The judgment established that in quasi-judicial proceedings, the principles of natural justice must be followed, and hearsay evidence may be admissible if it has probative value and is in accordance with the public policy behind the administered statute.

1. A show cause notice dated 10-6-1964 was issued to the petitioner by the Assistant Collector of Customs and Central Excise, Cochin-3, proposing to confiscate 258 wrist watches. Ext. P-1 is the notice. The notice also stated why action should not be taken against the petitioner under S.112 of the Customs Act, 1962, for being knowingly concerned in the offence of unauthorised importation of the aforesaid

watches. The petitioner submitted his explanation on 15-6-1964. (Ext. P-2). The Collector of Customs and Central Excise, the 1st respondent, passed Ext. P-3 Proceedings by which he confiscated the watches, and imposed a penalty of Rs. 2,500/- on the petitioner for being knowingly concerned in the commission of the offence. The petitioner appealed to the 2nd respondent. As the appeal was not accompanied by deposit of the penalty the appeal was dismissed on that ground.

2. The case against the petitioner was that he was concerned in the importation of 258 wrist watches from Singapore to Cochin through Mr. M. K. S. Nair, who at the relevant time was the Chief Petty Officer in I. N. S. Thrisul, that the said watches were entrusted to Mr M. K S. Nair at Singapore by the petitioner and his associate Mr. Abdul Rahiman for the purpose of the said import, that the deal was arranged by Mr. Syed Mohammed who is an ex-Chief Petty Officer of the Indian Naval Service and under whom Mr. M. K. S. Nair had formerly worked as a subordinate, that pursuant to the arrangement the petitioner and his associate Mr. Abdul Rahiman came over from Singapore to Ernakulam, where they were met by their friend Mr. Syed Mohammed, for the purpose of taking over the aforesaid watches from Mr. M. K. S. Nair, that the petitioner and Abdul Rahiman for that purpose travelled by the same plane from Singapore to Madras, and by the same train from Madras to Ernakulam and stayed in the same hotel at Ernakulam, where Mr. Syed Mohammed had already taken his room, that Sri. M. K. S. Nair brought the said watches from Singapore to Cochin in I.N.S. Thrisul according to the plan and that the said watches were seized from the possession of Mr. M. K.S. Nair when he was coming out of the vessel for the purpose of handing over them to Mr. Abdul Rahiman.

3. The main submissions of counsel for the petitioner were that Ext. P-3 order is not based upon any legal evidence, that the statements of the persons relied on in Ext. P-3 were taken behind the back of the petitioner, and that copies of these statements were not given to the petitioner, nor were those persons examined in the enquiry let alone in the presence of the petitioner.

4. In Ext. P-1 a summary of the statements given by persons from whom statements were taken was set out and that clearly showed that the petitioner was concerned in the conspiracy to import the watches without payment of the excise duty. So the materials before the 1st respondent were disclosed to the petitioner and he was given an opportunity to rebut the truth of the statements given by these persons. The petitioner never said that he wants any of these persons who gave statements to be cross-examined. In Kanda v. Government of Malaya 1962 A.C. 322 at 337 Lord Denning said:

"If the right to be heard is to be a real right it must carry with it a right to know the case against him. He must know what evidence has been given and what statements have been made affecting him; and then he must be given a fair opportunity to correct or contradict them

I think, the petitioner was given an effective opportunity of being heard. He was given a summary of the statements made by the persons in Ext. P-1 notice and there was effective opportunity to contradict or correct. But counsel for the petitioner said that the person who gave statements should have been examined in the presence of the petitioner and since the statements were made behind the back of the petitioner and since they were not formally introduced into the evidence the statements should not have b