Indo-China Steam Navigation Co. Ltd vs Jasjit Singh, Additional Collector

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 770 of 1962

Decision Date: 3 February, 1964

Coram: K.N. Wanchoo, K.C. Das Gupta, J.C. Shah, N. Rajagopala Ayyangar

In the matter titled Indo‑China Steam Navigation Co. Ltd. versus Jasjit Singh, Additional Collector of Customs, the Supreme Court of India delivered its judgment on 3 February 1964. The bench that heard the appeal consisted of Justice K. N. Wanchoo, Justice K. C. Das Gupta, Justice J. C. Shah and Justice N. Rajagopala Ayyangar. The petitioner was Indo‑China Steam Navigation Co. Ltd., a company engaged in the carriage of goods and passengers by sea. The respondents were Jasjit Singh, who held the office of Additional Collector of Customs, and other officials. The decision was reported in several law reports, including the 1964 All India Reporter at page 1140, the 1964 Supreme Court Reports (6) 594, and numerous subsequent citations. The case involved interpretation of several provisions of the Sea Customs Act, 1878, notably sections 52A, 167(12A) and 183, as well as constitutional questions under Articles 14, 19 and 31(1) of the Constitution of India, and the scope of special leave under Article 136.

The factual backdrop concerned the vessel Eastern Saga, owned by the petitioner, which arrived at the port of Calcutta. Customs officers conducted a search of the ship and discovered, within the sailors’ accommodation, a concealed opening measuring two and a half feet by five and a half feet in the wall paneling behind a wooden seat. The opening had been patched with a piece of wood and painted over. Behind the patch, officers found a compartment containing 1,458 gold bars with an estimated value exceeding twenty‑three lakh rupees. Following the discovery, the authorities served the requisite notices and, after hearing the parties, the Additional Collector of Customs concluded that the vessel had incurred liability for confiscation under section 167(12A) because it had contravened the provisions of section 52A. The Collector ordered the ship’s confiscation but allowed the owners the alternative of paying a fine of twenty‑five lakh rupees in lieu of seizure. The petitioner appealed this order to the Central Board of Revenue, which dismissed the appeal, and subsequently sought revision before the Central Government, which also rejected the petition. The petitioner then obtained special leave to appeal before this Court. In dismissing the appeal, the Court held that the customs authorities were correct in determining that the facts established that the Eastern Saga had contravened the provisions of section 52A when it entered the port of Calcutta and therefore had incurred the liability

In the judgment, the Court observed that the fine of twenty‑five lakh rupees imposed under section one hundred sixty‑seven paragraph twelve A of the Sea Customs Act was not excessive. The Court noted that the illegal importation of gold had become a serious problem for the nation, and therefore the customs authorities were justified in adopting a policy of imposing deterrent fines whenever such offences were discovered and proven. The Court further held that section fifty‑two A of the Act was not beyond the powers granted by articles fourteen, nineteen and thirty‑one sub‑paragraph one of the Constitution, and consequently the provision was neither unconstitutional nor invalid. The Court pointed out that the appellant was not only a corporate entity but also a foreign company, and as such it could not invoke the rights guaranteed by article nineteen. The pleas advanced under article thirty‑one sub‑paragraph one and under section fourteen could not be sustained because, in order to rely on those pleas, the appellant would inevitably have to depend on the fundamental right guaranteed by article nineteen paragraph one sub‑paragraph f.

The Court explained that, before an appeal could be entertained under article one hundred thirty‑six, two conditions had to be satisfied. First, the order that was being challenged had to be of a judicial or quasi‑judicial character and could not be a purely administrative or executive order. Second, the order had to have been issued by a court or tribunal that operated within the territory of India. The Court acknowledged that it was difficult to lay down a definitive test for determining whether a body qualifies as a court or tribunal. Courts sometimes examine whether the body possesses the “trappings” of a court, such as the power to compel witnesses to appear, administer oaths, adhere to procedural rules, comply with the rules of natural justice, and conduct proceedings fairly, justly and on the merits, without resorting to subjective considerations. If one or more of these important criteria are satisfied, the proceedings may be characterised as judicial. Likewise, the Court observed that if a body has been created by the legislature and endowed with the inherent judicial power of the State, that is a strong indication that the body functions as a tribunal. Analyzing the scheme of the Sea Customs Act of 1878, the nature of the proceedings before the appellate and revisional authorities, the extent of the claims, the nature of the penalties and the type of enquiry contemplated by the Act, the Court concluded that both the Central Board of Revenue and the Central Government, while acting as appellate or revisional authorities, operated as tribunals under article one hundred thirty‑six because they were invested with the State’s judicial power and were required to act judicially. Finally, the Court stated that to establish an offence under section fifty‑two A against a vessel, it was necessary to demonstrate that the vessel had undergone construction, adaptation, alteration or fitting for the purpose of concealing goods.

The Court observed that section 52A of the Sea Customs Act expressly forbids the entry of any vessel that shows any construction, adaptation, alteration or fitting carried out for the purpose of concealing goods. The provision does not require proof of a guilty mind, or mens rea, on the part of the person responsible for violating section 52A. In fact, the Court held that establishing such mens rea is impossible, and that the knowledge of the owners or even of the masters of the vessel is wholly irrelevant to the offence. The Court further explained that sections 167(12A) and 183 must be read together. While confiscation of a vessel is a statutory consequence of a breach of section 52A, section 183 specifically obliges the adjudicating officer to give the owners of the offending vessel the option of paying a fine in lieu of confiscation. Consequently, although confiscation is authorised and mandated by section 167(12A), the statutory requirement under section 183 makes it necessary for the officer to present the owner with the alternative of a fine. The ultimate penalty that may be imposed on the owners is therefore left to the discretion of the adjudicating officer.

In support of its analysis, the Court referred to a number of earlier decisions, including Shewpujanrai Indrasanrai 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 Jail, Mritsar and Anr. [1958] S.C.R. 822; Thomas Dana v. State of Punjab [1959] Supp. (4) S.C.R. 274; Maqbool Hussain v. State of Bombay [1953] S.C.R. 730; Harinagar Sugar Mills Ltd. v. Shyam Sundar Jhunjhunwala and Ors. [1962] 2 S.C.R. 339; Shivji Nathubhai v. Union of India [1960] 2 S.C.R. 775; Jaswant Sugar Mills Ltd., Meerut v. Lakshmi Chand [1963] Supp. 1 S.C.R. 242; Engineering Mazdoor Sabha v. Hind Cycles Ltd. [1963] Supp. 1 S.C.R. 625; Ravula Hariprasada Rao v. The State [1951] S.C.R. 322; Brend v. Wood (1946) 110 J.P. 317; and Sherras v. De Rutzen (1895) 9. The judgment then proceeded to set out the procedural history of the present appeal. The appeal, numbered Civil Appeal No. 770 of 1962, was filed by special leave against order No. 1742 of 1960 issued by the Government of India, Ministry of Finance (Department of Revenue) on December 17, 1960 in Custom Revision Application No. 1631 of 1959, and also against an order dated May 12, 1959 of the Central Board of Revenue in Customs Appeal No. 151 of 1959. Additionally, the appellant raised a petition under article 32 of the Constitution of India for the enforcement of fundamental rights. Counsel for the appellant and the petitioner were instructed, while the respondents were represented by counsel including the Additional Solicitor‑General. The matter was heard on February 3, 1964, and the judgment was delivered by Chief Justice Gajendragadkar. The appeal principally raised the question concerning the true scope and effect of section 52A of the Sea Customs Act, 1878, as applied to the appellant, Indo‑China Steam Navigation Co. Ltd.

The appellant, Indo‑China Steam Navigation Co. Ltd., conducted the carriage of goods and passengers by sea, owned a fleet of ships, and had been engaged in this business for more than eighty years. One of its regular services was the Calcutta‑Japan‑Calcutta route. The Customs Authorities issued an order that confiscated the appellant’s motor vessel named “Eastern Saga” under section 167(12A) of the Sea Customs Act, 1878, and simultaneously offered the appellant the alternative of paying a fine of twenty‑five lakh rupees pursuant to section 183 in lieu of confiscation. The appellant argued that the order was founded on an erroneous interpretation of section 52A of the same Act.

The vessel “Eastern Saga” measured 6,631 gross registered tons and 4,441 net registered tons. Its overall length was 475 feet 2½ inches, breadth 59 feet 3 inches, and summer draft 24 feet 7 inches. The ship carried a crew of fourteen officers and fifty‑six seamen. It contained one hundred and nineteen separate rooms, which comprised thirty‑four crew cabins, eight passenger 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, a lounge, a pantry, a chart‑room, a radio officer’s cabin, a captain’s cabin, a wheel house, as well as various alleyways and stairways. The vessel was thus a well‑equipped large ship. In addition, the ship possessed domestic refrigeration compartments whose walls were lined with insulation. All crew accommodation on the vessel was insulated in accordance with statutory regulations. The insulation consisted of fire‑board or similar material sheathed onto wooden frames that were fitted between the stiffeners projecting from the steel bulkheads or walls, thereby creating hollow spaces between the sheathing and the vessel’s walls. This sheathing or panelling was a removable furnishing of the ship.

“Eastern Saga” arrived at Calcutta from the Far East on 29 October 1957. While undertaking an ordinary cargo voyage carrying a lawful cargo of twenty‑four thousand eight hundred fifteen packages of general merchandise weighing one thousand five hundred six tons, the vessel was inspected by Calcutta Customs officers on 30 and 31 October and again on 12 November 1957. During the examination of the domestic refrigeration compartments, officers discovered a two‑tier white painted shelf fixed to the insulated wall of a handling room. Although the shelf appeared to be secured by screws, the screws had been hammered flat and could not be turned with a screwdriver; instead the shelf was held by wooden plugs concealed beneath a coat of paint. Beneath the shelf a hole in the panelling, sealed with a plug, provided access to the insulation space of the compartment. The opening measured seven inches by four‑and‑a‑half inches, and no concealed items were found within that space.

Subsequently, officers searched a forecastle cabin and identified two rectangular openings in the cabin‑wall panelling located behind a steel clothes locker that was screwed to the wall. One opening was closed with a wooden cover. The openings measured five inches by thirteen inches and five inches by five inches respectively, and no contraband was discovered. The cabin marked “Compradoree” was also inspected; when a wooden bench attached to the wall panelling was removed, two rectangular holes behind the bench were revealed. These holes, covered with wooden plugs and over‑painted, measured five inches by four‑and‑a‑half inches and eight inches by two‑and‑a‑half inches, and nothing was found inside. In the cabin of the No. 1 fitter, officers found two more rectangular holes in the visible portion of the wall panelling that had been filled and over‑painted; the openings measured seven‑and‑a‑half inches by ten‑and‑a‑half inches and twelve inches by twelve inches, and again no items were concealed. The search then proceeded to the sailors’ accommodation, where a hole measuring two‑and‑a‑half inches by five‑and‑a‑half inches was located in the wall paneling behind the back batten of a wooden seat that had been screwed to the wall. This hole was covered with a piece of wood and over‑painted, and no hidden objects were discovered.

The officials continued their examination of the vessel by inspecting the wall of the forecastle cabin, where they found one opening that had been sealed with a wooden cover. The dimensions of this opening measured five inches by thirteen inches, while a second opening measured five inches by five inches. Neither of these concealed spaces contained any items. The investigators then moved to the cabin marked “Compradoree.” After removing a wooden bench that had been fastened to the wall paneling, they discovered two rectangular apertures hidden behind the bench. Both apertures had been blocked with wooden plugs and subsequently over‑painted. The first opening measured five inches by four and a half inches, and the second measured eight inches by two and a half inches. No objects were found in either of these concealed spaces. The search proceeded to the cabin of the No 1 Fitter, where two additional rectangular openings were observed in the visible portion of the wall paneling. These openings had been filled in and over‑painted; one measured seven and a half inches by ten and a half inches and the other measured twelve inches by twelve inches. Again, the search yielded no hidden items. The officers then inspected the sailors’ accommodation. In that area they uncovered a hole measuring two and a half inches by five and a half inches in the wall paneling behind the back batten of a wooden seat that had been screwed to the wall. The hole had been sealed with a piece of wood and over‑painted, but it opened into a concealed space where the customs officers discovered a large quantity of gold in the form of bars. A further examination of the sailors’ accommodation revealed another hole in the wall paneling behind a steel clothes locker, which had been closed with a wooden plug; this space also contained no concealed items. Thus, the search of the Eastern Saga identified several hidden openings, of which only the one in the sailors’ accommodation yielded a substantial cache of gold bars.

On 12 November 1957 the authorities served notices on the owners’ agents at Calcutta, M/s Jardine Henderson and Co. Ltd., and on the master of the vessel, Captain Kiunear. The notices required the recipients to show cause why the ship should not be confiscated under section 167(12A) of the relevant Act, on the ground that the vessel had contravened section 52A, and also why penal proceedings should not be initiated against the agents and the master. On the same day a similar notice was issued to Kwok Cho, a crew member who had come forward to claim the gold discovered during the search. The following day, 13 November 1957, a further notice was served on the master concerning an additional hole that had been discovered after the first notice was issued. In response, the agents and the master submitted detailed replies in which they contended that the law did not permit any action against them. The master asserted that he possessed no knowledge of the presence of gold or of any unauthorized openings on the ship, and that he had taken all reasonable precautions consistent with the instructions of the company. He fully endorsed the other arguments presented by the agents. The agents placed considerable reliance on a report prepared by M/s Norman Stewart and Co., Marine Surveyors, Naval Architects and Consulting Engineers. In that report they argued that, absent a special, extensive, time‑consuming and uneconomic detailed search, it would have been impossible to locate the concealed compartments that the customs officials had uncovered. They further maintained that they had no knowledge of the hidden holes or of the gold that was found, and they cited the statement made by Kwok Cho to argue that gold could be smuggled by a conspirator without the master’s or the owners’ awareness. The agents emphasized that the vessel operated on the high seas as part of ordinary commercial voyages, making it implausible for the master, even while aboard, to be aware of illicit activities taking place in secluded corners of the ship, and it was inconceivable that the owners could ever know what was happening on board during such voyages. They also reiterated that they had taken all reasonable precautions and had issued clear and specific instructions to their crew prohibiting any unlawful conduct.

In the proceedings before the Additional Collector of Customs, the agents and the master put forward several arguments. They asserted that, without conducting extensive and time‑consuming searches, it was impossible to locate concealed compartments such as those discovered by the customs search. They further claimed that they possessed no knowledge of either the hidden openings or of the gold that was found in one of those openings. Referring to a statement made by the crew member Kwok Cho, they argued that the statement demonstrated that gold could be smuggled by a smuggler without the master’s or the owners’ awareness. They emphasized that a ship sailing on the high seas moves from port to port as part of ordinary commercial operations, and that it was implausible for the master, although present on board, to be aware of criminal activities carried out in hidden nooks and corners of the vessel. They also maintained that it was inconceivable that the owners could know what was happening on the ship while it was at sea. In support of their position they pointed out that they had taken every reasonable precaution that could be expected, and that they had issued clear and specific instructions to the crew prohibiting any offence such as smuggling. After the agents, the master and Kwok Cho submitted their written replies, the Additional Collector of Customs heard the appellant and, on 23 November 1957, issued the order that is now under challenge. The collector recorded that, after carefully reviewing the written explanations and hearing the oral arguments, he concluded that the preventive steps taken by the owners, the agents and the master were hopelessly inadequate and ineffective. He noted that the respondents had pleaded that they should not be treated as persons concerned with the illegal importation of gold into India within the meaning of section 167(8) of the Act, and that he accepted this particular plea. He also upheld their contention that the openings found in the cabin of the No 1 Fitter did not fall within the scope of section 167(12A). However, regarding all other matters, he found the explanations unsatisfactory and unacceptable. Consequently, the collector held that the vessel was clearly liable to confiscation under section 167(12A) because it had violated the provisions of section 52A. He observed that the amount of gold recovered from one of the cavities on the ship was valued at approximately Rs 23,79,490.80, calculated at Rs 109.24 per tola. He inferred that the existence of several hidden cavities indicated a systematic use of such hiding places to contravene section 52A. On that basis, he ordered the confiscation of 1,358 gold bars discovered during the search, acting under section 167(8) read with section 23A of the Foreign Exchange Regulation Act. He further imposed a personal penalty of Rs 10,000 on the sailor Kwok Cho. Regarding the vessel itself, he directed that the Eastern Saga be confiscated under section 167(12A) and, in lieu of that confiscation, offered the owners the option to pay a fine of Rs 25 lacs, the payment of which was to be made within the time prescribed in the order.

The order directed that the fine be paid within thirty days of the date on which the order was dispatched, or within any longer period that might be allowed by the authorities. In making this order, the Additional Collector noted that he had taken into account the fact that the agents had already suffered some loss because the vessel had been detained at the port. Following the order, the appellant filed an appeal before the Central Board of Revenue. The Board examined the matter and concluded that none of the contentions raised by the appellant were either justified by the facts or supported by the law as it presently stands. The Board agreed with the Additional Collector’s findings that an offence under section 52A of the Act had been established and that, consequently, the appellant was liable to be dealt with under section 167(12A) of the Act. The appellant had complained that the fine imposed as an option was excessive. The Board observed that, when the quantity and value of the smuggled gold and other relevant facts were considered, it was not inclined to alter the order. The Board also stated that the penalty imposed on the master was not so large as to require any revision. It was not contested that the market value of the ship far exceeded the amount of Rs 25 lacs that had been imposed as a fine under section 183. The order was pronounced on May 12, 1959. The appellant’s attempt to approach the Government of India under its revisional jurisdiction was unsuccessful, and the appellant’s application was dismissed on December 20, 1960. Thereafter, the appellant sought special leave to appeal before this Court, and the present appeal is before us because that special leave was granted. At the hearing of this appeal, the learned Additional Solicitor‑General raised a preliminary objection. He argued that none of the Customs authorities that had dealt with the appellant’s case qualified as a tribunal within the meaning of article 136(1) of the Constitution, and therefore the appeal was incompetent. While it is true that this Court had granted special leave, the Additional Solicitor‑General asserted that even where special leave is granted at an ex parte stage on the petition of the appellant, the respondent may, at the final hearing, raise a preliminary contention that the special leave should not have been granted, because the decision, judgment or order that is being appealed was not pronounced by a Court or Tribunal as contemplated by article 136(1). He further contended that neither the Customs Collector nor the Central Board of Revenue nor the Central Government constitutes a tribunal, and consequently the special leave that had been granted should be revoked on that basis. Established case law of this Court holds that the Customs officer who initially acts under section 167(12A) is not a Court or Tribunal, although it is also settled that...

In this matter the Court examined whether any vessel had violated section 52A and, by such violation, had become liable to confiscation under section 167(12A). The Court explained that the Customs Officer, when deciding such questions, was required to act in a quasi‑judicial manner. The Court referred to the decision in Shewpujanrai Indrasanarai Ltd. v. Collector of Customs and Others (1), where it had been held that an order of confiscation or a penalty issued under the Sea Customs Act was not a simple administrative or executive action. Rather, the order was a quasi‑judicial act, and consequently a writ of certiorari could be sought against it under article 226 of the Constitution. While delivering this conclusion, Justice S. K. Das, speaking for the Court, cited two earlier judgments that had considered the same issue. Those judgments were F. N. Roy v. Collector of Customs, Calcutta (2) and Lea Roy Frey v. The Superintendent, District Jail, Amritsar and Anr. (3), both of which affirmed that the Collector, while conducting proceedings under the Sea Customs Act, performed judicial functions. The Court also mentioned Thomas Dana v. State of Punjab (1), observing that the Collector and other officers listed in the Sea Customs Act might need to act judicially in the sense of evaluating evidence and hearing arguments, albeit in an informal setting. Nevertheless, the Court stressed that the Act did not envisage these authorities functioning as a Court. Further, the Court discussed Maqbool Hussain v. The State of Bombay etc. (1), where it considered the effect of confiscating goods under section 167 on the constitutionality of a subsequent prosecution against a person whose goods had been seized. In that case the Court held that the proceedings before the Sea Customs authorities were not a prosecution and that the confiscation order did not constitute a punishment imposed by a Court or judicial tribunal within the meaning of article 20(2). Accordingly, the Court concluded that the impugned prosecution was not incompetent or invalid. The Court also noted that the question of whether the Collector who issued the confiscation order was a judicial tribunal within article 20 had been answered negatively. Although the Court observed that Customs officers were not required to act judicially on sworn legal evidence nor authorized to administer oaths, the Court indicated that any appeals lay with the Chief Customs Authority, namely the Central Board of Revenue, and that further revision powers rested with the Central Government, which were not judicial bodies.

The power of revision was assigned to the Central Government, which plainly is not a judicial authority. The Court observed that the final remark in the earlier decision amounted merely to a passing comment, because the status of the Central Board of Revenue or the Central Government with respect to the handling of appeals or revision applications under sections 190 and 191 of the Act had neither been considered nor argued, and consequently had not been examined. Accordingly, that remark could not be treated as a decision on the issue that is presently before the Court. As a result, it is now beyond doubt that a Customs Officer does not constitute a Court or a Tribunal, even though, when adjudicating matters under section 167 of the Act, the officer is required to act in a judicial manner. It may also be conceded that neither the Central Board of Revenue nor the Central Government qualifies as a Court within the meaning of Article 136. The next question, therefore, is whether the Central Board of Revenue exercising its appellate authority under section 190, or the Central Government exercising its revisional jurisdiction under section 191, can be regarded as a Tribunal for the purposes of Article 136. The law stipulates that, before an appeal may be entertained under Article 136, two conditions must be satisfied: the order challenged must be of a judicial or quasi‑judicial character rather than a purely administrative or executive order, and the order must have been issued by either a Court or a Tribunal situated in India. Determining the character of a body tasked with adjudicating matters does not lend itself to a single precise test. Courts have sometimes examined whether the body or authority under scrutiny possesses the “trappings” of a court. Such trappings include the power to compel witnesses to appear, the authority to administer oaths, the requirement to follow prescribed procedural rules, the obligation to adhere to the principles of natural justice, and the expectation to deal with matters fairly, justly and on their merits without being influenced by extraneous considerations. If one or more of these essential features are present, the proceedings may be described as judicial, satisfying the test of trappings. Beyond the trappings, another significant test is whether the body or authority was created by the State and whether the State has bestowed upon it inherent judicial power. When a body is constituted by legislation and is granted such inherent judicial authority, this serves as a strong, often decisive, indication that the body functions as a Tribunal.

The Court observed that if the State has conferred its inherent judicial power on a body or authority, that circumstance serves as a strong, possibly decisive, indication that the entity should be regarded as a tribunal. Accordingly, the Court set out to determine whether the Central Board of Revenue and the Central Government qualify as a tribunal within the meaning of Article 136 of the Constitution. Before addressing that issue, the Court examined several authorities that had been cited by counsel. In the case of M/s Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhun‑jhunwala and Others (1), the question before the Court was whether the Central Government, while exercising powers under section 111(3) of the Companies Act, 1956 (No. 1 of 1956), functioned as a tribunal under Article 136. The Court first considered whether the Central Government was required to act in a judicial manner when exercising the powers granted by section 111. It then analysed the scheme of section 111 and noted that an appeal under that provision created a genuine dispute, or lis, between the parties concerning their civil rights, and that the Central Government was empowered to resolve that dispute according to law. The specific dispute concerned a claim by a transferee of a company’s shares seeking to have his transfer entered in the company’s register, as reported in the citation (1) [1962] 2 S.C.R. 339. The Court held that when such a dispute is presented to the Central Government under section 111, the Government must examine the proposal and objections based on the evidence before it, rather than on considerations of policy or expediency. Consequently, the Court concluded that the Central Government acted as a tribunal under Article 136. To support this conclusion, the Court referred to an earlier decision, Shivji Nathubhai v. The Union of India and Others (1), where it was held that the Central Government’s power of review under rule 54 of the Mineral Concession Rules, 1949, over a State Government’s administrative order granting a mining lease was subject to the appellate jurisdiction of this Court because the review power was judicial, not administrative. These two decisions therefore illustrate how the character of adjudication by the Central Government, whether under section 111(3) of the Companies Act or under rule 54 of the Mineral Concession Rules, 1949, is assessed by the Court. For contrast, the Court cited decisions in which the application of the same tests led to the conclusion that certain authorities could not be classified as tribunals, namely Jaswant Sugar Mills Ltd., Meerut v. Lakshmi Chand and Others (2) and Engineering Mazdoor Sabha and Another v. Hind Cycles Ltd. (3). In light of these authorities, the Court indicated that it would now proceed to consider the status of the Central Board of Revenue and the Central Government under Article 136.

The Court examined whether the Central Board of Revenue and the Central Government could be characterised as a Tribunal for the purposes of Article 136 of the Constitution. In order to address this question, the Court first set out the procedural scheme laid down by the Act for adjudications made under its provisions. Section 3 of the Act, inter alia, enumerates three categories of authorities that operate under the statute. The first category, the Chief Customs Authority, is identified as the Central Board of Revenue created under the Central Board of Revenue Act, 1924. The second category, the Chief Customs Officer, is described as the Chief Executive Officer of Sea‑customs for any port to which the Act is applicable. The third category, the Customs Collector, includes every officer of Customs who is at the time in separate charge of a custom‑house or who is duly authorised to perform all or any special duties of an officer so in charge. The procedural provisions of the Act must therefore be understood with reference to these three classes of officers.

Chapter XVII of the Act governs the procedure relating to offences, appeals and related matters. Section 169 empowers Customs officers to conduct a search when they have reasonable suspicion. Section 170A authorises a Customs officer to screen or X‑ray persons in order to detect concealed goods. Section 171 sets out the powers of a Customs officer to board and search vessels. Section 171‑A provides that officers of Customs may summon persons to give evidence and may require the production of documents; the power to summon a person also includes the authority to administer an oath under Section 4 of the Act 1 of 1873. An enquiry conducted by a Customs officer under subsection (4) of Section 171‑A is deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the Indian Penal Code. Under Section 183, an officer adjudicating a matter brought before him under Section 167 of the Act may give the person concerned the option of paying a fine in lieu of confiscation. Having outlined these adjudicatory powers, the Court then turned to the provisions concerning appeals and revisions. Section 188 provides for an appeal against any decision or order issued by any Customs officer, mandating that the appeal be filed within three months of the date of the challenged order or decision. The appeal lies to the Chief Customs Authority, or, where directed by the Central Government, to any Customs officer not inferior in rank to a Customs Collector and empowered in that capacity by name or by virtue of his office. The section further authorises the appellate authority to conduct an enquiry and to pass an order that may confirm, alter, or annul the original decision or order. The proviso to Section 188 stipulates that no appellate order may impose a confiscation, penalty, or duty rate greater than that adjudicated in the original order. Section 188 also declares that every order passed on appeal shall be final, subject only to the power of revision conferred by Section 191. Section 189 requires the appellant to deposit the duty demanded while the appeal is pending, and provides that if the appellate decision determines that the whole or any part of the deposited amount is not levyable, the Customs Collector shall return the surplus to the appellant.

The Court explained that the authority designated under section 188 could issue any order it considered appropriate, including confirming, altering, or setting aside the decision or order that was under appeal. The Court noted that the proviso to this provision expressly prohibited an appellate order from imposing a confiscation, penalty, or duty rate that was higher than what had been adjudicated in the original decision. Furthermore, the Court observed that the statute stipulated that every order made on appeal was to be final, although it remained subject to the revisional power granted by section 191.

In its analysis, the Court emphasized that orders issued by Customs Officers were expressly appeal‑able, and that the appellate authority was required to re‑examine the matter, conduct any additional inquiry it deemed necessary, and resolve the arguments presented by the appellant on their merits. The Court turned to section 189, which mandated that the appellant deposit the duty demanded while the appeal was pending. The Court further explained that, should the appellate decision determine that the entire deposited amount or any part of it was not recoverable, the Customs Collector was obliged to return that amount, or the relevant portion, to the owner of the goods upon the owner’s request.

Section 190, according to the Court, granted the Chief Customs Authority the power to remit a penalty or confiscation. Section 190A dealt with the revisional powers of both the Chief Customs Authority and the Chief Customs Officer, while section 191 laid down the revisional powers of the Central Government. The Court pointed out that the revisional powers enumerated in sections 190A and 191 could be exercised either on the authority’s own motion or in response to an application filed by an aggrieved party.

The Court summarized that the Act therefore provided a complete scheme of appeals and revisions, creating a clear hierarchy of authorities. This hierarchy began with the Customs Officer, who initially dealt with adjudication, and culminated with the Central Government, which functioned as the final revisional authority. The Court also referred incidentally to Rule 49 of the Rules framed by the Central Government under the powers conferred by section 9(c) of the Act. That rule required that every appeal presented to the Chief Customs Authority under section 188 and every application made to the Governor‑General‑in‑Council under section 191 be accompanied by a copy of the decision or order that gave rise to the grievance.

Finally, the Court identified the issue before it: whether the appellate authority operating under section 188 and the revisional authorities operating under sections 190A and 191 could be characterised as tribunals within the meaning of Article 136 of the Constitution. The Court observed that, once an order of confiscation was issued under section 167(12A) and the ship‑owner was offered the option provided by section 183, the original proceedings under the Act concluded, and the process entered the stage where an appeal against the confiscation order or the imposed fine could be made.

In the present appeal the Court was required to address the preliminary objection raised by the Additional Solicitor‑General concerning the legal status or character of the appellate authority and the Central Government when it exercises its revisional jurisdiction. The Court examined the scheme of the statutory provisions that had been cited earlier and concluded that there was no difficulty in holding that both the Central Board of Revenue, which functions as an appellate authority, and the Central Government, which exercises revisional powers, qualify as Tribunals within the meaning of Article 136 of the Constitution. The dispute before these bodies arises either by way of an appeal or a revision filed by a party who is aggrieved by an order issued by the Customs Officers, and such a dispute must be tried by the appellate or revisional authority on the basis of the facts adduced in the proceedings and in accordance with the law. All proceedings that fall under the Act—whether they are before the Customs Officer or are pursued on appeal or revision—must be conducted in conformity with the principles of natural justice; consequently, they constitute judicial or quasi‑judicial proceedings. The fact that the Customs Officer who adjudicates under sections 167(12A) and 183 of the Act is not himself a tribunal does not alter the analysis when the matter reaches the stage of appeal or revision. A prescribed limitation period governs the filing of an appeal, and Rule 49 mandates that the appeal or revision be accompanied by a copy of the decision or order that is being contested; the overall scheme therefore requires that both the appellate and the revisional authorities examine the matter judicially on the basis of the evidence and determine the outcome according to law. It is evident that the proceedings frequently involve the imposition of heavy fines and the issuance of confiscation orders that may affect ships of considerable value. By filing an appeal or a revisional application, the ship‑owner ordinarily contends that the confiscation order is improper or invalid and may also argue that the fine imposed is unreasonable or excessive. When such disputes are presented before the appellate or revisional authority, it would be untenable to accept the argument that the authority handling them in its appellate or revisional capacity is not a tribunal under Article 136. These authorities have been created by the legislature and are empowered to adjudicate disputes brought before them by aggrieved persons. Accordingly, the structure of the Act, the nature of the proceedings before the appellate and revisional authorities, the magnitude of the claims involved, the character of the penalties imposed and the type of inquiry contemplated by the Act all indicate that both the appellate and the revisional authorities, acting under the relevant provisions, constitute Tribunals within the meaning of Article 136 because they are invested with the judicial power of the State and are required to act judicially. Consequently, the Court overruled the preliminary objection raised by the Additional Solicitor‑General and proceeded to consider the appeal on its merits.

The Court decided to reject the preliminary objection raised by the Additional Solicitor General and to examine the appeal on its substantive issues. The central matter then became the proper interpretation of section 52A of the Act, a provision that had been the subject of extensive argument by counsel for the petitioner. Section 52A states that no vessel that has been constructed, adapted, altered, or fitted for the purpose of concealing goods may enter, or may be within, the limits of any port in India or the Indian customs waters. This provision is the sole clause contained in Chapter VIA and was introduced by Act 10 of 1957. The plain meaning of the provision appears to be that whenever a ship that falls within the description set out in the first part of the section comes into a port or customs waters in India, it violates the prohibition contained in the section. The prohibition is directed against any construction, adaptation, alteration, or fitting that is carried out for the purpose of concealing goods. Consequently, to establish a breach of section 52A, it must be shown that such a construction, adaptation, alteration, or fitting occurred and that it was undertaken with the intention of concealing goods. Thus, proof of an alteration made for the purpose of concealment would give rise to a presumption of a violation of section 52A. In other words, the provision absolutely forbids the entry of any vessel that exhibits any construction, adaptation, alteration, or fitting performed for the purpose of hiding goods. Counsel for the petitioner argued that a violation of section 52A cannot be proved unless the required mens reа, the guilty mind, is also demonstrated with respect to the persons responsible for the alleged breach. He pointed out that the section makes no distinction between concealed goods that are contraband and those that are lawfully carried, and therefore, even if an alteration is shown to have been made for the purpose of concealing lawfully carried cargo, the offence would still attract the consequences provided in section 167(12A) of the Act. Because the scope of the prohibition in section 52A is so broad, he maintained that it is necessary to incorporate a mens reа requirement to delineate its reach. He further relied on the well‑established principle of criminal jurisprudence that, unless a statute creating an offence and prescribing its punishment expressly, or by necessary implication, excludes mens reа as an essential element, no person should be convicted unless his guilty mind is proven. The Court noted that this principle had been affirmed in Ravula Hariprasada Rao v. State, where Justice Fazl Ali, speaking for the Court, accepted the observations of the Lord Chief Justice of England in Brend v. Wood, emphasizing the utmost importance of safeguarding liberty by ensuring that a criminal statute must clearly or implicitly require mens reа before imposing liability.

In this case the Court observed that a tribunal must always remember that, unless a statute expressly or by necessary implication excludes the requirement of a guilty mind, a person cannot be convicted of a criminal offence unless it is shown that he possessed such a guilty mind. The Court cited the authority in Sherras v. De Rutzen (3) to support this principle. The Court also acknowledged that offences which do not require proof of mens rea are generally of a comparatively minor nature and the punishments imposed for such offences are usually not severe. However, the Court pointed out that in the present matter the confiscation of a vessel could cause a very serious loss to its owner, and that imposing a monetary fine as an alternative to confiscation could also require the payment of a large sum. Consequently, the Court found that there is prima facie merit in Mr. Choudhary’s contention that the element of mens rea should not be excluded when interpreting the scope and effect of section 52A of the Act.

Conversely, the Court noted that the overall structure of section 167 supports the argument advanced by the Additional Solicitor‑General that, when section 52A is read together with section 167(12A), it becomes clear that the legislature, by necessary implication, intended to exclude mens rea from the offence created by section 52A. Section 167(12A) states that if a vessel which has been constructed, adapted, altered or fitted for the purpose of concealing goods under section 52A enters or is situated within the limits of any Indian port or within Indian customs waters, that vessel shall be liable to confiscation and the master of the vessel shall be liable to a penalty not exceeding rupees one thousand. The Court observed that, in the first column, section 167(12A) reproduces the material language of section 52A without adding the words “knowingly or wilfully.” The Court highlighted that the expressions “knowingly or wilfully” appear in several other provisions of section 167. For example, section 167(14) and section 167(61) use the word “wilfully,” while sections 167(3) and 167(81) use the word “knowingly,” and section 167(78) uses the term “intentionally.” Even in section 167(8), although the phrase “knowingly or wilfully” is absent, the expression “concerned in” is present, which may bring the notion of mens rea into consideration. The Court therefore concluded that whenever the legislature intended to make knowledge or intention an essential element of an offence, it deliberately employed the appropriate language to signal that requirement. The absence of such language in section 167(12A) cannot be viewed as accidental; rather, it must be regarded as a purposeful choice. The Court acknowledged that this line of reasoning also carries persuasive force. Finally, the Court indicated that further considerations remained to be addressed.

In this case the Court observed that when construing a statutory provision it was necessary to consider whether the construction urged by Mr Choudhary would render the provisions of section 52A read with section 167(12A) essentially ineffective. The Court explained that if adopting the suggested construction would substantially defeat the purpose and intention of the legislature in enacting the section, that would provide a legitimate basis for rejecting it. Conversely, the Court noted that if the language of section 52A allowed only one meaning and that meaning coincided with Mr Choudhary’s proposal, then the fact that the provision might become nugatory would not be of material significance. However, where two reasonable constructions were possible—one leading to the identified anomaly and another that furthered the legislative purpose—the Court held that it was its duty to adopt the latter construction. The Court then described the legislative purpose behind section 52A, stating that the provision was intended, inter alia, to put an end to illegal smuggling that severely disturbed the national economy. It pointed out that gold smuggling had become a serious problem in the country and that such operations were often conducted by operators working on an international basis. The individuals who physically carried out the smuggling were usually only agents, while a well‑organized group stood behind them motivated by profit. Accordingly, section 52A imposed an absolute prohibition on the entry of any vessel that contained, inter alia, any alteration made for the purpose of concealing goods. The Court warned that if the statute required proof of the owners’ or the master’s knowledge before a violation of section 52A could be established, most offending vessels would escape punishment. It observed that establishing mens rea against owners of vessels sailing on the high seas was rarely feasible and that proving the guilty mind of a ship’s master was also difficult. The Court reasoned that making knowledge an essential element would enable owners and masters to claim that any alteration, adaptation or fitting was carried out without their knowledge or contrary to their instructions. It concluded that such a requirement would render the provision virtually unenforceable, because customs authorities would find it nearly impossible to demonstrate the required mens rea as suggested by the appellant. Therefore the Court found that interpreting the statute in a manner that demanded proof of knowledge would defeat the legislative goal of preventing smuggling, and it emphasized that the wording of the statute targeted the act of entry itself, not the mental state of the vessel’s owners.

In this case the Court observed that a vessel is not ordinarily built with the intention of concealing goods, and any construction, adaptation, alteration or fitting that is carried out in a way that is not easily detectable would therefore be intended to hide something. The Court explained that if the interpretation suggested by counsel were accepted, it would be very difficult to prove the guilty mind of either the owners or the master, and the provision would effectively become ineffective. The Court noted that the heading of the Chapter makes clear that the purpose of section 52A is to regulate the entry of vessels, and that the legislature deliberately used negative language to indicate that the prohibition does not target the owner or the master but the vessel itself. Accordingly, the provision forbids a vessel that fits the description in the first part of section 52A from entering any Indian port or Indian customs waters, or from remaining there. The Court pointed out that the only legitimate defence available to a vessel is the requirement that the alleged alteration must be shown to have been originally made for the purpose of concealing goods. If the alteration can be demonstrated to serve a normal operational or functional purpose, the vessel may lawfully argue that the change was not intended to hide cargo. The Court further said that where an alteration was initially made for a functional purpose but later used without the knowledge of the master or owners for an illegal end, a factual dispute may arise as to whether the alteration falls within the description of section 52A. However, where the alteration does not serve any functional purpose and its very nature suggests a secret objective, the inference that it was intended to conceal goods is readily drawn. On this basis the Court concluded that the customs authorities were correct in holding that the lack of knowledge on the part of the owners or the master, and the concealment of gold bars recovered from the ship, did not remove the appellant from the operation of section 52A. The Court affirmed that, for the purposes of section 52A, the knowledge of owners or master is irrelevant.

In this case, the Court observed that the only matter of relevance was the evidence establishing that a vessel matching the description set out in section 52A had entered the limits of Calcutta, which is a port situated within India. Counsel for the appellant, Mr Choudhary, put forward an additional argument that the modification on which the present proceedings were based could not be characterised as an alteration contemplated by section 52A because, in his view, the change did not involve the vessel itself. He maintained that for an alteration to fall within the scope of the provision, the construction, adaptation, alteration or fitting must affect the vessel as a whole, or at the very least, affect a portion of the vessel that can be regarded as an integral or essential part. Accordingly, Mr Choudhary contended that the paneling wall in which the apertures had been created could not be treated as a part of the vessel, and therefore the modification could not be said to attract the operation of section 52A. This line of reasoning formed another substantive argument advanced on behalf of the appellant.

To support his position, Mr Choudhary referred the Court to a certificate issued by Mr B Hill, who is a Surveyor to Lloyd Register of Shipping in association with the British Corporation Register. In that certificate, Mr Hill purported to state that, in his professional opinion, the paneling and lining did not constitute part of the vessel and that the term “vessel” should be understood, for the purpose of assigning the notation “100 Al” or any other class notation in the Register Book of Lloyd’s Register of Shipping, as well as for the issuance of a Loadline Certificate under the Merchant Shipping Acts, as excluding such paneling or lining. He further added that this type of paneling is customarily installed in British vessels for the health and comfort of the crew, serving as a method of insulating the accommodation.

The Court was not prepared to accept Mr Choudhary’s contention that the record contained any material showing that the paneling was not part of the vessel. Section 3(f) of the Act defines a vessel as including anything that is made for the conveyance by water of persons or property, and there was no justification for treating the paneling as something excluded from that definition. Moreover, Mr Hill, who had issued the certificate, did not give evidence in the present proceedings; consequently, the statements made by him in the certificate had not been subjected to examination or cross‑examination. Even assuming his opinion that the paneling does not form part of the vessel for the two specific purposes he mentioned, such an opinion could not assist the Court in determining whether the paneling constitutes part of the vessel within the meaning of section 52A. The Court further reasoned that, irrespective of the purpose for which paneling may be installed, once it is constructed it becomes a part of the vessel, and any alteration made to that paneling therefore falls within the ambit of section 52A. Accordingly, the Court rejected Mr Choudhary’s argument and held that the alteration to the paneling was subject to the provisions of section 52A.

The Court observed that even if an alteration were proved to have been made in the panels of the vessel, the provisions of section 52A could not be ignored. The argument advanced by counsel for the appellant, suggesting that the holes cut in the panelling walls did not amount to an alteration, was dismissed as clearly unfounded. The Court explained that the way the holes were created and the purpose for which they were intended left no doubt that they qualified as an alteration within the meaning of section 52A. Consequently, the Court concluded that the Customs Authorities were correct in holding that the evidence established the appellant’s vessel Eastern Saga had violated section 52A when it entered the port of Calcutta, thereby attracting the liability prescribed by section 197(12A) of the Act. The next issue for determination in this appeal concerned the nature of the liability imposed by section 167(12A). The Court noted that section 167(12A) provides that a vessel contravening section 52A shall be liable to confiscation and that the master of such vessel shall be liable to a penalty not exceeding one thousand rupees. The Court then considered whether the penalty specified in section 167(12A) could be withheld in a particular case on the ground that the breach was trivial or resulted from the act of a criminal acting contrary to the master’s instructions. The wording in the third column of clause 12A states that “such vessel shall be liable to confiscation,” and the Court held that the context requires the Customs Authority not to refuse confiscation on the basis of any extenuating circumstances surrounding the breach of section 52A. The Court explained that two penalties are prescribed: one is the confiscation of the ship, and the other is a fine imposed on the master. Regarding the fine, the Court said that the Customs Authority possesses discretion to determine the amount of the penalty; similarly, just as the Authority cannot decline to confiscate the offending ship, it also cannot refuse to levy any penalty against the master. The Authority may, however, impose a nominal fine if it is satisfied that the master was innocent and, despite his best efforts, could not prevent the violation of section 52A. Finally, the Court observed that if the two penalties under clause 12A were alternative, the result might differ, but because they are independent penalties, one applies to the ship and

The Court observed that the penalty prescribed against the master is distinct from the penalty prescribed against the vessel, and therefore the Customs Authority cannot decline to impose one penalty while imposing the other, nor can it refuse to impose either of the two penalties. The Court explained that clause 12A imposes an elementary requirement that, once the offence identified in column 1 of that clause is proved, some penalty must be imposed. Clause 12A further indicates that two penalties, not one, must be imposed: one against the vessel and one against the master, with the amount of the penalty against the master left to the discretion of the Authority. Consequently, the Court held that it is not permissible to argue that, even where extenuating circumstances attend a breach of section 52A, the Customs Authority may refrain from confiscating the vessel. Confiscation of the vessel is the immediate statutory consequence of a finding that an offence under clause 12A has been established, just as the imposition of a penalty against the master is another statutory consequence of the same contravention.

The Court added, for the sake of fairness, that the learned counsel for the petitioner did not support the view expressed by Sinha J. in the matter decided under article 226 involving Everett Orient Line Incorporated (referencing W.P. No. 121/1959 and C.A. No. 374/1961, which were heard together with the present appeal and will be addressed separately). In that earlier case, Sinha J. appeared to hold that the Customs Authority possessed a discretionary power to, in appropriate circumstances, refuse to confiscate the offending vessel. The Court determined that this view was not justified by the wording of clause 12A of section 167.

The Court further noted that confiscation of the offending vessel under clause 12A does not represent the final step in the proceedings. In adjudicating an offence under clause 12A of section 167, the Customs Officer must also exercise jurisdiction conferred by section 183 of the Act. The Court emphasized that sections 167(12A) and 183 must be read together, and the adjudication process must be conducted in light of the provisions of both sections. Section 183 provides that whenever confiscation is authorised by the Act, the adjudicating officer shall offer the owner of the goods an option to pay, in lieu of confiscation, a fine that the officer deems appropriate. Accordingly, the Court clarified that, in dealing with offences under section 167(12A), an obligation is imposed on the Customs Officer to give the owner of the goods the option of paying a fine instead of suffering confiscation. The Court affirmed that it is not contested, and rightly so, that the term “goods” in section 183 includes vessels. Consequently, when the adjudicating officer was handling the present case, it was his duty to specify the fine that the owners of the ship could elect to pay in place of confiscation.

In this case, the Court observed that the wording of clause 12A of section 167, which strips the adjudicating officer of any discretion to decide whether to confiscate a ship, does not finally settle the issue. Although confiscation is a statutory consequence of a breach of section 52A, the legislature was aware that taking away a vessel could cause undue hardship to its owners. Consequently, section 183 expressly obliges the adjudicating officer to present the owners with an option to pay a fine instead of suffering confiscation. While section 167(12A) does authorize and require confiscation, the statutory duty imposed by section 183 makes it necessary for the officer to offer that alternative, meaning that the ultimate penalty to be imposed on the owners ultimately falls within the officer’s discretion. Section 183 therefore confers on the officer the power to determine the amount of fine that may replace confiscation, and in exercising that power the officer must consider relevant and material circumstances, including any extenuating factors that the owners may raise. Accordingly, the confiscation of the offending vessel, which under clause 12A lies outside the officer’s direct discretion, is indirectly brought within his discretion through the provisions of section 183. The scheme of section 183 indicates that the only penalty the officer may legally impose is confiscation; after doing so, he must give the owners the option of paying a fine in lieu of that confiscation. This approach was adopted because treating the fine as an alternative penalty would create difficulties in recovering the amount, so the legislature provided that the offending ship should be detained, and if the offence is proved, confiscated, while the owner may secure release of the vessel by paying the fine prescribed under section 183. The mere requirement to give the owner an option demonstrates that the fine under section 183 is not itself a penalty imposed by the officer, but merely an option offered to the owner. On a fair reading of section 167(12A) together with section 183, the Court concluded that the actions taken by the Customs authorities were sound and not open to any challenge. The petitioner’s counsel then contended that, on the merits, the Central Board of Revenue had erred in holding that section 52A had been violated by the appellant’s vessel Eastern Saga. The Court had already summarized the findings recorded by the customs authorities, noting that the Additional Collector of Customs had accepted the appellant’s plea that the owners were not involved in the illegal importation of gold within the meaning of section 167(8) of the Act.

In this case the customs authority concluded that, although the Act recorded the owners’ claim that they were not involved in the illegal importation of gold, the preventive steps taken by the owners, their agents and the ship’s master were wholly inadequate and ineffective. The authority examined the modifications made to the vessel and determined that the changes had been introduced for the purpose of hiding goods. The sheer number of alterations on the ship, in the authority’s view, objectively indicated that they were intended to facilitate the illegal activity prohibited by section 52A. When 1,358 gold bars were actually recovered from one of the holes cut in the paneling wall, the authority found it impossible to reject the inference that the alteration had been created specifically to conceal that gold. The authority further noted that the alterations served no operational or functional function for the ship and that the manner in which they were executed unmistakably pointed to a design for concealment. It was observed that if the concealed items had not been contraband, such elaborate alterations would have been unnecessary. Consequently, the court saw no merit in the argument that the customs officials were wrong in finding a violation of section 52A, especially since the determination of whether the provision had been contravened was essentially a factual question that the court does not normally re‑examine on the basis of evidence. The petitioner’s counsel then contended that the imposed fine of Rs 25 lakh was excessive and should be reduced, arguing that a fine of such magnitude could indirectly harm the country’s trade and that the amount appeared unreasonable, even vengeful. He further alleged that the additional collector had taken into account an irrelevant factor – the loss suffered by the petitioner while the vessel was detained. The court rejected this sub‑argument, observing that if the consideration was indeed irrelevant, it operated in the petitioner’s favour; without it the collector would likely have imposed an even higher penalty. Regarding the size of the fine, the court was not prepared to deem it unreasonable or excessive. It had already noted the value of the illegally imported gold, the presence of numerous suspicious alterations in the paneling and other parts of the vessel, and the difficulty of detecting such smuggling. The customs authority, therefore, had reasonably concluded that, given the value of the gold, the large number of alterations and the vessel’s worth, a fine of Rs 25 lakh was appropriate. The court affirmed that there was no ground to interfere with the fine under article 136 of the Constitution, as the fine merely offered the petitioner an option to pay and obtain the vessel’s release, and the amount was far less than the vessel’s value. Moreover, the appellate and revisional authorities had examined the propriety of the fine and found no reason to disturb it, making any grievance under article 136 untenable in the absence of a legal question.

In this case, the Court observed that the presence of numerous alterations in the vessel and the assessed value of the ship justified the imposition of a fine of twenty‑five lakh rupees. The Court stated that there was no basis for intervening under Article 136 of the Constitution because the fine merely offered the appellant the choice to pay and thereby obtain the release of the vessel. Since the fine was considerably lower than the market value of the vessel, it was in the appellant’s interest to settle the fine and secure release. The Court further noted that the propriety of the fine imposed by the Additional Collector of Customs had already been examined by both appellate and revisional authorities, and those authorities had found no reason to modify the amount. Consequently, the Court held that the appellant could not raise a complaint against the fine through an appeal under Article 136 when no question of law or principle was involved. The Court then reflected on a broader consideration concerning punishment. It acknowledged that contemporary criminology discourages the use of harsh or severe sentences because the deterrent or punitive purpose of punishment is no longer regarded as a primary objective in criminal law. Nevertheless, the Court emphasized that most ordinary offences arise from provoked emotions or adverse circumstances, and therefore the criminal law generally treats punishment as corrective or reformative rather than purely punitive. The Court warned, however, that this approach should not be uniformly applied to every offence committed by a vessel that contravenes Section 52A. It observed that illegal importation of gold has become a serious national problem, and the sophisticated and inventive methods employed in such smuggling indicate that the responsible organisations are motivated chiefly by greed and profit. Accordingly, the Court recognised that the customs authorities are entitled to view the imposition of deterrent fines as an effective means of curbing the spread of these illicit operations whenever such offences are discovered and proven. Having taken this perspective, the Court found no justification for entertaining the pleading of counsel that the fine of twenty‑five lakh rupees should be reduced. The Court rejected the argument that imposing a heavy fine might negatively affect the country’s trade, describing that contention as wholly misplaced and unfounded.

Before concluding the present appeal, the Court observed another point that required mention in its reasoning and discussion. Counsel for the appellant, Mr. Choudhary, argued that if mens rea was not an essential element of section 52A, the provision would be ultra vires Articles 14, 19 and 31(1). He further maintained that, because of this reasoning, the provision should be declared unconstitutional and therefore invalid under the Constitution. The Court stated that it would not examine the merits of that argument because the appellant’s status precluded reliance on the asserted constitutional rights. It observed that the appellant is not only a corporation but also a foreign corporation, and consequently it is not entitled to invoke the protections of Article 19. Only Indian citizens are guaranteed the freedom of expression and movement contained in that article, which therefore does not extend to the appellant. Accordingly, the pleas under Articles 31(1) and 14 could not succeed because successful reliance on them would inevitably require reliance on the fundamental right guaranteed by Article 19(1)(f). The appellant argued that it was deprived of its property by operation of the relevant provisions of the Act, and claimed those provisions were invalid. Article 31(1) merely provides that no person shall be deprived of his property except by authority of law. When the appellant raised that plea, the Court responded that the deprivation occurred pursuant to the authority granted by the Act. Consequently, the Article 31(1) argument ended there unless the appellant chose to challenge the validity of the Act, a step that would inevitably require reliance on Article 19(1)(f). A similar situation arose when the appellant advanced a plea based on Article 14, contesting the constitutionality of the provision. It may be that if section 52A infringes Article 19(1)(f), an Indian citizen could argue that his vessel cannot be confiscated even after violating section 52A, creating an inequality between citizens and foreigners. However, that inequality is a necessary consequence of the fact that Article 19 applies only to Indian citizens, and therefore any Article 14 claim must also incorporate Article 19 to succeed. The Court noted that certain rights guaranteed by Article 19 to Indian citizens are not available to foreigners, and consequently pleas that rely on those rights cannot be used by the appellant. Thus, the Court found no merit in the argument that if section 52A is construed against the appellant, it becomes invalid, allowing the appellant to avoid confiscation of its vessel under Article 31(1). The Court clarified that it was not expressing any opinion on the constitutionality of section 52A under Article 19(1)(f). If that question ever arose for decision, the Court would have to consider whether the provisions of section 52A are justified by Article 19(5).

The Court observed that the question of whether the provisions of section 52A are justified by Article 19(5) lay outside the matters that required consideration in the present appeal. Consequently, the Court concluded that the appeal could not succeed and ordered its dismissal, directing that costs be awarded against the appellant. The appellant had also instituted writ petition number 138 of 1961, seeking to challenge the validity of the order issued by the Central Government in the same subject matter. Because the appeal that the appellant had preferred against that governmental order was dismissed, the Court held that the writ petition could not proceed and therefore dismissed it as well. In the case of the writ petition, the Court expressly noted that no order as to costs would be made. Accordingly, both the appeal and the writ petition were dismissed, with the appeal incurring costs and the petition remaining without a costs order.