GIRDHARILAL GUPTA & ANR. versus D. N. MEHTA, COLLECTOR OF CUSTOMS & ANR.

Citation: [1971] 3 S.C.R. 748 · Decided: 18-08-1970 · Supreme Court of India · Bench: S.M. SIKRI

Cited by 10 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

748 
GIRDHARILAL GUPTA & ANR. 
v. 
D. N. MEHTA, COLLECTOR OF CUSTOMS & ANR. 
August 18, 1970 and February 18, 1971 
[S. M. SIICRI AND I. D. DuA, JJ.] 
· Foreit;n Exchange Regulation Act 7 of 1947-Indian currency sought 
to be sen~ out of I,ndia in contravention of .s. 8(2) of Act-Officer making 
search of accused's premises does not necessarily need to be cowoborated-
Account .1/ips found in search and tt;l/ying with account books are good 
evidence-Firm held guilty of contravention of Act-Partner incharge of 
business of firm is guilt;y under s. 23C( 1) of Ac~ unless he i;an prove that 
the contraventwn of the Act by. the firm took place without his knowledge 
and he had exercised diligence to prevent the contravenlion-Review, justi· 
fication for-Reduc1ion of sentence in case of vicarious liability, cqnsidera· 
lions /ol'. 
An air. parcel declared by the consigner to contain rasogol/as and other 
edibles was found to contain Rs. 51,000 worth of Indian currency notes. 
The parcel was booked to be sent from Calcutta to Hong Kong. 
The 
consignor's name as given on the parcel was found to be false and on 
investigation the suspicion of the customs authorities fell on the ~?pellants 
two of whom were partners in a firm, the third being an employee of the 
firm. 
The office of the firm was searched. Ce!rtain incriminating docu-
ment> including account slips and cash books of the firm were seized. In 
a complaint ftled by the Assistant Collector of Customs against .the appel-
lants and 1heir firm it was alleged that sending out money in Indian cur-
rency was prohibited by s. 8(2) of the Foreign &change Regulation 7 of 
1947 and any attempt to do the same was punishable under s. 23B of the 
Act. The trial court acquitted the appellants but the High Court in appeal 
convicted them under s. 23 ( lA). By special leave appeals were filed in 
this Court. Judgment was delivered on August 18, 1970. Thereafter 
review petition No. 37 of 1970, was filed. A further judgment in respect 
of the contention raised therein as to the interplretation of s. 23C(i) was 
delivered on February 18. 1971. 
HELD : (i) The proposition thaf if an investigating officer conducts a 
search bis evidence cannot be relied on unlesi; it is corroborated is a novel 
one with no principle or authority to support it. It all depends on the 
facts of each case. In the present case there was the corroborative evid-
ence of P.W. 8 who signed the search document and also the entries them-
selves in the account books and their tallying with the slips. [755 GJ 
(ii) There was no _substance in the. argument that the account slips 
couhJ not be taken into consideration because thev. were not evidence. These 
were part of the things discovered during search and if the entries therein 
were carried into the account books there was no reason why they could 
not be looked at [755 HJ 
A 
B 
c 
D 
E 
F 
G 
(iii) In the context of--s, 23C(l) a person 'in-charge' must mean that 
H 
the person •hould be in· over all control of the day to day business of the 
company or firm. The inference follows from the wording of s. 23C(2). 
It mentions director who may be a party to the policy being followed by 
A 
B 
c 
D 
E 
F 
G 
H 
G, L. GUPTA v. D. N. MEHTA (Sikri, J.) 
749 
a company and yet not be in charge of the business of the company. Fur-
ther i! mentions manager who usually is in charge of the business not in 
over all charge. Similarly the other officers may be in charge of only some 
part of the business. (758 G-759 Al 
State v. S. P. Bhadani, A.l.R. 1959 Pat. 9, R. K. Khandelwal v. 
State [1964] 62 A.L.J. 625 and Public Pro~ecutor v. R. K. Karuppian, 
A.LR. 1958 Mad. 183, referred to. 
In the present case the appellant G had himself stated that be alone 
looked after the affairs of the firm. 
This meant that be was in-charge 
within the meaning of the section though there may be a manager working 
under him (760 C-Dl 
· 
When a partner in charge. of a business proceeds abroad it does not 
mean that he ceased. to be in charge, unless there is evidence that be gave up 
charge in favour of another person. Therefore it must be held that the 
appellant wa' in charge of the business of the firm within the meaning of 
s. 23C(l). [760 E-F] .• 
In view of the fact that G was abroad at the time of contravention 
it was pos'1ble that the contravention took place without bis knowledge or 
lack of diligence. He was being vicariously punished. In such a case a 
sentence of imprisonment 

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