Section 170A confers power on the Customs Officer to screen
or X-ray bodies of persons for detecting secreted goods. Section 171 prescribes the powers of Customs Officer for boarding and searching such vessels.
Section 171-A lays down
the powers of Officers of Customs to summon persons to
give evidence and produce documents. The power to summon a person to give evidence would include the power to
administer oath to him under s. 4 of Act I of 1873. An
enquiry held by the Officer of Customs under s. 17 lA is by
sub-section (4) of s. 171-A deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the
Indian Penal Code.
Under s. 183, the officer adjudging
the matter brought before him under s. 167 of the Act is
empowered to give an option to a oerson to pay a fine in
lieu of confiscation.
Having thus broadly referred to the provisions rdating
to adjudication by the Customs Officer, we would now examine the provisions in regard to appeals and revisions made
by the Act. Section 18 8 provides for an appeal against any
decision or order passed by any officer of Customs, and it
requires that the said appeal must be filed within
three
months from the date of the orde"t or decision challenged.
This appeal lies to the Chief Customs Authority, or in such
cases as the Central Government directs, to any Officer of
Customs not inferior in rank to a Customs Collector and
empowered in that behalf by name or in virtue of his office
by the Central Government.
The section further provides
that the appellate authority may make such enquiry and pass
such order as it thinks fit, confirming, altering or annulling
the decision or order under appeal.
The proviso to this
section makes it clear that no order passed in appeal can
impose upon the person any greater confiscation, penalty or
6 S.C.R.
SUPREME COURT REPORTS
607
rate of duty than has been adjudged against him in the
1964
original decision or order.
The section adds that every Inda ch;;;; Steam·
order passed in appeal shall be final, subject to the power
Navigation
of revision conferred by s. 191. It is thus clear that the
JasiitvSingh
orders passed by the Officers of Customs are made appealbl
d
Gajendragadkar
a e, an the appellate authority is required to reconsider
c. J.
the matter, hold additional enquiry if thought necessary and
decide the contentions raised by the appellant on the merits.
Section 189 refers to the requirement of the deposit of
duty demanded which has to be made by the
appellant
pending the appeal, and it naturally provides that if as a
result of the decision of the appeal, the whole or any portion
of tlie amount deposited is not leviable, the Customs Collector shall return such amount or portion, as the case may
be, to the owner of such goods on demand by such owner.
Section 190 confers upon the Chief Customs Authority
the power to remit penalty or confiscation. Section l 90A
deals with the revisional powers of the Chief Customs
Authority and the Chief Customs Officer; and s. 191 prescribes for the revisional powers of the Central Government.
Both the revisional powers specified bys. 190A ands. 191
can be exercised either suo motu by the revisional authority,
or on an application made by an aggrieved party in that
behalf. That, briefly, is the scheme of appeals and revisions
contemplated by the Act. There is a regular hierarchy of
authorities beginning with the Customs Officer who deals
with the problems of adjudication initially and ending with
the Central Government which is the final revisional authority. We may also incidentally refer to Rule 49 of the Rules
framed by the Central Government in exercise of powers
conferred on it by s. 9 ( c) of the Aot. This Rule provides
that every appeal presented to the Chief Customs Authority
under s. 18 8 and every application made to the GovernorGeneral-in-Council under s. 191 shall be accompanied by a
copy of the decision or order by which the appellant or the
applicant is aggrieved. The question which we are considering at this stage is whether the appellate authority acting
under s. 188 and the revisional authorities acting under sections l 90A and 191 can be said to be tribunals within the
meaning of Art. 136.
608
SUPREME COURT REPORTS
1964
It is thus clear that after the order of confiscation is
/ndo China Steam made under s. 167 (12A) and an option is given to the
Navi~ation
?wner of the offending ship under s. 183, the inifial proceedlwditvSin~h
ings taken 'under the Act come to an end and a stage is
Gajendragadkar reached for making an appeal against the order of confiscac. 1·
tion or the imposition of fine.
In the present appeal, we
are concerned with the subsequent stage of the proceedings,
because what we have to decide on the preliminary objection raised by the Additional Solicitor-General is the status
or character of the appellate authority or the Central Government which exercises its revisional jurisdiction. In our
opinion, having regard to the scheme of the sections which
we have just cited, there is no difficulty in holding that the
Central Board of Revenue which functions as an appellate
authority, and the Central Government which exercises revisional powers are both Tribunals within the meaning of Art.
136 of the Constitution. A dispute is raised either by way
of appeal or revision by the party aggrieved by the order
passed by the Customs Officers, and that dispute has to be
tried by the appellate or the revisional authority in the light
of the facts adduced in the proceedings and according to
law.
All the proceedings under the. Act, whether before
the Customs Officer, or whether in appeal or revision, have
to be conducted in accordance with the principles of natural
justice and they are in that sense judicial or quasi-judicial
proceedings. The fact that the status of the Customs Officer who adjudicates under s. 167(12A) ands. 183 of the
Act is not that of a tribunal, does not make any difference
when we reach the stage of appeal or revision.
A period
of limitation is prescribed for the appeal, a procedure is
prescribed by Rule 49 that the appeal or revision must be
accompanied by a copy of the decision or order complained
against, and the obvious scheme is that both the appellate
and the revisional authorities must
consider the
matter
judicially on the evidence and determine it in accordance
with law. It is obvious that heavy fines are imposed in these
proceedings and the confiscation orders passed may affect
ships of very large value. By his appeal or revisional application the ship-owner naturally contends that the order of
confiscation is improper or invalid and he sometimes urges
that the fine imposed is unreasonable and excessive. Where
disputes of this character are raised before the appellate or
6 S.C.R.
SUPREME COURT REPOR rs
609
the revisional authority, it would be difficult to accede to
~964
the argument that the authority which deals with these dis· llldo Chiu s1111111
putes in its appellate or revisional jurisdiction is not a tribuN••igatw11
nal under Art. 136.
These' authorilies are constituted by
1u;;;'s11fg/11
the legislature and they are empowered to deal with the disputes brought before them by aggrieved persons. Thus. the TM1"1J.1':"""
scheme of the Act, the nature of tne proceedings 11rou~ht
before the appellate and the revisional authonues. the extent
of the claim involved, the nature of tne oenames 1mnosed
and the kind of enquiry which the Act contemplates, all
indicate that both the appellate and the revisional authorities acting under the relevant provisions of the Act constitute Tribunals under Art. 136 of thr- Constitution, because
they are invested with the judicial power of the State, and
are required to act judicially. Therefore, we must over-rule
the preliminary objection raised by the Additional SolicitorGeneral and iproceed to deal with the appeal on the merits.
That takes us to the principal question as to the c0nstruction of s. 52A of the Act which has been elaborately
argued before us by Mr. Sachin Choudhury. Section 52A
provides that no vessel constructed, adapted, altered, or fitted
for the purpose of concealing goods shall enter, or be within
the limits of any port in India, or the Indian customs waters.
This section is the only section included in Chapter VIA
and it was inserted by Act 10 of 1957. The plain construction of this section appears to be that whenever a ship
answering the description contained in its first part enters
or is within the limits of any port in India, or the Indian
customs waters, it contravenes the prohibition prescribed by
it. The prohibition is against the construction, adaptation,
alteration or fitting for the purpose of concealing goods.
What has to be proved against a vessel which is charged
with having contravened s. 52A is that there has been a
construction, adaptation, alteration or fitting, and that the
said construction, adaptation, alteration or fitting has been
made for the purpose of concealing goods.
Therefore, if
an alteration in a vessel made for the purpose of concealing
goods is proved, the contravention of s. 52A must be
inferred.
In other words, the section prohibits absolutely
the entry of vessels which show that there has been any
IM-159 S.C.-!9.
610
SUPREME, rou~T .REPORTS
!P~
.construction, adapta,tion, alteration or fitting made in them
"'4o.