MOGUL LINE LTD Vs. A K DUTT

JUDGEMENT

(1.) The Mogul Line Ltd. (referred to hereafter as "the Company") who are the 1st appellants before us, are an Undertaking of the Government of India which holds over 80% of the share capital of the Company. The Company carries on business as sea carrier and is the owner inter alia of an ocean-going vessel M. V. Noor Jahan (referred to hereafter as "the vessel"), whereof the 2nd appellant is the Master.

(2.) On 21st April, 1978, the vessel carrying a large number of passengers arrived from the Gulf Ports and was berthed at the Mole Station BPX where the passengers disembarked the same day. Thereafter the same day in the course of a search of the vessel by the Officers of the Rummaging Department of the Customs, certain contraband was found in 4 bundles wrapped with adhesive tape and concealed in a false ceiling in the Officers' toilet on the navigation deck. Those 4 bundles contained 10 wrist watches of foreign origin valued at Rs. 1,500/- c.i.f. and 10 gold bars of 10 tolas each valued at Rs. 60,632/- c.i.f. From a different part of the vessel were also found 2 paper bundles and one bundle with adhesive tape near the fire extinguisher on the B-Deck passengers bunk space under ropes in the foredeck. These bundles contained 26 wrist watches valued at Rs. 5,275/- c.i.f. The entire contraband was seized under a panchanama. No one came forward to claim any of those articles. On the same day, i.e. 21st April, 1978, the Master's voluntary statement was recorded, wherein inter alia he emphasised the precautions taken by him, namely issuing a strong admonition to the Officers and crew from indulging in any illegal activities like smuggling and the penal consequences thereof, and fortifying his admonition by personally conducting a search of the vessel shortly prior to its arrival in Bombay. In his statement the Master also stated that the spot where the 26 wrist watches were found was an open space accessible to the entire crew and passengers and that the Officers' toilet was used by two Second Officers, 8 Engineering Officers and 2 Pursers and was also accessible to the various stewards and other menial members of the crew who looked after its cleanliness. The following day, the vessel was seized and was released on the execution of a bond of Rs. 1,00,000/- by the Company. On 23rd June, 1978 the Collector of Customs issued a notice on the Company, the Master and 12 members of the crew to show cause why the seized articles and the vessel should not be confiscated and why penal action should not be taken against them. After the show cause notice was replied to on 1st August, 1978 by the Company and the Master, and a personal hearing given on 18th August 1978, the Additional Collector of Customs (Preventive), Bombay (who is the 1st respondent before us) issued his impugned order dated 18th August, 1978 in terms whereof (i) the seized articles were confiscated, (ii) the vessel was confiscated with option to redeem the same on payment of Rs. 80,000/-, and (iii) a personal penalty of Rs. 10,000/- was levied on the Master. Against that order, in so far as the same pertained to confiscation of the vessel and personal penalty on the Master the Appellants filed a writ petition in this Court, which was summarily dismissed by the learned single Judge. Hence the present appeal.

(3.) On behalf of the appellants, it was urged by their learned Counsel Mr. Andhyarujina that the impugned order in so far as it pertained to confiscation of the vessel and the imposition of personal penalty on the Master, was uncalled for and disclosed total non-application of mind. He emphasised that the Master had done all that he could possibly have done, by not only admonishing the Officers and the crew from desisting in smuggling activities and drawing their attention to the penal consequences thereof, but also personally making a search of the vessel shortly prior to its arrival in Bombay. On the other hand it was urged by Mr. Bulchandani, the learned Counsel appearing on behalf of the respondents, that all this was not enough, as what the Master should have done was to take positive steps to ensure that no contraband was carried in the vessel. Mr. Bulchandani attempted to attribute lack of diligence on the part of the Master on the ground that the search made by the Master must have been perfunctory, else he could not have failed to discover the hidden articles. Relying on Section 115(2) of the Customs Act, 1962, he further urged that the lack of knowledge on the part of the Master was not relevant to the question of confiscation.