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HIGH COURT OF CALCUTTA
H. K. BOSE, DEBABRATA MOOKHERJEE
BAL KISSEN KEJRIWAL - Appellant
Versus
COLLECTOR OF CUSTOMS - Respondent
A. F. O. O. 204 Of 1958
Decided On : SEPTEMBER 19, 1961
SEA CUSTOMS ACT - Section 167(8) - Penalty - Imposition - Principles of natural justice - Violation - Bias - Adjudicating officer acting as prosecutor - Validity of order of penalty - Certiorari - Quashing of order.
Fact of the Case:
The appellant, an employee of Palriwala Brothers Ltd., was found to be involved in an attempt to illegally export groundnut oil cakes. The Customs authorities issued a show cause notice to the appellant and others, and after considering their explanations, imposed a penalty of Rs. 30,000/- on the appellant under Section 167(8) of the Sea Customs Act.
Finding of the Court:
The Court found that the appellant was denied a fair hearing as the Customs authorities had mixed up two different proceedings against the appellant and had not given him a proper opportunity to inspect the documents relied upon against him. The Court also found that the adjudicating officer, who had been involved in the investigation of the case, was biased against the appellant and had acted as both judge and prosecutor.
Issues: 1. Whether the appellant was denied a fair hearing by the Customs authorities? 2. Whether the adjudicating officer was biased against the appellant? 3. Whether the order of penalty imposed on the appellant was valid?
Ratio Decidendi: 1. The Court held that the appellant was denied a fair hearing as the Customs authorities had mixed up two different proceedings against the appellant and had not given him a proper opportunity to inspect the documents relied upon against him. The Court observed that the appellant had requested for inspection of documents, but the Customs authorities had not responded to the request in a timely manner. The Court also noted that the Customs authorities had offered inspection of documents after the order of penalty had been made, which was futile. 2. The Court held that the adjudicating officer was biased against the appellant as he had been involved in the investigation of the case and had taken an active part in the collection of evidence against the appellant. The Court observed that the adjudicating officer had even given evidence against the appellant in a criminal trial arising out of the same incident. The Court held that the adjudicating officer's involvement in the investigation and prosecution of the case disqualified him from adjudicating the matter. 3. The Court held that the order of penalty imposed on the appellant was invalid as it was made in violation of the principles of natural justice and by a biased adjudicating officer.
Final Decision: The Court allowed the appeal, set aside the judgment and order of the lower court, and quashed the order of penalty imposed on the appellant.
( 1 ) THIS appeal is brought from an order of P. B. Mukharji, J. , dated January 22, 1958, dismissing an application under Article 226 of the Constitution and discharging a Rule Nisi requiring the respondents to show cause why a penalty of Rs. 30,000/- imposed on the appellant under Section 167 (8) of the Sea Customs Act should not be set aside or quashed.
( 2 ) THE appellant is a son of one Kanaiyalal Kejriwal, a Director of the Firm of Palriwala Brothers Limited. It is said that the appellant signed several shipping documents as export superintendent, and was thus concerned in, an attempted illegal exportation of groundnut oil cakes, mis-described as sesame oil cakes by the said Palriwala Brothers.
( 3 ) PROCEEDINGS were accordingly taken against the appellant by the Customs authorities which terminated in the imposition of the personal penalty referred to above by" S. K. Srivastava, Additional Collector of Customs, on June 19, 1956.
( 4 ) THE said order of imposition of penalty was challenged in a writ petition before P. B. Mukherji, J. , which eventually failed. Various objections to the validity of the order were raised, all of which were negatived by the learned Judge. The objections were dealt with, partly in the order under appeal, and partly in the order made in a connected application being Matter No. 140 of the 1956 (Palriwala Brother Ltd. v. Collector of Customs, Calcutta, disposed of by the same learned Judge on December 33, 1957. That order is an annexure to the paper book of the present appeal to which reference will be required to be made for disposal of this appeal.
( 5 ) COUNSEL for the appellant stressed in the main two points without abandoning others and invited our decision on them. They are, first, that the proceedings and the resultant order of the Additional Collector of Customs have been vitiated by reason of the violation of the principles of natural justice, in that the appellant had not had a fair hearing before the adjudication was made; and secondly, the order cannot be sustained on the ground of bias, since the person who made it had acted both as Judge and prosecutor.
( 6 ) IN order to examine the validity of these two contentions, it becomes necessary to consider the facts in some detail. Reference will also require to be made to certain other cognate proceedings without which the objections on the ground of bias and denial of fair hearing will be nearly unintelligible.
( 7 ) ACCORDING to the customs authorities Shew Sakti Oil Mills Ltd. and Palriwala Brothers Ltd. , are associate concerns; the former carrying on the business of shippers of oil cakes, and the latter acting more or less as the managing agents of the former. The three Palriwala brothers, Gouri Sankar Palriwala, Gajanand Palriwala and Satyanarayan Palriwala have controlling interest over the Shew Sakti Oil Mills and accordingly manage the business of the firm. The appellant's father Kanhaiyalal Kejriwal is a director of the firm of Palriwala Brothers Ltd. , and at all material times, the appellant acted as export superintendent of parliwal Brothers Limited.
( 8 ) IN the year 1955 the export of groundnut oil cakes was permitted by the Government of India only at a very high rate of duty, and such export was strictly controlled by license. In September of that year the Customs authorities received three shipping bills numbering E457, E458 and E459 (AP) and other connected documents for export of what had been described as sesame oil cakes. Those documents were submitted by Bharat Marble Co. , Bharat Mineral Industries and Gopaldas Saksoria and Co. , all carrying on business in Calcutta.
( 9 ) IN October, 1955, information reached the Customs authorities that the goods which were about to be exported were really groundnut oil cakes and not sesame oil cakes as declared in the shipping bills. The whole consignment was accordingly detained, and upon inspection it appeared that the goods had been misdesc
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