GIAN CHAND Vs. STATE OF PUNJAB

JUDGEMENT

(1.) THE following Judgment of the court was delivered by

(2.) THE three appellants were convicted by the First Class Magistrate of Jullundur of an offence under s. 167 (81) of the Sea Customs Act for 'having acquired possession of smuggled gold and for carrying, keeping and concealing the said gold with intent to defraud the government knowing that the gold had been smuggled into India from a foreign country and that no duty had been paid thereon,' and were sentenced to terms of imprisonment. Appeals were filed by the accused to the Sessions Judge, Jullundur but the convictions were upheld though the sentence was reduced in the case of the third appellant. A revision petition preferred therefrom to the High court of Punjab was dismissed and thereafter the appellants obtained leave from this court under Art. 136 of the Constitution and filed the appeal which is now before us.

(3.) IN regard to the first of the above matters the position stands thus: With a view to conserve the foreign exchange resources of this country, in line with provisions framed for a like object by several other governments, the Foreign Exchange Regulation Act, 1947, was enacted which came into force on 25/03/1947. Section 8(1) of the Act enacted: '8. (1) The central government may, by notification in the Official Gazette, order that, subject to such exemptions, if any, as may be contained in the notification, no person shall, except with the general or special permission of the Reserve Bank and on payment of the fee, if any, prescribed bring or send into INdia any gold or silver or any currency notes or bank notes or coin whether INdian or foreign. Explanation.-The bringing or sending into any port or place in INdia of any such article as aforesaid intended to be taken out of INdia without being removed from the ship of conveyance in which it is being carried shall nonetheless be deemed to be a bringing, or as the case may be sending, into INdia of that article for the purposes of this section.' On the same day on which the Act came into force a notification was issued under this section reading: '(1) Restrictions on import of gold and silver. IN exercise of the powers conferred by sub-s. 1 of s. 8 of the Foreign Exchange Regulation Act, 1947 (Act 7 of 1947) and in supersession of the notification of the government of INdia in the late Finance Department No. 12 (11) FI/47, dated the 25/03/1947, the central government is pleased to direct that except with the general or special permission of the Reserve Bank no person shall bring or send into INdia from any place outside INdia (a) any gold coin, gold bullion, gold sheets or gold ingot whether refined or not; ' Virtually therefore a ban was imposed on the import of gold into the country. This prohibition naturally resulted in the rise of the internal price of gold compared to its external price, i.e., its price in the international markets and this gave a great incentive to smuggling in the commodity. As a result Parliament enacted a provision (s. 178 A of the Sea Customs Act) reading: '178 A. (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. shifting the onus of proof in respect of particular commodities seized under the Act in stated circumstances that the goods were not smuggled, on the person from whose possession they were taken. Ss. (2) set out the commodities to which the section applied and gold was specified as one such. The details of the circumstances in which this provision found its place in the statute book as well as its construction have been dealt with in Collector of Customs, Madras v. Nathella Sampathu Chetty and need not here be repeated. Suffice it to say that if the terms of the section were satisfied the gold seized in the present case would be presumed to be smuggled and the burden of proving that they are not, would be on the person from whom they were seized.