D. Stephens vs Nosibolla

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Criminal Appeal No. 19 of 1950

Decision Date: 2 March 1951

Coram: N. Chandrasekhara Aiyar, Saiyid Fazal Ali, Mehr Chand Mahajan, B.K. Mukherjea

D. Stephens versus Nosibolla was decided by the Supreme Court of India on 2 March 1951. The judgment was authored by Justice N. Chandrasekhara Aiyar, who sat with Justices Saiyid Fazal Ali, Mehr Chand Mahajan and B.K. Mukherjea. The parties are styled as petitioner D. Stephens and respondent Nosibolla. The official citation for the decision is 1951 AIR 196 and 1951 SCR 284, and it is referenced in several later reports, including RF 1954 SC 266, F 1955 SC 584, R 1962 SC 1788, R 1968 SC 707, R 1970 SC 272, RF 1973 SC 2145, R 1975 SC 580, R 1978 SC 1, and R 1986 SC 1721. The judgment considered sections 417 and 439 of the Criminal Procedure Code, 1898, dealing with revision of an order of acquittal and the High Court’s power of interference, as well as sections 25 and 26 of the Indian Merchant Shipping Act, XXI of 1923, which govern the supply of seamen and the constitution of a recruiting board, the levy of one rupee per seaman for board expenses, and the question whether issuing a muster card amounts to “engaging or supplying” seamen.

The Court observed that the revisional jurisdiction granted to a High Court under section 439 of the Code of Criminal Procedure is not to be exercised lightly, especially when invoked by a private complainant against an order of acquittal that the Government may appeal under section 417. Such jurisdiction may be exercised only in exceptional cases where public-interest justice requires correction of a manifest illegality or prevention of a gross miscarriage of justice; it is not meant for situations where a lower court merely erred in interpreting the law or misappreciated the evidence. In the facts before it, shipowners in Calcutta were organized as the Calcutta Liners’ Conference, while the seamen were represented by the Joint Supply Office. A collective agreement between the owners and the seamen’s representatives led to the creation of the Calcutta Maritime Board, which consisted of an equal number of members from both organisations. Seamen presented themselves before this Board and received muster cards that permitted them to attend the musters where ship captains engaged them. To meet the Board’s expenses, owners paid Rs 2 per engaged seaman, and each seaman, after engagement, contributed Re 1 to the owner toward those expenses. The accused, who was the secretary of the Liners’ Conference and an ex-officio honorary joint secretary of the Maritime Board, was alleged by a seaman to have committed an offence under section 26(2) of the Indian Merchant Shipping Act by collecting Re 1 for the issue of a muster card. Held, that the seamen to whom the master cards were given by the

The Court observed that the Calcutta Maritime Board itself had neither engaged nor supplied any seaman, and that none of its officers, including the accused, performed such engagement or supply functions. The Court further noted that the one rupee deducted from a seaman’s wages after the seaman signed an employment agreement was not a payment for the provision of employment, but merely a contribution toward the Board’s office expenses. Consequently, the Court concluded that the accused could not be held liable for any offence punishable under section 25 or section 26 of the Indian Merchant Shipping Act.

The appeal arose under the criminal appellate jurisdiction and was designated Criminal Appeal No. 19 of 1950. It challenged the orders of the High Court of Judicature at Calcutta dated 21 January 1949 and 29 August 1949, which had been issued in Criminal Revision Cases Nos. 1007 of 1948 and 527 of 1949. Counsel for the appellants appeared as counsel for the appellant, assisted by an additional counsel, while counsel for the respondent represented the State. The judgment was delivered on 2 March 1951 by Justice Chandrasekhara Aiyar.

The Court explained that the appeal proceeded on a special leave granted by His Majesty’s Order in Council and was directed against the orders of the Honourable Mr. Justice Sen of the High Court of Judicature at Fort William in Bengal, which had directed a retrial of the appellant, D. Stephens, after his earlier acquittal by the Chief Presidency Magistrate on the charge of violating section 26 of the Indian Merchant Shipping Act. The factual background, as set out in the magistrate’s judgment, described the organizational structure of ship owners and seamen in Calcutta. The owners were represented by the Calcutta Liners’ Conference, while the seamen were represented by the Joint Supply Office. Following the abolition of the licensed broker system in 1940-41, the Calcutta Maritime Board was created through a collective agreement between ship owners and seamen’s representatives to facilitate direct recruitment of seamen. The Board functioned as a joint negotiating body composed of an equal number of members from the Liners’ Conference and the Joint Supply Office, with two government representatives also serving on the Board. Leadership of the Board comprised two joint chairmen and two joint secretaries, each pair drawn from the owners’ and seamen’s sides respectively. The appellant, Stephens, held the position of Secretary of the Calcutta Liners’ Conference, a paid office financed from contributions collected from ship owners. In his capacity as Secretary of the Conference, Stephens also served as one of the joint secretaries of the Calcutta Maritime Board, an honorary role that did not attract any remuneration. The Court reiterated that the engagement of seamen was performed by the captains of the ships, not by the Board or its officials, and that the Board’s role was limited to establishing procedures for such engagements.

In the recruitment system described, seamen were required to present themselves before the Calcutta Maritime Board, where they received muster cards that authorized them to attend the musters at which ship captains engaged the seamen. The Board attempted to establish a uniform procedure for captains while engaging seamen, because the number of willing seamen exceeded the demand for their services, a situation that had fostered corrupt practices. To eliminate corruption, the Board devised a rotational employment procedure for ship owners, and to meet the Board’s office expenses, the owners at that time paid two rupees for each seaman engaged. After a seaman signed on, he reimbursed the owners one rupee as his contribution toward the Board’s office expenses, a fact that the complainant did not dispute. The complainant, Nosibolla, alleged that the accused, acting as Joint Secretary of the Board, collected an unlawful charge of one rupee from him for the issuance of a muster card, thereby violating section twenty-six of the Indian Merchant Shipping Act and constituting an offence under sub-clause two of that section. The Chief Presidency Magistrate originally acquitted the accused of this charge, but on revision the Calcutta High Court ordered a retrial, holding that the accused clearly breached section twenty-five of the Act and, if the complainant’s testimony that the accused received one rupee before registration was credible, the accused was also guilty under section twenty-six; both parties were permitted to introduce further evidence. At the second trial, the Chief Presidency Magistrate again acquitted the accused, concluding that the accused neither supplied nor engaged seamen, that he had not received any payment of one rupee for issuing the muster card, and that the one-rupee collected from seamen by the ship owners after employment was deducted from wages as a contribution toward the Joint Supply Office’s expenses, not as remuneration to the accused or any other individual. A further revision petition was filed before the High Court, where the same learned judge who had previously sat heard the matter. That judge disagreed with the magistrate on every material point, sent the case back for a fresh trial, and effectively directed that the accused be convicted. In the judge’s view, the act of providing a muster card to a seaman constituted the “supply” of seamen within the meaning of section twenty-five, and the demand for one rupee represented remuneration within the meaning of section twenty-six, even though the money was ultimately used for the Joint Supply Office’s expenses and irrespective of whether the money was actually received.

It was observed that the sum in question was ultimately applied to the expenses of operating the Joint Supply Office, and that the very act of demanding payment would itself constitute an offence irrespective of whether the money had actually been received. The present appeal was therefore filed before the Judicial Committee of the Privy Council on the contention that the High Court’s exercise of jurisdiction to order a retrial interfered with the revision process and infringed the essential principles of justice. Before undertaking a brief discussion on whether the High Court’s approach was correct, the Court found it useful to set out the relevant provisions of the Merchant Shipping Act.

Section 24(1) of the Act provided that the Central Government, or any person duly authorised by the Central Government for that purpose, could grant licences to such persons as were deemed fit to engage or supply seamen for merchant vessels in British India. Section 24(2) added that any such licence would remain in force for a period determined by the Central Government and could be granted or revoked on such terms and conditions as the Central Government thought proper.

Section 25 dealt with the prohibition of unlawful engagement or supply of seamen. Clause 25(1) stated that a person must not engage or supply a seaman to be entered on board any ship in British India unless that person either held a licence under the Act for that purpose, or was the owner, master, mate of the ship, or was a bona-fide servant constantly employed by the owner, or was a shipping-master. Clause 25(2) extended the same restriction to any person employed for the purpose of engaging a seaman, requiring that such a person also hold a licence or fall within the categories named in clause (1). Clause 25(3) prohibited a person from receiving or accepting a seaman on board any ship if the person knew that the seaman had been engaged or supplied in contravention of the section. Clause 25(4) prescribed that any person acting in violation of the section would be liable, for each seaman involved, to a fine of up to one hundred rupees, and that a licensed person would additionally forfeit his licence.

Section 26 addressed the prohibition of unlawful remuneration. Clause 26(1) provided that a person shall not demand or receive, directly or indirectly, from any seaman, or from any person seeking employment as a seaman, or from any person on his behalf, any remuneration whatsoever for providing employment other than the fees authorized by the Act. Clause 26(2) stipulated that a person who contravened this provision would be liable, for each offence, to a fine of fifty rupees, and that a licensed person would also forfeit his licence.

Having set out these statutory provisions, the Court noted that, based on the facts that had been admitted or proved by the evidence, it was difficult to discern what offence, if any, the accused had committed.

In the factual matrix before the Court, it was established that neither the Calcutta Maritime Board nor the Calcutta Liners’ Conference actually supplied any seaman to the shipowners. The registration process granted each seaman a muster card, which permitted him to attend the muster gatherings where ship Captains selected and engaged the crew members. After the Captains had made their selections, the collective body of shipowners known as the Calcutta Liners’ Conference paid a sum of two rupees to the Calcutta Maritime Board; one rupee represented the Board’s own contribution, while the other rupee was contributed by the seaman and was deducted directly from his wages. Consequently, the transaction did not constitute a “supply of a seaman” as contemplated by section 25 of the Act. Numerous seamen presented themselves for employment and assembled in a common location, enabling a shipowner or Captain to choose any individual they preferred. No statutory or contractual duty existed obligating the shipowners to select any particular candidate, nor did the Maritime Board, either directly or through its officials, make selections on behalf of the owners for employment purposes. The Calcutta Maritime Board, in which the accused served as an honorary Joint Secretary, was created at the end of 1947 with the knowledge—though not the formal approval—of the Government of India. It functioned as a liaison institution intended to bring shipowners and seamen together concerning the engagement of seamen for vessels. While the Board, through its Joint Supply Office, facilitated contact between the labour corps and the owners, the actual engagement of the seamen was carried out by the shipowners or the Captains themselves. To a limited extent the Board regulated recruitment, but describing the Board or its officers as “supplying” seamen to the owners is inaccurate. In a written statement recorded on page twenty-eight of the printed record, the accused explained, a point that was not contested, that the earlier system of crew selection conducted through the agency of Serangs had been discontinued because the seamen opposed it, alleging that Serangs engaged only those who paid them large sums, thereby fostering corruption. The prosecution’s contention that the one-rupee amount deducted from a seaman’s wages after he signed an employment agreement amounted to remuneration for providing the man with employment was rejected as untenable. The remuneration actually received by the accused exceeded two thousand rupees per month and was paid as a salary by the Calcutta Liners’ Conference, under which he served as a paid Secretary. The one-rupee per seaman received by the Calcutta Maritime Board from the shipowners’ association was, in truth, a contribution toward the operating expenses of the Board’s Joint Supply Office. This factual arrangement was clearly affirmed by the evidence tendered on commission by Mr C.P. Srivastava, Officer on Special Duty, Ministry of Commerce, New Delhi, and by the testimony of Mr Dikken.

In the evidence presented by the prosecution, it was asserted that the contribution of one rupee per seaman was intended to meet the running expenses of the Joint Supply Office and the Maritime Board. Defence counsel called Mr. Goldwell of James Finlay & Co., who was the sixth witness for the defence. He testified that both the Calcutta Maritime Board and the Joint Supply Office received their financing from the liner companies and that the accused had no involvement in the engagement of the seamen. The record also contained a finding of the Chief Presidency Magistrate, which had not been overturned, that the complainant’s allegation—that the accused had received one rupee from him before the complainant’s name was entered in the Joint Supply Office—had not been substantiated by any evidence. From the material facts, it was clear that the accused neither engaged nor supplied any seamen, nor did he demand or receive any remuneration, directly or indirectly, for providing any person with employment as a seaman. Consequently, the facts left no doubt that the prosecution had failed to establish any element of its case against the accused. The presiding judge, Mr. Justice Sen, observed that “I fully realise that, ordinarily this Court ought not to interfere with orders of acquittal. It should do so only on exceptional grounds.” He expressed regret that, despite this understanding of the limited scope of the revisional jurisdiction, the Court had nevertheless issued an order directing a third retrial of the accused for offences that could not even be said to be prima facie established.

The revisional jurisdiction granted to the High Court by section 439 of the Code of Criminal Procedure is not to be exercised lightly, particularly when it is invoked by a private complainant against an acquittal for which the Government retains a right of appeal under section 417. Such jurisdiction may be invoked only in exceptional circumstances where the interests of public justice demand interference to correct a manifest illegality or to prevent a gross miscarriage of justice. It is not intended to be employed merely because a lower court may have erred in its interpretation of the law or may have misappreciated the evidence on record. In the present matter, the Court found that no such error existed. Moreover, the Court observed that on both of the earlier occasions, the Chief Presidency Magistrate had correctly held that the accused was not guilty of any offence under sections 25 and 26 of the Indian Merchant Shipping Act. Accordingly, the High Court’s order was set aside and the order of the Chief Presidency Magistrate was restored. The effect of this decision was that the accused was acquitted of the charge. The order of acquittal was confirmed, and the agents for the parties were recorded as follows: the appellant was represented by P. K. Chatterjee, and the respondent was represented by N. Shroff on behalf of P. K. Bose.