FORBES GOKAK LTD Vs. PRINCIPAL COMMR OF CUSTOMS

JUDGEMENT

(1.) The petitioner .has been carrying on the business, inter alia of acting as a local ship agent of various ships calling at the Port of Calcutta. It has been rendering agency Services in respect of the ships calling at Calcutta Port on behalf of the respective owners and masters of such vessels. Vessel MV Optima was one of such vessels for which the petitioner had been acting as an Agent.

(2.) Vessel MV Optima had arrived at 4, MS Dock Calcutta from Singapore on 5-7-1995. On 6-7-1995 a batch of customs officers posted in the Rummaging (Discipline) Unit at Outram Ghat went on board this vessel for rummaging under the order of the Superintendent, Rummaging (Discipline). During the course of rummage, the officers on board the vessel noticed the movement of one Mr. Harnani B. Villanueva, Radio Officer of the vessel under suspicious circumstances. Afterwards, in presence of the master of the vessel and independent witnesses the officers searched the person of the said Harnani B. Villanueva which resulted in the recovery of one piece specially made cloth waist belt worn by him around his waist beneath the under-garments and one piece of hand written document from inside right leg shoe worn by him. One visiting card, one pocket telephone diary and one temporary permit issued in his favour by Calcutta Port Trust were also recovered. All these recoveries around the suspicion of the officers that this person was engaged in dealing with some contraband which he however denied any such dealings. On prolonged interrogation the above named Radio Officer admitted of having some gold biscuits kept concealed inside a space in the controller of Radio Transmitter fixed in the radio room which was under his control. Accordingly the customs officers after unscrewing the bottom part of the controller of the radio transmitter recovered seven packets wrapped with adhesive tapes kept concealed in the empty space inside the said controller. On opening the aforesaid recovered packets, the officers found seventy pieces of gold biscuits having foreign inscription, with their total weight being 8.2 kgs. (approx) and valued at Rs. 41,00,000/- (rupees forty one lakhs). The gold biscuits so recovered were neither declared in his private properties list nor were entered in the Vessel's store list. The master of the vessel was not aware of the gold biscuits so kept concealed in the radio room of the vessel and being carried on board the ship. Mr. Hernani v. Villanueva, the radio officer could not produce any lists or any other documents be way of any evidence in support of any lawful acquisition, importation or transportation of the recovered gold biscuits of foreign origin. Accordingly these recovered 70 pieces of gold biscuits collectively weighing 8.2 kgs. and valued at Rs. 41,00,000/- (rupees forty one lakhs) were seized by the customs officers on the ground of alleged violation of the provisions of the Customs Act because of the reason and belief that these gold biscuits were smuggled into India and were being attempted to be unloaded from the vessel for disposing the same in the local market and therefore these were ultimately liable to confiscation under the Customs Act.

(3.) While the gold biscuits were seized and the proceedings had been initiated in consequence thereof, the petitioner being the agent of the owners and Master of the ship MV Optima executed on 12th July, 1995 a deed/bond for and on behalf of the owners and Master of the ship MV Optima whereby the petitioner, styling itself as the "grantor" in this bond, bound and obliged itself for a sum of Rs. 2 crores to be paid in accordance with the provisions of the Customs Act to the Government of India or to the Commissioner of Customs, if such a liability arose from any act with relation to the ship in question involving its owners or the master. We are not concerned with this stipulation regarding the liability to pay to Rs. 2 crores. We are concerned in this case with another stipulation in the bond whereby it was agreed by the grantor that the Commissioner of Customs or any other officer who may be incharge of the case of the grantor may appropriate any amount up to Rs. 5,00,000/- (rupees five lakhs) towards any penalty that may be imposed by the adjudicating officer and/are against any fine in lieu of confiscation and/are against all incidental charges that may be due and payable by the grantor in respect of the preservation or transport of the vessel etc. Actually in addition to the above referred liability of paying to Rs. 2 crores (with which we are not concerned in this case) the grantor had deposited with the Commissioner of Customs (Preventive) a sum of Rs. 2,00,000/- (rupees two lakhs) in cash and had furnished a bank guarantee of Rs. 3,00,000/-(rupees three lakhs) from the Standard Chartered Bank, Calcutta. The prescription regarding the appropriation of Rs. 5,00,000/-(rupees five lakhs) therefore was as a result of the aforesaid deposit of Rs. 5,00,000/-(rupees five lakhs) made by the grantor in favour of the respondents. We are concerned with the interpretation and application of two clauses in the bond, one relating to the deposit of Rs. 5,00,000/-(rupees five lakhs) and the other to the right of its appropriation by the customs authorities. The clause relating to the deposit reads as under :