79.S

SACHINDRA MOHAN NANDY.& ORS.

STATE OF WEST BENGAL & ORS.

February 19, 1971

(S. M. SIKRI, C.J., C. A. VAIDIALINGAM AND V. BHARGAVA, JJ,]

Chandernagore (Merger) Act, 1954-Cilandernagore (Assimilation of L<'lt's) Act, 1955-Exten•ion of Wes; Bengal Laws IP Chandernagort territory-Wm Bengal Land (Requisition and Acquisition) Act, 1948 whether applicable to Chandernagore by virtue of Merger and Assimilation

Acts afo•esald-Powtr of Collect01 to requisition land whether confined to areo of Hooghly District before merger of Chandernagore. ·

The French settlement of Chandermrgore was merged in the State of West Bengal with effect from October 2, 1954 by virtue of the Chandernagore (Mc'rger) Act, 1954. It was made part of Hoogly District. By s. 17 of the Merger Act the laws relating to Lists I and III of the Seventh Schedule to the Constitution, in force in West Bengal 'generally' were extended to the merged territory.

By s. 18 the corresponding Jaws of French chandc'rnagore . were repealed. '-TQe Chandernagore (Assimilation

of Laws) Act, 1955 by s. 3 thereof extended the laws relating to List II of the Seventh Schedule to the Constitution in force in West Bengal to the merged territory. By s. 4 the correspc>nding laws in force before merger we're repealed. The Collector of Hoogly in exercise of Powers conferred on him by notification dated May 11, 1948 made two orders under s. 3(1) of the Acquisition Act. The appellants challenged them in a petition under Art. 226 of the Constitution.

The petition being. dismissed api)eal was filed in this Court. It was contended : (i) that the clrders of requisition were illegal as the Acquisition Act under which they were issued did not apply to the territory pre\fously known as French Chandernagore; (ii) that under the notitjcation dated May 11, 1948 the Collector could exercise the powers of requisition only in respect of lands within the locaniinits of the territories then fotming part of the Hooghly District.

HELD : (i) The first contention had no force. Section 3 of the Chandernagore (Merger) Act, 1954 made Chandernagore part of the State.of West Bengal and s. 17 extended the Acquisition Act to it. Tlie •Acquisition Act was a law within the meaning of 'law' contained in s;2(c) of the Chandernagore (Assimilation of Laws) Act because it related to a matter enu.merated in List II in the Seventh Schedule to the Constitution whic~

refers to acquisition and requisitioning of property.

In so far as the Acquisition Act related to entry 42 of List III which deals with comiiensation, it was applied by s. 3 of the Chandernagore (Assimilation of Laws) Act, 1955, and s. 17 of the Chandernagore (Merger) Act, 1954, read with the definition. of the word 'laws' in s. 2(d) of the latter Act. [799 F•

800 A] ' The argument that the Acquisition Act was not in fclrce in West Bengal 'generally' because it was extended for short periods from time to time,. could not be accepted.

The word 'generally' refers to the territory of West Bengal and not to the duration of time during which it had to operate.

[800 B-C] ·~ The contention that because there was no corresponding law within the meaning of s. 17 of the Merger Act and s. 4 of the Assimilation Act, s. 3 of the latter Act did not have the effect of extending the Acquisition Act to Chandernagore must also be rejected. Section 4 has .. a limited effect

79H

SUPRFME COURT REPORTS

(1971 J 3 S.CK.

and that is that if there :s a corrcsj, onding law then that law shall. ; is from that date, stand 'repealed in (handcrnagore. If there is no corresponding law then s. 4 does not operate and it has no effect on the scope ot s. 3. f800 DJ

The fact that there ":as no la\v of rcquisifoning of property in French

trritory could not mean that the citiz'!n enjoyed th~ privilege of in1rnunitv 1rom such a law. If by virtue of s. 3 of the Assimilation of Laws Act .:1n Act hccomcs applicable to Ch; indcrnagorc all Privileges and imn1unities in conflict with the Act would cease to exist. [800 E-FJ B

(ii) The High Court was right in holding that the Collector of Hooj!ly 1u1J the otuthority to issue lhc orders in question. .Jf the order of requisition is by a Collector then the notification of 1948 applies and the C<>l- Jcctoi' of Hoogly \\-Ould he authorised to issue orders rcqu:sitioning J.and c.xi'iting in ChanJcrnagorc hecausc Chandernagore had come \\:ithin the .limits of his jurisdiction.

The notification must be construed to refer lo the liMils of the District as it exists on the date of the exercise of the Powers conferred by the notification.

If the ordei"s of requisition wcri: issued by the Additional District Magistrale, then he had authority bv virtue of notification dated Sepatember 15, 1959, by which he wos em- .powered to perform the functions of a Collector.

The said nl1titication amounted to 'special' appointment. of the said officer within the rncanin!! of the definition of 'Collector"· in the Acquisition Act as it stood in 1959.

TSOO G-801 BJ

C1v1L APPELLAT_E JURISDICTION: Civil Appeal No. 500 of 1967.

Appeal from the judgment and order dated January 13. 1965 of the Calcutta High Court in Appeal from original order No. 10.l of 1963.

Art111 K. Dutt, D. N. Mukherjee and S. Dey, for the appellant.

Niren De, Attorne)'-Genera/ aind P. K. Chakravarti. for the respondents.

The Judgment of the Court was delivered by F

Sikri, C.J.

In our order dated March I 0, 1970, we stated that we will give our reasons later for rejecting the points raised before us. We now proceed to give. those reasons.

This is an appeal against .the judgment of the High Court of -Calcutta (Bose, C.J., and Mitra, J;) dismissing the appe:ll of G Sachindra Mohan Nandy and Janandra Mohan Nandy, now appellants before us, against the judgment of Mukharji, J., dischargtng the rule obtained by the appellants under Art. 286 of the Constitution. In order to appreciate the. points rasied before u> it is necessary to state the relevant facts.

On October 9, 1960 and October 10, 1960, the Collector of -H Hoogly made iwo orders under s. 3(1) of the West Bengal Land (Requisition and Acquisition) Act, 1948-hereinafter referred to

F ..

',..,

as the Acquisition Act.

The Collector purported to requisition land belonging to the appellants for certain public purpose&. He had issued the orders in exercise of the powers which had been conferred upon him by notification No, 3775-L.A. dated May 11,

1948, published in the Calcutta Gazette, Part I, on May 27, 1948.

This notification had authorised the Collector to exercise the powers under s. 3(1) of tl:!.e Acquisition Act. When this notification was passed Chandemagore, where the requisitioned land is situate, was not part of West Bengal and it is on this fact that one argument, shortly to be mentioned, rests.

According to the appellants the Acquisition Act has never been extended and made applicable to Chandernagore. For \lPPreciating this particular poin!. it is necessary 1lo state the history of Chan demagore.

It is well-known that it was a French settlement in India, and it was only on October 2, 1954, that it was merged in 'the State of Bengal Secfion 3 of the Chandernagore (Merger) Act, 1954 (XXXVI of 1954) provided that Chandernagore shall form part of the State of West Bengal, District of Hoogly, and the . State Government shall provide for the administration of Chandernagore by constituting it into a new sub-division of the District of Hoogly.

Section 17 provided that "all laws which immediately before the appointed day extend to, or are in force in, the State of West Bengal generally shall, as from that day, extend to, or, as the case may lie. come into force in, Chanderna gore." Section 18 has not much relevance but the learned counsel relied on it. Section 18(1) reads thus :

"18(1) Repeal of Correspondinl! laws and savings : Any law in force in Chandernagore 'immediarely before the appointed day (hereafter in this Act referred to as the

"correspoing aw") which corresponds to any law re- !er!cd to m. section 17, whether suh corresponding Jaw 1s m force m Chandemagore by Virtue of the Chail'dernagore (Application of Laws) Order, 1950, or by virrue 0f any notification issued under th~ <; handernagore (Ad ministration) Regulation, 1952 (Reg. 1 of 1952) or otherwise, shall, a. from that duty, stand repealed in Chandernagore.

The word "law" was defined in the Chandernagore (Merger) Act, 1954, as follows: (S. 2(d))

" "law" means so much of any enactment, Ordinance, Regulation, _order, rule, scheme, notification, bye- Jaw or any other mstrument having the force of law as relates to matters Clnumerated in List I and List Ill in the Seventh Schedule to the Constitution."

SUPREME COURT .. RBPORTS

[1971] 3 S.CR.

, After this the Legislature of West Bengal enacted the Chan- . demagore (Assimilation of Laws) Act, 1955. Section 2(c) bf this

Act defined "law" to mean "so much of any Act, Ordinance, Regulation, order, rule, scheme, notification, .bye-law or any other instrument having the. force of law as relates to matters enumerated in List II in the Seventh Schedule to the Constitution of India." Section 3 provides that "all laws which immediately before .B the appointed day extend to, or are in force in, the State of West Bengal generally shall, as from that day, extend to, or, as the case may be, come into force in Chandernagore." Section 4(1) provided for repeal of corresponding laws and reads :

"4(1) Any law in force in Chandemagore immediately befpre the appointed day (hereinafter in this Act referred to as "corresponding law") which corresponds to any law referred to in section 3, whether such corresponding Jaw is in force in Chandernagore by vir1!ue of 'the Chandernagore (J\pplication of Laws) Order, 1950

or by virtue of any notification issued under the Chandernagore (Administration) Regulation, 1952, or otherwise, shall as from the day stand repealed in Chandernagore."

Section 8, which was inserted in 1959, removed certain doubts regarding the extension of certain acts to Chandernagore, in the following terms :

"8. Notwithstanding anything .to the contrary, in any judgment or decision of any court1 tribunal or authority, the' following Acts, tha~ is to say,-The West Bengal Land Development and Planning Act, 1948, The West Bengal Non-Agricul•ural Tenancy Act, 1949 and The West Bengal Estates Acquisition Act, 1953 shall extend to and be deemed always to have extended to Chandernagore with effect from the !lppointed day!'

We may here set out the notifications empowering Sri B. K.

Chatterjee, I.AS. to perform the functions of the Collector in the District of Hooghly under the. Acquisition Act.

By the . first notification dated September 15, 1959, the Governor was pleased "to specially appoint Sri B. K. Chatterjee, I.AS., Additional District Magistrate, Hooghly, to perform the functions of a Collector .under the said Act in the District of Hooggl.y." Another notification issued on the same day had authorisea Sri B. K. Cliatterjee, I.AS., Additional'District Magistrate, Hooghly, to requisition by order in writing any land 'within the local limits of the District of Hooghly. The two requisition orders purport to have been signedby the Collector of Hooghly.

-11.

The notification dated May 11, 1948, to which reference has been made above reads as follows : "No. 3775 L.A. (P.W.) 11th May, 1948. In exercise of the powers conferred by Sub-section (1) of Section 3 of the West Bengal Land (Requisition and Acquisition) Act 1948 (West Bengal Act II of 1948), the Governor is pleased hereby to authorise each of the Collector and the Deputy Commissioners mentioned in the Schedule below to requisition, by order in writing, in pursuance of the provisions of the said Sub-section

(1) of the said Section 3, (torn) land within the local limits of his jurisdiction and (torn) to make such further C orders as appear to him to be necessary '<lr expedient in connection with the requisitioning :

Schedule.

Collector of Hooghly District

" The learned counsel has raised \]le following points before us :

(1) that the orders of requisition were illegal as the Acqu!sition Act under which they were issued did not apply to the territlory

previously known as French Chandernagore; and (2) that under the notification dated May 11, 1948, the Collector could exerci&e

the powers of requisition only in respect of lands within the local limits of the territories then forming part of the Hooghly District.

Regarding the first point, it seems' to us that there is no force in the contentions. Section 3 of the Chandernago1e (Merger) Act, 195.4, made Chandernaore part of tbe State of West Bengal, and s. 17 extended the Acquisition Act to it. The Ac9uisition Act was a law within the meaning of "Jaw" contained m s. 2(c) of the Chandernagore (Assimilation of Laws) Act because it relatec; I to a matter enumerated in List II in the Seventh Schedule to the Constitution. List II, as it then existed, contained the following entries :

"36. Acquisition or requisitioning of property, except for the purposes of the Union, subject to .the provisions of entry 42 of List III." Entry 42 of List III was to the following effect :

"Principles on which compensation for property acquired or requisitioned for the purposes of the Union or of a State or for any other public purpose is to be determined, and the form and the manner in which sucl1 compensation is to be given." 7--LI 100 Sup.Cl/71

SUPREME COURT REPORTS

[1971] 3 S:C.R.

Insofar as the Acquisition Act related to entry 42 of, List III A it was applied bys. 3 of the Chandemagore (Assimilation of Laws) Act 1955, ands. 17 of the Chandemagore (Merger) Act, 1954, read with the definition of the word "law" in s. 2(d) of the latter Act. ' The learned counsel further urged, before us that this law was not in force in the State of West Bengal "generally" bceause it pro- B vided that it shall remain in force upto a certafn date and this qate had been changed from tiine to cime. In 1954 it was provided that it shall remain in force upto March 31, 1957. We are unable to appreciate how the word "generally" has any reference to the duraiion of the time during which an act has to operate. We agree with the High Court that the word "generally" refers to the territorv of c West Benga.. , Another argument that was urged before us was that because there was no corresponding law within the meaning of s. 17 of the Chandernagore (Merger) Act, 1954, and s. 4 of the Chandernagore '(Assimilation of Laws) Act, 1955, s. 3 of the latter Act did not have the effect of extending the Acquisition Act to Chan- 0 dernagore. We are unable to appreciate this reasoning. Section 4 has a limited effect and that is t1hat if there is a corresponding law then that law shall, as from that date, stand repealed in Chandernagore. If there is no corresponding law then s. 4 does not operate and it has no effect on the scope of s. 3.

It was finally urged-in this connection that as there was no law E , on the subject of requisitioning of property in French territory, the citizens enjoyed the privilege of immunity and any order to deprive the citizens of that immunity should have, been much more specific.

We agree with the High Court that there is no force in this contention. If by virtue of s. 3 of the Assimilation of Laws Act an Act becomes applicable to Chandetnagore all privileges and immu- llities in conflict with that Act would cease to exist.

, F Coming t<i the seco11d point, we agree with the High Court that the Collector .J>f-Hooghly had the authority to issue the orders of requisition in question. If the order of requisition is by a collectqr, then the no.tification of 1948 applies and the Collector of Hooghly would be authorised to issue orders requisitioning land G existing in Chandemagore because Chandernagore had come within the limits of his jurisdiction. The notification must be construed to refer to the limits , of the District as it exists on the date of the exercise of the powers conferred by the notification. If the orders of requisition were issued by Shri B. K. Chatterjee, l.A.S., Additional District Magistrate, then he had authority by virtue of the notification dated September 15, 1959, mentioned above.

H The learned counsel, referring to the Acquisition Act, as it stood in 1959, and the definition of "collector" ("the Collector of

a district and includes a Deputy Commissioner and any officer specially appointed by the State Government to perform the functions of a Collector under this Act) urged that the Additional District Magistrate was not "specially appointed." There is no force in thi; point. The notification of September 15, 1959, amounts to special appointment within the definition of "Collector."

We referred the following question to the Constitution Bnch which has answered it in the negative :-

"Whether the West Bengal Land (Requisition and Acquisition) Act 1948 is ultra vires the Constitution under Art. 19(1)(f) read with Art. 19(5) ?"

In the result the appeal fails and is dismissed with costs.

G.C.

Appeal dismissed.

S

SACHINDRA MOHAN NANDY.& ORS

STATE OF WEST BENGAL & ORS

February 19, 1971

S. M. SIKRI, C.J.

V. BHARGAVA, JJ

Act

October 2, 1954

s. 17

Seventh Schedule

West Bengal

s. 18

s. 3

Seventh Schedule

s. 4

May 11, 1948

s. 3(1)

Art. 226

Hooghly District

Section 3

Chandernagore

s. 17

Seventh Schedule

s. 3

s. 17

s. 2(d)

s. 17

s. 4

s. 3

Section 4

s. 4

s. 3

s. 3

TSOO G-801 BJ

Calcutta High Court

K. Dutt

D. N. Mukherjee

S. Dey

Niren De

P. K. Chakravarti

F

Sikri

High Court of -Calcutta (Bose, C.J.,

Mitra

G Sachindra Mohan Nandy

Janandra Mohan Nandy

Mukharji

Art. 286

October 9, 1960

October 10, 1960

s. 3(1)

s. 3(1)

Chandemagore

India

State of Bengal

Section 17

Chanderna

Section 18

Section 18(1)

section 17

S. 2(d)

Seventh Schedule

SUPREME COURT

SUPREME COURT .. RBPORTS

[1971] 3 S.CR.

Legislature of West Bengal

Section 2(c)

Seventh Schedule

Constitution of India

Section 3

Section 4(1)

section 3

Section 8

Tenancy Act, 1949

B. K.

Chatterjee

Hooghly

September 15, 1959

B. K. Chatterjee

B. K. Cliatterjee

11th May, 1948

Section 3

West Bengal Act

Section 3

Section 3

Chandernaore

s. 17

s. 2(c)

Seventh Schedule

Insofar as the Acquisition Act

s. 2(d)

March 31, 1957

s. 17

s. 4

s. 3

Section 4

s. 4

s. 3

s. 3

Chandetnagore

Constitution Bnch

Art. 19(1)(f)

Art. 19(5)


so~

ASSTT. COLLECTOR OF CUSTOMS

CHARAN DAS MALHOTRA February 19, 1971

[J. M. SHELAT AND C. A. VAIDIALINGAM, JJ.J

Customs Act (52 of 1962), s. 110 (I) and (2) and proviso-Power of extension of period,"· quasi judici<l-'Su/ficient cause being shown'-Scope oJ.

Under s. 110(1) of the Customs Act. 1962. if a proper officer has 'reason to believe' that any goods are liable to confiscation under the Act, he may seize such goods. Section 124 provides that no order confiscating any goods shall be made unless the owner of the goods is given notice in writing informing him of the grounds on which it is proposed to confiscate the goods. Under s. 110(2) where any goods are seized under sub-s. (1)

and no notice in respect thereof is given under s. 124 within six months of the seizure, the goods shall be returned to the person from whose possession they were seized; provided, the period . of six months may 'on •ufficient cause beipg shown' be extended by the Collector of Customs for a period not exceeding six months.

On March 19, 1963 goods were seized from the respondent and, on September 19, 1963 an extension for a period of four months was applied !or by the customs authorities and was granted by the Collector on the ground that certain inquiries yet remained to be made by them.

On February 20, 1964, that is, one month after the extended period had expired, the Collector passed an order granting further extension for two months. Both the extension orders were passed without giving any oppor- . 1unity to the respondent. The respondent challenged the second extension and the High Court held that the orders of extension we're bad as the Collector had to decide the application for extension judicially. In appeal :to this Court.

HELD : The power of extension under the proviso was quasi-judicial, Or at any rate, one requiring a judicial .approach, and therefore, an oppor- 1unity of being heard ought to have been given to the respondent before ordering extension. [811 B-C]

(a) The policy of the Legislature is, that in view of the extraordinary power of seizure the inquiry should ordinarily be completed within six months but in exceptional cases, the legislature entrusted to a superior officer ihe power of extension on sufficient' cause being shown. The Collector is not expected to pass extension orders mechanically or as a matter of routine but only on being satisfied that there exist facts which. inicatc that investigation could not be. completed for bona fide reason~ within the time of 6 months laid down 1n s. 110(2). [808 C-E; F-GJ

(b) Whereas s. 110(1) uses the expression re!'son to believe for enabling a custom~ officer to seize te goods, the provt"? to .sub-s. (2) uses the H expression sufficient er.use being sho'!'n. Sub-Section (I). does not c; ontemplate an inquiry at the stage of seizure, the ?nly reqmrement bemg the satisfaction of the concern~ officer that the are relevant i; easons. to hclieve that the goods are hable to confiscahon by reason of illegal 1m-

G '

l portation. The words sufficient cause being shown mean that the Collector must determine on materials placed before him that they warrant extension of time.

Furthel', the civil right to have the seized goods restored which accrues on the expiry of the initial six months is defeated on extension being granted.

Therefore, when the statute requires the determination of a sufficient cause on facts produced before the Collector it should be held to be a quasi judicial function or at least a function requiring judicial approach; and there is no distinction between extension orders passed before and those passed after the expiry of the initial or the extended period. [808 H; 809 A, C-D; 811 C-D)

( c) When an order is n1ade in bona fide exercise of power and within the provisions" of the Act which confer such power, the orderis immune from interference by a court of law and therefore, the adequacy orthe cause shown may not be a ground for interference, but the Collector has to hold an inquiry on facts, that is, on material placed before him,· and consider the pros and cons of the question. [809 D-E; 811 El

( d) By holding such inquiry there is no danger of disclosure of facts which would be detrimental to the investigation.

The only disclosure would be about the fact that investigation at some place or places and about certain matters was still incomplete and pending.

As between the right of the person from whom the goods were seized and the supposed danger to the investigation, the matter is not so weighted that it should be held that the Legislature could not possibly have contemplated a judicial approach by the Collector when he orders of extension of time. [813 G-H;

814 B-D]

Kraipak v. Union of India, [1970) 1 S.C.R. 457, followed.

Lakhanpal's case, A.I.R. 1967 S.C. 1507 and De Verteuil v. Knaggs, [1918] A.C; 557, referred to

Sheikh Mohcmmed Sayeed v. Asst, t. Collector of Customs, A.l.R. 1970 Caj. '134, GaneshmuJ Channilal Gandhi v. Collector of Central Excise, A,1.R. 1968 Mys. 89 and Mis. Prakash Cotton Mi/ls Pvt. Ltd. v. Asstt.

Collector of Central Excise, Bombay, M.P. No. 127/1963 di. 31-8-1970, overruled,

, CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1056 of 1967. ' Appeal from the judgment and decree dad May 12, 1967 of the'Calcutta High Court in Appeal from OrigiJ1, lll Order No. 21S of 1966.

R. H. Dhebar and S. P. Nayar, for the appellants.

• S. T. Desai and P. C. Bhartari, for the respondent.

The Judgment of the Court was delivered 'by

Shelat, J.

This appeal, under a certificate, raises two questions.

The first is as to the nature of the power of the Collector of Customs under the proviso to the second sub-section o.f s. 110 of the Customs Act, 52 of 1962, and the s, econd is as to whether the Collector under that proviso can extend the period

for giving notice under s. 124(a) of the Act either after the initial A period of six months or the extended period has already expired.

In 1963, the respondent carried on business as a dealer in watches in the name and style of Wallton Watch Company in Calcutta. In 1955, he also used to have another business premises where he carried on the same business in the name of Walcon Watch Company.

That business was wound up in that year and he had the stock-in-trade of that business transferred to I.is business carried on in the. name of Wallton Watch Company.

On March 19, 1963, the Rummaging staff under the appellant raided the respondent's business premises and seized 218 watches, all of foreign make, 87 of these watches, ho'(l'ever.

were released on the respondent then and there producing vouchers relating to them.

Later on, 21 more watches were released on September 18, 1963 and February 27, 1964 on more vouchers having been produced. The case of the Customs authorities, however, was that he was not able to produce documentary evidence in respect of the rest of the watches, and therefore. their release was not possible.

On March 6, 1964, the appellant served on the respondent a notice under s. 124(a) to show cause why the rest of the said watches should not be confiscated and personal penalty should not be imposed upon him.

Watches imported without licence or -0n which proper import duty has not been paid are undoubtedly liable to confiscation under s. lll(d).

Sec. 110, which finds its place in Ch. XIII dealing with searches, seizure and arrest, provides for seizure, inter alia, of goods.

Under sub-s. (1), if a proper officer has "reason to believe" that any goods are liable to confiscation under the Act.

he may seize such goods.

Sub-s. (2) reads as follows : F " ( 2) Where any goods are seized under sub-section ( 1) and no notice in respect thereof is given under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized : Provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the Collector of Customs for a period not exceeding six months."

Sec. 124 provides that no order confiscating any goods or imposing any penalty on any pers?n hall be m_ade. uril~. the. owner H of the goods or such person 1s given a notice m wntlng mforming him of the grounds on which it is prposed to confiscate the goods or to impose a penalty.

The section does not lay down

any period within which the notice required by it has to be given.

The period laid down in s. 110 ( 2) affects only the seizure of the goods and not the validity of the notice.

Since the watches in question were seized on March 19, 1963, the initial period of six months provided under the second subsection of s. 110 expired on September 19, 1963 and the respondent became entitled to the return of the said watches as no show cause notice had tilL then been issued to him.

But the appellant's case was that an extension for a further period of four months was applied for and was granted by the Collector on September 19, 1963 under his power under the said proviso on the ground that certain inquiries at Bombay and Delhi yet remained to be made.

The extended period of four months expired on January 19, 1964 and a further extension of two months was applied for on January 3, 1964.

But the Collector passed his order granting further extension on February 20, 1964, that is to say, about a month after the first extended period had expired.

Admittedly, both 'the extension orders were passed ex parte and without any opportunity of being heard having been given to the respondent.

The respondent, therefore, got no chance to resist either of the two applications for extension and to show that no sufficient cause had been shown, and that therefore, no order of extension was justified or should be granted, and the watches shol!ld, as provided by s. 110(2), be restored to him.

He also got no opportunity to plead before the Collector that the right to have the watches restored to him having already accrued to him on January 19, 1964, it could not be defeated by an order of extension passed after the first extended period had already lapsed.

Aggrieved by the two orders of extension passed in the manner aforesaid, the respondent moved the High Court of Calcutta under Art. 226 of the Constitution, contending that the proviso to s. 110(2) envisaged only one extension, and that therefore, the second extension was invalid.

The learned Single Judge, who heard the writ petition, rejected this contention holding that the proviso empowered the Collector to grant as many extensions as the completion of the inquiry and the issuance of the notice under. s. 124(a) required but in no case exceeding six months at a time.

The second contention urged by the respondent was that the period of the first extension having expired on January 19, 1964 and no further extension having been granted by that date, he became entitled to restoration of the said. watches and the second order extending the period by two months more granted a month after the expiry of the first extended period would be of no avail to the Customs authorities.

This contention too was rejected lln

the ground that where there is a prescribed time for doing a thing but ai:J. express power is given to an authority to extend that time, such power can be exercised even after the prescribed time has expired unless there is an express provision prohibiting to do so.

There was no such provision.

The learned Single Judge also held that there was no need to give to the respondent any notice of the applications for extension, the only requirement being that a sufficient cause had to be shown t<) the satisfaction of the Collector.

The .learned Judge also rejected a third contention by the respondent that in the absence of any information with the Customs officers as regards the watches save that they were of foreign manufacture, they could not have entertained any reasonable belief that their importation was contrary to or in violation of aqy statutory provision.

This contention was rejected on the strength of the supplemental affidavits of the Customs officers ord\lred by the learned Judge.

The result was that the learned Judge dismissed the writ petition negativing, inter a/ia, the respondent's plea as to the restoration of the seized watches.

On an appeal by the respondent, a Division Bench of that High Court took a contrary view.

It held that the watches having been seized on Marc!"! 19, 1963, the period of six months expired on September 18, 1963, that if a notice under s. 124(a) was not given by that time, s. 110(2) imposed a statutory obligation on the customs to return the goods to the person from whom they were seized.

The Division Bench observed that even assuming that the first extension which was granted ex parte and without any opportunity to the respondent of being heard were to be valid, the period of four months granted then havi'lg !!Xpired on January 19, 1964 and no order for further extension having admittedly been made, it was obligatory on the Customs to return the watches to the respondent.

There being such a statutory obligation under s. 110(2), there was a corresponding statutory right in the respondent to have them restored to him.

The Division Bench was of the view that such a right having accrued to the respondent, it coulcl not be defeated by an order passed one month after the lapse of the first extended period.

It also held that the words "sufficient cause being shown" used in the proviso meant that the Collector had to decide an application for extension judicially, the reason being that the Collector could not fairly and justly determine that a sufficient cause was shown without hearing the pros and cons of the question, and therefore, he had no jurisdiction to grant extension witho1;1t giving t? the resp?dnt an opportunity of being heard.

In this connectmn the D1v1s!on Bench observed :

"As Jon~ as the period of issuing notice has not expired, it iight be one thing.

But quite a different

set of circumstances arise when the period has e. :xpired and the right to the return of the goods is vested; ln the person from whose possession the goods are seized. If you are to take away the right you can only do that for a sufficient cause.

How can the officer concerned decide as to whether a sufficient cause has been shown, so as, to divest a vested right, unless he hears the parties affected.

Even after the supplementary affidavits were filed in this case, it is extremely doubtful whether a sufficient cause has been shown."

,\ccording to the Division Bench, even if the Collector's functioll' under the proviso were to be treated as an administrative function, his authority being to determine the question affecting the rights of the citizen, there was an implied duty to act judicially.

On this reasoning, the Division Bench held that in any event the , second order of extension was bad.

It also found that the show cause notice issued under s. 124(a) was vague, gave no opportunity to the respondent to explain the allegations contained therein, and therefore, was bad, with the result that the appellant would be required to give a fresh notice.

For the reasons above stated, t6e Division Bench reversed the judgment of the Single Judge and allowed the writ petition.

The correctness of this judgment is the subject matter of this appeal.

We may at this stage mention that cotms.el for appellant fornmlated the following two contentions only :

(I) that the liability to return the goods seized under s. 110 (1 ) on the expiry of the time prescribed under sub-s. (2) is not absolute as it is subject to the period being extended for a period not exceeding six months, that is to say, within the over all period of one year; that therefore, there is no question of any right beinl, l vested in the respondent on the expiry of the first six months or the extended. period or such right being divested until one year from the date of seizure has expired: and

( 2) that, te proviso to s. 110 ( 2) does not cotem plate any ilOhce to the respondent as the cons1dea tions which would weigh with the Collector or which. would be relevant for granting extension would be of such a nature that they could not be disclosed. such disclosure being against public interest; tht only !WO requirements are envisaged for the extension of Hme

and they are ( i) that a sufficient cause is shown. and

(ii) that the extension is within one year.

As already stated, sub-s. (1 i of s. 110 authorises seizure. the .only requirement being a reasonable belief on the part of the con-

<:erned officer at the time of seizure.

The . power of seizure founded on a mere reasonable belief being obviously an extra- .ordinary power, the second sub-section envisages i; ompletion of the enquiry within a period of six months from the date of seizure.

But it provides that if such an enquiry is not completed within that period and a notice under s. 124 (a) is, therefore, not given, the person from whom the goods are seized become: -entitled to their restoration.

However, on the supposition that in some cases such an investigation may not be c_ompleted owing to some difficulties, the legislature gave under the proviso power to the Collector, an officer superior in rank and also an appellate .authority under s. 128, to extend the time on 'two conditions. namely, (1) it does not exceed one year, and (2) on sufficient cause being shown.

The policy of the legislature, therefore, clearly was that in view of the extraordinary power of seizure, the enquiry should ordinarily be completed within six months but since it might not be possible to do so in some cases, it gave power of extension to the Co'.!ector.

The legislature was thus careful to entrust the power of extension to a superior officer who also has the power to hear inquiries under the Act involving penal consequences and also appeals.

Cases where extension would have to be asked for and granted are thus envisaged as exceptions to the general rule of six months laid down in sub-s. (2). The second limitation to the power is that such extension can be granted only on sufficient cause being shown, a phrase often used in provisions for condonation of delay, such as s. 5 of the T_;; nitation Act, 1908.

There can be no doubt that the proviso to the second sub section of s. 110 contemplates some sort of inquiry.

The Collector, obviously, is expected not to pass _extension orders mechani

cally or as a matter of routine, but only on being satisfied that there exist facts which indicate that the investigation could not be completed for bona fide reasons within the time laid down in s. 110(2), and that therefore, extension of that period has become necessary.

He cannot, therefore, extend the time unless he is satisfied on facts placed before him that there is a sufficient cause necessitating extension.

The burden of proof in such an inquiry is clearly on the Customs officer applying for extension and not on the person from whom the goods are seized.

The question, therefore, is as to the nature of such a function and power entrusted to and conferred on the Collector by the proviso.

It will be noticed that whereas sub-s. ( 1) of s. 110 uses the expression "reason to. believe" for enabling a Customs Officer 'to seiz1! goods, the proviso to sub-section (2) uses the expression 'su.'ficient cause being shown" It would seem that su?-s. ( 1) does not contemplate an inquiry at the _stage of seizure, the only requirement being the satisfaction of the concerned officer that there are reasons to believe that the goods are liable to confiscation by reason of their illegal importation. Even so, such satisfaction, as laid down in Narayanappa v. Commissioner of Income Tax, Bangalore('), is not absolutely subjective inasmuch as the reasons for his belief have to be relevant and not extraneous. It is clear that the legislature was not prepared to use the same language while giving p_ower to the Collector to extend time and deliberately used the expression "sufficient cause being shown".

The point is why should the legislature have used such a different expression while enacting the proviso if its intention was to confer power whic1i would depend on a more subjective satisfaction as to the cause for extension.

The words "sufficient cause being shown" must mean that the Collector must determine on materials placed before him that they warrant extension of time.

Where an order is made in bona fide exercise of power and within the provisions of the Act which confers such power, the order undoubtedly is immune from interference by a court of Jaw, and therefore, the adequacy of the cause shown may not be a ground for such interference.

But there can be no doubt at the same time that the inquiry to be held by the Collector has to be on facts, i.e., matertals placed before him.

There is therefore no question in such cases of the subjective satisfaction of the Collector, for, what he is asked to do by the proviso is to determine that the cause shown before him warrants an extension of time.

In l,, akhampal's case("), this Court noticed a similar difference of language used in rr. 30(1 )(b) and 30-A(9) of the Defence of India Rules, 1962 which dealt with two different types of powers.

Though it was a case dealing with preventive detention, what is important is that the decision primarily depended on the difference in language used in the two rules and the difference it made in the character of the two powers.

A similar expression, though not exactly the same, also came to be construed by the House of Lords in De Verteuil v. Knaggs & Anr..(8), a case often referred to wh; le determining the nature of power. The question which arose there was whether under s. 203 of the Trinidad Immigration Ordinance, No. 161, the government could pass an order transferring indentured labour from one employer to another without notice to the concerned employer against whom complaints as to treatment of the labourers were made. The section provided that if at any time "it appears to the governor on

(I) 63 I.T.R. 219.

(2) A.I.R. 1967 S.C. I 507.

(3) [191F[ A.C'. 557 ..

sufficient ground shown to his , satisfaction, that all or any of the immigrants indentured on any plantation should be removed therefrom. it shall be lawful for him to transfer the indentures of such immigrants to any other employer.'' Construing this provision, Loid Parmoor observed at p. 560 of the report :

"The Ordinance does not prescribe any special form of procedure, but there is an obvious implication that some form of inquiry must be made, such as will enable the Governor fairly to determine whether a sufficient ground has been shown to his satisfaction for the removal of indentured immigrants ... What is the procedure which in such a case the law will imply when the Legislature is silent '!

The acting Governor was not called upon to give a decision on an appeal between parties, and it is not suggested that he holds the position of a judge or that the appellant is entitled to insist on the forms used in ordinary judicial procedure ..... On the other hand, the acting Governor could not properly carry through the duty entrusted to him without making some inquiry whether sufficient grounds had been shown to his satisfaction that immigrants indentured on the La Glaria estate of the appellant should be removed. Their Lordships are of opinion that in making such an inquiry there is, apart from special circumstances, a duty of giving to any person against whom the complaint is made a fair opportunity to make any relevant statement which he may desire to bring forward and a fair opportunity to correct or controvert any relevant statement brought forward to his prejudice."

In Kraipak v. Union of India(1) the power of a selection board to prepare a selection list from amongst the public servants for appointment in the senior and junior scales was held to be quasijudicial although the board had no power of appointment itself.

In doing so, this Court observed that the dividing line between judicial and administrative functions was thin and gradually evaporating', .and that the functions performed by those doing judicial function and administrative function, where the rights ot citizens are affected to their pre.judice. had the same object, namely, to do justice and deciding the question fairly and justly. ln the former case, there would be express rules of procedure, but the object of those rules is only to em1ble or facilitate to decide fairly and justly.

The Court also pointed out that in recent years the concept of quasi-judicial power has been undergoing a radical change and noted with approval the decision in Regina v. Criminal Injuries Compensation Board Ex parta Lain(")' where it was

(I) [1970) 1 S.C.R. 457.

(2) [1967] 2 Q.B. 864.

held that certiorari would be available not only where the impugn

ed order infringes immediately enforceable rights but also where it is a step as a result of which legally enforceable rights may be affected. If the power of preparing a selection list without the power to appoint, as in Kraipak's case(!), and power to transfer indentured labour from one to another employer, as in De Vertcuil

v. Knaggs('), are held, in the context of their respective provisions, to be quasi-judicial powers, there is no reason why, when the statute requires the determination of a sufficient cause on facts produced before the Collector should be held not to be a quasi judicial function or at least a function requiring judicial approach.

But it may be said that in both thgse cases there was a civil right involved and the power, therefore, had to be held to be q11a.1ijudicial.

But in the present case also, the right to restoration of the seized goods is a civil right which accrues on the expiry of the initial six months and which is defeated on an extension being granted, even though such extension is possible within a year from the date of the seizure.

Since the Collector has on facts to decide on the existence of a sufficient cause, although his decision as to sufficiency of materials before him may be within his exclusive jurisdiction, it is nonetheless difficult to comprehend how he can come to his determination unless, as the Division Bench of the High Court has said, he has before him the pros and cons of the question.

An ex parte determination by the Collector would expose his decision to be one-sided and perhaps one based on an incorrect statement of facts.

How then can it be said that his determination that a sufficient cause exists is just and fair if he has before him a one-sided p:tJre without any means to check it unless there is an opportunity to the other side to correct or controvert it.

The difference in the language used in the first subsection and the proviso to sub-s. (2) lends support to the contention that the power in one case may be subjective, and therefore, not calling for an enquiry, and the power in the other is one, the exercise of which necessitates an enquiry into materials placed before the Collector for his determination.

In our view, these considerations lead to the conclusion that the power under the proviso is not to be exercised without an opportunity of being heard given to the person from whom the goods are seized.

In a recent decision in Sheikh Mohammed Sayeed v. Assistant Collector of Customs(') a contrary view has, however, been taken by a single Judge of the )ligh Court of Calcutta.

The extension order there was passed before the expiry of the initial six month~'

period.

But the contention raised was that an opportunity to be heard should have been given to the petitioner.

The learned --(t) [1970] I S.C.R 457.

12) [19181 A.C. 557.

0) A.1.R.1970Ca1.134.

Judge distinguished the decision of the Division Bench under this appeal (reported in A.LR. 1968 Cal. 28) on the ground that the

qution involved in tha~ dec!sion was whether an opportunity of bemg heard had to be given m respect only of an extension when the right to restoration of the goods .in question has already accrued to the party from whom they were seized, and therefore. the decision did not apply to the case before him when such a right had not vested in the petitioner.

With respect to the learned Judge, the distinction was not correct, firstly, because the first order of extension was only assumed to be correct as the Division

Bech concentrated its attention on the second order of extension which also involved the question of the right to restoration of the goods having already vested; and secondly, because the Division Bench set aside the extension order on the ground :hat the power of extension was quasi-judicial or at any rate one which required a judicial approach.

The latter ground applied to both the orders, and therefore. if" the second order of extension was bad. the first was for the same reason necessarily bad.

The order of extension in both the cilses would deprive the person from whom the goods are seized of the right to have the goods restored to him on the expiry of six months from the date of seizure.

As for his decision on the nature of the power, the learned Judge relied on decisions in Collector of Customs v.

N. Sampathu Chetty(').

Babula/ Amt halal v. Collector of Customs('), Pukhraj v. Kohli(") and Nathmal Jala11 v. Additional Collector of Customs(') which were all cases where the exercise of power depended on reasonable belief or reasons to believe. But he held that the power under the proviso to s. 110(2) should be construed on the same principles laid down in those decisions.

This is made clear at page 141 of the report where he observed :-

"In my view the same principles are attracted in construing the phrase 'on sufficient cause being shown' ..... With regard to the nature and sufficiency of the , cause, it is the satisfaction of the Collector of Customs that provides the ground and justification for an order extending the time to complete the inquiry ..... If the order' of extension is made before expiry of the inic ' tial period of six months, or before expiry of the extended period, it cannot in my view be challenged on the ground that notice to show cause, or opportunity of.. being heard. was not given to the party."

In our view, equating the power, the exercise of wkich depends on a mere reasonable belief, with the power, the exercise of .which depends on 'sufficient cause being shown' envisaging at

fl) A.I.R. 1962 S.C. 316.

(2) A.I.R. 19H S.C. 877.

(3) A.J.R. 1~62 S.C. 1559.

(4) 70C.W.N. 349.

II!

ASST. COLLECTOR CUSTOMS v. c. D. MALHOTRA (Shelat, J.) 813

• least some sort of inquiry on facts placed before the authority and determination by him on those facts, is not warranted.

Therefore, a conclusion based on such a premise creates difficulty in sustaiining it.

Further, the distinction between an order extending before and after the expiry of the i:nitial or the extendc ed period does not make any difference as was sought to be made by the learned Judge when one inquires into the character o.[ the power of extension.

Both would raise precisely the same question, whether the power is purely administrative requiring no opportunity of be.ing heard or judicial or quasi-judicial, as in both the cases the right to the goods being restored would be involved.

We cannot also agr_ee with the learned Judge that there is no indication in the Act 'ftJ suggest that the Collector is required to act judicially, firstly, because the proviso requires . determination on facts and not on mere suspicion and a sufficient cause being made out by the applicant-officer, and secondly, because a civil right of a citizen to the restoration of the goods on expiry of the period, whether initial or extended, is affected.

The other decisioo,. which takes a contrary view, is of the High Court of Mysore in Ganeshmul Channilal Gandhi v. Collector of Central Excise('). The grounds on which the learned Judges there took that view were (i) that the power was administrative, and (2) that if notice were to be necessary, the authority which applies for extension would have to make a disclosure about the investigatin, which disclosure would be detrimental to the investigation itself.

For the reasons already given we cannot agree with the first ground.

As for the second ground. we do not see any reason for the apprehension.

So far as the: initial period of six months is concerned, there is no question of disolosure of the investigation.

The legislature itself contemplated that ordinarily such an investigation would be completed within that period. The question of disclosure would arise only in cases where for bona fide reasons something yet remains to be done.

The only disclosure in such cnses would be about the fact that investigation at some place or places, or about certain matters is still incomplete and pending.

No one suggests that the inquiry to be held by the Collector would be similar to the one held in a court of law or that the officer applying for exte.nsion would be compelled to disclose the names of his informants or such other matters which would be detrimental to the investigation.

Even in more se'rious matters. such as applications for remand in criminal cases, opportunity to be heard has to be given

\fo one has yet suggested that such an opportunity is detrimental to the investigation. The unreported judgment of the High Court

(I) A.l.R. 19(8 Myrnrc

F9.

d14

SUPREME C'OL'RT REPORTS

[197J) 3 S.C'.R.

.of Bombay in M/ s. Prakash Collon Mi//.1 Pl'I. Ltd. v. Assis1a111 Collector of Cemrar Excise, Bombay( 1 ) does not throw a, ny further light as it is mostly based on the reasoning of the Mysore High Court.

We are not satisfied that as between the right of the person from whom the goods are seized and the supposed danger lo the investigation the matter is so weighted down that' we would be compelled 10 hold that the legislature could not pos-

'ibly have contemplated a judicial approach by the Collector when he orders extension of time, the effect of which would be the deprivation of, or in any event, postponement of the right to restoration.

In our view, the first question must be answered in favour of_ the respondent, and therefore, the -Division Bei.nch was right in holding that the power under the proviso was quasijudicial, or at any rate, one requirin_g a judicial approach. Consequently, an opportunity of being heard ou, ght to have been given to the respondent before orders for extension were made.

The High Court, consequently, was justified in ordering restoration of the watches in question to the respondent.

In this view it is not necessary for us to decide the second question raised by coumel for th~ respondent.

We are also not dealing with the question as to whether the notice under s. 124(a) was vague, and therefore, void as decided by the Division Bench.

That part of the decision of the High Court was not challenged before us, and therefore, we are not called upon to give our decision on that part of the case.

In the result, the judgment of the Division Bench has to be upheld.

The appeal will stand dismissed with costs.

V.P.S.

Appeal dismissed.

(t) M.P. No. 127 of 1963 dt. Augu't 31, t970

ASSTT. COLLECTOR OF CUSTOMS

CHARAN DAS MALHOTRA

February 19, 1971

M. SHELAT

Customs Act

s. 110

s. 110(1)

Customs Act

Section 124

s. 110(2)

s. 124

March 19, 1963

September 19, 1963

February 20, 1964

s. 110(2)

s. 110(1)

[1970) 1 S.C.R. 457

Lakhanpal

R. H. Dhebar

S. P. Nayar

S. T. Desai

P. C. Bhartari

Shelat

s. 110

Customs Act

s. 124(a)

Wallton Watch Company

Calcutta

Walcon Watch Company

I.is business

September 18, 1963

February 27, 1964

March 6, 1964

s. 124(a)

Sec. 110

section 124

Sec. 124

s. 110

s. 110

Bombay

Delhi

January 19, 1964

January 3, 1964

s. 110(2)

Art. 226

s. 110(2)

s. 124(a)

Marc!"! 19, 1963

s. 124(a)

s. 110(2)

s. 110(2)

s. 124(a)

s. 110

s. 110

s. 110

s. 124

s. 128

s. 5

s. 110

s. 110(2)

s. 110

akhampal

Defence of India Rules, 1962

s. 203

Loid Parmoor

[1970) 1 S.C.R. 457

Kraipak

ligh Court of Calcutta

s. 110(2)

High Court of Mysore

coumel

s. 124(a)

Augu't 31, t970