# VAJ,LABHDAS LILADBAR AND ORS v. ASSISTANT COLLECTOR OF CUSTOMS

- **Citation:** [1965] 3 S.C.R. 854
- **Court:** Supreme Court of India
- **Decided:** 1964-01-21
- **Case number:** CRIMINAL APPELLAlfE JURISDICTION· : Criminal Appeals Nos. B 48 and 80 of 1960
- **Bench:** P. B. Gajendragadkar, A. K. Sarkar, K. N. Wanchoo, K. c. OAS GUPTA, N. Rajagopala Ayyangar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/vaj-labhdas-liladbar-and-ors-v-assistant-collector-of-customs-3467
- **Pages:** 7

## Headnote

B
Sea Customs Act, 1878 (8 of 1878) ss. 186, 167 (81}-Statements
made to Customs authorities-If admissible in CTiminal trial-Con- a
flscation and penalty imposed-If baTS pTosecution-Dealina in Gold
proved to be .<muqgled-If against the law-Indian Evidence Act,
1872 (1 Of 1872), SS. 24, 25.
Smuggled gold recovered from the appellants was confiscated and
i
a penalty· imposed on them .. Thereafter the appellants were tried and ·
j
convicted under s. 167(81) of the Sea Customs Act. In their statements
made to the customs authorities, the
appellants had practicall)ll D
admitted the prosecution case and these statement\; were put 1n
evidence. An appeal to the Sessions Judge and a revision to the High
Court were dismissed. In appeal to this Court :
HELD: (i) Since the statements made to th<! customs authoritie•
bore the signature of the appellants which were admitted, they must
be taken to be nroved by such admission and no further evidence was E
neces9ary. [858C]
(ii) Customs officers are not in the circumstances arising In this
case police officers and statements made to them were not inadmissible under s. 25 of the Evidence Act. Section 24 would apply, as
customs authorities are persons in authority; and such statements
would be inadmissible if vitiated by inducement, threat or promise.
[858E-F]
·
1
State of f'uniab v. BaTkat Ram, [1962] 3 S.CR. 338, followed.
(iii) Section 186 of the Sea Customs Act, which is merely an
enabling section, is no bar to a. prosecution for an offence under the
Act in connection with a matter in which the award of ct>nflscation,
penalty or increased rate of duty has been made. [859F, G]
Leo Ray FTl!'I/ v. Superintendent of District Jail [1958] S.C.R. 822,
I
referred to.
(Iv) Once the gold recoverad is proved to be smuggled whosoever
is found to have brought it and dealt with it, thereafter, knowin11 it
to be smuggled must be held to have had the intention of evadinll!
duty or violating the prohibition or restriction. r860C-Dl
CRIMINAL APPELLAlfE JURISDICTION· : Criminal Appeals Nos. B
48 and 80 of 1960.
··
·
Appeals by special leave from the judgment and orders dated
December 11, 1959 and Ma.rch 2, 1960 of the Bombay High Coun
Rajkot (Now Gujarat High Court) Jn criminal Revision Application No. 100 of 1959.
, ,
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VALLABHDAS v. ASST. COLLECTOR (Wanclwo, J.)
85~
A
N. N. Keswani, for the appellants (in both the appeals).
B
D. R. Prem and R. N. Sachthey, for the respondent (in both
the appeals).

## Text

VAJ,LABHDAS LILADBAR AND ORS.
v.
ASSISTANT COLLECTOR OF CUSTOMS
January 21, 1964
[P. B. GAJENDRAGADKAR, A. K. SARKAR, K. N. WANCHOO, K. c.
OAS GUPTA AND N. RAJAGOPALA AYYANGAR, JJ.J
B
Sea Customs Act, 1878 (8 of 1878) ss. 186, 167 (81}-Statements
made to Customs authorities-If admissible in CTiminal trial-Con- a
flscation and penalty imposed-If baTS pTosecution-Dealina in Gold
proved to be .<muqgled-If against the law-Indian Evidence Act,
1872 (1 Of 1872), SS. 24, 25.
Smuggled gold recovered from the appellants was confiscated and
i
a penalty· imposed on them .. Thereafter the appellants were tried and ·
j
convicted under s. 167(81) of the Sea Customs Act. In their statements
made to the customs authorities, the
appellants had practicall)ll D
admitted the prosecution case and these statement\; were put 1n
evidence. An appeal to the Sessions Judge and a revision to the High
Court were dismissed. In appeal to this Court :
HELD: (i) Since the statements made to th<! customs authoritie•
bore the signature of the appellants which were admitted, they must
be taken to be nroved by such admission and no further evidence was E
neces9ary. [858C]
(ii) Customs officers are not in the circumstances arising In this
case police officers and statements made to them were not inadmissible under s. 25 of the Evidence Act. Section 24 would apply, as
customs authorities are persons in authority; and such statements
would be inadmissible if vitiated by inducement, threat or promise.
[858E-F]
·
1
State of f'uniab v. BaTkat Ram, [1962] 3 S.CR. 338, followed.
(iii) Section 186 of the Sea Customs Act, which is merely an
enabling section, is no bar to a. prosecution for an offence under the
Act in connection with a matter in which the award of ct>nflscation,
penalty or increased rate of duty has been made. [859F, G]
Leo Ray FTl!'I/ v. Superintendent of District Jail [1958] S.C.R. 822,
I
referred to.
(Iv) Once the gold recoverad is proved to be smuggled whosoever
is found to have brought it and dealt with it, thereafter, knowin11 it
to be smuggled must be held to have had the intention of evadinll!
duty or violating the prohibition or restriction. r860C-Dl
CRIMINAL APPELLAlfE JURISDICTION· : Criminal Appeals Nos. B
48 and 80 of 1960.
··
·
Appeals by special leave from the judgment and orders dated
December 11, 1959 and Ma.rch 2, 1960 of the Bombay High Coun
Rajkot (Now Gujarat High Court) Jn criminal Revision Application No. 100 of 1959.
, ,
'
VALLABHDAS v. ASST. COLLECTOR (Wanclwo, J.)
85~
A
N. N. Keswani, for the appellants (in both the appeals).
B
D. R. Prem and R. N. Sachthey, for the respondent (in both
the appeals).
The Judgment of the Court was delivered by
Wanchoo
J. The two appeals by special leave arise
out of the sa:Ue criminal trial before a magistrate at Porbunder
and will be dealt with together. The three appellants along with
one more person, namely, Keshavlal Nagjibhai were prosecuted
under s. 167 (81) of the Sea Customs Act, No. 8 of 1878, (hereinafter referred to as the Act). The prosecution case briefly was
C that Vallabhdas Liladhar, who is now dead, came in contact with
an Arab from whom he purchased smuggled gold weighing a little
more than 84 to/as on December I, 1956. Before this, Vallabhdas
Liladhar had borrowed Rs. 3,600/- from the other two appellants
and Keshavlal about November 2S, 1956, in order to make the
D
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G
purchase. After making the purchase, Vallabhdas Liladhar came
to Porbunder to the house of the other two appellants and Keshavlal and informed them of the purchase and wanted their help in
the disposal of the gold. The other two appellants namely, Narandas Nagjibhai and Vallabhdas Nagjibhai are brothers. Keshavlal
was also the brother of these two appellants. The prosecution case
further was that Narandas Nagjibhai asked Vallabhdas Nagjibhai
to take the gold to Bantwa and sell it at the rate of Rs. 103 /- or
so per tola. Vallabhdas Nagjibhai was also instructed that in case
he could not sell the gold at that rate he should contact Vallabhdas
Liladhar and Nara,ndas Nagjibhai at Bantwa bus stand from where
they were to go to Junagadh to dispose of the gold if no suitable
buyer could be found in Bantwa. Consequently Vallabhdas Nagjibhai proceeded to Bantwa by bus on December 2, 1956 in the afternoon. In the meantime information was received by Mehta who
was Inspector of Customs about the smuggling of this gold. He
consequently followed the bus in which Vallabhdas Nagjibhai was
travelling and intercepted him at Kutiyana bus stand at about
3 p.m. The Deputy Superintendent of Customs was also with
Inspector Mehta and Vallabhdas Nagjibhai was taken down from
the bus at Kutiyana. On search in the presence of witnesses, five
bars of gold weighing about 84 to/as were recovered from his possession. All these five bars bore marks of foreign origin and were
taken in possession by the customs authorities affer preparing a
Jt
recovery list. Fnrther investigation was made in the matter and
eventually on October 7, 1957, the Collector of Central Excise
Baroda confiscated the gold bars under s. 167 (8) of the Act read
with s. 23 of the Foreign Exchange Regulation Act, 1947 and also
imposed a penalty of Rs. l,000/- each on the three appellants and
a penalty of Rs. 500 !- on Keshavlal. Thereafter a complaint was
filed by the Assistant Collector of Customs under s. 167(81) of
the Act before the magistrate at Porbunder on .June 27. 1958.
856
SUPRll!4E
COUBT
REPORTS
[l965] 3 s.c.R.
The case of Vallabhdas Liladhar was thal he had not purA
cha~ed the gold from any Arab but had brought it with him from
Karachi in the year 1946. Vallabhdas Nagjibhai admitted the
recovery of gold from him but said that it belonged to Vallabhdas
Liladhar and he was carrying it at the request of the latter and that
he did not know that it was smuggled gold. Narandas Nagjibhai also B
admitted that Vallabhdas Liladbar had come to their house with
the gold but added that it was not smuggled gold and that
Vallabhdas Liladhar had told him that it belonged to him and was
for sale. Keshavlal, the fourth person, who has been acquitted, said
that he did not know anything about the matter and had no connection with it.
It may be added that the three appellants had made statements
before the customs authorities and those statements were also put
in evidence in support of the prosecution case. In those statements,
they practically admitted the prosecution case that the gold was
smuggled gold and they were trying to dispose it of. The magistrate
-convicted all the four persons under s. 167 (81) of the Act and D
sentenced them to rigorous imprisonment for six months and a fine
of Rs. 500 I - He relied on the statements made by the appellants and
Keshavlal before the customs authorities and also on the evidence
produced before him, which was mainly about the recovery of gold.
All the four convicted persons appealed to the Sessions Judge. E
The appeal was heard liy the Additional Sessions Judge, Porbunder
who acquitted Keshavlal. The appeal of the other three (namely,
the three appellants now before us) was dismissed and their convictions and sentences :w~re upheld.
The three appellants then
went in revision to the High Court. The High Court rejected the
revisiOns of Vallabhdas Liladhar and Vallabhdas Nagjibhai sumF
marily. The revision application of Narandas Nagjibhai was admitted but was eventually dismissed. The three appellants then applied
for leave to appeal to this Court which was refused. They then
prayed for special leave from this Court, which was granted, and
that is how the matter has come up before us.
G
Vallabhdas Liladhar, one of the appellants in Cr. A 48 of 1960.
is dead. So far therefore as he is concerned, his appeal abates. It
only remains to consider the appeal of Vallabhdas Nagjibhai
<Cr.A.48) and Narandas Nagjibhai (Cr.A.80). Before however we
consider the points raised before us on behalf of the appellants we
may refer to the circumstances which have been found established H
by all the courts and on the basis of which the conviction of the
appellants has been upheld. These circumstances are-
(1) Though the price of gold at the relevant time was over
Rs. 105 I· per to/a, the appellant were intending to sell
these gold bars at a lower price of about Rs. 103/- per
tola.
i-•c
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I
A
B
c
D
E
VALLAllHDAS "· ASST. COLJ,ECTOR (Wa,.chno, J.)
8D7
(2) The two appellants were working as goldsmiths at Porhunder and there was no reason why the gold had to
be sent elsewhere for disposal. As Porbtinder is a fairly
large town, there was no reason why the gold could
not be sold in the market at Porbunder.
(3) The two appellant~ displayed undue haste in the disposal of gold.
(4) The surreptitious manner in which the gold bars were
kept by Vallabhdas Nagjibhai as shown at the time of
recovery shows that the appellants knew that they were
dealing with smuggled gold.
(5) The amount of Rs. 3,600/- was advanced to Vallabhdas Liladhar but the entries in the account book of
the appellants were made in the name of the brother
of Vallabhdas Liladhar who is the brother-in-law of the
two appellants.
(6) The markings on the gold made it quite clear that it was
of foreign origin and the two appellants conld not be
unaware of this, particularly as they work as goldsmiths.
In addition to the above circumstances, all the courts relied
on the statements made by the two appellants before the customs
authorities and the presumption under s. 178-A of the Act was
raised and on that basis convicted the appellants, though the High
Court held that even without the presumption under s. 178-A the
F evidence was sufficient to convict the appellants.
a
ll
Learned counsel for the appellants has very properly not challenged the concurrent findings of fact by all the courts. He has
raised four points for our consideration, which are these-
(!) The statements made to the customs authorities were
inadmissible in evidence as they were not properly
proved.
(2) The statement made before the Collector of Customs
were inadmissible in evidence under ss. 24 and 25 of
the 'Indian Evidence Act.
(3) As the gold had already been confiscated and penalty
had been imposed under s. 167(8) of the Act, there
could be no further trial in a criminal cou.rt in view of
s. 186 of the Act.
(4) The ingredients of s. 167(111) are not satisfied in this
case.
·.~
858
[1965) 3 s.c.n.
Re. (!).
A
So far as the first point is concerned, the only argument is
that tlle lawyer who signed the statements made before the customs
authorities was not produced ·to prove the)ll, and therefore the
statements cannot be held to have been properly proved .. It us
however clear that the statements were not only signed by the B
lawyer of the appellants but also by the appellants. In their statements in court, the appellants admitted that they had signed the
statements, thcugh they said. that they di(! not know what the
statements contained and they signed it on being asked by their
lawyer. This part of the statements of the appellants has not been
believed by the courts below and in our opinion rightly. As the
C
statements bore the signature of the appellants which are admitted,
they must be held to be proved by this admission and it was not
further necessary to examine the lawyer who signed the statements
along with the appellants. The contention on this head must there•
fore fail.
Re. (2).
As to the second point. we are of opinion that s. 25 of the
Indian Evidence Act has no application on the facts of the present
case which are on all fours with the facts in The State of Punjab v.
Barkat Ram('). In similar circumstances it was held by this Court
D
in that case that customs officers are not police t>fficers and stateE
ments made to them were not inadmissible under s. 25. Section 24
would however apply, for customs authorities must be taken to he
persons in authority and statements would be inadmissible in a
criminal trial if it is proved that they were caused by inducement,
threat"or promise. But the finding of all the'courts is that the statements were not made on account of any inducern~'lt. threat or F
promise as required by s. 24 of the Indian Evidence Act. In the
face of this finding, therefore. it cannot be said that the statements are inadmissible under s. 24 of the Indian Evidence Act.
Re. (3).
l
i
Next the appellants rely on s. 186 of the Act. which reads as G
i
follows:-
"The award of any confiscation, penalty or increased
rate of duty under this Act by an officer of Customs shall
not prevent the infliction of any punishment to which the
person affected thereby is liable under any other law."
B
It is urged that when s. 186 lays down that the award of any confiscation, penalty or increased rate of duty under the Sea Customs
Act shall not prevent the infliction of any punishment to which
the.person. affectl'.d th.ere~y i~ li~bl~ under any other law, it necessanly forbids by 1mphcallon mfl1ct10n of any punishment to which
(') f!962] 3 S.C.R. 338.
f,
B
0
D
VALLABHDAS v. ASST. COLLECTOR (Wanr1100, J.)
859
the person affected thereby is liable under the Sea Customs Act
itself. In this connection our attention is drawn to certain observations in Leo Roy Frey v. The Superintendent District Jail('). It is
true that in that case this Court referred to s. 186 of the Act; but
that case was not directly concerned with the question whether a
prosecution under s. 167(81) cf the Act is permissible after the
award of confiscation, penalty or increased rate of duty under
s. 167(8) of the Act in view of s. 186. Clause (81) in ~- 1'67 was
introduced by the Amending Act No. 21 of 1955. Before that there
were 80 clauses in the section, and the scheme of those clauses
was that a person could either be dealt with by the award of confiscation, penalty or increased rate of duty, or by a prosecution
before a magistrate. It was in those circumstances that s. 186 provided that the award of confiscation, penalty or increased rate of
duty would not bar infliction of any other punishment under any
other law. The intention of the legislature by this provision in
s. 186 was.clearly to allow a prosecution under any other law even
though there might be award of confiscation, penalty or increased
rate of duty under the Act. Section 186 was thus meant for permitting prosecutions in addition to action under the Act in the
shape of confiscation, penalty or increased rate of duty; it was
never intended to act as a bar to any prosecution that might be
permissible after the award of confiscation, penalty or increased
E rate of duty. It was merely an enabling section and not a barring
section and seems to have been put in the Act ex abundant/
cautela. When however, cl. (81) was introduced ins. 167, it became
possible in some cases where goods had been confiscated
and penalty inflicted under the Act by the customs authorities to
prosecute persons also under cl. (8 J) of the Act. That however
F
would not change the nature of the provision contained in s. 186
which was an enabling provision and not a barring provision. If
the intention was to bar prosecutions in consequence of the award·
of confiscation, penalty or increased rate of duty, the words of
s. 186 would have been very different. We cannot therefore read
in s. 186 a bar by implication to a prosecution under the Act
simply because s. 186 enables prosecution under any other law.
In this view of the matter, s. 186 is no bar to the prosecution for
an offence under the Act in connection with a matter in which the
award of confiscation, penalty or increased rate of duty has been
made.
H
Re. (4).
Next it is contended that the ingredients of cl. (81) of s. 167
are not satisfied inasmuch as it is not proved that the intention
of the appellants was to defraud the government of any duty pay-
•
a\Jle on the gold which was the subject matter of the charge in
this case or to evade any prohibition or restriction for the timi:
('J (1958] S.C.R. 822, 827.
•
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· 860
; SUl'REMR · COURT I REPORTS .
[1965] 3 B.C.R,
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being in force. It is _true that before cl. (81) can apply·it has to be A
'· proved. inter a/ia that. the' person charged thereunder with possession at.any dutiable or prohibited or.restricted goods or concerned
in carrying, removing, depositing, keeping· or concealing such goods
has the· intention of defrauding the government of any duty payable thereon or of evading any prohibition or. restriction thereon
for the time being in force; So it is said that the prosecution has. B
failed to . prove by positive evidence that the intention was to ·
defraud the government of the duty payable on the gold in this
case· or to evade the prohibition or restriction on the import thereon
· for the time being in force.' We have not been able to understand: .
this argument at all. Once it is proved that the gold is smuggled
gold; it follows. that it was brought into the country without pay- c
ment of duty or in violation of the prohibition or restriction in force
and whosoever brought .. it and whosoever dealt with it ·
thereafter knowing it to be smuggled in the manner provided in
the section must ba held to have the intention of evading the payment of duty or violating the prohibition or· restriction. -There is . J;I
no force in this contention also.
, . Lastly it is· urged that the substantive sentence of imprisonment in the case of the two appellants before us may be reduced .
to the. period already undergone. particularly, as the appellant5\
- have been on bail since March 1960 and it would not be in tho E
interest of justice to send them back to jail for a short period after
four years when about half the sentence has already been servea
out. We however see no reason to interfere with the sentence in
cases of this nature .. The appeals therefore fail and are hereby
. dismissed.-,. ·
·
·
'Appeal dismissed.
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