# RADHA KISHAN BHATIA v. UNION OF INDIA AND OIBERS

- **Citation:** [1965] 2 S.C.R. 213
- **Court:** Supreme Court of India
- **Decided:** 1964-11-23
- **Bench:** K. SUBBA RAo, Raghubar Dayal, N. Rajagopala Ayyangar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/radha-kishan-bhatia-v-union-of-india-and-oibers-3320
- **Pages:** 8

## Headnote

Sea Customs Act, 1878 (Act 8 of 1878), s. 167(8)-Person concerned
in illegal importation of go/d,-who is-Inference from possession of gold
held to be smuggled-Positive finding as to being concerned in illegal importation, necessity for recording.
A number of gold bars held to be smuggled were recovered from the
person of the appellant. The Collector of Central Excise and Land Customs ordered the confiscation of the gold and imposed a penalty on the
appellant under s. 167(8) of the Sea Customs Act (Act 8 of 1878). The
appellant's writ petition challenging the above order was allowed by a
single Judge of the Punjab High Court on the ground that the Collector
had not recorded a finding that the appellant was concerned in the act of
smuggling gold into the country. On Letters Patent Appeal the appellate
Bench set aside the order of the single Judge and dismissed the writ petition,
whereupon the appellant came to the Supreme Court by special leave.
It was contended on behalf of the appellant that the finding that the
smuggled gold was recovered from the person of the appellant was not
sufficient in itself to justify the conclusion that the appellant \Vas concerned
in committing the offence of importing gold illegally. It was also urged
that Collector had not recorded any finding that the appellate was concerned in such importation.
HELD: (i) The person who can be penalised under s. 167(8) is one
who is in any Way 'concerned' in the commission of the offence of brinoing into India or taking out of the country goods with respect to whiCh
certain prohibitions· or restrictions exist.
The expression 'concerned. in
any such offence' in the penalty part of s. 167(8) may include the person
who be 'interested' or 'involved' or 'engaged' or 'mixed up' in the commission of the offence referred to in the first column of s. 167(8). [216 E;
217 A-Bl
(ii) Such 'concern' of the appellant in the commission of the offence
must be at a stage prior to the completion of the offence of illegal importation of gold into the country.
The offence of importation is completed
when the goods have crossed the customs frontier as is clear from the
provisions of ss. 18 and 19. Once the gold has been imported any subsequent interest etc. in the smuggled gold cannot bring in the person showing
such interest etc. within the purview of s. 167(8) for the purpose of
imposition of the penalty.
[217 B-D]
(iii) The mere finding of fact recorded by the Collector of Customs
in this case about the smuggled gold being recovere.d from the person of
the apoellant was not sufficient to conclude that the appellant was 'concerned' in the illegal importation of the smuggled gold into the country and
therefore liable for penalty under s. 167(8) of the Act.
[217 D-E]
Pukhraj Jain v. D.R. Kohli, I.L.R. 1959 Born. 1771, Gopal Mayaji v.
T. C. Seth, A.T.R. 1960 Rom. 478 and Addi. Collector of Customs v. Sitaram, A.I.R. 1962 Cal. 242, approved.
214
SUPREME COURT REPORTS
(1965) 2 S.C.R.
(iv) A finding of fact by the Collector of Customs that a person is
in possession of smuggled goods does not necessarily imply that the. Collector had considered the question of the person's being 'concerned' in the
commission of the offence of illegal importation of goods.
It is true that
an omission to record a formal finding to this effect may not be fatal to
the imposition of penally by the Collector, but the order must show that
he had considered this aspect of the matter.
The order should cicarly
indicate what matter he had considered to have a bearing on the question
of the person's being concerned in illegal importation of the goods, and
why he had concluded therefrom that the person 'vas so concerned and
therefore liable to pay th·o penalty under s. 167(8) of the Act. [219 C-D;
218 B-C]
.
Balbir Singh v. Collector of Ce;itral Excise & Land Customs, New Delhi,
A.LR. 1960 Punj. 488, referred to.
A
B
Union of India, v. Jagdish Singh, I.LR. 1962 (1) Punj. 369, disapprovC
ed.
CIVIL APPELLATE Juruso1cno

## Text

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RADHA KISHAN BHATIA
v.
UNION OF INDIA AND OIBERS
November 23, 1964
[K. SUBBA RAo, RAGHUBAR DAYAL AND N. RAJAGOPALA
AYYANGAR, JJ.]
Sea Customs Act, 1878 (Act 8 of 1878), s. 167(8)-Person concerned
in illegal importation of go/d,-who is-Inference from possession of gold
held to be smuggled-Positive finding as to being concerned in illegal importation, necessity for recording.
A number of gold bars held to be smuggled were recovered from the
person of the appellant. The Collector of Central Excise and Land Customs ordered the confiscation of the gold and imposed a penalty on the
appellant under s. 167(8) of the Sea Customs Act (Act 8 of 1878). The
appellant's writ petition challenging the above order was allowed by a
single Judge of the Punjab High Court on the ground that the Collector
had not recorded a finding that the appellant was concerned in the act of
smuggling gold into the country. On Letters Patent Appeal the appellate
Bench set aside the order of the single Judge and dismissed the writ petition,
whereupon the appellant came to the Supreme Court by special leave.
It was contended on behalf of the appellant that the finding that the
smuggled gold was recovered from the person of the appellant was not
sufficient in itself to justify the conclusion that the appellant \Vas concerned
in committing the offence of importing gold illegally. It was also urged
that Collector had not recorded any finding that the appellate was concerned in such importation.
HELD: (i) The person who can be penalised under s. 167(8) is one
who is in any Way 'concerned' in the commission of the offence of brinoing into India or taking out of the country goods with respect to whiCh
certain prohibitions· or restrictions exist.
The expression 'concerned. in
any such offence' in the penalty part of s. 167(8) may include the person
who be 'interested' or 'involved' or 'engaged' or 'mixed up' in the commission of the offence referred to in the first column of s. 167(8). [216 E;
217 A-Bl
(ii) Such 'concern' of the appellant in the commission of the offence
must be at a stage prior to the completion of the offence of illegal importation of gold into the country.
The offence of importation is completed
when the goods have crossed the customs frontier as is clear from the
provisions of ss. 18 and 19. Once the gold has been imported any subsequent interest etc. in the smuggled gold cannot bring in the person showing
such interest etc. within the purview of s. 167(8) for the purpose of
imposition of the penalty.
[217 B-D]
(iii) The mere finding of fact recorded by the Collector of Customs
in this case about the smuggled gold being recovere.d from the person of
the apoellant was not sufficient to conclude that the appellant was 'concerned' in the illegal importation of the smuggled gold into the country and
therefore liable for penalty under s. 167(8) of the Act.
[217 D-E]
Pukhraj Jain v. D.R. Kohli, I.L.R. 1959 Born. 1771, Gopal Mayaji v.
T. C. Seth, A.T.R. 1960 Rom. 478 and Addi. Collector of Customs v. Sitaram, A.I.R. 1962 Cal. 242, approved.
214
SUPREME COURT REPORTS
(1965) 2 S.C.R.
(iv) A finding of fact by the Collector of Customs that a person is
in possession of smuggled goods does not necessarily imply that the. Collector had considered the question of the person's being 'concerned' in the
commission of the offence of illegal importation of goods.
It is true that
an omission to record a formal finding to this effect may not be fatal to
the imposition of penally by the Collector, but the order must show that
he had considered this aspect of the matter.
The order should cicarly
indicate what matter he had considered to have a bearing on the question
of the person's being concerned in illegal importation of the goods, and
why he had concluded therefrom that the person 'vas so concerned and
therefore liable to pay th·o penalty under s. 167(8) of the Act. [219 C-D;
218 B-C]
.
Balbir Singh v. Collector of Ce;itral Excise & Land Customs, New Delhi,
A.LR. 1960 Punj. 488, referred to.
A
B
Union of India, v. Jagdish Singh, I.LR. 1962 (1) Punj. 369, disapprovC
ed.
CIVIL APPELLATE Juruso1cnoN : Civil Appeal No. 777 of
1962.
Appeal by special leave from the judgment and decree dated
March 6, 1962 of the Punjab High Court (Circuit Bench) at
Delhi in L.P. Appeal No. 120-D of 1960.
B. D. Sharma, for the appellant.
D. R. Prem, V. D. Mahajan and R. N. Sachthey, for the respondents.
The Judgment of the Court was delivered by
Raghubin Dayal, J.. A
number of gold bars, held to
be
smuggled gold, were recovered from the person of the appellant
·on September 17, 1957, when he was going in a truck from
J aisalmer to Pokaran.
The Superintendent of Land Customs
issued a notice to the appellant on December 4, 1957, to show
cause why penal action be not taken against him and as to why
the goods should not be confiscated under s. 167(8) of the Sea
Customs Act, 1878 (Act 8 of 1878), hereinafter called the
Act.
The appellant showed cause and on March 21, 1959, the
Collector of Central Excise and Land Customs, hereinafter shortly
termed Collector, ordered the confiscation of the gold seized from
the person of the appellant and imposition of a penalty ·of
Rs. 15,000 on him under s. 167(8) of the Act.
The appellant
presented writ application under art. 226 of the Constitution to
the High Court of Punjab praying for the issue of a writ of
.certiorari quashing the order of the Collector dated March 21,
1959 and for the issue of a writ of mandamus directing the respondents not to take any steps against him for the realisation of the
. amount of penalty.
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RADHA KISHAN v. UNION (Dayal, I.)
215
A
The writ petition was allowed by the learned Single Judge on
the ground that the Collector had not recorded a finding that the
appellant was concerned in the act of smuggling gold into the
country, in view of the decision of the Division Bench of the
Punjab High Court in Balbir Singh v. Collector of Central Excise
& Land Customs, New Delhi('). On letters patent appeal the
B
appellate Bench set aside the order of the learned Single Judge
and dismissed the writ petition.
The appellate Bench relied on
the Full Bench decision of the Punjab High Court in Union of
India v. Jagdish Singh('). It was held in that case that it was
not necessary for the Collector of Customs to record a formal
finding to the effect that the person proceeded against was cone cerned in the importing of the smuggled gold. The appellant then
preferred this appeal, after obtaining special leave from this Court.
Mr. Sharma, for the appellant, does not question the finding
that the gold was recovered from the person of the appellant as
alleged or that the gold recovered was a smuggled gold. His conD
tention is that these fmdings, by themselves, do not justify the
conclusion to the effect that the appellant was concerned in committing the offence of importing gold illegally.
His further contention is that the Collector did not record any finding to the
effect that the appellant was concerned in such importation of the
gold. It is therefore urged that the Collector was not competent
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to impose the penalty on the appellant.
Mr. Prem, for the respondent, has urged that on these facts
the appellant must be held to be 'interested in the importation' of
the smuggled gold and that the word 'concerned' in s. 167 ( 8) of
the Act be construed in the light of the policy of the Act and the
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difficulties in establishing the foct of a person found in possession
of smuggled gold being actually concerned in the importing of it
illegally.
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The relevant portion of s. 167 ( 8) reads :
"The offences mentioned in the first column of the following
schedule shall be punishable to the extent mentioned in the third
column of the same with reference to such offences respectively :-
(Column I)
Offences
(1)
8. lf any
goods,
the importation or
exportation <>f which is for the time
being prohibited or restricted by or
under Ch. IV of this Act, be imported
(1) A.I.R. 1960 Pun. 488.
(2) A.I.R. 1962 Punj. 484.
(Column 3)
Penalties
(2) __ ._
S1_1ch goods shall be Hable to confisca~
tion, and
any person concerned in any such
216
SUPREME COURT REPORTS
[1965] 2 S.C.R.
(I)
into or exported from India contrary
to such prohibition or restriction, or
if any ttempt be made so to irrJport
or export any such goods, or
if any such goods be found in any package produced to any offi ;er of
Customs as containing -no such goods
or
(2)
offence shall be liable to a penalty not
exceeding three times the value of the
goods, or not exceeding one thousand
rupees.
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The question is, who can be said to be 'concerned' in any such
offence for the purposes of the expression used in the third column
relating to penalties. Such a person would be one who is concerned
C
in the importation or exportation of such goods whose importation
into or exportation from India is contrary to the prohibition or
restriction placed under Chapter IV of the Act.
The offences
described in the first column h:::ve reference to ss. 18 and 19 of
the Act. Section 18 prohibits the bringing into India, whether by
land or sea, of the goads mentioned in its several clauses. Section
19 empowers the Central Government to prohibit or restrict by
notification in the Official Gazette, the bringing or taking by sea
or land goods of any specified description into or out of In~ia
across any customs front:~r. It follows therefore that the person
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. who can be penalised under s. 167 ( 8) is one who is in any way
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'concerned' in the commission of the offence of bringing into India
or taking out of the country goods with respect to which certain
prohibitions or restrictions exist.
It is not disputed that gold
cannot be brought into the country without a valid permit from
the authority empowered to issue it. It is not disputed also that
the gold recovered from the appellant was imported into the counF
try illegally. The appellant can therefore be said to be concerned
in the commission of the offence of illegally bringing into the country gold, if he had been in some way responsible for such 'bringing
into the country'.
He cannot be said to be so concerned in the
commission of this offence if he is not responsible in this manner
and if he got possession of the gold after it had been brought into
the country. His being in possession of such gold, when arrested,
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can in no way raise the presumption that he actually brought snch
gold into the country from outside the border or that he was responsible for its being brought into the country by taking such
action which led to the importing of the smuggled gold prior to its
import.
There is no evidence about any action taken by the
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appellant in connection with the import of the gold found in his
possession. It is immaterial what meaning be attributed to the
•
RADHA KISHAN V. UNION (Dayal, J.)
217
A
word 'concerned'. It can have the meaning 'interested' as urged
for the respondent. It may have the meanings 'involved' or
'engaged' or 'mixed up'. The requirements of the expression
'concerned in any such offence' in the penalty part of s. 167(8)
are that the person to be penalised must be interested or involved
or engaged or mixed up in the commission of the offence referred to
B
in the first column of s. 167 ( 8). The interest or the involvement or
the engagement or the mixing up of the appellant in the commission
of the offence must be at a stage prior to the completion of the
offence of illegal importation of gold into the country. Once the
gold has been imported, any subsequent interest etc., in the smuggled gold cannot bring in the person showing such interest etc.,
C within the purview o( s. 167 ( 8) for the purposes of the imposition
of the penalty. The offen~e of importation of goods is complete
when the goods have crossed the customs frontier. This is clear
from the provisions of s. 19 and also from those of s. 18 which,
however, does not use the actual expression 'across the customs
D frontier'.
We are therefore of opinion that the mere finding of fact recorded by the Collector of Customs in this case about the smuggled
gold being recovered from the possession of the appellant is not
sufficient to conclude, as urged for the respondent, that the appellant was 'concerned' in the illegal importation of the smuggled gold
E
into the country and therefore liable for the penalty under s. 167 (8)
of the Act.
The view we have expressed has been taken by the Bombay,
Calcutta and Madras High Courts in Pukhraj Jain v. D. R.
Kohli('); Gopal Mayaji v. T. C. Seth('); Addi. Collector of
F
C11stoms v. Sitaram('); Devi Chand J. & Co. v. Collector, Central Excise(').
The Punjab High Court has taken a different view and we may
now consider its reasons for the contrary view.
In Balbir Singh's Case ( ') there was no dispute that the ColG lector had not recorded a finding that the petitioner before the
High Court was concerned in the offence of importation or exportation of goods which were for the time being prohibited or restricted. It was therefore held that the order imposing a penalty on
the person could not be sustained. It was this case which was
relied on by the learned Single Judge in the present case as the
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finding recorded by the Collector was as follows :
(I) I.LR. 19S9 Bom. 1771.
(2) A.l.R. 19(,() Bom. 471.
(3) A.l.R. 1962 Cal. 242.
(4) A.l.R. 19"° Mad. 211.
(S) A.I.II.. 19"° l'ulli. 488.
lJSap./6S-tS
218
SUPREME COUIT REPORTS
[196$] 2 S.C.IL
"In view of all this evidence on record I hold that the
gold in question is smuggled one and was recovered from
Shri Radha Kishan while he was taking the same to
Pokaran in truck No. RJM 40.
I therefore order confiscation of the seized gold under
Section 7 ( i) of the Land Customs Act. .. I also impose
upon Shri Radha Kishan a personal penalty of
Rs. 15,000 (Rupees Fifteen thousand only) under Section 167(8) of the Sea Customs Act, 1878."
The Division Bench, on Letters Patent Appeal, relied on /agdish
Singh's Case(') and held that the finding that Radha Kishan was
concerned in the importation of gold was implicit in the manner
in which the Collector dealt with the case. It observed :
"It cannot be gainsaid that here, apart from the fact
that the smuggled gold in a large quantity was found
concealed on the person of Radha Kishan, the plea taken
by Radha Kishan that it was not taken from his person was found to be false and this circumstance taken
together with. the recovery of the smuggled gold would
be sufficient for the Collector to be satisfied that Radha
Kishan was concerned in the importation of the smuggled
gold."
The circumstances referred to by the Punjab High Court appellate Bench may be sufficient for holding that the appellant knew
that he was carrying smuggled gold and that he was thereby committing some offence.
But we are unable to say how these circumstances lead to the conclusion that he must be 'concerned' in
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the importation of that gold. It is not invariably the case that !'
smuggled things are carried by the smuggler himself or by someone who had taken steps for the smuggling of those goods. They
can be carried hy persons who had nothing to do with the smuggling
or illegal importation of the goods into the country and had come
to possess them subsequently even with the knowledge that they
were smuggled goods.
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The facts of /agdish Singh's Case(') were somewhat different.
The conclusion, whose correctness is not before us for decision,
about Jagdish Singh's being concerned in the illegal importation
of the foreign watches was based not only on his being in possession
of those watches after taking delivery of the parcel from the post H
office but was based on several other circumstances. We are how-
(I) A.I.R. 1962 Punj. 484.
RADHA KISHAN v. UNION (Dayal, J.)
219
A ever concerned with the other aspect of the decision in this case
and that relates to the findings which a Collector should arrive at
before he imposes a penalty on the person proceeded against, under
s. 167(8) of the Act. The Collector had not recorded any express
finding that Jagdish Singh had been concerned in the illegal importation of the watches.
The High Court held that law does not
B require any formal finding to that effect. It is true that an omission
to record a formal finding to this effect may not be. fatal to the
imposition of the penalty by the Collector, but the order of the Collector must show that he had considered this aspect of the matter.
The order should clearly indicate what matters he had considered
to have a bearing on the question of the person's being concerned
c in illegal importation of the goods and why he had concluded therefrom that that person was so concerned and therefore liable to pay
the penalty under s. 167 ( 8) of the Act. The decision of the High
Court in Jagdis'1, Singh's Case(') does not appear to hold to the
contrary. It is said at p. 486 :
D
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"What has to be ascertained is whether the Tribunal's
mind was directed to a certain matter and whether the
Tribunal did, in fact, arrive at a particular conclusion.
In the present case, I have no doubt that the Collector did
conclude that Shri Jagdish Singh was responsible for the
illegal importation of the watches in question and 'could
not absolve himself from the infringement of the regulations'."
The judgment in question mentions that the Collector of Customs,
after recording the order of confiscating the watches held to
be of foreign origin and to have been imported through unlawful
F means, went on to consider the question of Jagdish Singh's personal liability and held that he could not be absolved of the
liability of having infringed the Import Trade Control Regulations.
If the Collector had actually done so, hjs omission to record a
formal order about J agdish Singh's being concerned in the illegal
importation of the watches would not have made the order bad in
G law. The further extract from the order of the Collector does not,
in our opinion, support this view of the High Court as it indicates
that the Collector formed this opinion on the basis of his finding
that Jagdish Singh was in possession of the smuggled watches. The
way the Collector recorded his finding Indicates that he concluded
about Jagdish Singh's being concerned in the illegal importation
H
of the watches merely on the_ basis of his being in possession of
those watches. This he could not have justifiably done in view
{I) Al.R.1962 Punj. 484.
220
SUPUME COURT
IU!POP.TS
[1965) 2 S.C.ll.
of what we have said above. The extract from the Collector's order
A
in this connection is :
"Shri Jagdish Singh cannot absolve himself from the
infringement of I.T.C. Regulations inasmuch as he was in
possessfon of the offending watches. I, therefore, impose
on-Shri Jagdish Singh a personal penalty of Rs. 7,000 .. "
B
We do not agree with the High Court that it was implicit in this
order that the Collector was fully satisfied that Shri J agdish Singh
was concerned in the offence described in s. 167 ( 8) of the Act.
We therefore hold that a mere finding of fact that a person is
in possession of smuggled goods does neither imply that the ColC
lector of Customs had considered the question of the person's being
concerned in the commission of the offence of illegal importation
of the goods nor in any way justifies the conclusion that the person
must have been so concerned.
Other circumstances indicating
that the person had some connection wi~ the importation of the
goods prior to their actual import have to be established. In the D
present case no such circumstances have been alleged which would
connect the appellant with the actual importing of the smuggled
gold recovered from his person.
There is no mention of any
such circumstances in the order of the Collector or even in the
reply affidavit filed in the High Court by the Assistant Collector ~f
Central Excise and Land Customs, New Delhi, though the appel-· I:
!ant had said in ground no. C of the writ petition that there waa
absolutely no material before respondent no. 3 on which he could
have come to a finding that the petitioner had imported the said
gold.
We may also mention here that there .is no allegation that the
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appellant himself smuggled the gold from outside the countty.
In the result, we allow the appeal with costs throughout, set
aside the order of the appellate Bench of the High Court and
restore that of the Single Judge.
Appeal allowed.
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