Section 8(1) of the Foreign Exchange Regulation Act states that the Central
Government may, by notification in the Official Gazette, order that, subject to
such exemptions, if any, as may be contained in the notification, no person
shall, except with the general or special permission of the Reserve Bank and on
payment of the fee, if any, prescribed, bring or send into India any gold or
silver or any currency notes or bank notes or coin whether Indian or foreign.
[Case Brief] State of Maharashtra v. Mayer Hans George
Case Name: State of Maharashtra v. Mayer Hans George
Case Number: 1965 AIR 722
Court: Supreme Court of India
Bench: Justice SUBBARAO, K.
Justice AYYANGAR, N. RAJAGOPALA
Justice MUDHOLKAR, J.R.
Decided on: 24/08/1964
Relevant Acts/Sections: Foreign Exchange Regulation Act (7 of 1947),
ss. 8(1) 23(1- A) & 24(1)
BRIEF FACTS AND PROCEDURAL HISTORY
1. The respondent, a German smuggler, left Zurich by plane on 27th November 1962
with 34 kilos of gold concealed on his person to be delivered in Manila. The plane
arrived in Bombay on the 28th but the respondent did not come out of the plane. The
Customs Authorities examined the manifest of the aircraft to see if any gold was
consigned by any passenger, and not finding any entry they entered the plane, searched
the respondent, recovered the gold and charged him with an offence under ss. 8(1) and
23(1-A) of the Foreign Exchange Regulation Act (7 of 1947) read with a notification
dated 8th November 1962 of the Reserve Bank of India which was published in the
Gazette of India on 24th November.
2. The respondent was convicted by the Magistrate, but acquitted by the High Court on
appeal.
3. In the appeal by the State to the Supreme Court, the respondent sought to support the
judgment of the High Court by contending that :
(i) Mens rea was an essential ingredient of the offence charged and as it was not
disputed by the prosecution that the respondent was not I aware of the
notification of the Reserve Bank, he could not be found guilty,
(ii) The notification being merely subordinate or delegated legislation could be
deemed to be in force only when it was brought to the notice of persons!
affected by it and
(iii) The second proviso in the notification requiring disclosure in the manifest
was not applicable to gold carried on the person of a passenger.
ISSUES BEFORE THE COURT
1. Whether Mens rea was an essential ingredient of the offence charged?
2. Whether the respondent could not be found guilty as he was not aware of the
notification of the Reserve Bank?
3. Whether the notification being merely subordinate or delegated legislation could be
deemed to be in force only when it was brought to the notice of persons affected by
it?
4. Whether the second proviso in the notification requiring disclosure in the manifest
was applicable to gold carried on the person of a passenger?
5. What is the meaning of the term "cargo" in the notification?
RATIO OF THE COURT
1. The court referred to the statement of Wright J. in Sheri-cis v. De Rutzen, which is as
follows: But unless the statute clearly or by fair implication rules out mens rea, a man
should not be convicted unless be has a guilty mind.
2. The court referred to the decision of the Judicial Committee in Srinivas Mail Bairoliya
v. King-Emperor. Lord Du Parcq quoted with approval the view expressed by the Lord
Chief Justice in Brend v. Wood: "It is of the utmost importance for the protection of the
liberty of the subject that a court should always bear in mind that, unless the statute,
either clearly or by necessary implication rules out mens rea as a constituent part of a
crime, a defendant should not be found guilty of an offence against the criminal law
unless he has got a guilty mind".
3. The court referred to the case of Lim Chin Aik v. The Queen, where it was held: (1) In
order to constitute a contravention of s. 6(2) of the Ordinance mens rea was essential.
(2) Even if the order of the Minister under s. 9 were regarded as an exercise of
legislative power, the maxim ’ignorance of law is no excuse’ could not apply because
there was not, in Singapore, any provision for the publication, in any form, of an order
of the kind made in the case or any other provision to enable a man, by appropriate
enquiry, to find out what the law was.
4. The court observed that the bringing of gold into India is unlawful unless permitted by
the Reserve Bank,-unlike as under the Singapore Ordinance in Lim Chin Aik v. the
Queen, where an entry was not unlawful unless it was prohibited by an order made by
the Minister. In the circumstances, therefore, mens rea, which was held to be an
essential ingredient of the offence of a contravention of a Minister’s order under the
Ordinance, cannot obviously be deduced in the context of the reverse position obtaining
under the Act.
5. The court observed that the act lays an absolute embargo upon persons who without the
special or general permission of the Reserve Bank and after satisfying the conditions, if
any prescribed by the Bank bring or send into India any gold etc., the absoluteness being
emphasised, as we have already pointed out, by the terms of S. 24(1) of the Act. No
doubt, the very concept of "bringing" or "sending" would exclude an involuntary
bringing or an involuntary sending. Thus, for instance, if without the knowledge of the
person a packet of gold was slipped into, 154 his pocket it is possible to accept the
contention that such a person did not "bring" the gold into India within the meaning of s.
8(1). Similar considerations would apply to a case where the aircraft on a through flight
which did not include any landing in India has to make a force landing in India-owing
say to engine trouble. But if the bringing into India was a conscious act and was done
with the intention of bringing it into India the mere "bringing" constitutes the offence
and there is no other ingredient that is necessary in order to constitute a contravention of
s. 8 (1) than that conscious physical act of bringing.
6. Wills J. stated in R. v. Tolson: "Although, prima facie and as a general rule, there must
be a mind at fault before there can be a crime, it is not an inflexible rule, and a statute
may relate to such a subject-matter and may be so framed as to make an act criminal
whether there has been any intention to break the law or otherwise to do wrong or not".
7. The court referred to the decision of the Privy Council is that reported as Bruhn v. The
King, where the plea of mens rea was raised as a defence to a prosecution for
importation of opium in contravention of the Straits Settlements Opium Ordinance,
1906. Lord Atkinson speaking for the Board, referring to the plea as to mens rea,
observed : "The other point relied upon on behalf of the appellant was that there should
be proof, express or implied, of a mens rea in the accused person before he could be
convicted of a criminal offence. But that depends upon the terms of the statute or
Ordinance creating the offence. In many cases connected with the revenue certain things
are prohibited unless done by certain persons, or under certain conditions. Unless the
person who does one of these things can establish that he is one of the privileged
classes, or that the prescribed conditions have been fulfilled, he will be adjudged guilty
of the offence, though in fact he knew nothing of the prohibition."
8. The court referred to Regina v. St. Margarets Trust Ltd.it was held: "The words of the
Order themselves are an express and unqualified prohibition of the acts done in this case
by St. Margarets Trust Ltd. The object of the Order was to help to defend the currency
against the peril of inflation which, if unchecked, would bring disaster upon the country.
There is no need to elaborate this. The present generation has witnessed the collapse of
the currency in other countries and the consequent chaos, misery and widespread ruin. It
would not be at all surprising if Parliament, determined to prevent similar calamities
here, enacted measures which it intended to be absolute prohibition of acts which might
increase the risk in however small a degree. Indeed, that would be the natural
expectation. There would be little point in enacting that no one should breach the
defences against a flood, and at the same time excusing anyone who did it innocently.
For these reasons we think that article 1 of the Order should receive a literal
construction, and that the ruling of Diplock J. was correct. It is true that Parliament has
prescribed imprisonment as one of the punishments that may be inflicted for a breach of
the Order, and this circumstance is urged in support of the appellants’ argument that
Parliament intended to punish only the guilty. We think it is the better view that, having
regard to the gravity of the issues, Parliament intended the prohibition to be absolute,
leaving the court to use its powers to inflict nominal punishment or none at all in
appropriate cases."
9. The court referred to the Indo-China Steam Navigation Co. Ltd. v. Jasjit Singh, where
speaking for the Court Gajendragadkar C.J. said : "The intention of the legislature in
providing for the prohibition prescribed by s. 52-A, is, inter alia, to put an end to illegal
smuggling which has the effect of disturbing very rudely the national economy of the
country. It is well-known, for example, that smuggling of gold has become a serious
problem in this country and operations of smuggling are conducted by operators who
work on an international basis. The persons who actually carry out the physical part of
smuggling gold by one means or another are generally no more than agents and
presumably, behind them stands a well-knit organisation which for motives of profit-
making, undertakes this activity."
10. The court observed that the very object and purpose of the Act and, its
effectiveness as an instrument for the prevention of smuggling would be entirely
frustrated if a condition were to be read into s. 8 (1) of s. 23 (1-A) of the Act qualifying
the plain words of the enactment, that the accused should be proved to have knowledge
that he was contravening the law before he could be held to have contravened the
provision.
11. The court observed that in Lim Chin Aik v the Queen, in the first place, the
order of the ,Minister dealt with by the Privy Council was never "published" since
admittedly it was transmitted only to the Immigration official who kept it with himself.
But in the case on hand, the notification by the Reserve Bank varying the scope of the
exemption, was admittedly "Published" in the Official Gazette--the usual mode of
publication in India, and it was so published long before the respondent landed in
Bombay.
12. Learned Counsel for the respondent also referred us to the decision of the
Bombay High Court in Imperator v. Leslie Gwilt(1) where the question of the proper
construction and effect of rule 119 of the Defence of India Rules, 1937 came up for
consideration. The learned Judges held that there had not been a proper publication or
notification of an order, as required by rule 119 and that in consequence the accused
could not be prosecuted for a violation of that order. But the court observed that where
there is a statutory requirement as to the mode or form of publication and they are such
that, in the circumstances, the Court holds to be mandatory, a failure to comply with
those requirements might result in there being no effective order the contravention of
which could be the subject of prosecution but where there is no statutory requirement
we conceive the rule to be that it is necessary that it should be published in. the usual
form i.e., by publication within the country in such media as generally adopted to notify
to all the persons concerned the making of rules. In most of the Indian statutes,
including the Act now under consideration, there is provision for the rules made being
published in the Official Gazette.
13. The court observed that even on the narrowest view of the law the notification
of the Reserve Bank must be deemed to have been published in the sense of having been
brought to the notice of the relevant public at least by November 25, 1962 and hence the
plea by the respondent that he was ignorant of the law cannot afford him any defence in
his Prosecution.
14. The court observed that to say that the second proviso refers only to what is
handed over to the ship or aircraft for carriage would make the provision practically
futile and unmeaning. If all the goods or articles retained by a passenger in his’ own
custody or carried by him on his person were outside the second proviso, and the
provision were attracted only to cases where the article was handed over to the custody
of the carrier, it would have no value at all as a condition of exemption. The goods
entrusted to a corner would be entered in the manifest and if they were not it must be
owing to the fault of the carrier, and it could hardly be that the passenger was being
penalised for the default of the carrier. If the carriage of the goods on the person or in
the custody of the passenger were exempt, there would be no scope at all for the
operation of the 2nd proviso. We therefore consider that the proper construction of the
term ’cargo’ when it occurs in the notification of the Reserve Bank is that it is used as
contra-distinguished from personal luggage in the law relating to the carriage of goods.
The latter has been defined as whatever a passenger takes with him for his personal use
or convenience, either with reference to his immediate necessities or for his personal
needs at the end of his journey. Obviously, the gold of the quantity and in the form in
which it was carried by the respondent would certainly not be "personal luggage" in the
sense in which "luggage" is understood, as explained earlier.
DECISION HELD BY THE COURT
1. Per RAJAGOPALA AYYANGAR and MUDHOLKAR JJ. (majority)
(i) On the language of s. 8(1) read with s. 24(1) of the Act, which throws on the accused
the burden of proving that he had the requisite permission to bring gold into India,
there was no scope for the invocation of the rule that besides the mere act of
voluntarily bringing gold into India any further mental condition or mens rea is
postulated as necessary to constitute an offence referred to in s. 23(1-A). Further, the
very object and purpose of the Act and its effectiveness as an instrument for the
prevention of smuggling would be entirely frustrated if a condition were to be read
into the sections qualifying the plains words of the enactment, that the accused should
be proved to have knowledge that he was contravening the law before he could be held
to have contravened the provision.
(ii) The notification was "published" and made known in India by publication and
the ignorance of it by the respondent who is a foreigner was wholly irrelevant and
made no difference to his liability. In the absence of any statutory requirement the rule
is that subordinate or delegated legislation should be published in the usual form, that
is, by publication within the country by such media as are generally adopted to notify
to all persons concerned and publication in the Official Gazette is the ordinary method
of bringing a notification or rule to the notice of persons concerned.
(iii) The term "cargo" in the notification is used in contradistinction to personal
luggage" in the law relating to the carriage of goods. The latter has been defined as
whatever a passenger takes with him for his personal use or convenience either with
reference to his immediate necessities or for his personal needs at the end of the
journey. Gold of the quantity and in the form and manner in which it was carried by
the respondent would certainly not be "personal luggage."
(iv) By majority, the appeal is allowed and the conviction of the respondent is
restored; but the sentence imposed on him is reduced to the period already undergone.
The respondent shall forthwith be released and the bail bond, if any, cancelled.
2. Per SUBBA PAO J. (dissenting)
(i) The respondent should not be held guilty of contravening the provisions of s. 8 of the
Act read with the notification issued by the Reserve Bank, as it was not proved he had
knowingly brought gold into India in contravention of the terms of the notification.
There is a presumption that mens rea is an essential ingredient of a statutory offence.
(ii) The respondent was not guilty of the offence as it had not been established that
he had knowledge of the contents of the notification.
(iii) The permission given in the notification could be taken advantage of only by a
person passing through India to a foreign country if he declared the gold in his
possession in the manifest for transit as "bottom or "transhipment cargo".
(iv) “Though the facts established in the case stamp the respondent as an
experienced smuggler of gold and though I am satisfied that the Customs authorities
bona fide and with diligence performed their difficult duties, I have reluctantly come
to the conclusion that the accused has not committed any offence under s. 23(1-A) of
the Act. In the result, the appeal fails and is dismissed.”
