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  • provisions of Article 19(1)(f) and (g) and Article 31 of the Constitution
  • section 178-A infringed the provisions of Article 19(1)(f) and (g).
  • section 178-A infringed Article 14 of the Constitution,
  • Section 167, item 81 of the Sea Customs Act of 1878.
  • section 114 of the Indian Evidence Act,
  • SECTION 178 SEA CUSTOMS ACT
  • PREVENTION OF CORRUPTION ACT
  • SEA CUSTOMS ACT
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Cites
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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • provisions of Article 19(1)(f) and (g) and Article 31 of the Constitution
  • section 178-A infringed the provisions of Article 19(1)(f) and (g).
  • section 178-A infringed Article 14 of the Constitution,
  • Section 167, item 81 of the Sea Customs Act of 1878.
  • section 114 of the Indian Evidence Act,
  • SECTION 178 SEA CUSTOMS ACT
  • PREVENTION OF CORRUPTION ACT
  • SEA CUSTOMS ACT
Smart Summary

Analytical Summary of the Opinion delivered by G.D. Khosla, J. (with concurrence by Tek Chaad, J.)

Factual and Procedural Background

This is an appeal brought by the State against the acquittal of the respondent, Krishan Lal, who had been charged under Section 167, item 81 of the Sea Customs Act, 1878, on the allegation that smuggled gold was recovered from his possession.

Procedural history: The trial Court convicted the respondent and sentenced him to six months' imprisonment. On appeal, the Sessions Judge acquitted the respondent on the ground that the contraband nature of the gold had not been satisfactorily established. The State then appealed against that order.

Material facts: On 5 March 1957, acting on information that the respondent would be at a lorry-stand in Amritsar in possession of smuggled gold, a Customs raiding party accosted him and recovered five bars of gold (marked "999") totaling 48 tolas 11 mashas, concealed in the nefa of his underdrawers, and one gold piece in his trousers. The respondent admitted the recovery but maintained that he had purchased the gold in the open market. He was given the opportunity to produce evidence to substantiate his plea of bona fides but did not call any witnesses or produce documentary evidence and stated in Court that he had no witnesses or evidence to produce.

Legal Issues Presented

  1. Whether the statutory presumption created by Section 178-A of the Sea Customs Act—shifting the burden to a person from whose possession goods are seized to prove that the goods are not smuggled—is sufficient in law to sustain a conviction under Section 167 where smuggled goods are recovered from the accused's possession.
  2. Whether Section 178-A of the Sea Customs Act infringes the respondent's fundamental rights under Article 19(1)(f) and Article 19(1)(g) of the Constitution (i.e., the right to acquire, hold and dispose of property and to practice any profession, trade or business).

Arguments of the Parties

Respondent's Arguments

  • The respondent's counsel argued that Section 178-A violates the fundamental rights guaranteed under Article 19(1)(f) and 19(1)(g) of the Constitution by effectively depriving a citizen of the right to acquire, hold and dispose of property and to carry on trade unless the citizen can prove his innocence (i.e., that the goods are not smuggled).
  • Factually, the respondent maintained that he had purchased the gold in the open market and thus was not knowingly in possession of smuggled goods.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Babulal Amthalal Mehta v. Collector of Customs, A.I.R. 1957 S.C. 877 Consideration of the vires of Section 178-A and holding that Section 178-A did not infringe Article 14 (reasonable classification) of the Constitution; note that arguments under Article 19(1)(f), (g) and Article 31 were faintly raised but not pressed before the Supreme Court. The court relied on this Supreme Court decision to support the view that Section 178-A is constitutionally valid (at least with respect to Article 14) and to reinforce the proposition that Article 19 protections apply to lawfully acquired property, whereas smuggled goods are not lawfully acquired.
Amichand Vallamji v. M.G. Abrol, Misc. Appln. No. 21 of 1957 (Bombay High Court, unreported) Unreported decision in which Desai, J. appears to have taken the view that Section 178-A infringed the provisions of Article 19(1)(f) and (g). The court noted this decision but, with respect, disagreed, observing that the Bombay High Court decision did not sufficiently consider that Article 19 clauses protect lawfully acquired property and that the Legislature can place the onus of proof in special circumstances such as possession of goods reasonably believed to be smuggled.

Court's Reasoning and Analysis

The court's analysis proceeded in the following steps, based strictly on the text of the opinion:

  1. Identification of the legal question: The core question was whether the presumption under Section 178-A is sufficient to convict a person under Section 167 where goods believed to be smuggled are seized from his possession.
  2. Explanation of Section 178-A: The court explained that Section 178-A places the burden on the person from whose possession the seized goods were taken to prove that they are not smuggled, when the goods are seized under the reasonable belief that they are smuggled.
  3. Relationship to presumption of innocence: The court acknowledged that Section 178-A is an exception to the general criminal-law rule that an accused is presumed innocent until the prosecution proves all ingredients of the offence. The Legislature, given the peculiar nature of offences under the Sea Customs Act, has shifted the onus in these circumstances.
  4. Application of statutory prerequisites: The court assessed whether the prerequisites for Section 178-A were satisfied: (a) goods to which the section applies were seized; (b) the seizure occurred under a reasonable belief that the goods were smuggled. The court found both prerequisites met because information was received by the Customs Department and they organized and executed a raid—demonstrating a reasonable belief.
  5. Factual application: The gold was, in fact, recovered from the respondent; the recovery was admitted by him. Given the statutory presumption, the burden shifted to the respondent to rebut that the gold was smuggled.
  6. Onus not discharged: The respondent claimed purchase in the open market but produced no witnesses or documentary evidence (stated he had no witnesses to examine). The court held that he had ample opportunity to produce evidence (e.g., the shopkeeper or receipts) and failed to do so; therefore he did not rebut the statutory presumption.
  7. Constitutionality challenge considered: The court addressed the contention that Section 178-A infringes Article 19(1)(f) and (g). It reasoned that Article 19 rights protect lawfully acquired property and lawful trade; smuggled goods are not lawfully acquired property and therefore do not attract those fundamental-right protections in the manner suggested by the respondent's counsel.
  8. Reliance on precedent and statutory analogies: The court relied on the Supreme Court decision in Babulal Amthalal Mehta (holding Section 178-A not in violation of Article 14) and noted analogous statutory presumptions (e.g., presumptions under Section 114 of the Evidence Act or presumptions under the Prevention of Corruption Act regarding illicit money) to justify shifting the onus in such special cases.
  9. Conclusion of analysis: Because the statutory prerequisites were satisfied, the goods were recovered, and the respondent failed to rebut the presumption that the gold was smuggled, the court concluded that the offence under Section 167 was proved beyond reasonable doubt.

Holding and Implications

Core Holding: The appeal was allowed; the Sessions Judge's order of acquittal was set aside, and the conviction and sentence of six months' rigorous imprisonment imposed by the trial Court were restored.

Implications and consequences:

  • Direct effect: The respondent's acquittal was overturned and the original conviction and six months' imprisonment were reinstated.
  • Constitutional implication: The court found no infringement of Article 19(1)(f) or (g) by Section 178-A, on the basis—consistent with the Supreme Court decision cited—that Article 19 protections apply to lawfully acquired property and that legislatures may impose an onus in narrowly defined statutory circumstances involving goods reasonably believed to be smuggled.
  • Precedential impact: The opinion applies and follows existing authority (notably the cited Supreme Court decision) and does not purport to create a new constitutional principle; the decision restores the conviction on the facts and statutory framework before the court.

Disposition: Appeal allowed.

    The State Of Punjab v. Krishan Lal .

    G.D Khosla, J.:— This is an appeal by the State against the acquittal of the respondent, Krishan Lal, upon a charge punishable under Section 167, item 81 of the Sea Customs Act of 1878. The charge against the respondent that a Quantity of smuggled gold was recovered from his possession. He was convicted by the trial Court and sentenced to six months' imprisonment, but on appeal the learned Sessions Judge acquitted him on the ground that the contraband nature of the gold had not been established satisfactorily.

    2. I need not give the details of the recovery at length because the recovery of the gold is admitted by the respondent. Information was received by the Customs Department that the respondent would be arriving at a certain spot (a lorry-stand in Amritsar) and would be in possession of smuggled gold. A raiding party was accordingly organised and M.S Bedi, R.S ??? Satnam Singh, all Customs Inspectors, were members of this party. At 4.30 p.m on the 5th of March, 1957 this party accosted the respondent and recovered from his possession five bars of gold believed to be of foreign origin. These bars bore the mark “999” and weighed in all 48 tolas 11 mashas. The gold was concealed in the nefa of the underdrawers worn by the respondent. There was one gold piece in his trousers. The respondent's story was that he had purchased this gold in the open market. He was given ample opportunity to produce evidence and substantiate his plea of bona fide, but no evidence was produced by him and eventually he made a statement in Court that he had no witnesses to examine and no evidence to produce.

    3. The question for our decision in this case is whether the presumption arising under section 178-A of the Sea Customs Act is sufficient to hold the respondent guilty of the offence punishable under section 167 of the Act. Section 178-A is in the following terms:—

    “178-A. Burden of proof.—(1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.

    4. This section provides an exception to the general rule that an accused person must be presumed to be innocent until the prosecution have established all the ingredients which make up a criminal offence. Owing to the peculiar nature of the offence which is dealt with under the Sea Customs Act the Legislature thought it wise to put the onus of proving his innocence upon the accused person where there was a reasonable belief that he was in possession of smuggled goods and Such goods were actually seized from his possession. If the prosecution can prove that the gold recovered from the possession of the respondent was smuggled gold or if in law a presumption to this effect arises then he will clearly be guilty of the offence under section 167. In the present case gold was, in fact, recovered from him and the only question, therefore, is whether it is smuggled gold or not. Section 178-A provides that gold must be presumed to be smuggled unless this presumption is rebutted by the person from whom the gold is recovered. There is also another prerequisite, that is that there must be a reasonable belief that the goods are smuggled. Belief is clearly a subjective matter because for a belief to exist there must be a believer and it is that believer who must believe that the goods are smuggled. In the present case there can be no doubt at all that the Customs Department had a reasonable belief that the respondent was in possession of smuggled gold because information was received by them any they acted upon this information. The mere fact that they decided to organise a raid and took with them the information who was to point out the offender, shows that they believed the information conveyed to them and acted upon it. Therefore, ??? conditions required by section 178-A are fulfilled in the present case, ??? the respondent can show that the gold was not smuggled, he must be held guilty of the offence punishable under section 167 of the Act.

    5. The learned counsel for the respondent has argued ‘that this section’ violates the fundamental right which is guaranteed to very citizen under Article 19(1)(f) and also 19(1)(g) of the Constitution. His argument, in short, is that a citizen has the right to acquire, hold and dispose of property and to practice any trade or business. By enacting section, 178-A the Legislature has effectively deprived him of this right because it has given the Customs authorities the power to interfere with the exercise of this right unless the citizen can prove his innocence. It seems to me, however, that there is no question here of any infringement of a fundamental right. The right guaranteed by Article 19(1)(f) is in respect of property which has been lawfully acquired. For instance, there is no fundamental right to hold and dispose of stolen property or to hold explosive substances or other dangerous materials. A man cannot say that he has the right to lead an unleashed tiger through a crowded street or to explode a dangerous bomb where he may injure other people. The fundamental rights are to be exercised lawfully and are in respect of lawfully acquired property. Therefore, it cannot be said that where the Legislature imposes a certain kind of restriction upon smuggled gold which obviously could not have been acquired lawfully, any fundamental right has been infringed. The vires of this section were considered by the Supreme Court in Babulal Amthalal Mehta v. Collector of Customs, Calcutta . A.I.R 1957 S.C 877.. In that case the house of merchant in Calcutta was searched and a quantity of diamonds was recovered. The question raised before the Supreme Court was that since section 178-A infringed Article 14 of the Constitution, the seizure was bad in law and the petitioner could not be called upon to show that the goods were not contraband or smuggled. Their Lordships of the Supreme Court held that this section did not infringe Article 14 inasmuch as there was a reasonable classification because of the peculiar nature of the goods dealt with by this section. Govinda Menon, J., who wrote the judgment, observed at page 879 that Mr. Chatterjee, who appeared for the petitioner in that case, “faintly argued that the provisions of Article 19(1)(f) and (g) and Article 31 of the Constitution had been violated”. This argument, however, was not seriously pressed and there can be no doubt at all that Mr. Chatterjee realised the weakness of his argument and forbore to press it before the Supreme Court. I can scarcely imagine that if there were any force in this argument, Mr. Chatterjee would not have pressed it. Our attention was drawn to an unreported decision of the Bombay High Court in Amichand Vallamji v. M.G Abrol, Miscellaneous Application No. 21 of 1957, in which Desai, J. appears to have taken the view that section 178-A infringed the provisions of Article 19(1)(f) and (g). With great respect to the learned Judge, he does not appear to have considered the nature of the property referred to in clauses (f) and (g) of Article 19(1); it is clearly property which has been lawfully acquired. The Legislature can make a rule that the onus, in a certain case, of proving whether the property is or is not contraband shall be on the accused person. There are many such exceptions to the general rule that the prosecution must prove all the ingredients of an offence before an accused person can be held to be guilty. There are certain obvious inferences which can be drawn under section 114 of the Indian Evidence Act, but an instance which is more apt is to be found in the Prevention of Corruption Act where a Court may presume that certain money found in the possession of an accused person constituted illicit gratification. In the present case the Legislature has thought it fit to provide that where goods believed to be snuggled are, in fact, recovered from a person, then the onus of showing that they are not smuggled or are honestly acquired is upon the accused person. It is, no doubt, possible to speak of a case in which the accused person may experience considerable difficulty in proving his innocence, but in the vast majority of cases where bars of gold are recovered, the possessor will have no difficulty at all in showing and proving that he came by them by purchase, inheritance or by gift. In any event, we are considering the case before us. The story of the respondent was that he had purchased these bars in the open market. It would have been an easy matter for him to have called the shopkeeper from whom he purchased the bars and produced any receipt which he had or which he had given to the shopkeeper. He failed to do so, and, in fact, he did not cite any witnesses at all, and I cannot consider that any hardship has been occasioned by the throwing of the onus upon him by section 178-A. In the very nature of things, the prosecution may find it extremely difficult to bring home guilty knowledge to a smuggler or a receiver of smuggled goods and there is nothing unjust in changing the onus of proof in a case of this type. The matter has been examined from this aspect in detail by the Supreme Court in the case cited above and in saying anything more I would merely be reiterating the arguments of Govinda Menon, J. needlessly. The section has been held intra vires of the Constitution as far as Article 14 is concerned and as regards Article 16(1)(f) and (g) it is clear to me that these clauses are not infringed in any way because smuggled goods cannot be said to be goods in which anyone can claim a fundamental right.

    6. For the reasons given above, I would hold that the offence of being in possession of smuggled gold was proved against the respondent beyond all reasonable doubt. The order of acquittal announced by the learned Sessions Judge is liable to be set aside and setting it aside I would restore the conviction and the sentence of six months' rigorous imprisonment awarded to the respondent by the trial Court.

    7. Tek Chaad, J.:— I agree.

    Appeal allowed.

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    Comments

    The State Of Punjab v. Krishan Lal .
    (Apr 14, 1959)