DEVCHAND KALYAN TANDELversusSTATE OF GUJARAT AND ANR.

A                      DEVCHAND KALYAN TANDEL
                                   v.
                       STATE OF GUJARAT AND ANR.

                                  AUGUST 8, 1996

B              [K. RAMASWAMY AND G.B. PATTANAIK, JJ.]

          Customs Act, 1962: Sectio11s 11-K, 135 a11d 138-A.

          Accused-Canyi11g silver ingots i11 a car without transpo1t voucher-
C Seizure made in a specified area notified under section 11-K-Accused not
    discharging their b11rde11 to prove that they were not aware of ingots being
    tra11sported-Courts below co11cull"ently finding that offence agai11st the ac-
    cused person was proved-Held their conviction and sentence was
    valid-Cowts below were justified i11 taki11g recourse to statutory> presumptio11
D u11der Section 138-A-Object of presumptio11 explai11ed.

          Constitution of bidia, 1950: Article 136.

          Supreme Court-Power to i11te1fere with fi11di11g of fact a11d to re-ap-
    preciate evidence.
E         Se11tenci1115Eco11omic offenceo-Cowts should not take lenie11t view.

          Appellants D and J were prosecuted under section 135(1) of the
    Customs Act, 1962. The charge against them was that they were carrying
    10 silver ingots without any transport voucher within the specified area
F   notified under section llK of the Act. The prosecution case was that on
    the day of occu.-rence a vigilance squad of the Customs Department
    intercepted a fiat car, in which D was one of the occupents, at Bhilad
    Customs Check post. As nothing objectionable was found on search the
    vehicle was allo\ved to pass. After sometime the other group of the vigilance
    squad signaled ambassador· car coming from Sanjan to stop but it dis-
G regarded the same and proceeded straight. The vigilance party chased the
  car and apprehended it. On search 10 silver ingots were recovered from a
  secret cabinet in the hind portion of the car. D who bad earlier passed
  through the customs check post in the fiat car was found in the ambas-
  sador car J admitted to have purchased the silver ingots but took the plea
H that he had sold the same to his brothers and therefore, he had no role in
                                     382
                           DKTANDELv.STATE                                 383

the transportation of silver ingots by the offending ambassador car. D took       A
the plea that due to breakdown of his fiat car he had taken left in the
ambassador car and had, therefore, no knowledge of silver ingots being
transported in the ambassador car.

      Rejecting the plea of the accused persons the Trial Court convicted
and sentenced them. On appeal the High Court enhanced their sentence.             B
Both the trial court as well as High Court relied upon the statutory
presumption nnder section 138-A of the Act and held that the accused
failed to discharge the necessary burden of proof. The High Court also
rerorded a finding that the evidence on record had clearly established J's
link with the 10 silver ingots as he was the last purchaser and therefore,        c
the seized ingots belonged to him.

        In appeal to this Court it was contended on behalf of the appellants
 that (i) the courts below have committed serious error in disbelieving the
  defence plea of Das well as in raising the presumption under section 138-A
  of the Act; (ii) in view of the fact that sufficient time had elapsed between   D
  the date ofoccurrence and the judgment and that the appellants had spent
. about 18 months in custody their sentence should be reduced to the period
 already undergone.

       Dismissing the appeals, this Court
                                                                                  E
       HELD : 1. This Court usually does not reappreciate the evidence and
in this case no justifiable reasons have been advanced for taking a different
path. The two courts below have appreciated the evidence on record and
have rejected the defence plea of D that his fiat car broke down and so he
was taking a left in the ambassador car and as such he was not aware of           F
the transportation of silver ingots therein. The said plea of D has rightly
been rejected. There has neither been any perversity in the matter of
appreciation of evidence nor any important piece of evidence has been
ignored by the courts below. [389-C-E]

      2. It is no doubt true that in a charge for violation of the provisions
                                                                                  G
of Section 135(1)(a) it is required for the prosecution to establish that the
accused have fradulently evaded or attempted to evade any duty chargeable
on the goods or violated the prohibition imposed under the Act in respect
of the goods. But if the prosecution establishes the aforesaid facts then
there is no necessity of attracting the statutory presumption under section H
     384                  SUPREME COURT REPORTS [1996] SUPP. 4 S.C.R.

A    138-A and without such presumption an accused can be convicted under
     section 135(l)(a). The main object of section 138-A is to raise a presump-
     tion as to culpable mental state on the part of the accused when he is
     prosecuted in the court of law. If a recovery is made from the accused of
     any prohibited goods within the notified area then the statutory presump-
     tion would arise that he was knowingly concerned in the fradulent evasion
B    or attempted evasion of any duty chargeable on the goods in question.
                                                                      [390-D-G]

         3. The circumstances of the case unhesitatingly point towards the
  complicity of the accused D in the commission of offence under section
C 135(1). In the proved facts and circumstances the courts below were
  justified in taking recourse to the statutory presumption under section
  138-A of the Act. The burden lay on the accused to establish that either he
  did not know about the fact of silver ingots being transported in the vehicle
  or that he was in no way connected with the same. But D has utterly failed
  to discharge the said burden. His conviction was well founded and sentence
D imposed justified. [391-C-E]

          Bhanabl1ai Khalpabhai v. Collector of Customs and Anr., [1994] Supp.
     2 sec 143, referred to.

E         4. It has been proved beyond reasonable doubt that J was the last
     purchaser of seized silver ingots. His plea that he sold the same to his
     brothers has not been accepted by the courts below. The two courts below
     have affirmed that he was the owner of the seized silver ingots which was
     meant for transportation and illegal export and he was involved in commit-
     ting the offence in question. There is no reason warranting interference.
F
                                                                      [392-C-D]

            5. Though sufficient time has elapsed between the date of occurrence
     and the date of judgment and further the accused 11ersons have served
     their sentence for a major part but yet in such economic offences the courts
G    should not take any lenient view. Smuggling has got serious deleterious
     affect on legitimate trade. Taxation Enquiry Commission bad suggested
     that stringent measures, both legal and administrative, should be adopted
     to minimise the scope of the evil. Question of taking a lenient view of the
     matter, therefore, does not arise. Any leniency in economic offences will
 H   send a wrong signal. [391-E-H; 392-A]



                                                                                    r
                     D.K. TANDELv. STATE[PATTANAIK,J.]                      385

          CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.                     A
    812 of 1996 Etc.

         From the Judgment and Order dated 10.8.92 of the Gujarat High
    Court in Crl.A. No. 734, 829-31/82 and Crl.R.A. No. 371 of 1982.

          K. Madhava Reddy and Ms. Lata Krishnamurthy for the Appellant.           B
         K.T.S. Tutsi Additional Solicitor General, V.K. Verma, Y.P.
    Mahajan, Vikas Pahwa and B.N. Babu Chava for the Respondents.

          The Judgment of the Court was delivered by
                                                                                   c
          PATTANAIK, J. Leave granted.

          Both these appeals arise out of the same judgment of the Additional
    Chief Judicial Magistrate, Valsad dated 7th of May, 1982 in Criminal Case
    No. 60 of 1980 and therefore heard together and are being disposed of by
    this common judgment.                                                          D
           On the basis of a complaint filed by the customs authorities both
     these appellants stood charged of having committed the offences under
    Section 135(1)(a) of the Customs Act (hereinafter referred to as 'the Act')
    on the allegation that on the date of occurrence they were found to be
    carrying silver without any transport voucher within the specified area        E
     which is duly notified under Section 11-K of the Act. The appellants denied
     their complicity and pleaded not guilty. The learned Additional Chief
    Judicial Magistrate convicted the appellants under Section 135 of the Act
    and sentenced them to undergo six months rigorous imprisonment and to
    pay a fine of Rs. 4,000, in default, undergo further rigorous imprisonment     F
.   of three months. Against the aforesaid conviction and sentence of the
    learned Additional Chief Judicial Magistrate the appellants preferred ap-
    peals to the court of Sessions and the State also preferred appeal for
    enhancement of sentence in the High Court. The customs authorities who
    were the complainant also invoked the revisional jurisdiction of the High      G
    Court being aggrieved by the inadequacy of the sentence. After admission
    of the State's appeal in the High Court, the appeals preferred by the
    accused - appellants were ordered to be transferred and accordingly all the
    appeals and revision were heard together and were disposed of by common
    judgment. The High Court dismissed the appeals filed by the accused -
    appellants and allowed the State's appeals and enhanced the sentence of        H
     386                  SUPREME COURT REPORTS [1996] SUPP. 4 S.C.R.

A rigorous imprisonment to two years and fine of Rs. 4,000 so far as accused
     No. 2 is concerned and enhanced the sentence of rigorous imprisonment
     for two years and fine of Rs. 40,000 and in default further rigorous
     imprisonment for three months so far as accused No. 3 is concerned. Thus
     the present appeals by special leave.

B
           The prosecution case in nutshell is that the customs authorities had
     received secret information that certain contraband goods were likely to
     pass through the National Highway No. 8. The authorities, therefore, kept
     watch during the early hours of 5th August, 1973 around the Bhilad
     Customs Check Post. At about 8.30 a.m. a fiat car bearing R.T.0. Registra-
C    tion No. GJN 5953 came from Vapi side and proceeded towards Bombay
     side. The car was intercepted by the vigilance squad of the Customs
     department but nothing objectionable was found therefrom. The vehicle
     was allowed to pass. The appellant - Devchand Kalyan Tande!, who was·
     accused No. 2, was one of the occupants in the said fiat cat. The customs
D    authorities thereafter suspected some foul play and then divided themsel-
     ves in l\VO groups, one group \Vas sent on the \Vay to Umbergaon and the
     other group was sent on the \Vay to Sarigarn. The further prosecution case
     is that while the second group was on its vigil, an ambassador car was found
     coming from Sanjan. When the vehicle was signaled to stop, it ignored the
     signal and proceeded straight towards Bhilad railway station and from
E    there it took turn towards the underground bridge. The vigilance party
     chased the said car and when they found that the car is about to reach the
     National Highway, they took resort to firing and on hearing the sound of
     firing, the car stopped. The said ambassador car bore RTO Registration
     No. MRH 5042. The car was brought to the customs office at Bulsar and
F    in presence of two witnesses a search was conducted. On search, ten silver
     ingots worth more than Rs. 1,90,000, weighing 293.300 kilograms were
     recovered from a secret cabinet in the hind portion of the car. Appellant
      • Devchand and the other accused who is not an appellant namely Ishwar-
     bahi Gopalbhai Tande! were found to be in the car made their statements
      under Section 108 of the Act. After completion of investigation a complaint
G     was filed in the Court of learned Additional Chief Judicial Magistrate,
      Valsad which was registered as Criminal Case No. 60 of 1980. The accused
      - appellants stood charged under Section 135(1) of the Act. The accused
      persons pleaded not guilty of the charge and were accordingly tried. After
      the prosecution led evidence to establish the charge against the accused -
 H    appellants, the 1vitnesses were cross-examined by the accu.ed persons. The
                     D.K. TANDELv. STATE [PATTANAIK,J.]                    387

    statements of the accused persons were also recorded under Section 313 A
    of the Cr.P.C. and accused No. 2 appellant - Devchand also examined
    witnesses in defence. The plea of appellant - Devchand is that while he was
    proceeding in the fiat car after crossing the customs check post, the car
    had a break down and he was therefore looking for a lift, so that, he can
    get a mechanic and at that point of time an ambassador car was found B
    coming, he, therefore, raised his hand requiring the car to stop and the


-   accused No. 1 who was driving the ambassador car stopped the same and
    gave lift and accordingly he did not know about the alleged transportation
    of silver ingots in the secret chamber of the ambassador car. Accused No.
    3 though admitted to have purchased the silver ingots from one Pratapsingh
    Dhorda of Pratap and Company but he took the plea that he had sold the C
    same to his brothers and therefore he has no role in the transportation of
    the silver ingots by the offending ambassador car. The learned trying
    Magistrate on consideration of oral and documentary evidence led before
    him discarded the plea of the accused persons and came to hold that the
    prosecution has been able to establish the charge beyond reasonable doubt, D
    accordingly he convicted the accused - appellants and sentenced them as
    already stated. The High Court reconsidered the entire evidence and by
    the impugned judgment affirmed the conviction passed by learned trying
    Magistrate and enhanced the sentence as already stated. Both the trying
    Magistrate as well as the High Court not only relied upon the evidence led
    by the prosecution but also relied upon the statutory presumption under E
    Section 138 A of the Act and held that the accused failed to discharge the
    burden which lay on them.

          Mr. K. Madhava Reddy, learned senior courfsel appearing for the
    appellants raised the following contentions in assailing the conviction and   F
    sentence :


          (1) On the facts and circumstances of the case the learned trying
    Magistrate as well as the High Court committed serious error in disbeliev-
    ing the plea of appellant - Devchand that his fiat car has a break down and
    he has taken lift in the ambassador car and he had no knowledge of silver     G
    ingots being transported in the ambassador car.

         (2) The two courts below committed gross error of law in raising the
    presumption available under Section 138-A of the Act. No presumption
    can be raised unless the prosecution establishes minimum ingredients of H
    388                   SUPREME COURT REPORTS (1996] SUPP. 4 S.C.R.

A offence under Section 135(1}. consequently the judgments of the courts
    below are wholly unsustainable in law.

          (3) In any view of the matter, appellant • Devchand having already
    been in custody for about 15 months and appellant . .Tayantilal being in
    custody for about 18 months and the occurrence in question being of the
B   year 1980, it will not be just and proper to order for surrender to serve the
    balance period of sentence and therefore the courts should sentence to the
    period already undergone.

          Mr. K.T.S. Tulsi, learned Additional Solicitor General on the other
C hand contended that finding it difficult to check the large scale smuggling
  as well as violation of the provisions of the Foreign Exchange Regulation
  Act, the Parliament introduced Section 138A of the Customs Act by Act
  36 of 1973. While construing the provisions of the Act the court should
  bear in mind the legislative intent of the provision and in cases of economic.
D offences the provisions should be construed strictly. It is further contended
  that the facts and circumstances as found by the High Court irresistibly
  point towards the guilt of the accused and this Court should not interfere
  with the conviction and sentences passed by the High Court. It is further
  urged that in any view of the matter it would not be appropriate for this
  Court to reappreciate the evidence on record.
E
        Before examining the rival contentions at the Bar it would be ap-
  propriate to notice certain undisputed facts as well as the finding arrived
  at by the.High Court. The undisputed facts are that the Central Govern·
  ment had issued the Notification under Section 11 K of the Act prohibiting
F transport of silver within the specified area unless accompanied by
  transport voucher and the place were the ambassador car was stopped and
  silver ingots recovered from the said ambassador car was within the
  specified area. Appellant · Devchand was one of the occupants of the ,;aid
  car. Said appellant . Devchand earlier had passed through the customs
  check post in the fiat car and shortly thereafter when the ambassador car.
G was· intercepted he was found accompanying therein. Apart from the
  aforesaid undisputed facts the High Court on appreciation of evidence
  further found that the version of accused Devchand that the fiat car had a
  break down near Sanjan looks more fictitious than real and this version
  had rightly been rejected by learned trying Magistrate. The High Court
H also did not accept the defence of accused Devchand that he took a lift in
                 D.K. TANDEL v. STATE [PATTANAIK.J.J                     389

the ambassador car which was being driven by accused No. 1 in view of A
the inherent contradiction in the version given by both the accused persons.
So far as appellant Jayantilal is concerned the High Court recorded the
finding that the evidence on record has clearly established his link with the
10 silver ingots recovered from the ambassador car he was the last pur-
chaser therefor and the prohibited goods recovered from the ambassador B
car on the 5th of August, 1973 belonged to the accused No. 3 which has
been established at the trial.

      We would now examine the contentions raised by the Mr. K. Mad-
hava Reddy, learned senior counsel for the appellants. So far as the first
contention of Mr. Reddy the learned senior counsd for the appellants is         C
concerned, the same is in realm of appreciation of evidence and the two
courts below have already appreciated the evidence on record and have
rejected the defence plea of Devchand that his fiat car broke down and so
he was taking a lift in the ambassador car and as such not aware of the
transportation of silver ingots therein. We have scrutinised the judgments
of the learned trying Magistrate as well as the High Court and we find no       D
infirmity in either of them in the matter of appreciation of evidence. We
are of the considered opinion that the said plea of appellant - Devchand
has rightly been rejected. In our view there has neither been any perversity
in the matter of appreciation of evidence nor any important piece of
evidence has been ignored by the courts below. It is well settled that this     E
Court usually does not reappreciate the evidence and no justifiable reasons
have been advanced for taking a different path. Accordingly, the first
contention of Mr. K. Madhava Reddy must be rejected.

      So far as second contention of Mr. K. Madhava Reddy is concerned
it depends upon an interpretation of the provisions of Section 138-A of the     F
Act. For better appreciation of the point in issue Section 138-A is extracted
hereinbelow in extenso :

        138-A. Presumption of culpable mental state. - (l) In any prosecu-
        tion for an offence under this Act which requires a culpable mental     G
        state on the part of the accused, the court shall presume the
        existence of such mental state but it shall be a defence for the
        accused to prove the fact that he had no such mental state with
        respect to the act charged as an offence in that prosecution.

        Explanation - In this section, "culpable mental slate" includes H
    390                   SUPREME COURT REPORTS [1996[ SUPP. 4 S.C.R.

A           intention, motive, knowledge of a fact and belief in, or reason or
            to believe, a fact.

            (2) For the purposes of this section, a fact is ~aid to be proved
            only when the court believes it to exist beyond reasonable doubt
            and not merely when its existence is established by a
B           preponderance of probability.

            Mr. K. Madhava Reddy urged that before the presumption under
    sectiop 130-A{l) is attracted the prosecution must establish the basic
    ingredients of the offence for which charge has been framed and in the
c   case in hand, the necessary ingredients of section 135(1)(a) must be proved
    and then only the presumption under section 138-A can be attracted.
    According to Mr. Reddy this is apparent from sub-section (2) of section
    138-A of the Act. On a scrutiny of provisions of the Act particularly Section
    138-A thereof and the object for which the aforesaid provision was inserted
D   into the statute by Act No. 36 of 1973 it is difficult for us to accept the
    contention of Mr. K. Madhava Reddy. It is no doubt true that in a charge
    for violation of the provisions of Section 135(1)(a) it is required for the
    prosecution lo establish that the accused have fraudulently evaded or
    attempted to evade any duty chargeable on the goods or that violated the
    prohibition imposed under the Act in respect of the goods. But if the
E   prosecution establishes the aforesaid facts then there is no necessity of
    attracting the statutory presumption under section 138A and without such
    presumption and accused can be convicted under section 135(1)(a). But
    the legislature having found it difficult to establish the necessary in-
    gredients of such evasion of duty or prohibitions and the economic offences
F   having grown in proportion beyond the control, came forward with the
    presumption available under section 138A of the Act. The main object of
    Section 138A is to raise a presumption as to culpable mental state on the
    part of the accused when he is prosecuted in a court of law. In other words,
    if a recovery is made from the accused of any prohibited goods within the
    notified area then the statutory presumption would arise that he was
G   knowingly concerned in the fraudulent evasion or attempted evasion of any
                                                                                    •
    duty chargeable on the goods in question. In the case Blzanabhai Khalpab-
    lzai v. Collector of Customs and Another, [1994] Supp 2 SCC 143, this Court
     has held that in view of Section 138-A a presumption has to be drawn in
     respect of existence of the alleged mental state. An option has been given
H    to the accused to prove by way of defence the fact, that he did not have
                     D.K TANDELv. STATE[PATTANAIK,J.]                    391

     any such mental state with respect to the act charged which is an offence. A
    The question, therefore, arises as to whether in the proved facts and
    circumstances the courts below were justified in taking recourse to the
J   statutory presumption under section 138A of the Act. The answer must be
    in the affirmative. The fact that accused was found to be inside the vehicle
    from which the silver ingots were recovered; the fact that the vehicle did
                                                                                 B
    not stop even though customs authorities signaled for stopping; the fact
    that two courts below disbelieved the plea of accused - Devchand about
    the break down of his fiat car and he is taking a innocent lift by the
    ambassador car from the secret pocket of which the silver ingots were
    recovered; and that the place from where the recovery was made is
    undoubtedly a place within the notified area under Section llK of the Act   c
    and further that there was no transport voucher as required under section
    UK of the Act, unhesitatingly point towards the complicity of the accused
    - Devchand in the commission of offence under section 135(1) and the
    presumption under section 138-A having been rightly attracted. The bur-
    den lay on the accused - appellant to establish that either he did not know D
    about the fact of silver ingots being transported in the vehicle or that he
    was no way connected with the same. But the accused - Devchand has
    utterly failed to discharge that said burden. In our considered opinion the
    conviction must be held to be well founded and the sentence passed
    thereunder is wholly justified.
                                                                               E
            So far as the third submission of Mr. K. Madhava Reddy is con-
    cerned it is no doubt true that sufficient time has elapsed between the date
    of occurrence and the date of judgment and further the accused persons
    have served their sentences for a major part but yet we do not think that
    in such economic offences the courts should take any lenient view in the F
    matter. Smuggling has become a threat to the effective fulfilment of the
    objectives of foreign trade control. The extent of the leakage of revenue
    that takes through the process of tax evasion cannot be estimated. It has
    got serious deleterious effect on legitimate trade. Taxation Enquiry Com-
    mission had suggested that stringent measures both legal and administra- G
    tive should be adopted to minimise the scope of the evil. For the purpose
    of achieving the desired objective Parliament came forward with insertion
    of Section 138-A into the statute book. Question of taking a lenient view
    of the matter, therefore, does not arise. In view of large scale smuggling
    activities in the border area and large scale evasion of duty the country has
    faced severe economic imbalance. Notwithstanding stringent legislation H
    392                  SUPREME COURT REPORTS [1996] SUPP. 4 S.C.R.

A   having been made it has not been possible to eradicate the evil. Any
    leniency therefore in economic offences will send a wrong signal. In this
    view of the matter, we are unable to accept the last contention of Mr. K.
    Madhava Reddy, the learned senior counsel for the appellants.

          So far as Jayantilal is concerned the prosecution has been able to
B  establish that the ten silver ingots hold mark of Narandas Manordas and
   accused J ayantilal had purchased the said silver ingots from the Refinery
   of Narandas Manordas. The accused admitted the aforesaid fact and it was
   proved beyond reasonable doubt that he was last purchaser of said silver
   ingots. His plea that he convered the ingots into pieces and sold the same
c  to his Brothers under Exhibits 18 to 72 has not been accepted either by
   the trying Magistrate or by the High Court. On elaborate discussion of the
 · evidence on record the two courts below have affirmed that accused No.
   3 was the owner of the seized silver ingots which was meant for transpor-
   tation and illegal export and he was involved in committing the offence in
   question. No convincing argument has been advanced on his behalf to
D interfere with the findings and conclusions arrived at by the courts below
   and consequently we do not find any case warranting interference by this
   Court has been made out.

          In the net resolt, therefore, both the appeals are dismissed. The bail
    bonds stands cancelled. The appellants are directed to surrender forthwith
E   to serve the balance period of sentence.

    T.N.A.                                                   Appeal dismissed.