Smuggled Gold Can Be Proved by Circumstances Even Without Section 123 Customs Act: Supreme Court

On 6 March 1968 the Anti-Corruption Bureau, Bombay searched the respondent's house in his absence and recovered 100 gold bars with foreign markings, of 24 carat purity, stitched in a cotton jacket in a steel trunk and worth Rs. 1,85,000; the customs authorities took over the gold (para 3). The prosecution case was that he remained absconding until he surrendered on 14 March 1968 (para 3). His defence was that a prosecution witness had left the gold there in his absence (para 5). The Magistrate convicted him under Section 135 of the Customs Act and the Defence of India Rules, 1962, but the Bombay High Court acquitted him (paras 2, 6-8).

The police could search and seize under the Code of Criminal Procedure on reason to believe a cognizable offence; even assuming the search was illegal, it "will not affect the validity of the seizure and further investigation by the Customs Authorities or the validity of the trial" (para 10), as Radhakishan, Shyam Lal Sharma and Alasserry Mohammed show (paras 11-15). Even without Section 123, circumstantial evidence sufficed (para 16): the prosecution may rely on circumstances from which a prudent man may infer that the goods were smuggled and the accused knew it (paras 19-21). The High Court overlooked foreign markings, 24-carat purity unavailable in India, concealment in a specially prepared jacket, huge value and abscondence (para 22). Import with or without Reserve Bank permission was within the accused's peculiar knowledge, so he had to rebut the inference; conscious possession or keeping supplied the mens rea (para 23). Read under the Mischief Rule, "acquires possession" reaches even the temporary custody of a carrier or keeper (para 23). The High Court's narrow reading of the gold-control rules was also rejected (para 26).