Bhimji Ramji Gujrathi v. Emperor

1. The applicant Bhimji was tried along with one Maganlal under R. 90(2)(e) of the Defence of India Rules and R. 121 read with R. 90(2)(a). Under the first count the charge was that of possessing small coins to an amount in excess of their personal or business requirements for the time being, and under the second, for attempting to contravene the provisions of the Defence of India Rules which prohibit the selling of coins for an amount other than their face value, and the doing of acts preparatory thereto. Maganlal was convicted and sentenced to a fine of Rs. 10 on the first count, and in default rigorous imprisonment for 15 days, and to a fine of Rs. 100 on the second and in default to rigorous imprisonment for 3 months. Bhimji was convicted on the second count and received the same sentence as Maganlal. These convictions and sentences are not challenged. What is challenged here is an order of confiscation made by the learned trying Magistrate and upheld in appeal.

2. The two convicts are servants of a wealthy firm of jewellers who carry on business at Itwari in Nagpur. It is proved and admitted by the accused, that they were employed in conveying coins to Raipur where it was to be sold by them on behalf of their masters at a profit. One such previous transaction was traced and has been proved. Ragunandanlal (P.W 1) received 500 whole rupee from Maganlal and paid him Rs. 523-2-0 in notes for the money. He himself then resold the entire Rs. 500 for Rs. 525 in 20 minutes. This shows that 5 per cent, was the prevailing market rate for these illegal sales at that time with a slight discount for large transactions. The books of the accused's employers were seized and they disclose that Rs. 4957 were handed over to Maganlal on 29th December 1943 and Rs. 6535 on 30th December 1943. It is evident then that this illicit traffic in coins was proceeding on a large scale. On the day in question, namely, 31st December 1943, the two accused were arrested at Raipur, soon after their arrival there by the morning passenger, and 6300 one rupee coins and Rs. 132-12-0 in small change were recovered from the pos-session of the applicant Bhimji. Both made a clean breast of their guilt and stated that they had been sent for selling the larger coins at a profit of Rs. 4-8-0 per hundred and the smaller ones at a profit of Rs. 12 per hundred. The revision is concerned with the order which confiscates these two sets of coins. It is said that the Magistrate had no power to do so. In my opinion he had. Section 617(1) of the Cr PC confers it. When property is produced before a Court of justice, or is entrusted to its custody, it is evident that orders must be passed regarding its disposal at the conclusion of the enquiry or trial and therefore power has to be conferred on the Court to make such an order. Section 517 does that. Under S. 517(1) the Court has power, among other things, to “confiscate” any property

“produced before lit or in its custody or regarding which any offence appears to have been committed or which has been used for the commission of any offence.”

3. The attributes of jurisdiction are contained in the latter clauses, and in the one dealing with the conclusion of the enquiry or trial. It is necessary that the enquiry or trial should be at an end. But the moment it is, then any one of the matters mentioned in the latter clauses would be enough to confer jurisdiction. In the present case it so happens that three out of the four are present. The money is in the custody of the Court, an offence not only appears to have been committed in connexion with it but has actually been committed — the offence of attempt created by R. 121 and the offence of hoarding under R. 90(2)(e)—and the money was actually used for the commission of those offences. The Court, therefore, had power to pass orders regarding its disposal, and one of the orders it is empowered to make is an order of confiscation. It made that order and so was within its rights.

4. It was argued that the seizure was illegal and that therefore these powers did not exist. That, however, is immaterial. Once the property is there it does not matter how it reached the hands of the Court. The moment the enquiry or trial is at an end, the right to dispose of it under S. 517 at once arises. Whether the power has been exercised along right lines in any particular case is another matter. The right and the power to act is undoubted. In my opinion the matter is similar to the position with which their Lordships of the Privy Council dealt in (1944) 1 M.L.J 520.1 There a man had been illegally arrested, or so it was said, and it was contended that the Court had consequently no power to try him. Their Lordships rejected the contention and said that it was immaterial how he came before the Court. Being there the right and the power to try him was undoubted. If that is the position in regard to a human being, how much more is it the case in respect of inanimate matter. The decision in I.L.R (1942) Nag. 4262 is to the same effect. Next it was argued that S. 617 is limited to trials under the ordinary laws and in respect of offences under the Penal Code and matters dealt with in the Code of Criminal Procedure. It does not extend to the special offences created by the Defence of India Rules. But that is not so.

5. The first attribute of jurisdiction is that the property be produced before the Court or be in its custody. Once that is fulfilled then the right to make the orders arises. As I have said, the section leaves the Court with a wide discretion regarding the kind of order it can make and it may be a matter for revision in an appropriate case that the discretion was wrongly exercised. But the power to act cannot be questioned. It is not necessary that the property should be bound up with the commission of an offence. The clauses are disjunctive: see, I.L.R (1936) Nag. 150.3 But even if they were not, the words “any off ence” would cover offences under the Defence of India Rules.

“Offence” is defined in Section 4(1)(o) of the Cr PC. It means “any act or omission made punishable by any law for the time being in force.” The rules made under the Defence of India Act have the force of law and are covered by the words “any law”. Those rules are in force and were in force when the acts complained of were committed. Therefore the acts constitute “an offence” as here defined and consequently S. 517 is attracted. It was contended however that when a special offence is created under a special law and that law covers the matter in question, then the special law must prevail, and that of necessity excludes the general. Reliance was placed on R. 124, Defence of India Rules. But those rules are only enabling. They do not oust S. 517. They merely give certain authorities wider powers of search than they possess under the ordinary law. No one pretends that these powers were exercised in this case. There was no need for that. The ordinary law was enough. That being so, the special mode of disposal referred to in sub-r. (3) of p. 124 did not come into play. This sub-rule only applles when the special powers conferred by sub-r. (1) have been resorted to. As that did not happen in this case, sub-r. (3) has no application. This is in accord with the decision in A.I.R 1944 Mad. 1254 with which I respectfully agree.

6. The police in this case acted under Section 550 of the Cr PC. They received information that the convicts were engaged in this illegal trade. They caught the Convicts almost red-handed and found the money in their possession. The circumstances, coupled with the admissions of the men themselves, quite reasonably led the police to suspect that an offence had been committed. This section also speaks of “any offence” and so is wide enough to cover offences created by the Defence of India Rules. Accordingly the police had power and authority to seize the money under S. 550. Rule 124 has not abrogated this right. Incidentally that also disposes of the contention that the property was illegally seized. That brings me to the only point in this revision which has any substance, namely, whether the discretion to confiscate was properly exercised. Ordinarily I do not think it would be right to confiscate property in this wholesale way. But in this case a wide range of matters have to be considered.

7. In the first place, the fines here are ridiculous, or would be, if it were not for the fact that the convicts are only servants and that at would be pointless to punish them severely while the real culprits, their masters, go free. In the second place, acts of this kind have created widespread distress and inconvenience. Small change and currency just disappeared from the market and even wholesale fresh minting did not alleviate the tension. The technique is clear. Hoard until the market becomes tight and then sell at a profit. What untold distress this causes to the poor who have only annas and pice to deal with at the best of times has to be seen to be believed. Only the most drastic measures can set the matter right. Unless the game is made so expensive that it is worth neither the candle nor the risk, conditions will not easily return to normal. Those who traffic in this form of illicit dealing will pay small fines for the sake of large profits as willingly as any businessman or merchant foots the bill for his ordinary business expenses.

8. The evidence here discloses that profits of from 5 to 12 per cent, can easily be made and even a small man like P.W 1 discloses that he made a profit of Rs. 1-14-0 on his Rs. 523 outlay within 20 minutes and got his capital back into the bargain—clearly an exceedingly profitable pastime when conducted on a large scale. Even when money is lent on interest one usually has to wait a year for any return. Here the return is immediate and the capital can be used over and over again. The evidence also shows that as much as Rs. 11,492 were handed over to the applicant alone in two days. Even at 5 per cent, the profit would be Rs. 572 plus the capital all back again. Petty fines will have no effect on such a profitable game even if the man behind the scenes pays — a matter which is by no means certain. The only way to stop the business is to enforce the confiscatory provisions with the utmost rigour. This sort of game can only be played by those who handle money in a comparatively large way and it is evident that they will seldom do the dirty work themselves. They will naturally employ agents and servants. Therefore the most effective way to get at the ones really responsible is to confiscate their property without mercy. If they chose to risk their money with others who are to do the actual illicit work, they cannot grumble if in the end they lose what they have staked. The powers are there and the justice of the action is clear. However, I think the order confiscating the entire money is perhaps too severe here. I agree that there must be some reasonable proportion between the punishment and the crime. As the profit on the disclosed facts in this case would have been over Rs. 572 I think confiscation of a little over five times that amount will serve to have a deterrent effect. I direct therefore that Rs. 3500 of the money seized be confiscated, that is to say, just over half and that the rest be returned. The Magistrate's order is modified to that extent. I desire to add that had it not been for the confiscation I would have issued notice to show cause why the sentence should not be enhanced, and then a fine of Rs. 2000 to Rs. 3000 coupled with six months' imprisonment might have followed. I have repeatedly stated and state again that, in my opinion, this class of offence is not to be treated lightly, and I find from other cases that some of my learned colleagues share my view.

9. Order modified.