LexMANHARLAL BHOGILAL SHAH versus STATE OF MAHARASHTRA
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MANHARLAL BHOGO..AL SHAH v. STATE OF MAHARASHTRA April 5, 1971 [S. M. Snrn, c. J., G. K. MITTER, K. s. HEGDE, A. N. GROVER AND P. JAGANMOHAN REDDY, JJ.] Sea Customs Act, 1878, s. 167, items 87 and 81, and s. 187 A-If s. 187 A confers arbitrary powers on customs officials-I/ ultra vires A.rt. 14 of Constitution. The appellant import«! consignments of contraband and prohibited goods. He was prosecuted for an offence under s. 167, item 81, of the Sea Customs Act, 1878, on a complaint by the appropriate authority under s. 187 A, and was convicted. On the question whether s. 187-A violated Arl 14 of the Constitution on the grounds; (I) that tho Customs authorities had an absolute discretion to proceed either under s. 167(8) in which case there would be only an imposition of a fiscal penalty and confiscation of goods; or to fi!e a com- plaint in the criminal court under s. 187 A for the offence under s. 167 item 81, in which case there couJd also be a sentence of imprisonment up to two years. and (2) the customs officials have a wide latitude in choosing cases for criminal prosecution, HELD: (I) The proceedings under the Foreign Exchange Regulation Act, 1947, unlike under tho Sea Customs Act, could be taken in the alter- native clnd the punishment could also be imposed in the alternative. Any person guilty of contravention of s. 23(1Xal of that Act could not be made liable for a penalty under s. 23(1) (a) and also to prosecution and impri- sonment under s. 23(1Xb). Therefore, s. 23D, which empowers the Direc- tor of Enforcement to file complaint instead of imposing a penalty under s. 23(l)(a) only if he was satisfied that in tho circumstances of a case a penalty under s. 23(1Xa) would be inadequate, was necessary to prevent arbitrary exercise of discretion by the Director under that Act. Such a provision however, is not necessary under the Sea Customs Act, becau~. if a prrson is found guilty under s. 167, item 8, and if his case is also covered by item 81, there is no choice in the matter of imposing penalty or punishment. A penalty can be imposed under item 8, and be will also be liable to criminal prosecution under item 81. [363B-F; 364A-B] Reyala Corporation (P) Ltd. v. Director of Enforcement, New De/Iii. [19,71] 1 S.C.R. 639, referred to. (2) It cannot be said that s. 187A confers an unguided power on the customs authorities for not filing a complaint against a person •lthouah he was liable to a criminal prosecution under s. 167. item 81. 359 A B c D E ' G While deciding whether a complaint should be instituted for an offence which is covered both bf Utems 8 and 81 of s. 167, a customs offi~r must take ·into account the enOrmity and maa:oitude of. the contra ventron, the H evidence which is available, and whether. the evidence is sufficient to take the matter to a criminal court: T1ie officers who are authorised to mate a complaint under s. 187 A are senior officials holding re<Jponsiblo positions 360 SUPREME COURT REPORTS (1971] SUPP. s.c.R. A and, they have to act in a reasonable and bonafide n1anner. They cannot discrin11nate bet\\·een similar cases according to their whim and fancy. T~c power conferred by the section is to be exercised for effectuating the object and purpose of·-the Act keeping in view the entire scheme of the Act to ensure th::i1 goods do not escape the levy of duty and that the prohibitions ~nd restrktions imposed on importation and exportation are rigidly en- forced. [365C-E, G-H ; 3668-C, D-FJ B Matajog Dobey v. H. C. Dhari, (1955) 2 S.C.R. 925, 932 and Nirmala Textiles Furnishing Mills Ltd. v. The Second Industrial Tribunal, [1957) S.C.R. 335, followed. CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 44 of 1967. C Appeal from the judgment and order dated January 23, I 967 of the Bombay High Court in Criminal Appeal No. 525 of 1965. R. Jethmalani, S. B. Jaisinghani and K. Hingorani, for the appellant. D Jagadish Swarup, Solicitor-Genera/, H. R. Khanna, B. D. E F G H Sharma and S. P. Nayar, for the respondent. The Judgment of the Court was delivered by GroTcr, J.-This is an appeal by certificate from a judgment of the Bombay High Court upholding the conviction and · sen- tence of the appellant under s. 167(81) of the Sea Customs Act, 1878, hereinafter called the 'Act' and s. 120-B of the Indian Penal Code read with the aforesaid section and s. 5 of the Import and Export (Control) Act 1947. The main
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