In State of Maharashtra vs MH George case, the respondent i.e. Mayer Hans George who was a German national was charged for bringing gold to India without the permission of the Reserve Bank Of India as per Section 23(1A)(a) of the Foreign Exchange Regulations Act of 1947 and was sentenced for a year; as he was considered being doing so with an intent to defraud the government. The High court acquitted him, but the state made a further appeal in the Supreme Court. There, the apex court delved into question where, apart from in situations where any arrangement in that behalf is in place (a) a subordinate enactment could be said to have been passed, and (b) when it happens.
- In exercise of the powers conferred under Section 8 of the Foreign Exchange Regulation Act, 1947; the Government of India issued on August 25, 1948 a notification that gold and gold articles, among others, should not be brought into India or sent to India except with the general or special permission of the Reserve Bank of India. On the same date, the Reserve Bank of India issued a notification giving a general permission for bringing or sending any such gold provided it was on through transit to a place outside India.
- On November 24, 1962, the Reserve Bank of India published a notification dated November 8, 1962 in supersession of its earlier notification placing further restrictions on the transit of such gold to a place outside the territory of India, one of them being that such gold should be declared in the “Manifest” for transit in the “same bottom cargo” or “transshipment cargo“.
- The respondent, a German dealer, left Zurich via plane on 27th November 1962 with 34 kilos of gold-covered on his person to be conveyed in Manila.
- The plane reached in Bombay on the 28th, however; the respondent didn’t leave the plane. The Customs Authorities analyzed the manifest of the airplane to see if any gold was dispatched by any traveller, and not finding any entry they entered the plane, looked through the respondent, recouped the gold, and accused him of an offense under ss. 8(1) and 23(1-A) of the Foreign Exchange Regulation Act (7 of 1947) and under Section 167(8)(i) of the Sea Customs Act. read with a notification dated November 8, 1962, of the Reserve Bank of India which was published in the Gazette of India on 24th November.
- The respondent was initially sentenced by the Magistrate, however, acquitted by the High Court. The state made a further appeal in the Supreme Court to reinstate conviction.
- Whether mens rea is an essential ingredient regarding an offence under Section 23(1A) of the Act?
- Whether the respondent is liable for bringing gold to India under ss. 8(1) and 23(1A) of the Foreign Exchange Regulation Act (7 of 1947) which was published in the Gazette of India on 24th November 1962?
- What was the ban imposed by the Central Government and the Central Board of Revenue in exercise of the power granted an under section of the Foreign Exchange Regulation Act,1947, against person transporting prohibited goods through the vicinity of India?
- On the language of 8(1) read with Section 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 menta condition or mens rea is postulated as necessary to constitute an offence referred to in Section 23(1A).
- Further, the very object and purpose of the Act and its effectiveness as an instrument to prevent 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.
- The court held that the very object and purpose of the Act and, its effectiveness as an instrument to prevent smuggling would be entirely frustrated if a condition were to be read into 8(1) of section 23 (1A) 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.
- Addressing the second issue the apex court stated that in the case on hand, the notification by the Reserve Bank varying 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.
- The contravention contemplated by 23(1-A) of the Act is, in the present context, of an order of the Central Government issued under Section 8(1) of the Act and published in the Official Gazette on November 25, 1948 and this order was in force during all this period. For the period, till 8th November, the bringing of gold by through passengers would not be a contravention because of the permission of the Reserve Bank exempting such bringing front the operation of the Central Government’s notification.
- It was really the withdrawal of this exemption by the Reserve Bank that rendered the act of the respondent criminal. Being a general rule applicable to every person who passes through India, it would be reasonable to expect that the proper method of acquainting a person with an order which is directed to obey is to serve it on him or so publish it he would certainly know of it, but there would be no question of individual service of a general notification on every member of the public, and all that the subordinate lawmaking body can or need do, would be to publish it in such a manner that persons can, if they are interested, acquaint themselves with its contents.
- The knowledge of the existence or content of a law by an individual would not always be relevant, save on the question of the sentence to be imposed for its violation. For an Indian law to operate and be effective in the territory where it operates viz., the territory of India, it is unnecessary that it should either be published or be made known outside the country. It was “published” and made known in India by publication in the Gazette on the 24th November, and the ignorance of it by the respondent who is a foreigner is wholly irrelevant.
- Addressing the third issue, the court held that the Central Government, by notification in the Official Gazette imposed a ban on any person bringing gold into India any person who brought such gold in contravention of the notification would be guilty of an offence under this section.
- By that notification, it made the bringing of gold into India an offence. It is necessary to remember the Explanation to Section 8(1). By that Explanation it would be seen that even if the gold remained in a ship or an aircraft which is within India without it being taken out and was not removed from the ship or aircraft, it shall be deemed to be a bringing for the section. Reference to this explanation holds significance because if the act of the respondent was an offence under the section 8(1) he should not get any advantage by his having remained on the aircraft without disembarking at Bombay, for if the carrying on his person of the gold was the “bringing” of the gold into India, that he did not remove himself from the aircraft but stayed on in it would make no difference and he would be guilty of the offence by the Explanation to Section 8(1).
- The outcome, in this manner, is that the Judges of the High Court failed in clearing the respondent. The intrigue has, hence, to be permitted and the conviction of the respondent restored. In these conditions, however, the intrigue were permitted; the sentence would be decreased to the period previously experienced, which was just specialized impedance with the sentence passed by the Presidency Magistrate; however, in substance, it was not. The appeal was therefore allowed.
Majority opinion: Mens rea in Statutory Offences Excluded
- Section 23(1-A) of the Act merely refers to the contravention of the Act or the rule etc. so that it might be termed neutral in the present context, in that it neither refers to the state of the mind of the contravener by the use of the expression such as “wilfully”, “knowingly”, etc nor does it create an absolute liability.
- Where the statute does not contain the word “knowingly”, the first thing to do is to examine the statute to see whether it required the ordinary presumption that mens rea applies or not. When one turns to the main provision whose contravention is the subject of the penalty imposed by Section 23(1A) viz. 8(1) in the present context, one reaches the conclusion that there is no scope for the invocation of the rule of mens rea. It lays an absolute embargo upon persons who without the special or general permission of the Reserve Bank and after satisfying the conditions 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 Section 24(1) of the Act. 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 his pocket it is possible to accept the contention that such a person did not “bring” the gold into India within the meaning of Section 8(1).
- Similar considerations would apply to a case where the aircraft on a through a 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 intending to bring 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 Section 8(1) than that conscious physical act of bringing. If then under Section 8(1) the conscious physical act of “bringing” constitutes the offence, Section 23(1-A) does not import any further condition for imposing liability than what it provided for in Section 8(1). On the language, therefore, of Section 8(1) read with Section 24(1) we are clearly of the opinion that there is no scope for the invocation of the rule that besides the mere act of voluntarily bringing gold into India any further mental condition is postulated as necessary to constitute an offence of the contravention referred to in Section 23(1-A).
Regarding essentially because it depicted the offence as a grave social wrong, strict liability was imposed. The courts need to apply the law diligently regarding the use of the assumptions, as everything relies upon the realities of the case, just as any other statutory offence.
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