judgement:
N: Criminal Appeal Nos.
642 656 of 1987.
From the Judgment and order dated 24.4.1987 of the High Court of Bombay in Criminal Appeal Nos. 495, 496, 497, 660, 635, 636 and 637 of 1986.
A.K. Sen, A.K. Goel, Ajit Pudussery and M.D. Rijhwani for the Appellants.
M.K. Banerjee, Solicitor General, A.K. Ganguli, Hemant Sharma, R.P. Srivastave, C. Ramesh and C.V. Subba Rao for the Respondents The Judgment of the Court was delivered by RAY, J.
Crl.
A. Nos. 644 45187 and Crl.
A. Nos.
642 43/87.
These appeals by special leave are against the judgment and order dated 24th April, 1987 passed by the High Court of Bombay dismissing criminal appeal No. 636 of 1986 filed by masters of two trawlers against their conviction and sentence and allowing appeal No. 496 of 1986 filed by Commander S.D. Baijal against the acquittal of accused Nos. 3 and 4, i.e. the charterer company and its managing Director and also releasing the trawlers.
The High Court convicted the accused Nos. 3 and 4 for contravention of sub section 6 of section 5 of the Maritime Zones of India Act, 1981 read with section 7 thereof and rule 16 of Maritime Zones of India Rules, 1982.
The High Court also ordered confiscation of the two trawlers and to vest the same in favour of Central Government under section 13 of the Maritime Zones of C, India Act The trawlers in questions which are foreign vessel are chartered by respondent Nos. 4 and 5 of this appeal for the purpose of fishing in Maritime Zone of India after obtaining permit under section 5 of Maritime Zones of India Act, in short M.Z.I. Act.
These two trawlers 11 along with three other pairs of trawlers were apprehended and seized 647 by Coast Guard Ship Vikram commanded by Commander S.D. Baijal for fishing operations in the exclusive economic zone of India in violation of the terms and conditions of permit and the letter of intent granted to that company by the Government of India under section 5(4) of M.Z.I. Act and in violation of Maritime Zones of India Rules, in short M.Z.I. Rules, 1982 as amended.
They were prosecuted by Additional Chief Metropolitan Magistrate, 8th Court Ballard Estate, Bombay on the complaint of Commander S.D. Baijal filed as authorised officer under section 19 of the M.Z.I. Act.
The masters of the two trawlers, the respondent Nos. 2 and 3 of this appeal were convicted and sentenced to pay a fine of Rs.60,000 and Rs.40,000 respectively and the other accused respondents Nos. 4 and 5 were acquitted and the trawlers and the fishes thereon were ordered to be released on payment of the detention charges.
Of the other three pairs of foreign trawlers chartered by Indian company for fishing in the Maritime Zone of India under permit granted under M.Z.I. Act which were seized and prosecuted, two pairs of trawlers with fishes thereon were ordered to be confiscated while one pair of these trawlers were directed to be released.
The masters of each pair of trawler were similarly convicted and sentenced to pay fine for violation of provisions of the said Act and the Rules framed thereunder.
The masters of the pair of trawlers filed criminal appeal No. 536 of 1986 against their conviction and sentence while the complaining Commander S.D. Baijal filed criminal appeal No. 496 of 1986 against the order of acquittal of respondent Nos. 4 and S i.e. the Managing Director of the Company and the Company and also against the release of the pair of trawlers in spite of conviction of the masters under section 12(b) of M.Z.I. Act by the Magistrate.
These two appeals were heard together and disposed of by a common judgment by the High Court, Bombay whereby criminal appeal No. 636 of 1986 was allowed in part by modifying the sentence of the masters of the trawlers from R.I. for one year to S.I. for 9 months and from R.I. for 9 months to S.I. for 6 months.
In criminal appeal No. 496 of 1986 the accused respondent Nos. 3 and 4 i.e. the Managing Director and the Company were convicted and sentenced to pay a fine of Rs.30,000 each and the trawlers were ordered to be confiscated with the fishes thereon or in case of sale of the same the proceeds thereof.
The High Court also held the masters of trawlers guilty under Rule 8(1)(q) and they were convicted under section 12(a) instead of section 12(b) of the M.Z.I. Act but maintained the sentence of penalty.
It is against this judgment and order the instant appeals on special leave have been filed.
648 Crl.
A. Nos.
646 47 of 87 and Crl.
A. Nos.
650 51 of 1987 arise out of a common judgment made by the High Court of Bombay on April 24, 1987 modifying in part the judgment and order made by the Additional Chief Metropolitan Magistrate, 38th Court, Ballard Estate, Bombay in Criminal Case No. 28 of 1984 passed in Criminal Appeal Nos. 497 and 637 of 1986.
The Additional Chief Metropolitan Magistrate convicted the masters of the trawlers i.e. accused Nos. 1 and 2 for contravening Rule 8(1)(G) read with Rule 16 and Section 20(b) of M.Z.I. Act and sentenced them to pay a fine of Rs.60,000 and Rs.40,000 respectively; in default of payment of fine to suffer R.I. for 1 year and 9 months respectively.
The Magistrate also made an order confiscating the trawlers JIANN TAI No. 301 and JIANN TAI No. 302 along with the fishing gear, equipments, stores, cargo and fish and directed that the same shall vest with the Central Government together with the proceeds of the sale of fish, if any, under order of the Court.
The Magistrate however.
acquitted accused Nos. 3 and 4, i.e the Charterer Company and its Managing Director.
A. No. 497 of 1986 filed by Cdr.
S.D. Baijal against the order acquitting accused Nos. 3 and 4, i.e. Charterer Company and its Managing Director was allowed by the High Court of Bombay and they were convicted and sentenced to pay a fine of Rs.30,000 each; in default to suffer S.I. for 4 months.
The order of confiscation of the two trawlers was also maintained.
A. No. 637/86 filed by the masters of the trawlers was dismissed with the modification that the conviction made u/s 12(b) was altered to 12(a) of M.Z.I. Act and the sentence of R.I. for 1 year and 9 months respectively in default payment of fine were modified as S.I. for h months and S months respectively.
A. Nos.
648 49 87 and Crl.
A. Nos. 652 53 of 1987 arise out of a common judgment passed in Criminal Appeal Nos. 495 and 634 of 1986 by the High Court of Bombay on 24th April, 1987 dismissing the appeals of the masters of the vessels and allowing the appeals filed on behalf of the prosecution.
All these aforesaid appeals were filed against the judgment and order passed by the Additional Chief Metropolitan Magistrate in Criminal Case No. 27 of 1984 wherein the Magistrate convicted and sentenced the masters of the trawlers with the imposition of fine of Rs.30,000 and Rs.40,000 on accused Nos. 1 and 2 respectively for contravening Rule 8(1)(g) and Rule 16 of the M Z I. Rules and also of the offence u/s 5 of the Act and imposing penalty u/s 12(b) of the M.Z.I. Act.
The Magistrate, however, acquitted the accused Nos. 3 and 4 i.e. the Charterer Company and its Managing Director and directed the release of the trawlers in favour of the masters of these trawlers.
The Crl.
A. No. 634 of 1986 filed by the 649 masters of the vessels was dismissed by the High Court of Bombay and the convinction and sentence u/s 12(b) of M.Z.I. Act was altered to one u/s 12(a) of the said Act.
A. No. 495 of 1986 filed on behalf of the prosecution was allowed and the accused Nos. 3 and 4 i.e. the Charterer Company as well as the Managing Director of the Company were convicted and sentenced to pay a fine of Rs.30,000.
The vessel as well as the fishing equipment were confiscated and the same were directed to vest in favour of the Central Government.
A. Nos.
654 55 of 87 and Crl.
A. No. 666 of 1987 arise out of a common judgment and order passed by the High Court of Bombay in Crl.
Appeal Nos. 660 and 635 of 1986.
These criminal appeals were filed against the judgment and order passed in criminal case No. 26 of 1984 made on 21st May, 1986 by the Additional Chief Metropolitan Magistrate, 38th Court, Ballard Estate.
The Magistrate convicted and sentenced the accused Nos. 1 and 2 i.e. the masters of the vessel to pay a fine of Rs.60,000 and Rs.40,000 respectively; in default to undergo R.I. for 1 year and 9 months respectively.
The Magistrate also made an order confiscating the trawlers BWA Sheng No. 21 and HQA Sheng No. 22 together with fishing gear, equipment, stores, cargo and fish therein.
A. No. 660/86 was filed by the Charterers.
A. No. 635 of 1986 was filed by the masters of the trawlers.
A. No. 635 of 1986 was dismissed with the modification that conviction and sentence passed u/s 12(b) of the M.Z.I. Act was altered to one u/s 12(a) of the said Act and Crl.
A. No. 660 of 1986 was dismissed with the modification that the imprisonment awarded in default of payment of fine imposed on the appellant was altered to S.l.
for 4 months instead of R.I for 6 months The order of confiscation of trawlers passed by the Magistrate was also confirmed.
The facts and issues involved in all these appeals being similar we dispose of these appeals by a common judgment.
It has been first contended on behalf of the appellant that at the time of apprehension of the trawlers no fish was found on board and the net was not wet.
There was no evidence that fish on board was seized nor there was any evidence to show what had happened to fish or who put the fish in the hold of the trawlers.
It has, therefore, been submitted that no presumption under section 22 of the said Act can be drawn that the trawlers were engaged in fishing within the exclusive economic zone of India in contravention of the provisions of the Act and the Rules framed thereunder.
This contention cannot be considered in this appeal under special leave as there has been concurrent findings 650 by the Chief Metropolitan Magistrate as well as by the High Court that there was fish on board which includes the hold of the trawlers.
The learned single Judge observed: "I am, however; unable to accept that for a minor omission to make entry of finding of the fish or the net in the officers ' diary can by itself negative the evidence of actual finding of the fish and the wet net on the deck and in my view the Authority quoted will have no application to the facts of this case." The High Court further held on a consideration of the evidence that the fishing trawlers were fishing in a depth within 40 fathoms and the finding of the Magistrate on this score is unassailable.
There has been violation of amended Rule 8(1)(q) of M.Z,.
I. Rules.
Condition 2(S) of the permit provides that any condition could be imposed which would be binding on the charterers, masters of the trawlers.
Rule 8(1)(q) requires the.
trawlers to fish at a depth of more than 40 fathoms.
This condition in the permit has been violated.
The masters and the charterers have been accordingly convicted under section 12(a) by the High Court as the violation is with regard to the area of operation specified in the permit and the penalty provided for the same is not exceeding Rs.5 lakhs.
As the Magistrate has exercised his discretion in sentencing the masters to pay lesser amount as penalty the High Court did not consider it proper to interfere with the same.
The main argument on behalf of the appellant was focussed on the vital question as to whether the words used in Section 13 of M.Z.I. Act "shall also be liable to confiscation" mandate that the foreign vessel used in connection with the commission of the offence as soon as the masters have been convicted under section 10 or 11 or 12 of the said Act, shall be confiscated or it is the discretion of the Court to order either for release of the vessel or for confiscation of the vessel together with the fish and other equipment, cargo and fishing gear considering the graveness of the offence.
It has been strenuously urged before us that the object of the M.Z.I. Act is to prevent poaching of fishes in the exclusive economic zone of India by foreign vessels without any licence or permit as required under the said Act.
Section 10 provides that where a vessel contravenes the provisions of Section 3.
the owner or master of the vessel shall be punishable for imprisonment for a term not exceeding 3 years or with a fine not exceeding Rs.15 lakhs; where the contravention takes place in an area within the exclusive economic zone of India, the punishment of fine will not exceed 651 rupees ten lakhs.
Similarly for contravention of licence the punishment of fine will not exceed rupees ten lakhs whereas in case of contravention of the provisions of the permit in respect of the area of operation or method of fishing, the punishment of fine will not exceed rupees five lakhs and in any other case the punishment of fine will not exceed rupees fifty thousand.
Referring to these provisions providing for different kinds of penalty, it has been urged that the confiscation of the vessel for contravention of the permit is not warranted in as much as the punishment provided for such contravention u/s 12 is much less than the punishment provided for in respect of contravention of licence as well as contravention of Section 3 of the said Act It has, therefore, been submitted that the provisions of Section 13 of the said Act are not mandatory but directory.
This leaves option to the Court to use its discretion to pass an order of confiscation of vessel in the facts and circumstances of the case.
The trawlers in question were chartered by the company and the company duly obtained permit under Section 5 of M.Z.I. Act, 1981 for fishing in economic zones of India at a depth of not less than 40 fathoms.
It has been submitted that it is not possible to fish at the said depth as depth varies from place to place and for such a minor infringement the penalty of confiscation of the vessel i.e. the fishing trawlers should not be awarded as the trawlers are fishing in the maritime zone of India under permit granted by the Government of India in favour of the Indian company which chartered those trawlers.
Moreover, different penalties are prescribed for different offences committed under sections 10, 11 and 12 of M.Z.I. Act according to the graveness of the offence.
The penalty of confiscation of the vessel under Section 13 if found to be imperative, the provisions will be arbitrary.
The words "shall also be liable to confiscation" in Section 13 of the said Act have to be interpreted as not mandatory in the context they have been used but discretionary.
It is left to the discretion of the Court to award this sentence of confiscation in case of commission of grave offences In support of this submission the decisions in State of Madhya Pradesh vs Azad Bharat Finance Co. & Anr., [1966] (Supp,) SCR 473; Indo China Steam Navigation Co. Ltd. vs Jasjit Singh, Addl.
Collector of Customs & Ors., ; and Superintendent and Legal Remembrancer of Legal Affairs to the Govt.
Of West Bengal vs Abani Maity, ; have been cited at the bar wherein similar words "shall also be liable to confiscation" have been used.
It is convenient to ascertain the legal position before deciding the question raised.
In the Statement of objects and Reasons of The Maritime Zones of India (Regulation of Fishing by Foreign Vessels) Act, 1981 it is stated: 652 "There has been an increase in poaching activities of foreign fishing vessels in our exclusive economic zone.
There have also been instances of foreign fishing vessels chartered by Indian parties indulging in such activities.
To prevent such activities and to protect our fishermen from the hardship caused by poaching vessels, it is necessary to regulate fishing activities by foreign fishing vessels and to provide for deterrent punishment by way of heavy fines and confiscation of foreign fishing vessels engaged in such activities.
Section 2(a) defines "exclusive economic zone of India" as meaning the exclusive zone of India in accordance with the provisions of section 7 of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976.
According to Section 2(i) "owner" of vessel a includes any association of persons whether incorporated or not, by whom the vessel is owned or chartered; Section 2(j) defines "permit" meaning a permit granted or deemed to have been granted under section 5.
Section 3 states that subject to the provisions of the act, no foreign vessel shall, except under and in accordance with: (a) a licence granted under section 4; or (b) a permit granted under section 5, by the Central Government, be used for fishing within any maritime zone of India.
Section 4 provides for procedure for making application for licence by the owner of a foreign vessel for fishing within any maritime zone of India and grant of licence by Central Government.
Section 5 prohibits fishing by Indian citizens using foreign vessels within any maritime zone of India without obtaining permit and the procedure for grant of permit to charterer has been specified therein.
Sub section (6) of Section 5 of the Act provides: "A person holding a permit under this section shall ensure 653 that every person employed by him complies, in the course of such employment, with the provisions of this Act or any rule or order made thereunder and the conditions of such permit.
Section 10 says that for contravention of provisions of Section 3, the owner of master of the vessel: B (a) in case of contravention of territorial waters of India shall be punishable with imprisonment for a term not exceeding three years or with fine not exceeding rupees fifteen lakh or with both; and (b) in a case where contravention takes place in any area within the exclusive economic zone of India, shall be punishable with fine not exceeding rupees ten lakh.
Section 11 prescribes punishment of fine not exceeding rupees ten lakhs in case of contravention of licence.
Section 12(a) prescribes punishment of fine not exceeding rupees five lakhs where the contravention relates to the area of operation or method of fishing specified in the permit and; section 12(b) in any other case with fine not exceeding rupees fifty thousand.
Section 13 which is relevant for deciding these appeals is as under: "Confiscation of vessels, etc. (1) Where any person is convicted of an offence under section 10 or section 11 or section 12, the foreign vessel used in or in connection with the commission of the said offence, together with its fishing gear, equipment, stores and cargo and any fish on board such ship or the proceeds of the sale of any fish ordered to be sold under the second proviso to clause (a) or subsection (4) of section 9 shall also be liable to confiscation.
(2) the foreign vessel or other things confiscated under subsection (1) shall vest in the Central Government.
" Other provisions of the said Act are not necessary for our purpose and as such they are not stated herein.
Thus, it is crystal clear that the M.Z.I. Act has been enacted with 654 the object of preventing illegal poaching of fishes by foreign vessels including foreign vessels chartered by Indian parties by providing deterrent punishment to protect Indian fishermen.
The objects and reasons of the Act are to be taken into consideration in interpreting the provisions of the Statute and not the debates in Parliament on the Bill.
This has been observed by this Court in K.P. Varghese vs The Income tax officer, Ernakulam and another; , as under.
"Now it is true that the speeches made by the Members of the Legislature on the floor of the House when a Bill for enacting a statutory provision is being debated are inadmissible for the purpose of interpreting the statutory provision but the speech made by the Mover of the Bill explaining the reason for the introduction of the Bill can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation is enacted.
This is in accord with the recent trend in juristic thought not only in western countries but also in India that interpretation of a statute being an exercise in the ascertainment of meaning, everything which is logically relevant should be admissible .
It is pertinent to mention that in interpreting a statute the Court has to ascertain the will and policy of the legislature as discernible from the object and scheme of the enactment and the language used therein.
Viewed in this context it is apparent that the said Act has been made with the sole purpose of preventing poaching of fishes by foreign vessels chartered by Indian citizens within the exclusive economic zone of India as specified in Rule 8(1)(q) of Maritime Zone of India Rules as amended in 1982 as well as in breach of the provisions of the said Act and the terms and conditions of permit issued under Section 5 of the said act.
Section 8 under the heading "Prohibition of fishing in Maritime zone of India by foreign vessels" expressly prohibits foreign vessels from fishing in maritime zone of India except under and in accordance with a licence or permit granted by Central Government and breach of the same has been made punishable under Section 10 of the said Act.
Similarly violation of the terms and conditions of licence and permit granted under Sections 4 or 5 is punishable under Sections 11 or 12 respectively of the said Act.
655 Section 13 of the said Act expressly says that besides conviction and sentence of the masters of the vessels and charterers, the vessel is little to be confiscated with fishes therein.
The contention on behalf of the appellants is that the words "shall also be liable to confiscation" as used in Section 13 of the said Act do not mean that it is mandatory to confiscate the vessel, i.e. the trawlers as the masters of the vessel have been convicted and sentenced to pay penalty under section 12 of the Act.
As various punishments have been provided for different types of offences, it is left to the discretion of the court to order confiscation of the vessel or to release the vessel In the case of Indo China Steam Navigation Co. Ltd. vs Jasjit Singh, Additional Collector of Customs & ors.
; , the foreign vessel 'Eastern Saga ' arrived at Calcutta from the Far East carrying a legitimate cargo.
On its arrival at the port the Custsoms officers on search found a hole in sailors ' accommodation which was covered with a piece of wood and over painted.
From the hole the Customs officers found out a large quantity of gold in bars valued at about Rs.23 lakhs.
The Additional Collector of Custom found that the vessel had clearly rendered itself liable to confiscation under section 167(12A) of because it had infringed the provisions of Section 52A of the said Act.
He also confiscated the gold bars under Section 167(8) read with Section 23A of the Foreign Exchange Regulations Act.
He also directed that 'Eastern Saga ' be confiscated u/s 167(12A) of the said Act and in lieu of confiscation he gave the owners of the ship an opportunity to pay a fine of Rs.25 lakhs within a period of 30 days of the despatch of the order.
This order was challenged in an appeal under special leave before this Court.
Section 167(12A) provides that if a vessel contravenes section 52A it "shall be liable to confiscation".
It was held: ".
The context seems to require that it is not open to the Customs to refuse to confiscate the vessel on the ground that there are any extenuating circumstances surrounding the contravention of Section 52A in a given case and that it would be unfair to impose the penalty of confiscation.
Two penalties are prescribed, one is the confiscation of the ship, and the other is a fine against the master.
In regard to the latter penalty it is within the discretion of the Customs Authority to decide what amount of penalty should be imposed; just as in the case of the first penalty it is not open 656 to it to say that it would not impose the penalty of confiscation against the offending ship, so in the case of the second penalty it is not open to it to say that it will not levy any penalty against the master .
It must be regarded as an elementary requirement of clause 12A that as soon as the offence referred to in column I of the said clause is proved, some penalty has to be imposed and clause 12A indicates that two penalties have to be imposed and not one there being discretion in regard to the penalty imposable against the master as regards the amount of the said penalty.
Therefore, we do not think it would be possible to take the view that if there are extenuating circumstances attending the contravention of Section 52A in a given case the Customs Authority can refrain from confiscating the vessel.
Confiscation of the vessel is the immediate statutory consequence of the finding that an offence under clause 12A is established, just as the imposition of some penalty against the master is another statutory consequence of the same contravention.
" Section 183 lays down that whenever an order of confiscation is made the Adjudicating Authority has to give the owner of the goods which includes the vessel, an opportunity to pay fine in lieu of confiscation.
Section 183 confers discretion on the Authority to determine what amount of fine should be imposed.
Section 11 of the M.P. Opium Act as amended where the words "shall be liable to confiscation" occurred came up for consideration before this Court in the case of State of Madhya Pradesh vs Azad Bharat Finance Co. Ltd . & Anr., [1966] (Supp) SCR 473 a truck hired by one Harbhajan Singh from the respondent company was found on search to have contained contraband opium.
Harbhajan Singh was tried for offences u/s 9A and 9B of the opium Act (10 of 1979).
The Magistrate while acquitting him on the ground that he had no knowledge, ordered for confiscation of the truck as the word "shall" occurring in Section 11 of the Act make it mandatory to confiscate.
Sessions Judge on revision affirmed the order of the Magistrate.
High Court on revision held that the words "shall be liable to confiscation" in section 11 did not mean that it was mandatory to confiscate.
It is the discretion of the Court whether to make an order for confiscation of the conveyance or not according to the facts and circumstances of the case.
This Court had observed that provisions of Section 11 of the Madhya Bharat Act are permissive and not obligatory.
Three factors 657 were taken into consideration in construing Section 11.
"First, it would be unjust to confiscate the truck of a person if he has no knowledge whatsoever that the truck was being used for transporting the opium.
Secondly, it is a penal statute and it should if possible be construed in such a way that a person who has not committed or abetted any offence should not be visited with a penalty.
Thirdly, if confiscation was obligatory under the section, the section may have to be struck down as imposing an unreasonable restriction under Article 19 of the Constitution .
Section 11 of the Madhya Bharat Act is not therefore to be construed as obligatory and it is for the court to consider in each case whether the articles in which the contraband opium is found or it being transported should be confiscated or not having regard to all the circumstances of the case.
" The earlier decision of this Court has not been referred to in this case.
Moreover what appears to have weighed with this court was that unless the owner of the truck knew that hirer used the truck in transporting contraband opium it would be unjust to confiscate the conveyance.
In the instant case the owner of the vessel has been defined in Section 2(i) of M.Z.I. Act as including any association of persons, whether incorporated or not, by whom the vessel is owned or chartered.
The charterer company and its Managing Director, have been convicted for contravention of Section S of the Act and Rule 8(1)(q) of the Rules framed thereunder and penalty has been awarded.
So the charterer who is deemed to be the owner of the trawler was held guilty of the offence of breach of terms of the permit.
In the case of Superintendent and Legal Remembrancer of Legal Affairs to the Govt.
Of West Bengal vs Abani Haity, ; the car belonging to Abani Haity was searched and contraband ganja was found concealed in the car owned by Abani Haity.
The Magistrate passed order of conviction and sentence against him but he did not make any order for confiscation of the car used for transporting the contraband article.
This matter ultimately came up before this Court in an appeal by special leave.
This Court held on an interpretation of Section 63(1) of the Bengal Excise Act, 1909 that the words "shall be liable to confiscaticn" as used in the context convey an absolute imperative to confiscate the vehicle used for transport of the contraband goods.
It was further held that it is incumbent on the Magistrate to pass, at the conclusion of the trial, in addition to the conviction and sentence.
an order of confiscation of the car by which such offence 658 has been committed.
The word "liable" occurring in many statutes, has been held as not conveying the sense of an absolute obligation or penalty but merely importing a possibility of attracting such obligation, or penalty even where this word is used along with the words "shall be".
Thus, where an American Revenue Statute declared that for the commission of a certain act, a vessel "shall be liable to forfeiture", it has held that "these words do not effect a present absolute forfeiture but only give a right to have the vessel forfeited under due process of law.
Similarly, it has been held that in Section 302, Indian Penal Code, the phrase, "shall also be liable to fine" does not convey a mandate but leave it to the discretion of the Court convicting an accused of the offence of murder to impose or not to impose fine in addition to the sentence of death or transportation for life.
" In the case of F.N. Roy vs Collector of Customs, Calcutta, ; the petitioner on the basis of a notification dated March 16, 1953 issued by the Government of India giving general permission to all persons to import into India from certain countries any goods of any of the description specified in the schedule annexed to the notification had placed an order with a company in Japan for supply of certain goods called in the trade Zip Chains.
The goods on arrival in Calcutta Port could not be cleared from the Port as a notice was issued by the Collector of Customs for Appraisement stating that the petitioner did not possess valid import licence for the goods and asked him to show cause why the same should not be confiscated and action taken against the petitioner u/s 167(8) of the .
The petitioner submitted a written answer stating that the Zip Chains imported by him were chains of the kind free import of which has been permitted and as such no licence to import them was necessary.
The petitioner was again asked by the Customs authorities whether he wanted a personal hearing.
The petitioner did not reply to the same.
The Collector of Customs made an order confiscated the goods and imposing a penalty of Rs.1,000 on the petitioner.
The petitioner thereafter filed an appeal which was dismissed on the ground that it was barred by limitation.
The petitioner thereafter made an application for quashing the order of confiscation of goods and imposing penalty on him.
This application was dismissed.
The petitioner thereafter filed an application under Article 32 of the Constitution challenging the validity of the order made against him.
The order of confiscation was questioned on the ground that it did not give the petitioner an option to pay a fine in lieu of confiscation, as provided in Section 183 of the .
The Imports and Exports (Control) Act, 1947 by Section 3(1) empowers the Central Government to make provisions for prohibiting, 659 restricting or otherwise controlling, in all cases or in specified classes of cases, the import, export, carriage coastwise or shipment as ships ' stores of goods of any specified description.
Sub section (2) of that Section provided that all goods to which any order under sub section (1) applies shall be deemed to be goods of which the import or export has been prohibited or restricted under section 19 of the Sea Customs, 1878, and all the provisions of that Act shall have effect accordingly, except that section 183 thereof shall have effect as if for the word "shall" therein the word "may" was substituted.
It was held that the goods imported into India contrary to the prohibition or restriction shall be liable to confiscation and any person concerned in such importation shall be liable to a penalty not exceeding three times the value of the goods or not exceeding one thousand rupees.
Under Section 167(8) of the the provisions of confiscation of goods illegally imported are mandatory.
The only question adjudicated before this Court was that as no option was given to pay fine in lieu of confiscation u/s 183 of the , the order should be held bad.
It was held that in view of the substitution of the word 'may ' in place of 'shall ' in Section 183 of the , it has been left to the discretion of the Customs Authorities to give or not to give the option to payfine.
It was held that it was obligatory on the part of the Customs Authorities to make an order confiscating the goods illegally imported in violation of the provisions of the Act.
The objects and reasons of the M.Z.I. Act are to prevent illegal poaching of fishes by foreign vessels chartered by Indian citizens in the exclusive economic zone of India at a depth less than 40 fathoms by providing deterrent punishment for contravention of the provisions of the Act in order to protect and safeguard the interests of India fishermen.
Chapter II of the Act deals with Regulation of fishing by foreign vessels.
The heading of Section 3 is "Prohibiting of Fishing in Maritime Zones of India by Foreign Vessels".
Thus Section 3 prohibits the use of foreign vessels for fishing within any maritime zone of India without licence or permit granted by the Central Government and also in accordance with the terms mentioned in the licence or permit.
Section 5 under the caption 'Prohibition of Fishing by Indian Citizens ' using foreign vessels clearly enjoins in sub section 6 that a person holding permit shall ensure that every person employed by him complies, in the course of such employment with the provisions of the act or any rule or order made thereunder and the conditions of such permit.
660 Rule 8(1) (q) inserted by M.Z.I Rules as amended in 1982 expressely prohibits fishing by foreign vessel chartered by Indian citizens in a depth less than 40 fathoms in any exclusive economic zone of India.
Infringement of this rule as well as violation of the provisions of Section 5 of the Act and the conditions of permit will make the masters of the vessel as well as the company and the Managing Director or Secretary of the Company chartering the vessel liable to conviction and sentence of penalty expressly provided in section 12 of the said Act.
Section 13 also in clear and unambiguous terms says that on the conviction of the person i.e. the master and the charterer of an offence under Sections 10 or 11 or 12 the vessel used in connection with the offence together with the fish on board such ship or the sale proceeds of the sale of such fish, stores, cargo shall also be liable to confiscation.
Viewed in the context the words "shall also be liable to confiscation" do not leave any discretion to the Magistrate or the court to make no order of confiscation of the vessel as soon as the masters of the vessel are convicted u/s 10 or 11 or 12 of the said Act.
The Legislative intent in making this provision is to provide deterrent punishment to prohibit fishing in exclusive economic zone of India by foreign vessel in infringement of the Act and the rules framed thereunder and the conditions of permit or licence.
Viewed in this context Section 13 mandates that on conviction of the master and charterer of an offence under Section 12 not only penalty of fine shall be imposed but the vessel used in or in connection with the commission of such offence has to be confiscated.
It is not open to the Court to consider the graveness of the offence and other extenuating circumstances and to make no order for confiscation of the offending vessel concerned.
Confiscation of the vessel is the immediate statutory consequence of the finding that an offence either under Section 10 or 11 or 12 has been proved and its master has been convicted.
Section 13 is thus mandatory and it is not open to the court as soon as the masters of the vessel is convicted of an offence under Section 12 and is awarded penalty to refrain from making an order confiscating the offending vessel.
For the reasons aforesaid we dismiss all these appeals and affirm the judgments and orders of the High Court.
The vessels have been detained in Bombay Port after apprehending them on July 26, 1984 and a huge amount has to be paid as port charges.
Considering the facts and circumstances of the case the Port Authorities at Bombay may consider if an application is made by the parties for exemption or partial exemption of the same favourably in view of the order of confiscation of the trawlers.
There will be no order for costs.
S.L. Appeals dismissed.

summary:
% The facts and issues involved in all these appeals were similar.
Criminal Appeals Nos.
644 45.87 and Criminal Appeals Nos.
642 45 /87 were against the judgment and order of the High Court of Bombay, dismissing the Criminal Appeal filed by masters of two trawlers against their conviction and sentence and allowing the appeal filed by Commander S.D. Baijal against the acquittal of accused Nos. 3 and 4, i.e. the Charterer Company and its Managing Director and also releasing the trawlers.
The High Court convicted the accused Nos. 3 and 4 for contravention of sub section 6 of section 5 of the Maritime Zones of India Act, 1981 (M.Z.I. Act) read with section 7 thereof and rule 16 of the Maritime Zones of India Rules 1981, (M.Z.I. Rules).
The High Court also ordered confiscation of the two trawlers, vesting the same in favour of the Central Government under section 13 of the M.Z.I. Act.
The two trawlers involved foreign vessels were chartered by the respondents Nos. 4 & 5 herein for fishing in Maritime Zone of India after obtaining permit under section 5 of the M.Z.I. Act.
The trawlers along with three other pairs of trawlers were apprehended and seized by the Coast Guard ship commanded by Commander S.D. Baijal for fishing operations in the exclusive economic zone of India, in violation of the terms and conditions of the permit and the letter of intent granted to that company by the Government of India under section 5(4) of the M.Z.I. Act and in violation of the M.Z.I. Rules.
They were prosecuted by the Additional Chief Metropolitan Magistrate on the complaint filed by Commander S.D. Baijal as authorised officer under section 19 of the M.Z.I. Act.
The masters of the trawlers, respondents Nos. 2 and 3, were convicted and sentenced to pay fines and the other accused respondents Nos. 4 and 5 were acquitted and the trawlers and the fishes thereon were ordered to be released on payment of the detention 642 charges.
Of the other three pairs of foreign trawlers chartered by Indian Company for fishing in the Maritime Zone of India under the permit granted under the M.Z.I. Act, which were seized and prosecuted, two pairs of trawlers with fishes thereon were ordered to be confiscated while one pair of these trawlers were directed to be released.
The masters of each pair of trawlers were similarly convicted and sentenced to pay fine for violation of the provisions of the said Act and the Rules thereunder.
The Masters of the pair of trawlers filed a criminal appeal against their conviction and sentence while the complaining Commander S.D. Baijal filed a criminal appeal against the acquittal of respondent Nos. 4 and 5 i.e. the Managing Director of the company and the company and also against the release of the trawlers in spite of conviction of the masters under section 12(b) of the M.Z.I. Act.
The High Court disposed of these appeals by a common judgment, allowing the appeal of the masters in part and modifying their sentence and convicting.
in the appeal filed by S.D. Baijal, the Managing Director and the Company, accused respondents Nos. 3 and 4 and sentencing them to pay fines, and ordering the trawlers to be confiscated with fishes thereon or the proceeds thereof in case of sale of the same.
The High Court also held the masters of the trawlers guilty under Rule 8(1)(g) and convicted them under section 12(a) instead of section 12(b) of the M.Z.I. Act, but maintained the sentence of penalty.
Criminal Appeals Nos.
645 47;87 and Criminal Appeals Nos.
65051 of 1987 arose out of a common judgment of the High Court in two criminal appeals, modifying in part the judgment and order of the Additional Chief Metropolitan Magistrate, whereby the Magistrate had convicted the masters of the trawlers, i.e. accused Nos. 1 and 2 for contravening Rule 8(1)(g) read with Rule 16 and section 20(b) of the M.Z.I. Act and sentenced them to pay fines, in default of payment of fine, to suffer rigorous imprisonment.
The Magistrate also had made an order, confiscating the two trawlers alongwith the fishing gear, equipments, stores, cargo and fish and vesting the same together with the proceeds of the sale of the fish, if any, with the Central Government.
The Magistrate had acquitted the accused Nos. 3 and 4 i.e. the Charterer Company and its Managing Director.
The criminal appeal filed by Cdr.
S.D. Baijal against the order acquitting the accused Nos. 3 and 4 above said was allowed by the High Court and they were convicted and sentenced to pay fines etc.
The order of confiscation of the two trawlers was maintained.
The criminal appeal filed by the masters of the trawlers was dismissed with the modification that the conviction 643 made under section 12(b) was altered to one under section 12(a) of the M.Z.I. Act and the sentence of vigorous imprisonment was modified.
Criminal Appeals Nos.
648 49.87 and Criminal Appeals Nos.
65253187 arose out of a common judgment of the High Court, dismissing the appeals of the masters of the vessels and allowing the appeals filed on behalf of the prosecution.
All these appeals were filed against the judgment and order of the Additional Chief Metropolitan Magistrate in the Criminal case wherein the Magistrate had convicted and sentenced the masters of the trawlers with the imposition of fines on accused Nos. 1 and 2 for contravening Rules 8(1)(g) and 16 of the M.Z.I. Rules and also of the offence under section 5 of the Act and imposing penalty section 12(b) of the M.Z.I. Act.
The Magistrate had acquitted the accused Nos. 3 and 4 i.e. the Charterer Company and its Managing Director and directed the release of the trawlers in favour of the masters of the trawlers.
The criminal appeal filed by the masters of the vessels was dismissed by the High Court and the conviction and sentence u/s 12(b) of the M.Z.I. Act was altered to one under section 12(a) of the Act.
The criminal appeal filed on behalf of the prosecution was allowed and the accused Nos. 3 and 4 i.e. the Charterer Company and its Managing Director, were convicted and sentenced to pay fine.
The vessel and the fishing equipment were confiscated and directed to vest in favour of the Central Government.
Criminal Appeal Nos. 654 55/87 and Criminal Appeal No. 656 of 1987 arose out of a common judgment and order of the High Court in the Criminal Appeals filed by the Charterers and the masters of the trawlers, respectively.
These appeals were filed against the judgment and order of the Additional Chief Metropolitan Magistrate in a criminal case against the masters of vessel.
The Magistrate had convicted and sentenced the accused Nos. 1 and 2, i.e. the masters of the vessel to pay fines; in default to undergo rigorous imprisonment, and had confiscated the trawlers together with fishing gear, equipment, stores, cargo and fish therein.
The criminal appeal of the masters of the trawlers had been dismissed with a modification of the conviction and sentence passed under section 12(c) of the M.Z.I. Act was altered to one u/s 12(a) of the Act and the criminal appeal of the Charterers was dismissed with a modification of the imprisonment awarded in default of payment of fine imposed on the appellant to simple imprisonment instead of rigorous imprisonment.
The order of confiscation of trawlers passed by the Magistrate was confirmed.
Dismissing all the appeals, the Court, 644 ^ HELD: The appellants contended that at the time of the apprehension of the trawlers no fish had been found on board and there was no evidence that fish on board was seized or that what had happened to fish or who had put the fish in the hold of the trawlers, and that, therefore, no presumption under section 22 of the Act could be drawn that the trawlers were engaged in fishing within the exclusive economic zone of India in contravention of the provision of the Act and the Rules framed thereunder.
This contention could not be considered in appeal by special leave as there had been concurrent findings by the Chief Metropolitan Magistrate and the High Court that there was fish on board.
[649F H; 650A] The main argument on behalf of the appellants was focussed on the vital question as to whether the words used in section 13 of the M.Z.I. Act "shall also be liable to confiscation" mandated that the foreign vessel used in the commission of the offence would be con fiscated as soon as the masters were convicted under section 10 or 11 or 12 of the Act, or it was the discretion of the Court to order either release of the vessel or confiscation of the vessel with the fish and the other equipment, cargo and fishing gear, considering the graveness of the offence.
On an examination of the objects and Reasons and the various provisions of the Maritime Zones of India (Regulation of Fishing by Foreign Vessels) Act, 1981, it was crystal clear that the M.Z.I. Act had been enacted with the object of preventing illegal poaching of fishes by foreign vessels, including foreign vessels chartered by Indian citizens in the exclusive economic zone of India at a depth less than 40 fathoms, by providing deterrent punishment for contravention of the provisions of the Act to protect Indian fishermen.
The objects and reasons were to be taken into consideration in interpreting the provisions of the statute.
In interpreting a statute, the Court has to ascertain the will and policy of F. the legislature as discernible from the object and scheme of the enactment and the language used therein.
Viewed in this context, it was apparent that the said Act had been made with the sole purpose of preventing poaching of fishes by foreign vessels chartered by Indian citizens within the exclusive economic zone of India as specified in Rule 8(1)(g) of Maritime Zone of India Rules as amended in 1982 as well as in breach of the provisions of the said Act and the terms and conditions of the permit issued under section 5 of the said Act.
[650E G; 651D; 654F] Section 13 of the Act expressly says that besides the conviction and sentence of the masters of the vessels, and charterers, the vessel is liable to be confiscated with fishes therein.
The appellants ' contention was that the words "shall also be liable to confiscation" used in section 13 of 645 the Act did not mean that it was mandatory to confiscate the vessel as the masters of the vessel had been convicted and sentenced to pay penalty under section 12 of the Act, and as various punishments had been provided for different types of offences, it was left to the discretion of the court to order confiscation of the vessel or to release the vessel.
[655A C] Section 13 in clear and unimbiguous terms says that on the conviction of the master and the charterer of an offence under section 10 or 11 or 12, the vessel used in connection with the offence together with the fish on board such ship or the sale proceeds of such fish, and stores, cargo shall also be liable to confiscation.
Viewed in the context, the words "shall also be liable to be confiscation" do not leave any discretion to the Magistrate or the court to make no order of confiscation of the vessel as soon as the masters of the vessel were convicted u/s 10 or 11 or 12 of the Act.
The Legislative intent in making this provision was to provide deterrent punishment to prohibit fishing in the exclusive economic zone of India by foreign vessels in infringement of the Act and the rules framed thereunder and the conditions of the permit or licence.
Viewed in this context, section 13 mandates that on conviction of the master and the charterer of an offence under section 12, not only penalty of fine would be imposed, the vessel used in or in connection with the commission of such offence has to be confiscated.
It is not open to the court to consider the graveness of the offence and other extenuating circumstances and to make no order for confiscation of the offending vessel concerned.
Confiscation of the vessel is the immediate statutory consequence of the finding that an offence either under section 10 or 11 or 12 has been proved and the master of the vessel has been convicted.
Section 13 is thus mandatory and it is not open to the court to refrain from making an order, confiscating the offending vessel as soon as the masters of the vessel are convicted of an offence under section 12 and awarded penalty.
[660BF] The judgments and orders of the High Court were affirmed.
The vessels had been detained in Bombay Port after apprehending them on July 26, 1984 and a huge amount had to be paid as port charges.
Considering the facts and circumstances of the case, the Port Authorities at Bombay might consider if an application was made by the parties for exemption or partial exemption of the same favourably in view of the order of confiscation of the trawlers.
[660G H] State of Madhya Pradesh vs Asad Bharat Finance Co. Anr., [1966] Supp.
SCR 473; Indo China Steam Navigation Co. Ltd. vs Jasjit Singh, Addl.
Collector of Customs & Ors., ; ; 646 Superintendent and Legal Remembrancer of Legal Affairs to the Govt.
Of West Bengal vs Abani Maity, ; ; K.P. Verghese vs The Income tax officer, Ernakulam and another, [19821 I SCR 629 and F.N. Roy vs Collector of Customs, Calcutta; , , referred to.


judgement:
ivil Appeal No. 2912 of 1986.
From the Judgment and Order dated 1.4.85 of the Bombay High Court in Appeal No. 262 of 1985.
J.P. Cama and Mukul Mudgal for the Appellant.
V.N. Ganpule for the Respondents; The Judgment of the Court was delivered by, VENKATARAMIAH, J.
The appellant is M/s. Isha Steel Treatment, Bombay A firm carrying on the business of metal processing, i.e., heat treatment of metals.
In the year 1963 it established a factory (hereinafter referred to as the 'I Unit ') for the purpose of carrying on the business of metal processing with about 32 workmen.
Nearly 12 years after the establishment of the I Unit it established a second factory (hereinafter referred to as the "II Unit ') for carrying on the same kind of business employing about 75 workmen about 200 yards 418 away from the I Unit.
Both the units had independent loca tion, separate factory licences and separate municipal licences.
The said two units also had separate stores and maintained separate accounts and balance sheets.
The workmen of both the units were also employed independently and there was a separate muster roll in respect of each of the two units.
There was no rule or condition regarding the inter transferability of the workmen.
On finding that the workmen of the I Unit were wilfully slacking their work and that there was growing indiscipline among them, the appellant decided in the year 1981 82 to reduce the three shifts working previously to two shifts.
The indiscipline and the lack of production continued and on it becoming impossible for the appellant to carry on with even the aforesaid two shifts as reduced, the appellant came to the unhappy conclu sion that it had no alternative but to close down the I Unit altogether.
The aforesaid closure of the I Unit (set up in 1963) took effect on 15.12.1982 and closure compensation was offered to the entire staff of the 32 workmen.
The workmen of the I Unit raised through their Union, namely, Associa tion of Engineering Workers, Bombay, an industrial dispute before the Deputy Commissioner of Labour (Conciliation), Bombay District Office, Bombay, who in exercise of the powers delegated to him, under clause (d) of sub section (1) of section 10 read with section 12(5) of the (hereinafter referred to as 'the Act ') referred to Shri B.L. Borude, Industrial Tribunal, Maharash tra, Bombay the dispute between the appellant and the work men employed in the I Unit over the demand for reinstatement with full back wages and continuity of service with effect from 15.2. 1982.
The said reference was registered as Refer ence (IT) No. 218 of 1982 before the Tribunal.
In the statement of claim filed by the workmen it was urged that the two units which were being run by the appel lant had functional integrality and were for all purposes parts of the establishment and that the workmen were mutual ly transferable from one unit to the other.
It was further stated that the workmen were originally members of Mazdoor Congress which, according to them, could not improve their service conditions.
Therefore, they decided to join another union, namely, the Association of Engineering Workers and were canvassing amongst themselves for organising under the banner of the Association of Engineering Workers.
They further pleaded that on the management coming to know about it, it tried to persuade the workers not to join the said Association.
On the workmen not agreeing to the suggestion made by the management, the management in an attempt to retaliate against the move of the workmen, removed 22 work men on 419 15.2.
1982 alleging that the I Unit was making a loss, that the workmen had resorted to giving less production, that there was indiscipline in the 1 Unit and, therefore, the management was closing down the said unit.
The workmen pleaded that the action of the management was arbitrary and was a colourable exercise of the management 's power of closure.
It was alleged that the impugned action was by way of victimisation for the trade union activities of the said workmen.
They claimed that the principle of 'last come, first go ' while terminating the services of the workmen having not been followed as required by section 25 G of the Act, the termination was illegal.
The appellant resisted the claim made by the workmen.
It pleaded inter alia that the closure of the I Unit was due to the non co operation and indiscipline on the part of the workmen, that the two units were independent of each other and there was no functional integrality between them.
The management denied that there was any rule or service condition permitting transfer of workmen from one factory to another.
The management stated that it was always willing to pay the compensation payable on closure to the workmen concerned and that section 25 G of the Act was inapplicable to the case.
After recording the evidence tendered by the parties and hearing the arguments urged on their behalf, the Tribunal held that the two units were independent of each other, there was no common seniori ty list of the workmen of the two units and there was no rule or practice of transferring workmen from one factory to the other.
The Tribunal rejected the case of the workmen that the closure was in retaliation to the trade union activities of workmen.
It also found that there was no victimisation of the workmen and the workmen concerned were not entitled to be reinstated as the closure of the I Unit had become legally effective from 15.2.
Accordingly, it rejected the demand made by the workmen by its Award dated September 6, 1983.
Aggrieved by the Award passed by the Tribunal, the workmen filed a petition under Article 226 of the Constitution of India before the High Court of Bombay challenging the legality of the Award.
The learned Single Judge, before whom the writ petition came up for considera tion, reversed the Award of the Tribunal and remanded the proceedings back to the Tribunal for afresh disposal.
By the time the decision was rendered, there were only 14 workmen, who were interested in the dispute.
The learned Single Judge, therefore, directed the Tribunal to consider whether the termination of services of any of the 14 workmen, whose claim for reinstatement still subsisted, was done in viola tion of the principles laid down under section 25 G of the Act.
The learned Single Judge also directed the Tribunal to determine whether the workmen were entitled to reinstatement and if the Tribunal found that they were entitled to such reinstatement the 420 question as to the grant of back wages should also be con sidered by it.
It should be stated here that the learned Single Judge made it clear that the finding of the Tribunal that the Association of workmen had 'failed to establish that the services of the workmen were terminated because of their joining the petitioner union ' was not disturbed.
The learned Single Judge, however, found that there was func tional integrality between the two units and in that connec tion observed thus: "In my judgment the fact that the two units are situate within a distance of 200 meters, the fact that both the units are controlled by the same employer and the fact that the busi ness of heat treatment process carried on in the two units was identical, it leaves no manner of doubt that the two units were really integral and were known separately only be cause the business in the two units commenced on different dates.
In my judgment, the find ing recorded by the Tribunal that the two units were separate and independent is clearly erroneous and cannot be sustained.
" With these observations, the learned Single Judge set aside the finding recorded by the Tribunal to the effect that the two units were independent and separate and held that they were one and the same.
In view of his finding the learned Single Judge held that section 25 G of the Act was applicable.
He accordingly set aside the Award and remanded the case to the Tribunal with the directions already set out above.
Aggrieved by the judgment of the learned Single Judge, the appellant preferred an appeal before the Division Bench of the High Court.
That appeal was dismissed with the obser vation that the finding of the learned Single Judge that the two units had functional integrality was correct and the remitting of the matter to the Tribunal was in order.
This appeal by special leave is filed against the decision of the Division Bench of the High Court.
It is not disputed before us that after 15.2.
1982 when the work in the I Unit was completely stopped no work is being carried on in the premises where the I Unit had been established.
It is also not disputed that the II Unit has been working as usual and the stoppage of the work in the I Unit had no effect on the work of the II Unit.
The finding recorded by the Tribunal that the management had not closed down the I Unit by way of retaliation to the alleged trade union activities of the workmen of the I Unit has not been shown to be untenable.
It is 421 also seen that the findings of the Tribunal that the two units had been established in two different places although at a distance of about 200 yards from each other; that the muster rolls of the two units were separate; that the two units had separate factory licences and municipal licences; that the balance sheets of the two units were separate; and that there was no rule or condition of service that the workmen were transferable from one unit to the other are not set aside by the learned Single Judge.
It is true that in the course of the evidence of one of the witnesses for the management it had been brought out, that the name of workman Kishore Ram of the 1 Unit had been by mistake entered in the Muster Roll of the II Unit in October, 1980 and it had been scored out.
This was a stray case.
There was no evidence in the case showing that Kishore Ram had actually worked in the II Unit.
Neither Kishore Ram nor anybody else had been examined to give evidence in support of the said fact.
On a consideration of the entire evidence including the fact that there was no common seniority list of workmen of the two units and the fact that the name of Kishore Ram had been entered in the Muster Roll of the II Unit in October, 1980 and that it had been scored out, the Tribunal came to the conclusion that the workmen of the two units were not trans ferable from one unit to the other.
The first question which arises for consideration in this case is whether the two units should be treated as having functional integrality.
In the Workmen of the Straw Board Manufacturing Company Limited vs M/s. Straw Board Manufacturing Company Limited, this Court had occasion to consider a similar question.
At page 507 this Court considered the above question as follows: "20.
After giving due consideration to all the aspects pointed out by the learned counsel for the appellants, we are unable to hold that the R. Mill is not an independently functioning unit and that there is any func tional integrality as such between the R. Mill and the section Mill.
The fact of the unity of ownership, supervision and control and some other common features, which we have noticed above, do not justify a contrary conclusion on this aspect in the present case.
There is considerable force in the submission of Mr. Chitaley that the R. Mill is a different line of business and the closure of the section Mill has nothing to do with the functioning of the R. Mill.
The matter may be absolutely different when in an otherwise going concern or a func tioning unit some workmen 's services are 422 terminated as being redundant or surplus to requirements.
That most of the conditions of service of the two mills were substantially identical can be easily explained by the fact that, being owned by the same employer and the two units being situated in close proximity, it will not be in the interest of the manage ment and peace and wellbeing of the company to treat the employees different creating heart burning and discrimination.
For the same reason, there is no particular significance in this case even in the application of the standing orders of the company to the employ ees of the R. Mill which, because of the non requisite number of employees employed in the latter, is not even required under the law to have separate standing orders.
It is, in our opinion, a clear case of closure of an inde pendent unit of a company and not a closure of a part of an establishment.
" In the above decision this Court has held that the unity of ownership, supervision and control that existed in re spect of the two mills involved in that case and the fact that the conditions of the service of the workmen of the two mills were substantially indentical were not by themselves sufficient in the eye of law to hold that there was func tional integrality between the two mills.
It held that it was a clear case of closure of an independent unit and not of a part of an establishment.
The decision of the learned Single Judge of the High Court that the fact that the two units were situate in a distance of 200 meters, the fact that both the units were controlled by the same employer and that the business of heat treatment processing carried on in the two units was identical had left no room for doubt that the two units were really integral cannot be sustained.
The decision in S.G. Chemicals and Dyes Trading Employees ' Union vs S.G. Chemicals and Dyes Trading Limited and Another, ; is not of much assistance to the work men.
The management in that case was running its business in pharmaceuticals at three places.
The Pharmaceutical Division was at Worli, the Laboratory and Dyes Division was at Trom bay and the Marketing and Sales Division was at Churchgate.
In 1984 the company which was managing the said three divi sions of business was sold out.
As the buyers proposed to handle the future sales of the Company through their own distribution channels, they found that the services of the staff working at the Churchgate office were no longer re quired.
Therefore, the management closed down the office at Churchgate.
The question was whether there was functional integrality between the office at the Churchgate and the factory at Trombay.
This Court on a 423 consideration of the material before it in that case, held that the functions of the Churchgate division and the Trom bay factory were neither separate nor independent but were so integrally connected as to constitute the Churchgate and the Trombay factory into one establishment, because the Churchgate division used to purchase the raw material re quired by the Trombay factory for producing or processing the goods.
it used to market and sell the goods so manufac tured or processed by that factory and it also used to disburse the salary and other employment benefits and main tain accounts etc.
of the workmen.
These were considered to be integral parts of the manufacturing activities of the factory at Trombay, because the factory could never have functioned independently without the Churchgate division being there.
It is not the case of the workmen in the present case that the II Unit could not continue to function after the closure of the I Unit.
As already mentioned, the II Unit is continuing to function as usual even now notwith standing the stoppage of the activities at the I Unit.
The question of application of section 25 G of the Act arises only when the services of the workmen are retrenched.
In Santosh Gupta vs State Bank of Patiala, ; it is laid down that if the termination of service of a workman in a given case falls either under section 25 FF or under section 25 FFF of the Act it would not be a termina tion falling under section 25 F of the Act.
This Court has observed in that case that after the enactment of section 25 FF and section 25 FFF retrenchment included every kind of termination of service except those not expressly included in section 25 F or not expressly provided for by other provisions of the Act such as sections 25 FF and 25 FFF.
Hence if the case is one of genuine closure then the ques tion of applying section 25 G of the Act which is applicable to a case of retrenchment would not arise.
It is not necessary that in order to effect closure of business the management should close down all the branches of its business.
In Management of Hindustan Steel Ltd. vs The Workmen & Others, ; this Court has held that the word 'undertaking ' used in section 25 FFF seems to have been used in its ordinary sense connoting thereby any work, enterprise, project or business undertak ing.
It is not intended to cover the entire industry or business of he employer.
Even the closure or stoppage of a part of the business or activities of the employer would seem in law to be covered by the said provision.
In deciding the above case this Court relied upon its earlier decision in Workmen of the Indian Leaf 'Tobacco Development Company Limited, Guntur vs Management of the Indian Leaf Tobacco Development Co. Ltd., Guntur, ; In that case the Court 424 observed that a genuine closure of depots or branches, even though it did not amount to closure of the business could not be interfered with by an Industrial Tribunal.
It further held that the closure was stoppage of part of the activity or business of the management and such stoppage is an act of management which is entirely in the discretion of the man agement.
The Court further observed that no Industrial Tribunal could interfere with the discretion exercised in such a matter.
It was, however, argued in this case on behalf of the workmen that since the Provident Fund accounts of the em ployees and the Employees ' State Insurance accounts of the two units had common numbers with the authorities concerned and settlements containing similar terms (copies which are not produced before us) had been entered into in 1974 be tween the management and the workmen of the two units, it should be held that the two units had functional integrality between them.
We are of the view that even these factors are not sufficient to hold that the two units were one and the same notwithstanding the fact that the nature of the busi ness carried on in them was the same.
In Indian Cable Co. Ltd. vs Its Workmen, this Court has held that the fact that the balance sheet was prepared incorpo rating the trading results of all the branches or that the employees of the various branches were treated alike for the purpose of provident fund, gratuity, bonus and for condi tions of service in general, could not lead to the conclu sion that all the branches should be treated as one unit for purposes of section 25 G of the Act.
On a consideration of the entire material before it, the Tribunal had reached the conclusion that the closure of the I Unit was bona fide, that it did not have any functional integrality with the II Unit and that there was no victimi sation of workmen for their trade union activities.
On going through the Award passed by the Tribunal we feel that it had not committed any error in recording the said findings which called for interference at the hands of the High Court under Article 226 of the Constitution of India.
We are satisfied that this case is one of bona fide closure of an independent unit of business.
The learned Single Judge and the Division Bench 'of the High Court were, therefore, in error in hold ing that the termination of service of the workmen in this case amounted to retrenchment and not closure and the case of the workmen had to be considered on remand by the Tribu nal in the light of section 25 G of the Act.
They overlooked that it would result in a wholly unjust situation in which a corresponding number of workmen in the II Unit would be prejudicially affected even though they had nothing to do with the I Unit.
425 We, therefore, set aside the judgments of the Division Bench and of the learned Single Judge and restore the Award passed by the Tribunal.
Before concluding we should record that the learned counsel for the management submitted that the management was willing to pay ex gratia a sum of Rs.10,000 to each of the workmen who had not received till now any compensation payable to them under section 25 FFF of the Act for closure of the I Unit.
He submitted that as on date 11 workmen had not received the compensation payable to them on closure and that each of them would be paid the compensation payable to them on closure and Rs. 10,000.
The names of those 11 work men are as under: S/Shri 1.
Madanlal Surajbali Jaiswal 2.
Sukhdev 3.
Dulsinger Rasharak Jaiswal 4.
Motilal Pawar Kurmi 5.
Mohanram Katwaro Jaiswal 6.
Udaychand Keshavasingh 7.
Zagaro Palveer Singh 8.
Murlidhar Govind Javane 9.
Wandev Prasad 10.
Radhashyam Rajpati Yadav 11.
Karmraj Lakshman Yadav We, therefore, direct the management to pay each of the above workmen compensation payable to them on closure and a sum of Rs. 10,000.
The management is given two months ' time to pay the amount due to each of the above eleven workmen.
The appeal is accordingly allowed.
There shall, however, be no order as to costs.
S.R. Appeal al lowed.

dataset_name: IN-Abs

summary:
The appellant carries on the business of metal process ing i.e. beat treatment of metals.
In 1963 it established a factory with about 32 workmen called "No. I Unit".
In the year 1975 another factory called "No. II unit" was estab lished for carrying on the same kind of business employing about 75 workmen about 200 yards away from the No. 1 Unit.
Both the Units had independent location, separate factory licences and separate municipal licences.
The two Units had separate stores and maintained separate accounts and balance sheets.
The workmen of both the units were also employed independently and there was a separate muster roll in re spect of each of the two units.
There was no rule or condi tion regarding the inter transferability of the workmen.
However, there was by mistake the name of one workman by name Kishore Ram of Unit 1 entered in the muster roll of the II Unit in October 1980 and it had been scored out later.
On finding that the workmen of No. 1 Unit were wilfully slacking their work and that there was growing indiscipline among them, the appellant decided in the year 1981 82 to reduce the three shifts working previously to two shifts.
The indiscipline and the lack of production continued and on it becoming impossible for the appellant to carry on 415 with even the two shifts as reduced, the appellant came to the unhappy conclusion that it had no alternative left but to close down the No. 1 Unit altogether with effect from 15.2.82 and closure compensation was offered to the entire staff of 32 workmen.
The workmen of the I Unit raised through their Union, namely, Association of Engineering Workers, Bombay an indus trial dispute reference (IT) No. 218 of 1982.
In the state ment of claim filed by the workmen it was urged; (i) that the two units which were being run by the appellant had functional integrality and were for all purposes parts of one establishment and that the workmen were mutually trans ferable from one unit to the other; (ii) that the reasons given by the management for closing down Unit No. 1 is false, the action of the management was arbitrary and was colourable exercise of the management 's power of closure; (iii) the impugned action was by way of victimisation for the trade union activities of the said workmen in Unit No 1 and the principle of "last come, first go" while terminating the services of the workmen having not been followed as required by section 25 G of the Act, the termination was illegal.
The Tribunal rejected the case of the workmen that the closure was in retaliation to the trade union activities of workmen and found that there was no victimisation of the workmen and the workmen concerned were not entitled to be reinstated as the closure of the 1 Unit had become legally effective from 15.12.1982 and passed its award to that effect on September 6, 1983.
Aggrieved by the Award passed by the Tribunal, the workmen filed a petition under Article 226 of the Constitution of India before the High Court of Bombay challenging the legality of the Award.
The learned Single Judge, before whom the writ petition came up for consideration, reversed the Award of the Tribunal and re manded the proceedings back to the Tribunal for afresh disposal.
By the time, the decision was rendered, there were only 14 workmen, who were interested in the dispute, and therefore, the learned Single Judge directed the Tribunal to consider whether the termination of services of any of the 14 workmen, whose claim for reinstatement still subsisted, was done in violation of the principles laid down under section 25 G of the Act.
Aggrieved by the judgment of the learned Single Judge, the appellant preferred an appeal before the Division Bench of the High Court.
That appeal having been dismissed the appellant has come by way of special leave to the Supreme Court.
Allowing the appeal, the Court, HELD: 1.
The existence of the unity of ownership, supervi sion 416 and control in respect of the two units, the fact that the conditions of the service of the workmen of the two Units were substantially indentical, the fact that both the units are situate at a distance of 200 meters and that the busi ness of heat treatment processing in the two Units are the same are not by themselves sufficient in the eye of law for holding that there was functional integrality between the two Units.
This is a clear case of closure of an independent unit and not of a part of an establishment.
[422D E] Workmen of the Straw Board Manufacturing Co. Ltd. vs M/s Straw Board Manufacturing Company Ltd., followed.
S.G. Chemicals and Dyes Trading Employees ' Union vs S.G. Chemicals and Dyes Trading Ltd. & Anr., ; distinguished.
The question of application of section 25 G of the Act arises only when the services of the workmen are re trenched within the meaning of section 25F and not when sections 25FF, and 25FFF are applicable.
If the case is one of genuine closure then the question of applying section 25 G of the Act which is applicable to a case of retrench ment would not arise.
It is not the case of the workmen in the present case that the II Unit could not continue to function after the closure of the I Unit.
In fact the II Unit is continuing to function as usual even now notwith standing the stoppage of the activities at the I Unit.
[423C E] Santosh Gupta vs State Bank of Patiala, ; , relied on.
It is not necessary that in the order to effect closure of business the management should close down all the branches of its business.
A genuine closure of a Unit even though it did not amount to closure of the business could not be interfered with by an industrial Tribunal.
The clo sure was stoppage of part of the activity or business of the management and such stoppage is an act of management which is entirely in the discretion of the management.
No Indus trial Tribunal could interfere with the discretion exercised in such a matter.
[423F H; 424A B] Management of Hindustan Steel Ltd. vs The Workmen & Ors., ; ; Workmen of the Indian Leaf Tobacco Development Co. Ltd. Guntur vs Management of the Indian Leaf Tobacco Development Co. Ltd., Guntur ; fol lowed.
417 4.
The two factors; namely: (i) the provident fund accounts of the employees and the Employees ' State Insurance accounts of the two units had common numbers with the au thorities concerned and (ii) settlements containing similar terms had been entered into in 1974 between the management and the workmen of the two units are not sufficient for holding that the two units were one and the same notwith standing the fact that the nature of the business carried on in them was the same.
[424B D] 5.
On a consideration of the entire material it is clear that (i) the Tribunal had not committed any error in record ing the findings which called for interference at the hands of the High Court under Article 226 of the Constitution; (ii) this case is one of bona fide closure of an independent unit of business and not a case of termination of services of workmen requiring consideration on remand, by the Tribu nal in the light of s.25 G of the Act; (iii) it was a case where the judgment of the High Court if maintained would result in a wholly unjust situation in which a corresponding number of workmen in the II Unit would be prejudicially affected even though they had nothing to do with the 1st Unit.
[424E H] Indian Cable Co. Ltd. vs Its Workmen, , followed.


judgement:
Civil Appeal No. 1074(N) of 1977.
From the Judgment and order dated 26.11.1976 of the High Court of Orissa in original Jurisdiction Case No. 811 of 1974.
Rajinder Sachher and Amrish Kumar for the Appellant.
Pankaj Kalra, Amicus Curiae and R.K. Mehta for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
The respondent Padmanabha Padhy was appointed as a Lecturer in the appellant College on the 26th July, 1971 and was placed under probation for one year.
He was informed by the letter dated the 28th March, 1972 that his services were no longer required and would stand terminated with effect from the afternoon of the 30th April, 1972.
He challenged the termination order by a writ application before the orissa High Court, which was allowed and the writ petitioner was declared to have continued in service.
The appellant has filed the present appeal against the High Court judgment after obtaining special leave.
The respondent, in the first instance had filed a writ application which was registered as O.J.C. No. 308 of 1972 but later withdrew it and approached the Director of Public Instruction (in short referred to as the DPI), present respondent No. 2, for the necessary relief.
Subsequently on 12.8.1974 he filed a second writ application being o.
J.C. No. 811 of 1974 which has been allowed by the judgment presently impugned.
It is stated before us on his behalf that the D.P.I. by his order dated 19.9.1973 declined to interfere which necessitated the filing of the second case.
It has been, inter alia, contended by Sri Padhy in his writ application that his appointing authority was "the Managing Committee or the Governing Body" and as such the impugned order of termination of his services by the Principal was without jurisdiction.
The stand of the College was that the Principal who was the Ex officio Secretary was the appointing authority and was vested with the power to terminate the appellant 's services.
The counter 710 affidavit of the D.P.I. stated that both the orders of appointment and termination had been passed by the Governing Body and the Principal was, in sending the orders to Sri Padhy, acting on behalf of the Governing Body.
It has further been said that he (D.P.I.) was not concerned with termination orders passed before the 3rd of May, 1972, the date from which the relevant 1974 Amendment of the Orissa Education Act, 1969 took effect and he had, therefore, no power to look into the matter.
The High Court held that, "undoubtedly, until confirmation petitioner had no right to the post and during the period of probation he could be turned out from service", but in view of the language of the appointment letter and the termination order it proceeded to point out that both the orders had been passed by some authority other than the Principal and the Principal was merely a communicating agent.
The High Court further opined that the Principal was acting on behalf of the Management of the Trust which had established the College, and the termination order did not emanate from the Governing Body.
Observing that it is only the Governing Body of a College which has power to terminate the services of a teacher, it was further held that the impugned order was without jurisdiction.
The objection to the maintainability of the writ application on the ground that the College was a private institution was rejected and it was held that in view of the provisions of the Orissa Education Act, 1969, Berhampur University Act, 1966 and the Berhampur University Statutes, 1966, the college must be considered to be a statutory body amenable to the writ jurisdiction.
Mr. Sachher, learned counsel appearing in support of the appeal, has contended that both the orders of appointment and termination of service were passed by one and the same body and the finding of the High Court to the contrary is not based on any material and, therefore, has to be set aside.
Referring to the statement of Sri Padhy in paragraph 7 of the writ petition that the Governing Body of the College and the Managing Committee are one and the same body, it was argued that the termination order was passed by the appointing authority of the writ petitioner and it could not be set aside on the ground of lack of jurisdiction.
The maintainability of the writ application in the High Court has also been seriously challenged and it has further been urged that in any view of the matter the High Court on the facts and in the circumstances of the case should have refused to allow any relief to the writ petitioner.
711 5.
Mr. Kalra, learned counsel representing Sri Padhy respondent No. 1, has submitted that the.
finding of the High Court as to the authorship of the appointment and termination orders should not be disturbed by this Court.
He also supported the view of the court below that the writ petition was maintainable and that it is a fit case in which the High Court was right in granting the relief as prayed for.
The learned counsel for both sides placed before us the appointment and termination orders more than once and there is no manner of doubt that none of the orders was passed by the Principal alone.
The termination order stated that the Principal had been directed to inform Sri Padhy that his services were being no longer required and stood terminated with effect from 30.4.1972.
It is true that none of the two letters expressly states about the authority passing the respective orders but this much is clear that the Principal was only conveying the decision of another authority and was thus acting in the same capacity on both occasions.
The writ petition was founded on the assumption that it was the Principal who had passed the termination order by himself and that he had no jurisdiction to do so.
Instead of merely pointing out that it was not so, the affidavit on behalf of the College made a confused statement forgetting that the Principal was only one of the members of the Governing Body.
Both sides, thus, misrepresented the situation before the Court and it was only the D.P.I. who correctly appreciated the position.
In this background the question arises as to whether the High Court was right in assuming that the termination order was passed by an authority other than the appointing authority.
No material or basis has been referred to in the Judgment of the High Court in support of its view and neither side has pointed out before us any evidence to that effect.
Mr. Kalra contended that in view of the statutory provisions it should be presumed that Sri Padhy had been appointed by the Governing Body as envisaged in law, and further in view of the stand of the College before the High Court that the Principal had issued the termination order, it should be held that the same was without jurisdiction.
The finding of the High Court in this regard is in his opinion thus supported by the supposed admission of the College in its pleading.
We are afraid, the argument cannot be accepted.
The case of the College has been that both the appointment and the termination orders were given by the Principal.
This plea is of course incorrect but for that reason the statement by the College cannot be truncated and part of it accepted while rejecting the other part.
712 As was observed by the Privy Council in M.M. Essabhoy vs M. Haridas, AIR 1915 PC 2, although it is permissible for a tribunal to accept part and reject the rest of any witness 's testimony, so far as admission in pleading is concerned, it cannot be so dissected.
It may be accepted as a whole or not at all.
We therefore, hold that the assumption made by the High Court in this connection being not supported by any material whatsoever on the records has to be set aside.
The burden of proving the necessary facts for grant of relief was on the writ petitioner which was not discharged.
The writ application was, therefore, bound to fail.
The appeal accordingly must succeed on this ground and it is, therefore, not necessary to consider the other questions raised on behalf of the appellant.
In the result, the appeal is allowed, the decision of the High Court is set aside and the writ petition is dismissed.
Parties shall bear their own costs throughout.
N. V. K. Appeal allowed.

summary:
% The 1st respondent was appointed as a Lecturer in the appellant College on 26th July, 1971 and was placed under probation for one year.
He was informed by a letter dated 28th March, 1972 that his services were no longer required and would stand terminated with effect from the afternoon of 30th April, 1972.
The 1st respondent challenged the aforesaid termination order by a writ application contending that his appointing authority was "The Managing Committee or the Governing Body" of the College, and as such the order of termination of his services by the Principal of the College was without jurisdiction.
The writ application was contested on behalf of the Appellant by contending that the Principal who was the Ex officio Secretary was the appointing authority and was vested with the power to terminate the appellant 's services.
On behalf of the director of Public Instruction, who was also a party to the writ application, it was stated that both the orders of appointment and termination h ad been passed by the Governing Body and the Principal who communicated the same to the 1st respondent was acting on behalf of the Governing Body, and that the DPI was not concerned with the termination orders passed before 3rd of May, 1972 the date from which 1974 Amendment of the Orissa Education Act, 1969 took effect, and that the DPI had no power to look into the matter.
The High Court rejected the objection to the maintainability of the writ application on the ground that the College was a private institution, and held that in view of the provisions of the orissa Education Berhampur University Act 1966 and the Berhampur university Statutes 1966, the college must be considered to be a statutory body amenable to the writ jurisdiction.
It held that, "undoubtedly until confirmation petitioner had no right to the post and during the period of probation he could be turned out from his service", but in view of the language of the appointment letter and the termination order both the orders have been passed by some authority other than the Principal and the Principal was merely a communicating agent.
It opined that the termination order did not emanate from the Governing Body of the College which alone had the power to terminate the services of a teacher, and as such held that the termination order was issued without jurisdiction.
The writ application was allowed, and the 1st respondent was declared to have continued in service.
Allowing the appeal by the College, this Court, ^ HELD: l.
The writ petition was founded on the assumption that it was the Principal who had passed the termination order by himself and that he had no jurisdiction to do so.
Instead of merely pointing out that it was not so, the affidavit on behalf of the College made a confused statement forgetting that the Principal was only one of the members of the Governing Body.
Both sides, thus, misrepresented the situation before the Court.[711D E] 2.
Although it is permissible for a tribunal to accept part and reject the rest of any witness 's testimony, so far as admission in pleading is concerned, it cannot be so dissected.
It may be accepted as a whole or not at all.
[7l2A B] M.M. Essabhoy vs M. Haridas, AIR 1915 PC 2 referred to.
The case of the College had been that both the appointment and the termination orders were given by the Principal.
This plea is of course incorrect but for that reason the statement by the College cannot be truncated and part of it accepted while rejecting the other part.
It had to be accepted as a whole or not at all.
[711H] 4.
The finding and the assumption made by the High Court that the termination order was passed by an authority other than the appointing authority being not supported by any material whatsoever on the record has to be set aside.
[712B] 5.
The burden of proving the necessary facts for grant of relief 709 was on the writ petitioner which was not discharged.
The writ application was, therefore, bound to fail.
The decision of High Court is set aside, and the writ petition dismissed.
[712B C]