Boddu Ramaiah Vs. Government of India and ors. - Court Judgment

Excerpt:
customs - confiscation--penalty--fine--goods not proved to have been imported contrary to statutory provisions--cannot be confiscated--no penalty can be levied--no proof that person in possession of goods had knowledge that they were liable for confiscation--levy of penalty--illegal--person not connected with importation or exportation of smuggled goods--no fine can be imposed on such person--revision--no charge that smuggled goods were kept in petitioner's shop for sale--penalty not levied on such ground--confirmation of penalty in revision on such ground--order in revision liable to be quashed--customs act (52 of 1962), sections 11, 105, 111, 112, 135--imports and exports (control) act (18 of 1947), section 3--imports (control) order, 1955, clause 3. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and insurer - held, the language employed in enacting sub-section (2) of section 149 appears to be plain and simple and there is no ambiguity in it. it shows that when an insurer is impleaded and has been given notice of the case, it is entitled to defend the action only on grounds enumerated in sub-section (2) of section 149 of the act, and no other grounds are available to it. the insurer is not allowed to contest the claim of the injured or heirs of the deceased on other grounds, which are available to the insured. if insurer is permitted to contest the claim on other grounds it would mean adding more grounds of contest to the insurer and will be negation of the intention of the legislature and annihilate mandate of the provisions of sections 170 and 149 of the act. the insured can pursue appeal only after giving up the insurer as the appellant and not otherwise. in the instant case, the insurer has not withdrawn from party array but has remained prosecuting the appeal with the insured on the grounds which are available only to the insured. therefore, the joint appeal as filed by the insured and the insurer is not maintainable. section 166: [v. gopala gowda & jawad rahim, jj] claim for compensation accident due to mechanical defect in the vehicle held, it is not in dispute that the claimant suffered injuries in an accident, which occurred during the course of his employment, albeit due to his negligence but law does not render him remediless. statutory right is conferred on him, accruing by virtue of his employment under insured to claim compensation under workmens compensation act. the insurer is statutorily duty bound to discharge the liability of the owner of the vehicle, to pay such compensation to the employee, as mandated under the provisions of section 149 of the act. the right of an injured employee or his dependents as the case may be to be compensated, when injury is suffered or death occurs during his employment, is recognised not only under workmens compensation act, but also under benevolent provisions under section 166 and 167 of the m.v. act. the right of driver to seek compensation is not restricted only to the workmens compensation act, it has been enlarged to enable such person to seek just compensation (sections 166 and 168), conferring upon him the right of election engrafted under section 167 of the act to choose either of the two forum. the only defence which the insurer could take is limit of its liability as enumerated under section 147 of the act, leading to contest, inter alia, only between insured and insurer and does not impact claimants right to recover the compensation determined by the tribunal which crystallizes into enforceable right against both. in the instant case, the claimant/driver has exercised right of election under section 167 of the act to seek compensation under section 166 of the act resulting in award passed by the tribunal. therefore, the insured and the insurer have no escape but to discharge the said award as directed. undisputedly, in this case as deduced for proved facts, the vehicle in question was not properly maintained by the owner and despite faulty brake system, the claimant had undertaken the hazardous journey to his peril at the behest of and at the instruction of the owner. the owner is therefore, tortfeasor. section 168: [v. gopala gowda & jawad rahim, jj] insurers limit of liability - held, it is well settled that the liability of the insurance company for payment of compensation can be statutory or contractual. is for the insurance company to show that the insurance policy was a statutory policy and not a contractual policy to restrict its liability. that issue was neither raised before the tribunal nor is raised in this appeal requiring decision. thus, if at all the insurer has any valid ground to restrict its liability, it can proceed against the insured but firstly it has to discharge the award as required under section 149 (1) of the act. where the owner/insured has failed to maintain the vehicle as per prescribed safety standards and has caused the claimant to drive the vehicle with mechanical defects, the owner would be the tortfeasor and the claimant can maintain a petition seeking compensation under the provisions of the act, instead of seeking compensation under the workmens compensation act. on facts, held, the material evidence on record, particularly, with regard to the income of the claimant, his age, medical evidence and the evidence relating to pecuniary loss has not been considered by the tribunal in the correct perspective, which has resulted in passing of the impugned award, disproportionate to the pecuniary loss and the loss of future income of the victim. the settled principles governing determination of compensation has been given a go-bye. compensation of rs.4,15,150/- awarded by the tribunal was enhanced to rs.8,20,000/-. - in the absence of anything on record, it cannot be assumed that the goods were brought into india in violation of the said provision and as such confiscation under section 111(d) is bad in law. in paragraph 13 of the lordships of the supreme court observed as follows :it is well settled by the decision of the court that goods which have been imported against the prohibition or restriction imposed under chapter-iv of the act are liable to confiscation at any time after import and this liability extends even in the hands of third persons who may not have had anything to do with the actual import. it is also well settled by the decisions of this court that the second part of the penalty relating to any person applies only to a person concerned in the importation or exportation of the goods and does not apply to a person found in possession of the smuggled goods who had nothing to do with the importation or exportation thereof'.in the above case it is clearly laid down that once it is proved that the goods are illegally imported goods, their confiscation from the hands of the third parties is valid. further under section 112 penalty can be levied only if the person is in possession of the goods has knowledge that the goods in question are liable to confiscation under section 111. in the decision of the supreme court quoted above, it is clearly laid down that the penalty of fine leviable under the act does not apply to a person, found in possession of the smuggled goods, who has nothing to do with the importation or exportation thereof.1. the petitioner is a partnership firm represented by its partner one boddu ramaiah. the firm deals in stainless steelware. while the partner was out of station, the officers of the custom house, visakhapatnam, questioned boddu atchutharama gupta, son of he partner, who was present in the shop, as to whether he was in possession of they goods of foreign origin and seized certain goods consisting of cassette recorder etc. on the ground that they were imported illegally. the seizure is said to have take place on 7-9- 1978. thereafter the requirement of the show cause notice and other formalities were dispensed with, as in his statement, the junior partner has stated that the case may be adjudicated without a show cause notice. on the basis of the material, the assistant collector, customs, respondent no 3, on 11- 9-1978 held that the seized goods were illegally imported and acquired in violation of the prohibition imposed under section 3 of the imports and exports (control) act, 1974 read with section 11 of the customs act, 1962. it was also held that the said atchutharama gupta is liable to penalty under section 105 of the customs act as he was in possession of the contraband goods and a sum of rs. 300/- was levied as penalty. aggrieved by that order, the petitioner filed an appeal to the 2nd respondent who held that there is circumstantial evidence to hold that the goods are smuggled goods and upheld the order of the 3rd respondent. against the order of the appellate authority, a revision was preferred to the 1st respondent. the revision was also dismissed and that order is assailed in this writ petition. 2. in the counter-affidavit, inter alia, it is stated that section 11(g) of the customs act, 1962 has no application, as the confiscated goods were purchased by atchutarama gupta from some unknown persons as per his statement dated 7-9-1978. it was further stated that even if there was illegality in the seizure it would not vitiate the confiscation as the same was done following the seizure. therefore, it was prayed that the order of confiscation may be held as legal and valid. 3. sri subrahmanya narasu, the learned counsel for the petitioner, contends that the authorities proceeded on the assumption that the goods in question were acquired in violation of the prohibition imposed under clause 3 of the import control order read with section 3(1) of the imports and exports (control) act, 1974 and section 11 of the customs act, 1962 and confiscated the goods under section 111(d) of the customs act. in the absence of anything on record, it cannot be assumed that the goods were brought into india in violation of the said provision and as such confiscation under section 111(d) is bad in law. section 111(d) of the customs act, 1962 reads as follows : '111. confiscation of improperly imported goods, etc. :- the following goods brought from a place outside india shall be liable to confiscation : (a) .............. (b) ............... (c) .............. (d) any goods which are imported or attempted to be imported or are brought within the indian customs waters for the purpose of being imported, contrary to any provision, imposed by or under this act or any other law for the time being in force'. a perusal of the section, extracted above, makes it clear that for confiscation of the said goods, it must be shown that the goods are imported contrary to the prohibibition clause in the customs act, 1962 or any other law for the time being in force. 4. the learned standing counsel for the respondent submits that the goods, which have been imported in contravention of the provisions of the customs act are liable for confiscation and relied upon the decision of the supreme court reported in assistant collector of customs, calcutta v. sitaram - (1) : 1966crilj712 . 5. there is nothing on record to show that the goods in questions have been notified under section 3 read with section 11 of the customs act, 1962 or that they were imported into india contrary to the said section. merely because the goods were seized in visakhapatnam town, it cannot be assumed that the goods in question have been imported into india in contravention of the above said provision. for being liable to confiscation, it has to be shown under section 111(d) of the customs act that they were imported contrary to the provisions of the act. therefore, in my view, the goods cannot be confiscated. 6. the decision cited by the learned standing counsel may not be of any assistance to him. in paragraph 13 of the lordships of the supreme court observed as follows : 'it is well settled by the decision of the court that goods which have been imported against the prohibition or restriction imposed under chapter-iv of the act are liable to confiscation at any time after import and this liability extends even in the hands of third persons who may not have had anything to do with the actual import. so long as it is proved that the goods had been imported against the restriction imposed under chapter iv, the goods remain liable to confiscation whenever found even if this is long after the import is over and even if they are in possession of persons who had nothing to do with the actual import. it is also well settled by the decisions of this court that the second part of the penalty relating to any person applies only to a person concerned in the importation or exportation of the goods and does not apply to a person found in possession of the smuggled goods who had nothing to do with the importation or exportation thereof'. in the above case it is clearly laid down that once it is proved that the goods are illegally imported goods, their confiscation from the hands of the third parties is valid. in the instant case there is no record to show that the goods are smuggled or imported into india in contravention of the provisions of the act. therefore, the order of confiscation passed in not sustainable. 7. it is next contended by the learned counsel for the petitioner that the order of penalty under section 112 of the customs act cannot be passed against the petitioner-firm. it is worth noticing that no attempt is made in the counter-affidavit to justify the order or penalty. further under section 112 penalty can be levied only if the person is in possession of the goods has knowledge that the goods in question are liable to confiscation under section 111. in the decision of the supreme court quoted above, it is clearly laid down that the penalty of fine leviable under the act does not apply to a person, found in possession of the smuggled goods, who has nothing to do with the importation or exportation thereof. that apart, once it is held that there is no record to show that the goods in question were imported in contravention of the act, the question of levying penalty does not arise. further, for levying penalty under clause (d) of section 111, the fact that the possessor has knowledge of the goods being liable for confiscation under section 111, has to be proved. in the instant case no such knowledge has been proved. in my view, therefore the order of penalty is not sustainable. 8. the impugned order, so far as it is relevant, reads as follows: 'government observe that the finding of the appellate authority that there is adequate circumstantial evidence in this case to prove that impugned articles were illegally imported into india and that they were kept in the shop for sale is correct and accordingly reject the revision application'. a perusal of the order shows that the order of respondent no. 2 was sustained by the 1st respondent on the ground that the goods are kept in the shop for sale. this was not the subject-matter of the charge. further the goods in question were not seized and penalty was not imposed on the ground that the said goods are kept for sale. for this reason alone, the order under revision is liable to be quashed. 9. for the above reasons, the writ petition is allowed. but, in the circumstances of the case, there shall be no order as to costs.