Supreme Court Dismisses Appeal and Upholds Conviction of Bullion Dealer for Possession of Smuggled and Undeclared Gold. Accused's statement under Section 107 of Customs Act, 1962 held admissible and Rule 126P(2)(ii) of Defence of India Rules, 1962 applied to possession of undeclared indigenous gold.

Case Note & Summary

Background: The appeal before the Supreme Court arose from a criminal case involving possession of smuggled and undeclared gold. The appellant, a bullion dealer, was prosecuted by the State of West Bengal under the Defence of India Rules, 1962 and the Customs Act, 1962 after customs authorities recovered gold bars from his shop and residence. Facts: On 10 May 1965, acting on intelligence, a preventive officer of the Customs Department searched the appellant's jewellery shop at 59 Manohar Das Street, Calcutta. The appellant was found sitting on a pillow laid on a mattress; beneath the pillow and mattress, two gold bars with foreign markings were discovered and seized in the presence of independent witnesses. Later the same day, customs officers searched the appellant's residential flat. The appellant's wife contacted him by telephone; he arrived and handed over the key to an almirah from which a gold bar of indigenous origin was recovered. The appellant was then taken to the Customs House, where his statement was recorded under Section 107 of the Customs Act, 1962. He claimed the residential gold represented ornaments given to his wife by his mother, melted into a bar and kept without his knowledge. The appellant was charged under Rule 126I(10) read with Rule 126P(2)(ii), Rule 126I(i) read with Rule 126P(1)(i) of the Defence of India Rules, 1962, and Section 135(b) of the Customs Act, 1962. The trial court convicted him. On appeal, the Calcutta High Court acquitted him on one charge but sustained the sentence on the other charges, removing a fine of Rs.1000. Legal Issues: Two principal contentions were raised: first, whether Section 107 of the Customs Act, 1962 permitted examination of a person subsequently arraigned as an accused, and whether 'any place' included the Customs House, so as to make the statement admissible; second, whether Rule 126P(2)(ii) applied to smuggled gold and to indigenous non-ornament gold recovered from the residence without a declaration. Arguments: The appellant argued that Section 107 did not apply to an accused but only to other witnesses, and that the statement was obtained under pressure and was inadmissible as a quasi-confession; however, counsel conceded that customs officers were not police officers and the statement was not a confession under Sections 24 and 25 of the Indian Evidence Act. He also contended that Rule 126P(2)(ii) could not apply to smuggled gold because declaration of non-ornament gold did not cover smuggled gold. The State maintained that the provision was wide enough to include the accused and that the possession of undeclared gold was an offence. Court's Analysis: The Supreme Court held that the language of Section 107 was clear and unambiguous; 'any person' included a suspect and potential accused, and 'any place' meant any place, including the Customs House. The provision was designed to facilitate investigation without restriction on person, place or time. The Court further held that Rule 126P(2)(ii) penalised possession of any quantity of gold in contravention of Part XII-A of the Defence of India Rules, and its wide language could not be cut down to exempt smuggled gold. The accused was in control of the indigenous gold and no declaration had been made, so possession was an offence. The Court also observed that social and economic offences stood on a graver footing and that professional economic offenders required deterrent punishment, including incarceration. Decision: The Supreme Court dismissed the appeal and confirmed the conviction and sentence. The concurrent findings of possession were upheld, and the statement recorded under Section 107 was held admissible. The appeal failed.

Headnote

Issue of Consideration

Final Decision

The Supreme Court dismissed the appeal and confirmed the conviction and sentence. The Court held that Section 107 Customs Act applies to any person including the accused and any place including the Customs House; the statement recorded was admissible. The Court further held that Rule 126P(2)(ii) of the Defence of India Rules, 1962 covers smuggled gold and undeclared indigenous gold, and the appellant's possession of indigenous gold without declaration was an offence. The concurrent findings of possession were upheld.

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