ISSARDAS DAULAT RAM AND OTHERS versus THE UNION OF INDIA AND OTHERS

Citation: [1962] SUPP. 1 S.C.R. 358 · Decided: 13-11-1961 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Dismissed
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Judgment (excerpt)

358 SUPREME COURT REPORTS [1962] SUPP. 
1~1 
ISSARDAS DAULAT RAM AND OTHERS 
THE UNION OF INDIA A.i.~D OTHERS 
(P. B. GAJEJWRAGADKAR, A. K. SARKAU, 
K. N. WANCHOO, K. c. DAS GUPTA 
ancl N. RAJAGOPALA AYYANGAR, JJ.) 
Smuggled Good..-Confiscation by Co/l<clor of G1Uwma-
Et>idente-lf dfr•cl evidmce ea•enlial-lnter/erc11ce of findi719 by 
wm-Sea 01Uwms Act, 1878 (8 of 1878), a. 167(8)-Con· 
•luulion of India, A11. 226. 
On September 14, 1954, the appellant sent a quantity of 
gold to a refinery in Bombay for the purpose of melting it. On 
receipt of information that the gold which was being melted 
was believed to be smuggled, the customs authorities made 
some enquiries at the refinery and seized the gold. The 
Collector of Customs found that the gold was of foreign origin 
and had been importd into India in contravention of the 
Foreign Exchange Regulations Act, 1947, and made an order 
confiscating it under s. 167(8) of the Sea Customs Act, 1878. 
The a1,>pcllant filed a petition under Art. 226 of the Constitution 
of India before the Punjab High Court challenging the legality 
of the order of confiscation on the ground that there was no 
evidence before the Collector of Customs to show that the gold 
had been imported after restrictions had been imposed in 
March 19+7 by notification under the Foreign Exchange 
Regulations Act, 1947, and consequently the finding that the 
gold had been smuggled was unsustainable. 
In reaching the 
conclusion that the gold had been smuggled the Colletor 
of Customs considered 
the 
credibility 
of 
the 
story 
put 
forward 
by 
the appellant 
about the purchase of 
the gold and the price at which the gold was stated to have 
been purchased which was less than the market price and also 
the conduct of the appellant in trying to get the gold melted 
at the refinery with a small bit ohilvcr added so as to reduce 
the fineness of the gold and thus approximate the resultant 
product to licit gold found in the maket. 
Held, that though there was no direct evidence to show 
that the gold had been imported in contravention of the 
notification i!sucd under the Foreign Exchange Regulations 
Act, 1947, the evidence relied on by the Collector of Customs 
in coming to the conclusion that the gold was smuggled could 
justify the finding and that the matter did not call for inter· 
fcrcncc under Art. 226 of the Constitution. 
(1) S.C.R. SUPREME COURT RFPORTS 
359 
CIVIL .APPELLATE JURISDICTION : Civil Appeal 
No. 591 of 1960. 
Appeal by special leave from the jmlgment 
and order dated November 6, 1958, of the Punjab 
High Court (Circuit Bench) at Delhi in Civil Writ 
No. 417-D of 1958. 
A. V. Viswanatha Sustri, J. B. Dadachunji, 
0. C. Mathur and Ravinder Narain, for the appel-
lants. 
P. K. Chatterjee and T. M. Sen, for the respon-
dents. 
1961. November 13. The Judgment of the 
Court was delivered by 
AYYANGAR, J.-This appeal comes before us by 
virtue of leave granted by this Court uuder Art.136(1) 
of the constitution and is directed against the judg-
ment and order of the Punjab High Court by which 
a Writ Petition filed before it by the appellants, 
under Art. 226 of the constitution was summarily 
dismissed. 
The point raised for our consideration relates 
to the legality of an order of confiscation, by the 
Customs Authorities, of certain gold belonging to the 
appellants on the ground of its being smuggled. The 
appellants are the pa1tners ofa Joint Hindu Family 
firm carrying on business in Bombay in inter alia 
gold and jewellery. On September 14, 1954, the 
appellant-firm had despatched to the Bombay Bul-
lion Refinery for the purpo8'3 of melting about 500 
tolas of gold. Certain Customs Officers received 
information that some quantity of gold which was 
believed to be smuggled was being sent to the 
refinery for melting and in pursuance of this 
information they went to the refinery and found 
the gold bullion which is the subject of these pro-
ceedings JJ!aced in a crucible for the pui·pose of 
being melted. These officers ascertained from the 
Mana.ger of the refinery that this gold belongecl 
to the appellant-firm who were later contacted and 
lssardas Daiiiat Ram 
v. 
Tk Union of India 
AyJangar J. 
JUI 
lssardas Dauiat RtU11 
'· 
'Fht U11fon of India 
AJ7angar J, 
360 SUPREME COURT REPORTS [1962) SVPP. 
who addmittcd their ownership of the gold. The 
gold was thereupon seized and investigation started 
for ascertaining whether the gold was or was 
not smuggled gold after which th
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