judgement:
80, 80A. 81 and 116 to 213 of 1960.
Petitions under article 32 of the Constitution of India for enforcement of Fundamental Rights.
section V. Gupta, M. C. Bhandare, section N. Andley, Rameshwar Nath and P. L. Vohra, for the petitioners.
H. N. Sanyal, Additional Solicitor General of India, D. N. Mukherjee and P. D. Xenon, for the respondents.
Porus A. Mehta, J. R. Gagrat, and G. Gopalakrishnan, for the interveners.
August 11.
The judgment of Gajendragadkar, Hidayatullah, Shah and Raghubar Dayal, JJ., was delivered by Hidayatullah, J., Subba Rao,:J., delivered a separate judgment.
112 HIDAYATULLAH, J ' These writ petitions raise identical questions, and a common argument was addressed to the Court in all of them.
Petitions Nos. 80 and 80A of 1960 have been filed by two petitioners.
One petitioner holds a permanent ' licence and the other, a temporary licence renewable triennially, to work as Dalal 's at New.
Customs House, Bombay.
In the other petitions also, petitioners Nos.
1 to 50 hold permanent licences, and petitioners Nos.
51 to 99 hold temporary but renewable licences.
Some of the permanent licences were issued in 1936, and some of the temporary licences were issued as far back as 1944.
These licences, whether permanent or temporary, were issued under s.202 of the , prior to its amendment by the Sea Customs 'Amendment) Act, 1955 (Act 21 of 1955).
They were issued after a brief enquiry and subject to the fulfilment by the applicant of the following conditions : "(1) He must produce at least 2 certificates of character each from a Justice of Peace or other persons of known respectability.
(2) He must certify that he has not been convicted of any criminal offence.
(3) He must declare that he will have no claim to any accommodation in the Custom House.
(4) He must also give a security of Rs. 2000 in cash or Government paper having an equivalent market value and execute a Bond for Rs. 2000 on It fifteen rupees Stamp Paper in the attached form.
" In 1955, by the amending Act, s.202 was substituted by another section.
The section now reads : "202.
(1) With effect from such date as the Central Government may, by notification in the Official Gazette specify, no person shall act as an agent for the transaction of any business relating to the entrance or 113 clearance of any vessel or the import or export of goods or baggage in any Custom house unless such person holds a licence granted in this behalf in accordance with the rules made under sub section: (2).
(2) The Chief Customs authority may make rules for the purpose of carrying out the provisions of this section and in particular such rules may provide for (a) the authority by which a licence may be granted under this section and the period of validity of any such licence; (b) the form of the licence and the fees payable therefor; (c) the qualifications of persons who may apply for a licence (d) the :restrictions and conditions (including the furnishing of a security by the licensee) for his faithful behaviour as regards the custom house regulations and officers) subject to which a licence may be granted ; (e) the circumstances in which a licence may be suspended or revoked; and (f) the appeals, if any, against an order of suspension or revocation of a licence, and the period within which such appeals shall be filed.
" As A result of the enactment of this section, the original licence, whether permanent or temporary. would have become ineffective after.
the date to be specified by the Central Government.
It became necessary for the petitioners and others to apply for licences granted in accordance with the rules framed under sub section
These rules were framed, and public notices were issued.
inviting applications ; but the dates were postponed 114 till the rules were published in the Gazette on May 14, 1960.
It is not necessary to refer to the prior history of these rules and to the many representations that were made, as they are not relevant.
On June 18 1960, a public, notice (No. 87) was issued fixing June 25, 1960 as the last date for making applications for the new licences, and the persons affected were informed that the.
operation of the new licences under the rules would commence on July 14, 1960.
On June 27, 1960, Writ Petitions Nos. 80 and 80A of 1960 were filed, followed by Writ Petitions Nos. 81 and 116 to 213 of 1960 filed on July 12 1960.
An ex parte ad interim stay of the revocation of the existing licences was obtained from this Court, and subsequently, the respondents undertook to issue to the petitioners special temporary licences renewable yearly till the disposal of these petitions.
Prior to the.
Custom House Agents Licensing Rules, 1960, there were four classes of Agents.
They were (1) Clearing Agents, (2) Dalals., (3) Muccadams and (4) Baggage Clearing Agents.
According to the petitioners, there were, 100 licensed Clearing Agents, 200 licensed Dalals, 270 Muccadams and about 15 Baggage Clearing Agents.
The duties and functions of these four classes of agents were different.
Whether these distinctions were always maintained and whether they grew out of regulations or usage is hardly necessary to enquire.
By the Rules of 1960, these classes were merged into one, and all licensed agents were placed on an equal footing.
In other words, there is to be hereafter one class of agents ' Though the petitioners holding "permanent ' licences and the petitioners holding 'temporary" licences with a term to run out have relied upon the fact that their licences are still valid, there was no serious attempt to deny that under section 202(1) they would be rendered ineffective after the date to be fixed by Government.
The "permanent ' licences 115 also are not in a favourable position in this regard.
If the first sub section requires that fresh licences to work as Custom House Agents be obtained, the distinction between permanent and temporary licences ceases to be material.
No part of s.202 was challenged as being void or ultra vires.
In these petitions, only the Rules &ire challenged as in breach of the fundamental rights under articles 14 and 19 of the Constitution and Also as being in excess of the rule making power conferred by sub section (2) of section 202.
Form prescribed under the Rules for taking security from the approved agents is also questioned as being in excess of the power to make rules and contrary, in certain respects, to the itself.
It may be mentioned that the petitioners in all the Writ Petitions are Dalals; but at the hearing, certain Clearing Agents obtained permission to intervene, and were also heard.
Since the , ' in general and section 202, in particular were.
not challenged in the petitions, we must start with the premise that the authority to insist , on fresh licences under the Rules in the case of all the operators was properly exercised.
The first question to consider is whether the Rules, speaking generally, were validly framed and the next question to consider is whether any of the.
Rules individually challenged goes beyond the , or offends against the Constitution.
In questioning the Rules generally, the petitioners submit that these Rules could only be framed for the purpose of carrying out the purposes of s.202 [ provide sub section
(1) ], or, to provide for the, matters 'mentioned in cls.
(a) to (f) of section 202(2).
Some of the Rules.
it is submitted, go beyond the general purpose of the section, which is to license agents and the special 'topics mentioned there, and seek to further some of the purposes of other parts of the Act.
Mention in this connection 116 is made specially of Form 'O ' prescribed by the Rules, under which the agents personally and the security furnished by them have been made liable for short collection of Customs duty, etc.
The question whether the agents are liable, in any event,.
for such short collection under section 39 is a question, which will have to be examined on merits separately, but for repelling the argument in its present from, it is sufficient to say that it is robbed of all its force by a. 9 of the .
under section 202(2), the Chief Customs authority is empowered to make rules for the purposes of t hat section.
That purpose is the licensing of agents and the regulation of their conduct and functions.
But the Chief Customs authority is also empowered by section 9 to make rules consistent with the " 'generally to carry out the provisions of this Act".
The power to make rules under section 202 is not the only power which the Chief Customs authority can exercise, and it is only too clear that power can also be derived from section 9, if there be need.
Thus, if it is necessary that the agents must carry out certain provisions of the Act, a rule can be made in the exercise of the two powers together.
Though the impugned Rules are headed as framed under s.202 of the ., they cannot be questioned, if they carry out not only the special purposes of s.202 but also certain other purposes of the Act, because the two powers will concur to sustain them.
It is only when a rule or rules are pointed out, which subserve neither the special purpose of the section nor the general purposes of the Act that they can be successfully questioned.
In short, therefore, the petitioners ' case on the individual Rules alone remains to consider.
The first contention is that under the impugned Rules, the number of licences to be granted at the Customs House can be limited by the Customs.
collector, and that applications can only be made, if the Customs collector publishes a notice inviting 117 applications.
This restriction, it is contended, is unconstitutional, as it interferes with the right of all the petitioners to carry on their profession or a vocation freely as contemplated, by Art, 19.
The Rules bearing upon these matters are rr.4 and 8.
The latter Rule says that the number of licences to be granted would be fixed by the Customs collector, having regard to the volume of import and export business transacted through the Customs House, and the number is capable of being revised from time to time.
The former empowers the Customs collector to invite applications, as and when he considers it necessary.
It cannot be said that the Rules are not designed to advance public interest, because even a processions or trade has sometimes to be limited in the public interest, When we pointed out to Mr. Gupta that this kind of limitation on the number of persons allowed to hold licences is common, as, for example, porters in a railway station, taxicab drivers and so on, he stated that at least during the transitional period, the old operators might have been given licences on production of proof that they held licences previously.
The argument is really not one based upon the interests of the public but upon the interests of the present holders of the licences.
Public interests in the context must override private interests.
It cannot be said that all the present operators are equally desirable, and if their number exceeds the requirement of the Customs House, it is obvious that some retrenchment in their numbers may legitimately be made, Every one has an equal chance of applying for the.
existing vacancies, but he must stand in.
competition with the others.
There is no limitation on the number of applications that can be made, and thus, every operator will get ' a chance to have his case examined.
It is to be expected that the most exprienced and the most efficient will get preference, and.
no claim can be made on behalf of the incompetant and the inefficient that they should 118 receive equal treatment.
Once the number is limited to the requirements of the business, it is manifest that the Customs collector will invite applications only, as and when occasion demands.
These Rules, in our opinion, cannot be said to ' offend against the Constitution.
The next contention is about rr.6(a), (b) and (c), which require the applicant to furnish to the Customs collector satisfactory evidence as to his respectability, reliability and financial status, and that he would be in a position to muster sufficient clientele and business in the event of his being granted the licence.
The applicant has also to furnish an income tax clearance certificate.
These conditions are challenged as being unreasonable restrictions upon the right to carry on a profession or avocation.
Serious attempt was not made to establish that the condition about respectability and reliability was unconstitutional.
It was, however, pointed out that evidence about financial status created a class barrier between the rich and the poor and only the rich were to be preferred.
By the words financial status" is not meant that the applicant must be a wealthy person; what is required is that he should not be financially embarrassed, and proof that he is in easy circumstances.
It is obvious that the agents under the Act deal with vast sums of money and valuable articles, and it may be necessary to scrutinise the financial position the applicant to find out whether or not he would be exposed to temptations.
A person heavily indebted or insolvent cannot be trusted in the same way as a person who is not so embarrassed, and an enquiry into financial status is so much in the public interest, that we cannot say that the condition must necessarily be unreasonable.
Similarly, the argument.
that new entrants would find it difficult to assure that they would have sufficient clientele and business and would thus be discriminated against, is not correct.
The Customs House is not a place where persons can allowed to learn a 119 profession or to take a chance.
The movement of goods, the due performance, of the duties and functions under the and observance of the regulations are not easy matters for a person, who is not sufficiently experienced and who has not got the backing of a certain amount of business and the experience which such business affords.
It may be necessary for a person to apprentice himself for some time to get to know the importers and exporters, and to prove to the Customsauthority that by reason of his apprenticeship and his business connections lie would be in a position to handle the work in the Customs House from the moment he is licensed.
The Rule is designed to avoid entry into the Customs House premises of persons who, being there, are unable to do business, and merely add to the number of persons present.
The last condition is the production of an income tax clearance certificate.
The petitioners rely upon a decision of the Madras High Court reported in K. Raman and Co. vs State of Madras (1).
In that case, it was hold that the fact that a person was in arrears of income tax was not germane to the issue of a licence under the Yarn Dealers Control Order, and that the insistence on the production of an income tax clearance certificate was extraneous to the carrying on of the business.
The position of an agent who handles other persons ' moneys and goods is different from that of a dealer who deals with goods on his own behalf.
As part of an enquiry into an applicant 's respectability, reliability and financial status, an enquiry can also be made to see whether he has discharged his debts to the State.
If a person is liable to income tax and pays it punctually, he would have no difficulty in proving it.
If, however, for some good reason the payment has been delayed, there would be nothing to prevent.
him from proving it.
(1) A.I.R. 1953 Mad '.
8A. 120 insistence upon the production of the certificate is, in our opinion, connected with the enquiry into his respectability and financial status.
to find out if he can be trusted with other persons ' money and goods.
The next Rule which is questioned is r. 9, which provides for an examination of the applicant.
This examination follows a scrutiny of the application under the other Rules, and embraces questions on various subjects.
The duties of the agents require them to handle goods, and the examination is designed to find out whether a candidate knows the elements of the law relating to the arrival, entry and clearance of vessels and goods.
Objection is not raised to the examination as a whole but only to cl.
(p) of r. 9 (2) under which a candidate is supposed to know the procedure in the matter of refund of claims, appeals and revision petitions under the .
It is contended that these are matters in which an agent is not interested as an agent, but are matters for the owner and the Castoms authorities to know.
It is true that the curriculum for the examination is somewhat extensive ; but it is also, clear that what is expected of the candidate is knowledge, not necessarily exhaustive but sufficient, of the laws relating to the arrival, entry and clearance of vessels and goods.
We do not think that it is wrong for the.
authorities to insist upon at least a working knowledge of the laws applicable to the kind of work the agents are required to do.
When licences are issued under other laws, a candidate is sometimes required to answer questions relating to the law under which the licence is issued.
One well known example is the questioning of a candidate about the rules of the road when he is issued a licence to drive a mechanically propelled vehicle.
These Rules advance efficiency, and the additional know, ledge about refunds, appeals and revisions under the Act may be necessary where an agent handles 121 goods of a principal, who is himself not present to file appeals or revisions or to claim refunds.
The Rule, in our opinion, is perfectly valid.
Rule 10 is the next subject of attack.
It provides that the Customs collector shall reject an application, for the grant of a licence (a) if the candidate fails to pass the examination, or (b) the number of vacancies do not justify the grant of such licence, or (c) the applicant is not otherwise considered suitable.
Objection is taken to cl.
It is said to confer a very wide discretion on the Customs collector, and reference is made to sub r.(2), in which it is provided that no appeal shall lie from the order.
of the Customs collector rejecting an application.
It is further pointed out that in July, 1960, the Rules were amended by the addition of r. 25, under which an appeal is to lie to the Chief Customs authority against every order of the Customs collector (i) rejecting an application for the renewal of a licence granted under these Rules; (ii) rejecting a fresh application made in accordance with r. 17 ; and (iii) refusing the grant or renewal of a special temporary licence under r. 24.
It is argued that even though an appeal has been provided for these matters.
, no appeal has been provided for the rejection under r. 10(1)(c).
No doubt, other reasons may exist for rejecting the application of a candidate, as for example, when he is found to be a leper or an epileptic ; but one would expect that an order of this kind would ' be backed by reasons to be recorded in writing.
It must be remembered that there is first a scrutiny of the application and an enquiry into the respectability, reliability and financial status of the candidate.
follows an examination, If a ' candidate satisfies 'all the above condition 's, there would hardly be any ground left.
for rejecting his application, except probably his physical unfitness to.
the work, The Rule which: is framed is so gel general that it leaves to discretion of the 122 Customs collector to reject a. candidate for a trumpery reason (which he need not state), even though the candidate may be otherwise suitable.
In out opinion, if a candidate is found fit under the other Rules and has successfully passed the examination, he should only be rejected under a rule which requires the Customs collector to state his.
reasons for the rejection, and the rules must provide for an appeal against that order, as they do in the other cases.
As the Rule stands, it cannot be considered to be a reasonable restriction upon the right of the successful candidate to carry on his avocation.
The next Rule which is questioned is r. 11, which enjoins the payment of a fee of Rs. 50 both for a fresh application as well as renewal of the licence.
In so far as the fee for the grant of a licence in the first instance is concerned, it cannot be said that the charge is exorbitant.
It is not disputed that a fee is an amount collected to reimburse the Government for the expenses of licensing.
It must reasonably be measured against the cost which may be entailed in the process of granting licences.
In the initial stage, the Customs authorities have to scrutinise applications, subject the candidates to an examination, and provide them with licences to carry on their work.
A fee of Rs. 50 initially may not be considered unreasonable, regard being had to the services involved.
The same, however, cannot be said in the case of renewals.
It is pointed out in the petition that formerly the charge was only 50 nP. It is averred in the petition that all that the licensing authority does, is to make an endorsement on the licence that it is renewed for a further period.
It has been ruled in this Court that under the guise of a fee there must not be an attempt to raise revenue for the general funds of the State.
In our opinion, a renewal fee of Rs. 50 does not entail services which can be reasonably said to measure against the charge.
It may be pointed out that, though this averment was made in the petition, 123 No. attempt was made by the answering respondents to traverse it.
In our judgment the renewal fee of Rs. 50 ceases to be a fee, and is, in its nature, a tax to raise revenue.
Such an impost cannot be justified ' as a fee, and we accordingly, hold that this charge is improper.
It would, however, be open to the Government to frame a rule in which the renewal fee to be charged is reasonable in the circumstances.
The next objection is to sub r.(g) and sub r.(k) of Rs. 15.
Sub rule (g) requires a Custom House Agent to pay over to Government all sums received for payment and to account to his client for monies in his hands.
Sub rule (k) requires him to maintain accounts in such form and manner as may be directed from time to time by the Castoms collector, and submit them for inspection to the Customs collector or an officer authorised by him.
No exception can be taken to sub r.(g) which only states what must be regarded as an inevitable obligation on the part of the Agent.
Sub rule (k) is said to be excessive control on the part of the Customs authorities of the way in which the agent may keep his own account.
:The licensing of an agent creates an assurance,, in the minds of the prospective clients, and the Rule is designed to ensure that the monies which the agents handle are properly accounted for.
In our opinion, these Rules are salutary, and further the control over the agents, who stand in a fiduciary capacity both in regard to their own clients and the Government.
Rule, 17, which enjoins upon a firm which acts as a licensee to report to the Customs collector as early as possible and, in any event, within a period of three days of a change in the constitution of the firm, is next challenged.
It is said that the period of three days is too short ; but it" must be remembered that 'a large number of transactions may go through without the licensing authority being aware that the constitution of a firm has changed.
The Rule is designed to bring promptly to the notice 124 of the Customs collector the change in the constitution of the firm, so that he may be in a position to decide for himself whether the licence in the changed circumstances should be allowed to operate or be suspended or revoked.
In our judgment, this Rule, cannot be questioned.
Mr. Porus Mehta who argued the case on behalf of the Clearing Agents, stated that the newly constituted firm is required to make a fresh application which is to be dealt with in accordance with the provisions of rr. 6 to 13.
According to him, every change in the, constitution of the firm requires the firm to go through the entire process of scrutiny and examination, which he ' terms unnecessary.
The rule is designed to ensure that the new members of firm answer the requirements which have been laid down is Rules 6 to 13, and these requirements may be necessary, if new,entrants come in.
It is to be noticed that pending the disposal of the application, the Customs collector is authorised by the rule in his discretion to allow the existing firm to carry on the business of Custom ' House Agents.
This softens the rigorous of the rule, because the work of the agents in proper cases would not be hampered, and the application would stand over for disposal to a later date.
Rule 19 which also enjoins the maintenance and inspection of accounts by a firm was criticised in the same manner as was r. 15, and for the reasons which we have given, we hold it to be conducive to the proper control of the financial activities of a firm as licensee.
Rule 22 deals with the cancellation of the licence for failure of the agent to comply with Any conditions of the bond executed by him, under "the Rules, for failure to comply with any of the, provisions of the Rules and for misconduct on. his part which, in the opinion of the Customs colloctor renders him unfit, to transact business in the 125 Customs House.
It is contended that,the rules are so exhaustive and numerous thatno agent would ever be able to keep out of theoperation of that Rule, and that he would be ' perpetually exposed to the penalty of suspension or revocation of his licence.
Rules are made for compliance and not for breach, and even though strict, they are all designed to ensure efficient and proper working on the part of the agents.
A rule insisting upon such compliance with the other rules on pain of penalty _cannot be said to be outside the rulemaking power of the Customs authorities.
Every order of suspension or revocation is subject to appeal, and there is thus room for interference if the Customs collector acts arbitrarily or perversely.
In our: opinion, with the existence of an appeal, the rigour of the rule, if any, is taken away except in those flagrant cases, where suspension or revocation of the licence would be merited.
Lastly, it is contended that the Rules control a licensed agent in a manner which makes him an unpaid servant ' of the Customs authorities.
This is one way of looking at the matter.
The right way to look at it is that a profession is being regulated, and the profession is one in which an agent deals with the property of another and by the law is deemed to be owner of the property.
A person in such a high fiduciary position must, of necessity, be subjected to strict control, and the licensing authority in holding him forth to the prospective principals as a reliable and trustworthy person must see that persons acting on the faith of the assurance of the licence are in no way damning.
The Rules, therefore, subserve a very salutary and necessary principle, and, in our judgment, are designed to advance public interest and cannot be questioned, unless a person wishes to act, dishonestly and wants to avoid control.
It is wellknown that many underhand practices are common at Customs Houses, and 'the Customs authorities 126 have to be vigilant in preventing them.
They must, therefore, see that they do not license the wrong type of person is and in the interests of the Revenue and more so, in the inte rests of persons who employ licensed agents, these Rules have, been framed.
Looking at the Rules generally, we are of opinion that though they, are strict, they axe Absolutely necessary, and their strictness would be felt only by persons, who, are not otherwise honest.
The main argument in the case is upon r.12 read with From It, which is the bond which every applicant has to executive in favour of the President of India, and its enforcement against the applicant under certain 'circumstances.
Under r. 12, it is provided that before a licence is granted under the Rules, the Customs collector shall require the applicant to enter into a bond in Form 'C ' for the 7 due observance of these Rules.
and the conditions of his licence and also to furnish a security of Rs. 3,000 in cash or securities and a solvent surety for a sum of Rs. 2,000.
The surety is required to execute ' a separate bond in, Form 'D '.
A proviso added to the 'Rule says that the security may be: increased or, decreased by the Customs collector at any time, should he, consider it necessary to do so, having regard to the volume and type of the business which the applicant will transact as Custom House Agent.
It may be mentioned here, that the four classes of agents which had grown in the past have now been fused into one, and an agent under the Rules may not confine his activities to those of any one or more of the four classes previously existing.
Objection, however, is taken to the basic figure of security and particularly, the cash security of Rs 3000, which are innovations under the present Rules.
Reference is made to the provisions of Form 'C ', in which it is provided as follows: 127 "It is also agreed and declared that the President of India may apply the above sum of Rs. . in making good wholly or in part, any short collection of duty or other charges in respect of any transactions made by the said. on behalf of importers in the event of such sums remaining unpaid,, even after issue of demands under section 39 of the .
" The petitioners contend.
that the increased security, particularly, in cash, puts an unreasonable restriction upon the right to carry on the profession or avocation.
They point to the fact that in the, past a security of Rs. 2,000 had been considered adequate, and from 1937 onwards, that security alone was demanded.
They also contend that as Dalals they are only required, to present the shipping bills and the assessment or appraisement of the customs duty is the function of the Customs Officer.
If any mistakes are made, due to an error on the part of the Customs authority, or even due to a wrong declaration of the real value of the goods by the importer, the collection of duty should be made from the owner of the goods and not from them.
They also contend that this is the meaning and intent of section 39, which, in terms, makes the owner of the goods liable to make up for the short collections and puts no responsibility on the agents.
They further.
contend that the last clause of the bond, quoted earlier, makes the agent liable for payment of the balance of the duty before any attempt is made to recover it from the owner or importer.
The last point need not detain us long, because it is raised on the existence of the ' word " 'even" in the clause "even after issue of demands under section 39 of the ".
The word "even" does not mean that the agent 's security can be touched before the notice is given.
It rather indicates that the security would be utilised to make up the deficit only when a notice 128 is given and if even after notice there is no compliance.
This would indicate that before the ,security is so utilised, a notice must go to the agent or his principal, and the bond makes the notice a sine qua non of an action to recoup the deficit duty from the security amount.
The larger question whether the agent can be made responsible for the short collection of duty under s.39 may be deferred for the moment.
Previous to the promulgation of the Rules, there were, as already stated, four classes of Agents, and their duties, by custom and usage, were also different.
It is now contemplated to make a single class of agents and also to restrict the number of such agents.
It is quite clear, therefore, that the amount of business which would be done by the agents who are licensed, would grow significantly.
Also, each agent would be entitled to do all kinds of businesses which were handled separately.
This justifies the demand for increased security, and it should be noticed that there is room for the reduction of the duty in individual cases, if the amount of business which the agent would carry on, would be small.
Similarly, there is provision for demanding increased security from a person who does or is expected to do a much larger amount of business as an agent.
There is thus no room for a proper adjustment of the amount of security to be obtained from each individual licensed agent, commensurate with the volume and type of business which he will transact.
We do not, therefore, consider that r. 12 is defective on this ground.
Before we deal with section 39, it is necessary to review certain other sections of the .
Under the , it is not obligatory upon a principal to appoint a licensed agent.
An importer or exporter, as the case may be, can also appoint any person with the approval of the Customs collector as 129 his agent, who need not be a licensed agent.
(R.3).
The Rules are me ant to control action of agents, particularly the licensed agents.
Under the Act, the position of an agent, whether licensed or not, is indicated in section 4, which reads "When any person is expressly or impliedly authorized by the owner of any goods to be his agent in respect of such goods for all or any of the purposes of this Act.
and such authorization is approved by the Customs collector, such person shall, for such purposes be deemed to be the owner of such goods." , One of the duties of the ' owner of the goods is to make a declaration of the real value of the goods in a bill of entry or shipping bill.
Under section 29, on the importation into, or exportation from, any customs port of any goods, whether liable to duty or not, the owner of such goods must, in his bill of entry or shipping bill as the case may be, state the real value, quantity and description of such goods to the best of his knowledge and belief, and must subscribe a declaration of the truth of such statement at the foot of such bill.
Under the same section, the Customs collector may require the production of invoices, broker 's note, policy of insurance or other document to satisfy himself about the real value, quantity or description of such goods.
The Customs Collector is also authorized to inspect the goods for the same purpose.
Under sections 29A and 29B, there may be an assessment of duty prior to the examination of the goods and a provisional assessment of duty and its payment even prior to, the production of the documents above mentioned or the inspection of the goods.
Section 30 of the Act defines "real value" and that is the value on which the assessment of the goods takes place.
That section is not dependent upon the 'declaration of the owner, but defines "real value" in terms of a formula which, on its application determines of the real value, apart from any declaration.
130 Section 31 provides for the examination of ad valorem goods, and if the real value such goods is correctly stated in the bill of entry or shipping bill, the goods are assesssed in accordance therewith.
Section 32 provides for the procedure, if it appears that such goods are properly chargeable.
with a higher rate or amount of duty than that to which they were subject according to the value stated in the bill of entry or shipping bill.
The Officer may then detain the goods and collect the proper duty.
Sections 33, 34A and 35 deal with abatement allowed or disallowed under certain circumstances.
Sections 36, 37 and 38 deal with the alteration of import and export duties or tariff valuations.
When the proper duty has been paid according to the checks and inspections, if any, the goods are allowed to be cleared.
Section 39, as the marginal note, shows correctly, deals with payment of duties not levied, short levied or erroneously refunded.
, The first subsection, provides as follows : "(1) When customs duties or charges have, not been levied or have been short levied through inadvertence, error, or collusion or misconstruction on the part.of the Officers of Customs, or through misstatement as to real value, quantity.
or description on the part of the owner or when any such duty or charge, after having been levied, or has been, owing to any such cause, erroneously refunded, the person chargeable with the duty or charge which has not been levied or which has been so short levied or to whom such refund has erroneously been made, shall pay the duty or charge or the deficiency or repay the amount paid to him in excess., on a notice of demand being issued to him within three months from the relevant date as defined in sub section (2); 131 and the Customs collector may refuse to pass any goods belonging to such person until the said duties or charges or the said deficiency or excess be paid or repaid," ' The second sub section need not be quoted, because ,it does not bear upon the controversy.
The contention of the Petitioners is that although in the first paragraph of section 39(1) the word "owner" may comprehend an agent who is deemed to be an_owner, if authorised under the Act, the, section does not use the word "owner" in the latter part, and speaks of "the person chargeable with the duty", meaning thereby a change over to the real owner of the goods in contradistinction to the agent.
They urge that this is even more apparent from the words of the fourth paragraph of the first sub,section which authorises the Customs collector to refuse to pass any goods belonging to ",such person" which must mean the goods belonging to the real owner, who is properly chargeable with the duty.
It is contended, therefore, that as the agent is not within the reach of s.39, the demand of duty from him cannot be made, and that the provisions of the bond by which the agent and his security are made liable, are beyond the provisions of section 39 and thus invalid.
One, thing is clear that the Customs authorities may have no dealing with the real owner of the goods where the agent has been authorised to deal with them for the purposes of the or any of its provisions.
Section, 4 clearly lays down a fiction, that if the agent is authorised by the real owner in respect of any of the matters in the Act, the Customs authorities would deal ' with the agent as if he were the owner.
The effect of the fiction is, therefore, to make an agent answerable to the Customs authorities within the four corners of his authorisation.
The fiction operates only within those limits.
An agent may be authorised 132 to declare the real value and to pay the customs duty or other charges.
If an agent is authorised in this manner, under the fiction created by section 4 he would be regarded as the owner and would be dealt with as such, by the Customs authorities.
It bar, already been pointed out that the real value, quantity and description of the goods have to be declared in the bill of entry or the shipping bill.
A form was shown to us at the bearing in which the declaration has to be made either by the real owner or the agent.
The form emphasis also that all responsibility for the declaration and for the payment of the proper duty and charges may be taken by an agent.
Once an agent has made a declaration and has also been authorised to pay the duty etc.
, it is to him that the Customs authorities would look for payment or additional payment, and it is to him that refunds would be, made.
The Customs authorities would not deal with the real owner, and that is the scheme of the Act.
When section 39 says that where customs duties or charges have not been levied or have been short levied through inadvertence, error collusion or misconstruction on the part of the officers of Customs, or through misstatement as to real value, quantity or description on the part of the owner, it refers not only to the real owner,, but also to an agent, if the latter can be deemed to be the owner.
, This is indeed, conceded by the petitioners.
The question then arises, what does the section mean when it speaks of " 'the person chargeable with the duty or charge which has not been levied or Which has been so short levied, or to whom such refund has erroneously been made"? Obviously enough, the person to be charged, in so far as the Customs authorities are concerned, is not the, real owner but the agent, a fictional owner of the goods.
If a 'fictional owner, can be read into the first part 133 of the section there is no reason why the words "the person chargeable with duty" cannot also be applied to him.
In the circumstances in which the agent makes a declaration with authorisation from the real owner, the agent is the person chargeable with the duty.
Otherwise, for the duty chargeable in the first instance the agent would be the person charge able with the duty and 'for any short payment he would cease to be such a person and the Customs authorities would have to deal with the real owner, who made no declaration or payment.
The words "the person chargeable with the duty. ", therefore, have advisedly been used not to exclude the agent but to describe in a neutral way the person from whom such a demand can be made.
They are wide enough in their ambit to take in, not only the real owner but also a "deemed owner" under the Act.
So far, there is no difficulty, and the objection of the learned counsel for the petitioners that a simpler method would have been to use the word " 'owner" in this part of the section ,is without substance, because the legislature may express its meaning and intention in different ways.
The critical argument, however, is, on the.
fourth paragraph of section 39(1).
There, it is provided that if the excess charge is not paid, "the Customs collector may refuse to Pass any goods belonging to 'such person ' until the said duties or charges or the said deficiency or excess be paid or repaid".
It is contended that an agent deals with numerous owners at the same time, and if this paragraph is applied literally, then the Customs collector would be entitled to refuse to pass the goods belonging to other Owners, handled by the same agent.
This argument, in our opinion, does not represent the true state of the law.
An agent, when he works for different owners with authorisation, undoubtedly becomes a fictional owner of the goods belonging to them; but he does not become.
a single, owner in respect of the good belonging to 134 different clients.
He becomes an owner quoad each client and his ownership of the goods is diversified and is not one.
The agent, therefore, stands in the shoes of several persons at the same time, and is himself a multitude of owners.
It is only when short payment has been made in his capacity as one fictional owner, that he can be asked to pay that which he ought to have paid in the first instance.
He is exposed to the penalty of having his goods detained in the, same capacity as owner quoad his defaulting client, and the goods within his control for the same client will be detained until the duty has been paid.
It is only the goods of the defaulting owner in respect of which he is also the deemed owner, that would suffer the penalty of detention but not the goods of a different owner, even though the agent may be authorised to deal on his behalf.
It is in this way that the section must be read ' without contradiction in its several parts, because to read it as suggested by the petitioners, creates a contradiction between the first paragraph and the other paragraphs that follow.
An authorised agent is an owner for all purposes of the Act (including payment of duty).
If one were to say that in the other paragraphs of section 39(1) he is not included, then the fiction which is created by section 4 would cease to be worked out to its logical limits.
Once it is held that the words ", 'the person chargeable with the duty. . . are apt to describe not only the real owner but also his authorised agent (and there is no reason why these words should be restricted), the fourth paragraph falls in line with the others, and the ownership of the agent is, therefore, limited to one client at a ' time, and the goods of that client of which the agent is also the deemed owner, are exposed to the. penalty of detention.
It must be remembered that the Act makes the 'goods ' liable to duty and the payment of duty by owners clears the goods.
The law goes further, and says that other goods of the owner are also liable for an deficit, if the 135 liable to duty are 'cleared. ' before the full duty has been paid.
The condition in the bond is limited by the operation of s.39 to the transactions of one constituent at a time, and the for feature of security is also limited to the constituent in default.
The bond prescribes for recouping of the deficiency in the customs duty or charges from the security, even after notice is given.
This notice must be given within three months from the relevant date as demand in the section.
The limit of three months also applies to the agent as the deemed owner in the same way as it does to the real owner.
If no notice.
is given, then the bond, on its own terms, cannot be enforced.
In our opinion, the contentions of the petitioners are not, sustainable.
In the result, the petitions must fail except to the extent that we declare r. 10(c) to be an unreasonable restraint upon the right of the petitioners to carry on their avocation and r.11 when it prescribes a renewal fee of Rs. 50, invalid inasmuch as it has provided not for a fee but for a tax.
Subject to this, the petitions are dismissed.
The petitioners will pay the costs of the other side (one set only), as they have lost substantially.
SUBBA RAO, J.
I have, had the advantage of ', perusing the judgment prepared by my learned brother, Hidayatullah, J.
I agree with him except in regard to r. 6(c) of ' the Custom House Agents Licensing Rules, 1960 (hereinafter called the Rules).
Rules 6(c) says : "An applicant for a licence shall furnish an income tax clearance certificate.
" The Rules were made to regulate the conduct of the clearing agents so that they may discharge their duties to the satisfaction of not only the Customs Authorities but also the public.
In my view, the production of income tax clearance certificate is extraneous to the issue, of a licence to a customs house agent.
How ' does the 'production of such a certificate improve the credentials of an applicant 136 for selection as a customs house agent, An applicant may be financially sound and also otherwise duly qualified; he may have discharged all his debts, and paid all his taxes except a small portion of his income tax: he may not have paid the income tax for good reasons.
Yet, if he goes.
not produce the income tax clearance certificate, he is disqualified.
What is.
the reasonable nexus between the production of such a certificate and a person 's right to do business as a clearing agent ? There is none, except a remote and fanciful presumption that a man who pays the income tax.
may also pay the dues payable to the Customs Authorities.
In K. Raman & Co., Tellicherry vs State of Madras (1), in the context of issue of a licence under the Yarn Dealers Control Order, as Judge of the Madras High Court,, I have held, "the fact that a person is in arrears of income tax is not germane to the issue of a licence under the Yarn Dealers Control Order.
It is a, circumstance extraneous to the petitioner 's right to carry on his business.
The Income tax Act provides an adequate machinery for realising the arrears due from an assessee.
I am of the view that the restriction imposed is unreasonable and is not in the interests of the general public.
" I still adhere to that view.
Every taxing Act has a machinery for collecting the tax imposed by it, but the said rule, in effect and substance, provides for an additional machinery for collection of income tax.
I would, therefore, hold that the nonproductive of an income tax clearance certificate is not germane to the issue of a licence under the said Rules.
I would therefore strike out r.6(c) of the Rules on the ground that it constitutes an unreasonable restriction on the right of an applicant to do business as customs, house agent, (1) A.I.R. 1953 mad.
137 BY COURT: In accordance 'with the opinion, of the majority, the petitions must fail except to the extent that we declare r.10 (c) to be: an unreasonable restraint upon the right of the, petitioners to carry on their avocation, and r.11, when it prescribes a renewal fee of Rs. 50, invalid inasmuch as it has provided not for a fee but for a tax.
Subject to this, the petitions are dismissed.
The petitioners will pay the costs of the other side (one set only), as they have lost substantially.

summary:
The petitioners were working as Dalals at New Customs 109 House, Bombay, under licences issued under section 202 of the Sea Customs Act, 1 878.
In 1955 by an amending Act, section 202 was substituted by another section and, by sub s.(1) of section 202 it was enacted : "no person shall act as an agent for the transaction of any business relating to the entrance or clearance of vessel or the import or export of goods or baggage in any custom house unless such person hold '$ a licence granted in this behalf in accordance with the rules made under sub section (2) ".
By sub section
(2) the Chief Customs authority was empowered to make rules for the purpose of carrying out the provisions of the section.
Section 4 provided that "when any person was . authorised by the owner of the goods to be his agent in respect of such goods for all or any of the purpose, of thisAct. such person shall for such purposes be deemed to be the owner of such goods".
The petitioners who, after the enactment of the news.202, had to apply for licences to be granted in accordance with 'the rules framed under sub s(2), challenged the validity of certain of the rules on the ground that they contravened articles 14 and 19 of the Constitution of India and also that they were in excess of the rule making power conferred by s.202 (2).
In particular, they questioned power validity or r. 12 under which inter alia the agent was required to enter into a bond in Form C by which he was made liable for short collection of customs duty under section 39 and also to furnish security which might be increased or decreased by the Customs collector.
Held : (1) that the rules in question though they were headed as framed under section 202 of the , cannot be impugned on the ground that some of them go beyond the special purposes of that section and seek to further some of the general purposes of other parts of the Act, since the Chief Customs authority is also empowered under section 9 of the Act to make.
rules consistent with the Act "generally to carry out the provisions of the Act." (2) that rr. 4 and 8 under which the Customs collector could limit the number of licences to be granted at the Customs House and applications could only be made if the Customscollector published a notice inviting applications, do not contravene article 19 of the Constitution, as they are only designed to advance public interest.
(3) that rr. 6(a) and 6(b) which require the applicant, to furnish to the Custom 's collector satisfactory evidence as to his respectability, reliability and financial status and that he would be in a position to muster sufficient clientel, 110 and business in the event of his being granted the licencee, are reasonable restrictions within the meaning of article 19(6) and are valid.
(4) that cl.
(p) of r. 9(2) whicn requires the licensee to have a working knowledge of the procedure in the matter of refund of claims, appeals and revision petitions under the , is valid, since it is necessary where an, agent handles goods of the principal.
(5) that r. 10 (1)(c) which gives the Customs collector a wide discretion to reject an application for the grant of a licence, if he considers the applicant to be not suitable, is an unreasonable restriction upon the right of the successful candidate to carry on his avocation, and is invalid.
If a candidate is found fit under the other rules and has successfully passed the examination, he should only be rejected under a rule which requires the Customs collector to state his reasons for the rejection, and the rules must provide for an appeal against the order.
(6) that r. 11, in so far as it prescribes a renewal fee of Rs. 50,is invalid inasmuch as it has thereby provided not for a fee but for a tax to raise revenue.
It would be open to the Government to frame a rule in which the renewal fee to be charged is reasonable in the circumstances.
(7) that rr.
15(g), 15(k), 17 and 19, are designed to have a control over agents, including firms which act as agents, who stand in a fiduciary capacity both in regard to their own clients and the Government, and are valid.
(8) that r, 22 which enables the Customs collector to cance a licence for non compliance by the agent with the other rules or for misconduct on the part of the agent, which in the opinion of the Customs collector, renders him unfit to transact business in the Custom House, is within the rule.
making power of the Customs authorities and is valid.
(9) that the words "the person chargeable with the duty or charge" in section 39(1) of the.
Act are wide enough.
in their ambit to take in, not only the, real owner but also a "deemed owner" within the meaning of s.4 of the Act.
(10) that on its true construction of s.39(1) it is only the goods of the defaulting owner in respect of Which, the agent is also the deemed owner that would suffer the penalty of detention, but not the goods of a different owner, 111 even though the agent may be authorised to deal on his behalf.
(11) that r. 12 read with Form C, which makes an agent liable for short collection of customs duties under section 39, is valid and the rule is not invalid on the ground that it enables the Customs authorities to make a proper adjustment of the security to be obtained from each individual agent commensurate with the volume and type of business which he might transact.
Held, further (Subba Rao, J. dissenting,) that r. 6(c), which requires the applicant to produce an income tax clearance certificate, is connected with the enquiry into his respectability and financial status to find out if fie can be trusted with other persons ' money and goods, and is valid.
K. Raman and Co. vs State of Madras, A. I. R. 1953 Mad.
84, distinguished.
Per Subba Rao, J. Non production of an income tax clearance certificate is not germane to the issue of a licence under the Custom House Agents Licensing Rules, 1960, and the principle in K. Raman and Co. vs State of Madras, A. I.R. , is applicable.
Accordingly, r. 6(c) constitutes an unreasonable restriction on the right of an applicant to do business as Custom house agent, and is invalid.


judgement:
Criminal Appeal No. 118 of 1961.
Appeal by special leave from the judgment and order dated May 10, 1961, of the Punjab High Court (Circuit Bench) at Delhi in Criminal Misc.
No. 256 D of 1961.
, C. K. Daphtary, Solicitor General of India, Bepin Behari Lal, T. M. Sen and R. H. Dhebar, for the appellant.
N. C. Chatterjee, Mehar Singh Chaddah A. K. Nag and I. section Sawhney, for the respondent.
623 1961.
September 14.
The Judgment of, the Court was delivered.
by WANCHOO, J. The respondent Jagjit Singh along with two other 's ' was prosecuted for conspiracy and also under sections 3 and 5 of the Indian Official Secrets Act, No. XIX of 1923, (hereinafter called the Act).
The respondent is, a former captain of the Indian Army and was at the time of.
his arrest in December, 1960, employed in the delegation in India of a French company.
The other two persons were employed in the Ministry of Defence and the Army Headquarters, New Delhi.
The case against the three persons was that they in conspiracy had passed on official secrets to a foreign agency.
The respondent applied for bail to the Sessions Judge; but his application was rejected by the Additional Sessions Judge, Delhi.
Thereupon the respondent applied under section 498 of the Code of Criminal Procedure to the High Court, and the main contention urged before the High Court was that on the facts disclosed the case against the respondent could only be under s 5 of the.
Act, which is bailable and Dot under section 3 which is not bailable.
The High Court was of the view that it was hardly possible at that stage to go into the question whether section 3 or section 5.
applied ; but that there was substance in the suggestion on behalf of the respondent that the matter was arguable.
Consequently the High Court took the view that as the other two persons prosecuted along with the respondent had been released on bail, the respondent should also be so released, particularly as it appeared that the trial was likely to take a considerable time and the respondent was not likely to abscond.
The High Court, therefore, allowed bail to the respondent.
Thereupon the State made an application for special leave which was granted.
The bail granted to the respondent was cancelled by an interim order by.
this Court, and the matter has now come up before us for final disposal.
There is in our opinion a basic error in the order of the High: Court.
Whenever.
an application for bail is made to a court, the first question that 624 it has to decide is whether the, offence, for which the accused is being prosecuted is bailable or otherwise.
If the offence, is bailable, hail will be granted, under section 496 of the Code of Criminal Procedure without more ado ; but if the offence is not bailable, further considerations will arise and the court will decide the question of grant of bail in the light of those further considerations.
The error in the order of the High Court is; that it did not consider whether the offence for which the respondent was being prosecuted was a bailable one or otherwise.
Even if the High Court thought that it would not be proper at,, that stage, where.
commitment proceedings were: to take place, to express an opinion on the question whether the offence in this case fell under section 5 which is bailable or under: section 3 which is not bailable, it should have proceeded to deal with the application on the assumption that the offence was under section 3 and therefore not bailable.
The High Court, however, did not deal with the application, for bail on this footing, for in the order it is said that the question whether the offence fell under section 3 or section 5 was arguable.
It follows from this observation that the High Court thought it possible that the offence might fall under section 5.
This, in our opinion, was the basic error into which the High Court fell in dealing with the application for bail before it, and it should have considered the matter even if it did not consider it proper at that stage to decide the question whether the offence was under s.3 or s.5, on the assumption that the case fell under section 3 of the Act.
It should then have taken into account the various considerations, such as, nature and seriousness, of the offence, the character of the evidence, circumstances which axe peculiar to the accused, a reasonable possibility of the, presence of the accused not being secured at the trial, reason , able apprehension of witnesses being tampered with, the larger interests of the public or, the State, similar other considerations, which arise when, court is asked for bail in a non bailable offence.
It is true that under section 498 of the Code, of Crime 625 Procedure, the powers of the High Court in the matter of granting bail are very wide; even so where the offence is non bailable, various considerations such as those indicated above have to be taken into account before bail is granted in a non bailable offence.
This the High Court does not seem to have done, for it proceeded as if the offence for which the respondent was being prosecuted might be a bailable one.
The only reasons which the High Court gave for granting bail in this case were ' that the other two persons had been granted bail, that there was no likelihood of the respondent absconding, he being well connected, and that the trial was likely to take considerable time.
These are however not the only considerations which should have weighed with the High Court if it had considered the matter as relating to a non bailable offence under section 3 of the Act.
The first question therefore that we have to decide in considering whether the High Court 's order should be set aside is whether this is a case which falls prima facie under section 3 of the Act.
It is, however, unnecessary now in view of what has transpired since the High Court 's order to decide that question.
It appears that the respondent has been committed to the Court of Session along with the other two persons under section 120 B of the Indian Penal Code and under sections 3 and 5 of the Act read with section 120 B. Prima facie therefore, a case has been found against the, respondent under section 3, which is a non bailable offence.
It is in this background that we have now to consider whether the order of the High Court should be set aside.
Among other considerations, which a court has to take into account in deciding whether bail should be granted in a non bailable offence, is the nature of the offence; and if the offence is of a kind in which bail should not be granted considering its seriousness, the court should refuse bail even though it has very wide powers under section 498 of the Code 626 of Criminal Procedure.
Now a. 3 of the Act erects an offence which is prejudicial to the safety or interests of the State and relates to obtaining, collecting, recording or publishing or communicating to any other person any secret official code or paw word or any sketch, plan, model, article or note or other document or information which is calculated to be or might be or is intended to be, directly or indirectly, useful to an enemy.
Obviously, the offence is of a very serious kind affecting the safety or the interests of the State.
Further where the offence is committed in relation to any work of defence, arsenal, naval, military or air force establishment, or station, mine, minefield, factory, dockyard, camp, ship or aircraft or otherwise in relation to the naval, military or air force affairs of Government or in relation to any secret official code, it is punishable with fourteen years ' imprisonment.
The case against the respondent is in relation to the military affairs of the Government, and prima facie therefore, the respondent if convicted would be liable upto fourteen years ' imprisonment.
In these circumstances considering the nature of the offence, it seems to us that this is not a case where discretion, which undoubtedly vests in the court, under section 498 of the Code of Criminal Procedure, should have been exercised in favour of the respondent.
We advisedly say no more as the case has still to be tried.
It is true that two of the persons who were prosecuted along with the respondent were released on bail prior to the commitment order; but the case of the respondent is obviously distinguishable from their case inasmuch as the prosecution case is that it is the respondent who is in touch with the foreign agency and not the other two persons prosecuted along with him.
The fact that the respondent may not abscond is not by itself sufficient to induce the court to grant him bail in a case of this nature.
Further, as the respondent has been committed for trial to the Court of Session, 627 it is not likely now that the trial will take a long time.
In the circumstances we are of opinion that the order of the High Court granting bail to the respondent is erroneous and should be set aside.
We therefore allow the appeal and set aside the order of the High Court granting bail to the respondent.
As he has already been arrested under the interim order passed by this Court, no further order in this connection is necessary.
We, however, direct that the Sessions Judge will take steps to see that as far as possible the trial of the respondent starts within two months of the date of this order.
Appeal allowed.

dataset_name: IN-Abs

summary:
The respondent who was a former Captain of the Indian Army and was employed in the delegation in India of a French Company was prosecuted along with two others for conspiracy and passing on Official Secrets to a foreign agency under ss.3 and 5 of the Official Secrets Act.
His application for bail was rejected by the Sessions judge but the High Court allowed bail on the ground inter alia that his case might fall only under s.5 which was bailable and not section 3 which was not bailable.
It did not express any opinion whether the case fell under section 5 or section 3 in view of the commitment proceedings which were going on at the time.
On appeal by the State.
Held, that the High Court should have proceeded to deal with the application for bail on the assumption that the offence was under section 3 and therefore not bailable.
It should have then taken into account the various considerations such as, nature and seriousness of the offence, the character of the evidence circumstances peculiar to the accused, possibility of his absconding, tampering with witnesses larger interests of the public.
and the State and similar other considerations Which arise When bail is asked for in a non bailable offence.
The fact that the applicant for bail might not abscond was not by itself a sufficient ground for granting bail.


judgement:
minal Appeal No. 248 of 1960.
Appeal by special leave from the judgment and order dated October 31, 1960, of the Rajasthan High Court in D. B. Criminal Appeal No. 290 of 1960 and D. B, Criminal Murder Reference No 7 of 1960.
591 R. L. Anand, C. L. Sareen and B. L. Kohli, for the appellants.
S.K. Kapur and T. M. Sen, for the respondent 1961.
September.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal by special leave from the judgment of the Rajasthan High Court.
It arises out of an incident in which Bhimsen was murdered on May 8, 1959 at Mandi Pili Bangan shortly before 3 P.m.
The prosecution story briefly was, that there was bad blood between Ramratan appellant and the members of the family of Bhimsen on account of panchayat elections in which they had supported rival candidates.
Another cause for.
enmity was that some time before the occurrences Ramratan appellant was prosecuted under section 307 of the Indian Penal Code and Bhimsen was cited as a prosecution witness in that case and Ramratan did not like that.
Bhimsen and his father brought some gram for sale on the night between May 7/8, 1959, to Pili Bangan.
Bhimsen returned to the village to bring more grain and came back at about10/11 A.M. on the 8th on his tractor trolly along with his brother Ram Partap.
The gram was to be sold 'through Roopram and was stacked in front of his shop in the mandi.
Ram Partap was apparently not interested in the sale; and had wandered away leaving his father Jawanaram and his brother Bhimsen at the shop.
Shortly before 3 p.m. while the gram was being weighed by Lekhram weighman, the three appellants and two others (namely, Moman and Ramsingh) came up there armed with ,guns.
Ramratan shouted that the enemy should not be allowed to escape as Bhimsen was trying to enter the shop of Roopram to save himself on seeing these persons.
Before, however, Bhimsen could enter the shop of Roopram, Ramratan came in between and fired at him from a distance 592 about 5 feet.
Bhimsen got injured and fell down and died soon after.
Jawanaram raised his hands and asked the assailants not to kill Bhimsen but Hansraj appellant fired at him causing a wound on his left hand,.
which resulted in a compound fracture.
Maniram also fired at.
Jawanaram but he dropped on the ground and pellets hit Lekhram weighman who was standing behind Jawanaram.
Thereafter all the assailants ran away.
Roopram had shut up his shop when the incident took place and he only came out When everything was over.
Jawanaram asked him to send telegram to police station Suratgarh and told him the names of the five assailants.
Thereafter jawanaram started for the police outpost in Pili Bangan to make a report; but Ramsingh constable met him on the way at a short distance from the shop of Roopram.
Thereupon Jawanaram made a report (exhibit P 1) to Ramsingh then and there.
While this report was being recorded, Ram Partap also turned up.
After the report had been recorded, Jawanaram was sent to the hospital where his injuries were examined at 3 30 P.m.
Ramsingh constable went to the spot after recording the report and found the dead body of Bhimsen lying in front of Roopram 's shop It appears that head constable gone outside and returned at 5 P.M. and started investigation thereafter.
The Sub inspector arrived on the scene at about 6 p.m. and took over the investigation and.
completed it.
Thereafter the three appellants and two others who have been acquitted by the Sessions Judge were prosecuted for this murder.
The case of the appellants was that they had not committed this offence and that they had been implicated on account of enmity They examined no evidence in defence.
The main prosecution evidence consisted of the statements of Jawanaram, his son Ram Partap, Roopram and Lekhram as to what happened at the spot.
Jawanaram related the whole story as given above, Ram Partap said that he had come near 593 the spot on seeing the assailants going that way and hid himself at some distance and saw the incident from there.
Roopram 's statement was that he shut up his shop as soon as he heard some noise outside and did not see the assailants.
When he came out, however, he was told by Jawanaram the names of the five assailants and saw Bhimsen lying dead.
He had also heard three reports of gunshots from inside his shop.
He saw Jawanaram and Lekhram were also there injured and Jawanaram went away shortly after for making the report.
Sometime thereafter the police came to the spot and started investigation.
Lekhram stated that he was there weighing the gram.
Four or five persons armed with guns came there and shouted and fired two or three times with the result that Bhimsen, Jawanaram and he were injured and Bhimsen died immediately.
But he was unable to say whether the five persons in the dock were the assailants.
Because of certain answers that he gave in cross examination this witness was treated as hostile by the prosecution.
The Sessions Judge relied on the statement of Jawanaram and convicted the three appellants.
He however, gave the benefit of doubt to the other two assailants and acquitted them.
He did not rely on the statement of Ram Partap as he was of the view that Ram Partap did not arrive in the Mandi till about 6 P.m.
He also did not rely on the statement of Lekhram, which in any case was useless in so far as the connection of the appellants with the crime was concerned.
As to Roopram he held that his statement that Jawanaram had told him the names of the assailants immediately after the incident was over when he came out of his shop could not be used as corroborate on of the statement of Jawanaram under section 157 of the Indian Evidence Act, as Jawanaram had not said in his statement in Court that he had told Roopram the names of the five assailants He was also doubtful whether the report (exhibit P 1) was 594 recorded at 3 P.m. and thought that it might have been recorded any time up to 6 P.m.
But even so he placed full reliance on the evidence of Jawanaram only and convicted the three appellants, sentencing Ramratan to death and the other two to imprisonment for life.
This was followed by an appeal to the High Court by the convicted persons.
The Sessions Judge also made a reference for the confirmation of the sentence of death passed on Pamratan.
The High Court dismissed the appeal.
It also accepted the evidence of Jawanaram in the main.
The High Court was further of opinion that Ram Partap was in Pili Bagan when the incident took place having come there with his brother Bhimsen at about10/11 A.M.; but the High Court did not think it fit to rely on his evidence as to the actual incident, for it thought that he had not been able to see it properly from where he said he was hiding.
Further the High Court did not consider the evidence of Lekhram of much value as if, did not connect the appellants with the crime.
But the High Court was of the opinion that Roopram 's statement that Jawanaram had told him immediately after the occurrence the names of the five assailants was admissible in evidence and could be used to corroborate the statement of Jawanaram.
The High Court thought that this statement of Roopram was admissible under section 6 as well as under a. 157 of the Evidence Act.
The High Court therefore upheld the conviction on the evidence of Jawanaram corroborated as it was by the evidence of Roopram.
The High Court having refused to grant a certificate, the appellants applied to this Court for special leave which was granted; and that is how the matter has come up before us.
Two main contentions have been urged before, us on behalf of the appellants.
In the first place, it is urged that the High Court was not right in the view that the statement of Roopram was 595 admissible under section 6 and section 157 of the Indian Evidence Act and went to corroborate the statement of Jawanaram.
Secondly, it is urged that once the statement of Roopram is ruled out as inadmissible there is only the statement of Jawanaram left to connect the appellants with the crime and in the circumstances of this case that solitary evidence should 'De held insufficient to bring home the guilt to the appellants.
The first question therefore that arises in the appeal is whether the statement of Roopram to the effect that Jawanaram told him immediately after the incident, when he came out of his shop that the appellants and two others were responsible for the murder of Bhimsen and the injuries to Lekhram and himself, is admissible, either under section 6 or under section 157 of the Indian Evidence Act.
We (lo riot think it necessary to consider whether this statement of Roopram is admissible under section 6 of the Evidence Act and shall confine ourselves to the question.
whether it can be admitted under section 157 as corroboration of Jawanaram 's state ment.
Learned counsclfor the appellants in this connection relies on Mt. Misri vs Emperor (1), and Nazar Singh vs The State (2) which support him and lay down that unless the witness to be corroborated says in his statement in court that be, had told certain things immediately after the incident to another person, that other person cannot give evidence and say that the witness bad told him certain things immediately after the incident.
The argument is that the corroboration that is envisaged by section 157 is of the statement of the witness in court that he had told certain things to the person corroborating the witness 's statement, and if the witness did not say in court that he had told certain things to that person, that person cannot state that the witness had told him certain things immediately after the incident and (1) A.I.R. 1934 Sind 100, (2) A.I.R. 1931 Pepsu 66.
596 thus corroborate him.
We are of opinion that this contention is incorrect.
Section 157 is in these terms: ",In order to corroborate the testimony of a witness, any former statement made by such witness relating to the same fact, or at about the time when the fact took place, or before any authority legally competent to investigate the fact, may be proved.
" It is clear that there are only two things which are essential for this section to apply.
The first is that a witness should have Riven testimony with respect to some fact.
The second is that he should have made a statement earlier with respect to the same fact at or about the time when the fact took place or before any authority legally competent to investigate the fact.
If these two things are present, the former statement can be proved to corroborate the testimony of the witness in court.
The former statement may be in writing or may be made orally to some person at or about the time when the fact took place, if it is made orally to some person at or about the time when the fact took place, that person would be competent to depose to the former statement and corroborate the testimony of the witness in court.
There is nothing in section 157 which requires that before the corroborating witness deposes to the former statement the witness to be corroborated must also say in his testimony in court that he had made that former statement to the witness who is corroborating him.
It is true that often it does happen that the witness to be corroborated says that he had made a former statement about the fact to some person and then that person steps into the witness box and says that the witness to be corroborated had made a statement to him about the fact at or about the time ",hen the fa ct took place.
But in our opinion it is not necessary in view of the words of section 157 that in order to make corroborating evidence admissible, the witness to be corroborated must also say in his evidence that he had made such 597 and such statement to the witness who is to corroborate him, at or about the time when the fact took place.
As we have said already what section 157 requires is that the witness to be corroborated must give evidence in court of some fact.
If that is done, his testimony in court relating to that fact can be corroborated under section 157 by any former statement made by him relating to the same fact, and it is not necessary that the witness to be corroborated should also say in his statement in court that he made some statement at or about the time when the fact took place to such and such person.
The words of section 157 are in our opinion clear and require only two things indicated by us above in order to make the former statement admissible as corroboration.
We are therefore of opinion that the Sind and Pepsu cases were wrongly decided.
Now let us see what happend in this case.
Jawanaram was examined in court and stated about a certain fact (namely, that the assailants of Bhimsen, Lekhram and himself were five persons whom he named).
The testimony of Jawanaram to be corroborated is his statement in court with respect to the fact that five persons attacked Bhimsen, Lekhram and himself.
Section 157 makes his former statement with respect to the same fact admissible provided that the statement was made at or about the time when the fact took place or before any legal authority competent to investigate the fact.
In this case we are concerned with the first of the two conditions necessary, namely, whether he had made that former statement relating to the same fact.
at or about the time when the fact took place.
The former statement which can be used as corroboration must be about the fact namely that Jawanaram had seen five persons attacking Bhimsen, Lekhram and himself and must have been made at or about the time when the fact took place i. e., when the attack was made.
Now Roopram says that Jawanaram 598 had made the statement immediately after the incident was over that five persons including the three appellants had attacked Bhimsen, Lekhram and himself.
This was therefore a former statement of Jawanaram at or about the time when the fact took place, namely, the attack by five persons on Bhim sen and others.
This former statement can be proved by the person to whom it was made and can be used as corroboration of the evidence of Jawanaram.
It was not necessary before the statement of Roopram as to what he heard from Jawanaram can be admissible for Jawanaram also to say in his testimony in court that he bad told Roopram immediately after the incident the names of the five assailants of Bhimsen and others.
The former statement which can be used as corrobo ration is the, statement at or about the time the fact took place about which evidence has been given in court by the witness to be corroborated.
Section 157 does not contemplate that before the; former statement can be proved in corroboration, the witness to be corroborated must also say in his testimony that he had made the, former statement.
Of course if the witness to be corroborated also says in his testimony that he had made the former statement to someone that would add to the weight of the evidence of the person who gives evidence in corroboration, just as if the witness to be corroborated says in his evidence that he had made no former statement to anybody that may make the statement of any witness appearing as corroborating witness as to the former statement of little value.
But in order to make the former statement admissible under section 157 it is not necessary that the witness to be corroborated must also, besides making the former statement at or about the time the fact took place, say in court in his testimony that he had made the former statement.
We are therefore of opinion that even though Jawanaram did not say in his statement in court that he had told Roopram the names of the five assailants, Roopram 's 599 evidence that Jawanaram had made such a statement would be admissible under section 157 in corroboration of Jawanaram 's testimony as to the fact that five persons had attacked Bhimsen and others.
As to the value to be attached to this corroboration in the present case, it is enough to say that Roopram is an independent witness and even though Jawanaram may not have said in evidence that he had told the names of the assailants to Roopram (perhaps by inadvertence as the High Court seems to think), we agree with the High Court in accepting the statement of Roopram that Jawanaram had immediately named the five persons who had attacked Bhimsen, Lekhram and himself.
Thus the statement of Roopram corroborates the statement of Jawanaram in two ways : firstly, that there was an incident in front of his shop in which Bhimsen was murdered and Jawanaram and Lekhram were injured, arid secondly, proves the former statement of Jawanaram as to the persons who took part in the incident, thus corroborating his statement in court under s.157.
This is not therefore a case where there is no corroboration of the testimony of Jawanaram, even if he were the solitary witness of the incident itself.
As to the second point, namely, that we should not accept the solitary testimony of Jawanaram in the circumstances of this case, learned counsclrelies on Vemireddy Satyanarayan Reddy vs The State of Hyderabad (1).
In that case there was the solitary testimony of one witness and it was urged that he was an accomplice.
This Court hold that he was not an accomplice but remarked that "we would still want corroboration on material particulars in this particular case, as he is the only witness to the crime and as it would be unsafe to hang four people on his sole testimony unless we feclconvinced that he is speaking the truth.
" The reason why this Court said so in that (1) ; 600 case was that though the witness was not an accomplice his position was considered somewhat analogous to that of an accomplice though not exactly the same.
It was in those circumstances that this Court said that corroboration in material particulars would be required in the circumstances of that case.
We are of opinion that those observations cannot be divorced from the context of that case.
In the present case Jawanaram is neither an accomplice nor anything analogous to an accomplice; he is an ordinary witness who was undoubtedly present at the time the incident took place. '.rho case of such a solitary witness was considered by this Court in Vadivelu Thevar vs The State of Madras (1) and after referring to the earlier case it was held that as a general rule a court may act on the testimony of a single witness, though uncorroborated.
It was further held that unless corroboration is insisted upon by statute, courts should not insist on corroboration except in cages where the nature of the testimony of the single witness itself requires as a rule of prudence, that corroboration should be insisted upon, and that the question whether corroboration of the testimony of a single witness was or was not necessary, must depend upon facts and circumstances of each case.
These are the general principles which we have to apply in the case of the testimony of a single witness, like Jawanaram.
But as we have held that in the present case there is corroboration of Jawanaram 's statement by his former statement deposed to by Roopram, it is not a case of altogether uncorroborated testimony of a single witness.
In any case the evidence of Jawanaram has been considered by both the Sessions Judge and the High Court, and the Sessions Judge was prepared to convict the appellants on the sole testimony of Jawanaram while the High Court has also accepted that testimony, though it has added that it is corroborated by the statement of Roopram.
In (1) ; 601 the circumstances when the evidence of Jawanaram has been accepted by both the courts, with or without corroboration, we see no reason to disagree with the conclusion of the two courts as to the value of Jawanaram 's evidence.
The criticism made against the acceptance of the evidence of Jawanaram has been considered by the two courts and in spite of that criticism the two courts have come to the conclusion that the evidence of Jawanaram is reliable.
We agree with the estimate of that evidence by the two courts and hold that Jawanaram 's evidence can be relied on in the circumstances of this case.
Two main points are urged in this connection to shake the testimony of Jawanaram.
It is said that Jawanaram has introduced Ram Partap in the first information report and that the Sessions Judge at any rate did not believe that Ram Partap was in Pill Bangan before 6 P.m. though the High Court held otherwise.
Secondly, it is said that Jawanaram did not make the first report at about 3 P. M. and the Sessions Judge at any rate held that the report could have been made at any time upto 6 P.m. though the High Court held otherwise.
We have been taken through the evidence in this connection and we agree with the High Court that even though Ram Partap might not have actually seen the incident he had definitely come to Pili Bangan at about II A.M. with his brother Bhimsen.
There is the evidence of Ram Singh constable who says that Ram Partap came there when the report (exhibit P 1) was being written at about 3 P.m., which is supported by the fact that Ram Partap 's presence is mentioned in the report.
The defence relied on a statement in the inquest report (Ex.
P 4) in which it is mentioned at the end that Ram Partap son of Jawanaram also arrived during the course of the completion of the inquest report and was sent along with the corpse.
This means that Ram Partap was not present when the inquest proceedings began and arrived there when they 602 were coming to an end.
From this it cannot be inferred that Ram Partap was not in Pili Bangan at all before 6 P.m.
There.
is ample evidence, which the High Court has rightly believed, to show that Ram Partap had come to Pili Bangan at about 10 or 11 A. M.
The other criticism with respect to the time when the report (exhibit P.1) was made is also in our opinion unjustified and the High Court was right in the view it took in that connection.
There is no doubt that Jawanaram reached the hospital at 3 30 P.m. as deposed to by Dr. Sudershan Singh and that he was sent by the police.
It is obvious therefore that Jawanaram had contacted the police before 3 30 P.m.
It stands to reason that if he had contacted the police before 3 30 P.m. be must have made a report of the incident also and that is what exactly Ram Singh constable deposes.
We agree with the High Court that in the circumstances there is no reason to disbelieve the statement of Ram Singh constable.
The Sessions Judge was doubtful of the evidence of Ram Singh because he was of the view that documentary evidence from the police outpost at Pili Bangan had not been produced in support of Ram Singh 's statement.
Ram Singh was asked about it and stated that though exhibit P 1 did not bear the despatch number as it was not sent to the outpost at all, he must have made entries in the diary of the outpost about his starting from there and his return and also about the occurrence, though he did not remember about it.
After this statement of Ram Singh, the Sessions Judge was not right in disbelieving him because of the non production of the entries from the outpost.
It would have been better if the prosecution had produced those entries ; but even if the prosecution rested upon the oral testimony of Ram Singh, the Sessions Judge could and should himself have sent for those entries, if he was inclined to disbelieve the oral testimony of Ram Singh constable who appears 603 to be a reliable witness.
In the circumstances we are of opinion that the view of the High Court that the report was written at 3 P. m. as stated by Ram Singh constable is correct.
The evidence of Jawanaram therefore cannot be rejected on these two grounds.
Lastly it was urged that Jawanaram bad named five assailants and at least two have been acquitted, and that shows that Jawanaram is not wholly reliable.
It is enough to point out that the Sessions Judge gave the benefit of doubt so far as two accused persons were concerned.
He did not hold that Jawanaram 's evidence was false with respect to those two persons.
Apparently those two persons did not take any active part in the incident and that may have led the Sessions Judge to give them the benefit of doubt; that is, however, no reason for disbelieving the testimony of Jawana ram.
We are therefore of opinion that the two courts below were right in relying on Jawanaram.
His evidence is corroborated undoubtedly by other witnesses to the extent that the incident did take place at the shop of Roopram; his statement that the three appellants and two others were the assailants is corroborated by his former statement made immediately after the incident was over and deposed to by Roopram.
In the circumstances we are of opinion that the appellants have been rightly convicted.
Two of the appellants (namely, Maniram and Hansraj) have been sentenced to imprisonment for life while Ramratan has been sentenced to death.
The reason why Ramratan has been sentenced to death is that he was the man who shot Bhimsen.
He was also the leader of this group and the enmity was directly between him and the members of the family of Jawanaram.
We agree with the High Court that there are no extenuating 604 circumstances which would justify the reduction of sentence of death passed on Ramratan.
The appeal therefore fails and is hereby dismissed.
Appeal dismissed.

summary:
The appellants were convicted on a charge of murder on the sole testimony of one witness.
Another prosecution witness deposed that the former witness told him immediately after the incident that the appellants were responsible for the murder.
The question which arose was whether it was necessary for the former witness also to depose in Court that he had told the names of the murderers to the other witness immediately after the occurrence or whether his former statement be proved under s.157 of the Indian Evidence Act to corroborate his.
testimony without his deposing about it in Court.
Held, that it was not necessary under section 137 of the Evidence Act that the witness to be corroborated must also say in his testimony in court that he had made the former statement to the witness who was corroborating him.
What s.157 required was that the witness to be corroborated must give evidence in court of some fact and if that was done his testimony in court relating to that fact could be corroborated by any former statement made by him relating to the same fact.
Mt. Misri vs Emperor, A.I.R. 1934 Sind 100 and Nazar Singh vs The State, A.I.R. 1951 Pepsu 66, held as wrongly decided.
As a general rule a court may act on the testimony of a single witness, though uncorroborated and the question whether corroboration of the testimony of a single witness was or was not necessary must depend on the circumstances of each case.
Vemireddy Satyanarayan Reddy vs The State of Hyderabad, ; , distinguished.
Vedivelu Thevar vs The State of Madras, ; , followed.