Assistant Collector of Customs vs Tey Teck Seng

The complainant, the Assistant Collector of Customs (Prosecution), Preventive Department, Customs House, Madras-1, is the appellant. Tey

Teck Seng, a Chinese National, is the accused/respondent in this appeal. This appeal is filed u/s 378 Cr.P.C. against the order of acquittal made in

O.C. No. 109/86 on the file of the Additional Chief Metropolitan Magistrate (E.C. II), Egmore, Madras.

The accused was prosecuted for an offence punishable u/s 135(1)(a)(i) of the Customs Act on the allegation that on the arrival of the accused

from Singapore at Meenambakkam Airport, Madras on 18-10-1985, when his person was searched, two gold biscuits each weighing 10 tolas

with foreign markings were recovered from a purse; that two similar gold biscuits were recovered from each of the chappals he was wearing that

the accused had no valid permit of the Reserve Bank of India, that the accused attempted to smuggle the same into India without declaring them

and that the market value of the gold was Rs. 1,02,630/-

Four witnesses were examined on the side of the prosecution as P.Ws. 1 to 4 and Exs. P-1 to P-10 were marked. M.Os. 1 to 4 were also

marked by the prosecution. The accused has examined S. Panchyappam, Senior Intelligence Officer, Directorate of Revenue Intelligence, Madras-

17 as D.W. 1 and marked Ex. D-1 on his side. Learned Additional Chief Metropolitan Magistrate found that the prosecution has proved its case

beyond reasonable doubt on merits; but it failed to prove the validity of the sanction and on that ground, found the accused not guilty and acquitted

him u/s 248(1) Cr.P.C. Aggrieved with the judgment of the lower Court the Assistant Collector of Customs has filed this Appeal.

Mr. P. Rajamanickam, learned Central Government Public Prosecutor appearing for the appellant contended that the Court below erred in

holding that the sanction is invalid. Learned Counsel for the accused/respondent Mr. M. A. Abdul Ghani contended that there is no valid sanction

as held by the court below. It was also contended on behalf of the respondent that the findings of the lower Court are also not correct even on

facts and that the finding of the lower Court with regard to the other aspect of the case are not legally and factually correct. Mr. P. Rajamanickam,

learned counsel for the appellant replied that the findings of the lower court on other aspects of the case are correct and that they could not be

interfered with in this appeal.

The points for consideration in this appeal are whether there is valid sanction for prosecuting the accused and whether the finding of the lower

Court that the accused has committed the offence is correct.

Mr. P. Rajamanickam, learned Central Government Public Prosecutor contended that there is a valid sanction in this case, P.W. 1 M.V.

Srinivasan is the Senior Grade Preventive Officer, Madras Customs, Madras. P.W. 2 Devarajan is also a Senior Grade Preventive officer. P.W. 3

Sriram is a Preventive Officer, Madras Customs, Madras. P.W. 4 is also a Preventive Officer, Madras Customs. Ex. P-10 is the sanction order

which reads as follows :

Sanction for prosecution u/s 137(1) of the Customs Act, 1962. Whereas it appears from the records of the case and from the facts and materials

placed before me that adequate grounds exist for prosecuting Tey Teck Seng, S/o Tey Tinen Hoo aged 24 years, staying at Hotel Chola, Dr.

Radhakrishnan Road, Madras - 600 004 for an offence connected with the seizure of 4 gold biscuits, each weighing 10 tolas (making in all 40

tolas) i.e. 2 gold biscuits recovered from black colour small zip purse from the back pocket of the pant worn by the said Tey Teck Seng and the

remaining two gold biscuits from the black colour chappals worn by him, having a market value of Rs. 1,02,630/- on his arrival from Singapore at

the Meenambakkam Airport, Madras, on the night of 18-10-1985.

Now therefore in exercise of the powers conferred upon me u/s 137(1) of the Customs Act, 1962 (as amended), T. N. Nagarajan, Additional

Collector of Customs, Customs House, Madras - 600 001, do hereby accord sanction for the filing of complaint by the Assistant Collector of

Customs (Prosecution) Preventive Department, Customs House, Madras - 1, against the aforesaid Tey Teck Seng for an offence u/s 135(1)(a) of

the Customs Act, 1962 (as amended) in the Court of the Additional Chief Metropolitan Magistrate, E.O.I., Madras.

Learned Counsel for the appellant contended that the Additional Collector, Customs, the sanctioning authority had considered the records of the

case and also the facts and materials placed before him and found that adequate grounds existed for prosecuting the accused for an offence

connected with the seizure of four gold biscuits each weighing 10 tolas (making in all 40 tolas), having a market value of Rs. 1,02,630/- and that

therefore the Additional Collector of Customs, in exercise of power conferred upon him u/s 137(1) of the Customs Act, accorded sanction for

filing of a complaint by the Assistant Collector of Customs (Prosecution) Preventive Department, Customs House, Madras for an offence u/s

135(1)(a) of the Customs Act, 1962, as amended. Therefore, learned counsel for the appellant contended that the sanctioning authority has

applied his mind before issuing the sanction.

Learned Counsel for the respondent Mr. M. A. Abdul Ghani submitted that the sanctioning authority has not at all applied his mind and that the

records of the case had not been placed before him. According to him, the particulars of the records which were placed before the sanctioning

authority have not been mentioned in the sanction order or in the annexure attached to the order of sanction. According to him, there are exhibits

P-1 to P-9 which were not placed before the sanctioning authority. Learned Counsel for the respondent further submitted that the sanctioning

authority did not make any reference about any of the exhibits in the order. But there is a vague reference in the sanction order with reference to

the case that the facts and materials were placed before the sanctioning authority. Ex. P-1 is the Declaration Card signed by the accused in which

he has mentioned that he was not carrying with him any T.V./V.C.R./V. Cassette. Computer, Gold or Gold Jewellery. When question by P.W. 1

the accused has replied that he did not carry with him any gold. Ex. P-2 is the mahazar for the seizure of four gold biscuits each weighing 10 tolas.

Ex. P-3 is the Economy Class Boarding Pass for travel of the accused from Singapore to Madras. M.O. 1 series are the two chappals. M.O. 2 is

the black colour purse and M.O. 3 is silver paper foil and M.O. 4 series are the four gold biscuits, the market value of which is Rs. 1,02,630/-.

According to P.W. 1, two gold biscuits were seized from the two black chappals worn by the accused and the other two gold biscuits were seized

from the purse kept in the back pant pocket of the accused. P.W. 2 got the statement of the accused under Ex. P-4 in which the accused is stated

to have signed on both the pages. According to the accused, he does not known to read or write English. It is admitted by P.W. 2 that a friend of

the accused who had accompanied the accused has made to write Ex. P-4 and the name of that person is Chan Pon Cheng. P.W. 3 is a

Preventive Officer and his evidence is that he processed the records of the case and he drafted the show cause notice Ex. P-5 to be sent to the

accused Ex. P-6 is the acknowledgment of the accused. The accused has sent the reply Ex. P-7 dated 2-1-1986 and on 8-1-1986 the accused

sent another letter Ex. P..... waiving personal hearing. The case was adjudicated by the Deputy Collector of Customs and the gold bars were

confiscated and a personal penalty of Rs. 15,000/- was imposed on the accused. Ex. P-9 is the copy of the order of adjudication. P.W. 4. C.H.V.

Gopal is the another Preventive Office of the Customs. His evidence is that as soon as the order of adjudication was over, the file was sent to the

prosecution unit for filing a complaint and that the case records were put up by him before the Additional Collector of Customs for issue of

sanction for prosecution. The Additional Collector, Customs passed orders on 17-2-1986 granting sanction for prosecution Ex. P-10 as that

order. The complaint was filed by the Assistant Collector, Customs in the lower Court on 18-2-1986. According to P.W. 4, mahazar, statement

of accused, green card ticket were placed before the Additional Collector on 12-2-1986. In the cross-examination P.W. 4 admitted that a week

prior to 12-2-1986, the papers were sent to the Public Prosecutor for drafting the complaint. The complaint was drafted even before the file was

placed before the Additional Collector. He has also admitted that he had formed an opinion that there would be a prosecution of the accused. The

file was placed before the Additional Collector along with the drafted complaint. On 17-2-1986, sanction was accorded.

Learned Counsel for the respondent submitted that even according to P.W. 4, the mahazar, statement of accused and green card ticket were

placed before the Additional Collector on 12-2-1986. But a week prior to 12-2-1986, the papers were sent to the Public Prosecutor for drafting

the complaint. Therefore, the complaint was drafted even before the papers were placed before the Collector. But the Additional Collector

granted sanction only on 17-2-1986 as according to him, he could have perused the file and also the draft complaints which were sent to him for

sanction. The order of adjudication was over on 31-1-1986. In the order of adjudication, the value of four gold biscuits weighing 40 tolas is stated

to be 60,645/-. In the show cause notice Ex. P-5 also the value of four gold biscuits weighing 40 tolas is stated to be Rs. 60,645/-. In the show

cause notice the accused was asked to show cause as to

(i) why the bits of gold with foreign markings weighing 40 tolas valued at Rs. 60,645/- I.V. under seizure should not be confiscated u/s 111(d)(i) &

(m) of the Customs Act, 1962 read with Section 67 of the Foreign Exchange Regulation Act, 1973;

(ii) why the black colour gip-purse, the silver paper foil, and the one pair of chappals of no commercial value should not be confiscated u/s 119 of

the Customs Act, 1962; and

(iii) why penalty should not be imposed on him u/s 112 of the Customs Act.

This show cause notice was issued u/s 124 of Customs Act, 1962 and is without prejudice to any other action that may be taken against him under

the Customs Act, 1962, or under any other Law for the time being in force in the Republic of India.

The order of adjudication under Ex. P-9 runs as follows :

I have gone through the records of the case. This is a case of deliberate concealment of gold bars in the chappals and partly in the purse kept in the

back-pocket of the passenger. The passenger has no satisfactory explanation to offer. In the circumstances I confiscate all the 4 gold bars u/s

111(d) of Customs Act read with Section 67 of Foreign Exchange Regulation Act and also u/s 111(i) and (m) of customs Act, 1962, I also

impose a personal penalty of Rs. 15,000/- (Rupees fifteen thousand only) on Shri Tey Teck Seng.

This order was signed by Deputy Collector of Customs (Adjudication).

Now let me consider the evidence of prosecution witnesses. P.W. 1 in his evidence has stated that the value of four gold biscuits is Rs.

1,02,630/-. A suggestion was put to this witness to the effect that the value arrived at was imaginary and that the value was only Rs. 90,000/- on

18-10-1985. According to this witness, the value of the gold was ascertained from the price of gold published in newspaper. He admitted that he

used to read both Hindu and Express. But he did not admit that the value was arrived at by his imagination and that the value was only Rs.

90,000/- as on 18-10-1985. I am unable to accept the evidence of this witness even though he is stated to be a Senior Grade Preventive Officer in

Madras Customs because when the value of the gold seized was given in the adjudication proceedings as Rs. 60,645/-, how this witness was able

to say that the value is Rs. 1,02,630/-. Therefore, his evidence is incredible. This is a sorry state of affairs that an Officer of his Rank should give

evidence contrary to their own official proceedings, namely, Ex. P-9, and adjudication proceedings and also Ex. P-5 show cause notice. P.W. 1

should have produced the newspapers dated 18-10-1985 showing the value of the gold, as according to him, he ascertained the value of the gold

as on 18-10-1985 from the newspapers, but he had not filed the same in this case.

Learned Counsel for the respondent contended that the reason for the prosecution to increase the value of the gold beyond Rs. 1,00,000/- is

that the accused could be punished for violation of the provisions of Customs Act, only if the value of the gold seized is beyond Rs. 1,00,000/-. In

that view only, the prosecution has put the value of the gold biscuits beyond Rs. 1,00,000/- in order to get conviction against the accused. There is

a controversy with regard to the statement said to have been given by the accused. Learned Counsel for the respondent contended that the

statement Ex. P-4 was not given by the accused and that it is not a voluntary statement also. According to him, the accused does not know to read

or write English. Whereas, the case of the prosecution is that the accused replied in English and that what the accused has stated has been written

by his friend Ching Poh Chong. For deciding the case, the fact whether Ex. P-4 was given by the accused voluntarily or not necessary at all. We

can ignore this statement Ex. P-4 and decide the case without the statement Ex. P-4. P.W. 3 was examined for proving the show cause notice Ex.

P-5 the reply Ex. P-7 of the accused and the subsequent letter Ex. P-8 of the accused waiving personal hearing and the copy of Ex. P-9 order of

adjudication. From the evidence of P.W. 4 it does not appear that all the material records were placed before the Additional Collector of Customs

on 12-2-1986 for according sanction. Even according to P.W. 4, mahazar, statement of accused and green card ticket were placed before the

Additional Collector on 12-2-1986. Whereas, there are other exhibits in this namely, show cause notice, adjudication proceedings, reply Ex. P-7

and further reply Ex. P-8. Those documents appear to have not been placed before the sanctioning authority. The complaint drafted even before

the file was placed before the Additional Collector itself is highly irregular and illegal. The complaint should have been drafted only after the

sanction was accorded by the Additional Collector since the prosecution should not take it for granted that sanction would be accorded by the

Additional Collector as if the Additional Collector would be hearing their advice and would accord automatically. It is thus clear that the

prosecution had made up its mind to prosecute the accused even before the sanction was accorded. Even without knowing whether the sanction

would be granted or not, the drafting of the complaint was done which shows the malacious attitude on the part of the prosecution especially

suppressing the value of the gold seized and increasing the value beyond Rs. 1,00,000/- for the purpose of getting conviction, Therefore, learned

Counsel for the respondent contended that even the findings of the lower Court with regard to the commission of offence by the accused are not

correct in view of the abovesaid circumstances. I am also of the view that the prosecution is interested in getting the conviction of the accused by

some means or other and in that view, P.W. 1''s evidence giving the value of the gold seized at Rs. 1,02,630/- is without any basis at all.

The next contention raised by the learned Counsel for the appellant is that the sanction is valid. Learned Counsel for the respondent contended

that the prosecution has not proved that the biscuits seized were gold. A suggestion was also put to P.W. 1 by the counsel for the accused in the

lower Court that the seized article is not gold. But P.W. 1 denied the suggestion.

Learned Counsel for the appellant relied upon a decision reported in Balumal Jamnadas Batra Vs. State of Maharashtra, wherein it has been

observed as follows :-

Section 123(1) of the Customs Act, 1962 provided that 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.

Their Lordships of the Supreme Court in the abovesaid Judgment has also observed as follows :

The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and bought into this

country very recently from another country. The inscriptions on them and writing on the boxes were parts of the State in which the goods in

unopened boxes were found from which inference about their origin and recent import could arise. The appellant''s conduct, including his untruthful

denial of their possession, indicated consciousness of their smuggled character of mens rea. There was some evidence to enable the Courts to

come to the conclusion that the goods must have been known to the appellate to be smuggled even if he was not a party to a fraudulent evasion of

duty.

Here, learned counsel for the appellant submitted that the prosecution has noted foreign markings on the biscuits and that they were newly brought

by the accused from Singapore. Applying the ratio of the abovesaid decision, learned counsel submitted that it could be decided that the seized

goods in the instant case are of foreign origin of gold.

Learned counsel for the appellant also cited a decision reported in Union of India Vs. Abdulkadar Abdulgani Hasmani, for the purpose of

showing that Section 123 of the Customs Act shifts the burden on the accused to prove that the goods are not smuggled goods only when the

goods are seized under the Act in the reasonable belief that they are smuggled goods. The reasonable belief must be of the officer who seized the

articles and who is authorised to seize. Section 110 of the Act empowers only the proper officer to seize the goods if he has reason to believe that

any goods are liable to confiscation under the Act.

With regard to sanction, Mr. P. Rajamanickam, learned Central Government Public Prosecutor for the appellant cited a judgment reported in

Mohd. Iqbal Ahmed Vs. State of Andhra Pradesh, . There, their Lordship of the Supreme Court held as follows :

It is incumbent on the prosecution to prove that a valid sanction has been granted by the sanctioning authority after it was satisfied that a case for

sanction has been made out constituting the offence. This should be done in two ways either (1) by producing the original sanction which itself

contains the facts constituting the offence and the grounds of satisfaction and (2) by adducing evidence aliunde to show that facts placed before the

Sanctioning Authority and the satisfaction arrived at by it. Any case instituted without a proper sanction must fail because this being this being a

manifest defect in the prosecution, the entire proceedings are rendered void ab initio. What the Court has to see is whether or not the sanctioning

authority at the time of giving sanction was aware of the facts constituting the offence and applied its mind for the same; any subsequent fact which

may come into existence after the grant of sanction is wholly irrelevant. The grant of sanction is not an idle formality or an acrimonious exercise but

a solemn and sacrosanct act which affords protection to Government servants against frivolous prosecutions and must therefore be strictly

complied with before any prosecution can be launched against the public servant concerned.

In this case, Mr. P. Rajamanickam, learned counsel, for the appellant pointed out to me the sanction order Ex. P-10. The first sentence of the

sanction orders is ""Whereas it appears from the records of the case and from the facts and materials placed before me that adequate grounds exist

for prosecuting Tey Teck Seng, S/o Tey Tinen Hoo, aged 24 years, staying at Hotel Chola, Dr. Radhakrishnan Road, Madras - 600 004 for an

offence connected with the seizure of 4 gold biscuits ......"". From this, learned counsel, for the appellant contended that all the records of the case

and the facts and materials were placed before the Sanctioning Authority and that the Sanctioning Authority found that adequate grounds exist for

prosecuting the accused. In this view learned counsel for the appellant submitted that the sanction order is valid and that the sanctioning authority

has considered all the materials and records and satisfied himself that here was a prima facie case for prosecution.

As pointed out by me, all the relevant records excepting the mahazar, statement of the accused and the green card ticket were not placed

before the Additional Collector on 12-2-1986 by P.W. 4. There is no evidence that the adjudication proceedings, the show cause notice and the

reply Ex. P-7 were placed before the sanctioning authority. Therefore, the Sanctioning Authority could not have applied his mind and granted

sanction. The sanctioning authority had been submitted with a draft complaint even at the time of according sanction possibly to prejudice his mind

and make him to concur with the view of the prosecution to file prosecution against the accused. Otherwise, there is no necessity at all for

producing a draft complaint before the sanctioning authority while he granted sanction. The placing of a draft complaint before the sanctioning

authority before he accorded sanction, is illegal and it is deprecated. The object of sanction has been very clearly stated by the Supreme Court in

the judgment in Mohd. Iqbal Ahmed v. State of A.P. (supra).

Learned counsel for the respondent cited a judgment reported in Bhagat Stores and Others Vs. State, following the judgment reported in The

State of Bombay Vs. Parshottam Kanaiyalal, . In The State of Bombay Vs. Parshottam Kanaiyalal, , Their Lordships of the Supreme Court had

an occasion to consider the scope of Section 20(1) of Prevention of Food Adulteration Act (37 of 1954). Even under that Act sanction for

prosecution of the accused is necessary. The observations of Their Lordships are as follows :-

....... In the first place, the reason of the Rule could not suggest or imply such a condition. The rule has undoubtedly been designed to prevent the

launching of frivolous or harassing prosecutions against traders. It therefore, provides that the complaint should be filed, either by a named or

specified authority or with the written consent of such authority. To read by implication that before granting a written consent, authority competent

to initiate a prosecution should apply its minds to the facts of the case and satisfy itself that a prima facie case exists for the alleged offender being

put up before a court appears reasonable, but the further implication that the complainant must be named in.......

Extracting the above observation of the Supreme Court, it has been held in the decision reported in M/s. Bhagat Stores, Panaji v. State (supra) it

has been observed as follows :

It is thus clear from the above observation that before giving written sanction the concerned authority should apply its mind to the facts of the case

and satisfy itself that there is a prima facie case to prosecute the offender in the Court. It should also consider the reasonableness and propriety of

the prosecution that is to say that the case is not frivolous and deserves to be presented to the Court for trial.

Even in the decision reported in Mohd. Iqbal Ahmed v. State of Andhra Pradesh (supra), Their Lordships of the Supreme Court laid two tests for

valid sanction which are extracted above.

The facts and circumstances of the case do not show that the sanction order Ex. P-10 has been issued in accordance with law, that the

sanction order does not satisfy that the sanctioning authority has applied his mind before according sanction, and that he has not considered all the

facts and circumstances and perused all the records. Even the prosecution has not, as seen above, placed all the materials before the sanctioning

authority.

Therefore, I hold that there is no valid sanction and the finding of the lower Court that the sanction is invalid, is upheld. I also find that

prosecution has put up the value of the gold seized at Rs. 1,02,630/- possibly to prosecute the accused. In any event there is evidence that the

accused has brought gold bars from the foreign country and since a valid adjudication has been made and the gold biscuits have been confiscated

and a penalty of Rs. 15,000/- has been imposed against the accused I do not find a warrant to interfere with that finding of the lower Court even

though my observation is that the value of the gold seized has been exaggerated possibly to bring home the guilt to the accused. In this view, the

order of acquittal passed by the lower Court is confirmed and there are no grounds to interfere with the same. The appeal is dismissed.