LAKHANIS LTD Vs. A N SATTANATHAN

JUDGEMENT

(1.) The petitioner in this case is Messrs. Lakhanis Ltd. a company incorporated under the Indian Companies Act. The facts are shortly as follows: The petitioner company presented to the Export Department of the Customs House at Calcutta on 4th of March, 1954 a shipping bill for 17 cases of mica to be shipped and sent to London by "S.S. Clan Mactaggart" weighing about 1700 ibs. c.i.f. London. Upon presentment, the Appraiser dealing with the case started an investigation into the ultimate destination of the consignment. The petitioner company was asked to answer certain queries and to produce certain documents. It appeared that Messrs. C. Phillips Jones & Co. Ltd. of London placed an order with the petitioner company dated 16th December, 1953 for supply to them of certain mica blocks to be shipped during the months of January and February 1954 and the invoices showed that delivery was to be c.i.f. London, payment against arrival and inspection of the goods in London. It appeared, however, from the internal evidence that was disclosed that these goods were intended for re-export from the United Kingdom to South Africa. The case of the respondents is that the order was placed by the British firm in collusion and conspiracy with the petitioner to avoid a prohibition which has been imposed by Sec. 19 of the Sea Customs Act read with clause (b) of the Government of India, Ministry of Finance Notification No. 2C(6)/46(1), dated 17th July, 1946 whereby export of mica to South Africa has been prohibited. It is further alleged that the petitioner company had been dealing with South Africa in the past and its effort to carry out the transaction through the British firm was a mere ruse to get over the prohibition aforesaid. It is finally said that it was clear from the documents that the real purchaser was M/s. Electrical Construction (Pty) Ltd. Durban, Natal in South Africa. On or about the 11th March, 1954 a case was started against the petitioner company by Shri B. B. Gujral who was then the Assistant Collector of Customs for Exports. At the time when the investigation started, Shri Venkatesan was the Assistant Collector of Customs and Superintendent, Preventive Service of the Calcutta Customs. This officer is usually described as the S. P. S. Thereafter, a search warrant was obtained from the Chief Presidency Magistrate and the goods of the petitioner company mentioned above were seized. On the 8th April, 1954 a show cause notice was issued upon the petitioner company by Shri S. K. Srivastava who was the then Assistant Collector of Customs for Exports. A copy of this show cause notice is annexed to the petition. It has been stated in the show cause notice that in respect of a shipping bill filed by the petitioner company in relation to 17 cases of mica blocks for shipment per "s.s. Clan Mactaggart ", the forwarding agents being Messrs. Daga Shipping Agents Ltd.. Calcutta, it was found that although the declaration was that the goods were consigned to the U. K. but on examination of relative documents with the shipping bill it was found that the goods though destined for U. K. were intended to be taken to the Union of South Africa, and therefore, came within the mischief of the prohibition under Sec. 19 of the Sea Customs Act. The petitioner company was therefore called upon to show cause why penal action should not be taken against it under Sec. 167(8) of the Sea Customs Act, and it was further requested to submit all evidence and to state whether it wished to be heard in person. The company gave its explanation a copy whereof is also annexed to the petition. It asked for a personal hearing. The date of hearing was thereafter fixed by the then Collector of Customs Shri B. N. Banerjee. In the meanwhile, Shri Srivastava took over charge as Assistant Collector of Customs and S.P.S. On 29th April, 1954 Sri Venkatesan was transferred and one Shri G. S. Sawhney, took over charge as Assistant Collector of Customs for Exports. The hearing took place before Shri Banerjee on the 22nd May, 1954 and 28th June, 1954. The petitioner appeared through Counsel and it is admitted that Mr. Sawhney conducted the prosecution. It appears from the impugned order that the Counsel had taken the point on behalf of the petitioner that the Chief Customs Officer could not have been satisfied at the time when the goods were apprehended that there was any attempt at exportation to South Africa, and therefore, there was no violation of the law. After the hearing had taken place a note was written by Shri Sawhney dated 30th June, 1954 which is set out in paragraph 2(j) of the affidavit of H. R. Syiem affirmed on the 25th March, 1958. This sets out the argument of Shri Sawhney in answer to the point made out by the lawyer on behalf of the petitioner company. According to Shri Sawhney, the point made out by the lawyer was of no substance because the question as to whether the Chief Customs Officer should have been satisfied before or after the attempt was made to violate the legal prohibition for export, did not arise. As long as he was satisfied, the point of time when that satisfaction arose was immaterial. This opinion was given after the hearing was over and is to be found only in the records of the authorities, which had not been disclosed to the petitioner or to his lawyer and they had no opportunity of dealing with the same. This note was not given in the first instance, to Shri Banerjee. It was sent to Shri Srivastava who made the following notes:

(2.) "I agree with A. C. X. Dagas are being examined." This obviously means that Sri Srivastava the S.P.S. was agreeing with the view expressed by Shri Sawhney and he refers to the fact that the Dagas, namely, the forwarding agents, were being examined.

(3.) It then appears that on the 6th of July, 1954 Shri Banerjee, Collector of Customs, made an order which has been set out in paragraph 2(m) of the affidavit of Shri Syiem mentioned above. The order starts by saying "on the whole I too agree". He held that there was clear evidence of deliberate and premeditated attempt to export, knowing fully well that the goods were destined for South Africa. According to Shri Banerjee, the offence must be held to have been established. The order proceeds to state as follows : "The consignment is confiscated. Fine in lieu for home consumption Rs. 15,000/-, personal penalty Rs. 25,000/- (twenty five thousand)."