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Issues: (i) Whether Section 107 of the Customs Act, 1962 permits examination of a person who is later arraigned as an accused; (ii) whether Rule 126P(2)(ii) of the Defence of India Rules, 1962 applies to possession of smuggled or undeclared gold; (iii) whether the conviction and sentence called for interference on the facts.
Issue (i): Whether Section 107 of the Customs Act, 1962 permits examination of a person who is later arraigned as an accused.
Analysis: The expression "any person" was held to be unqualified and wide enough to include a suspect or a person subsequently prosecuted. The provision was read as part of the customs investigative scheme and not confined to third-party witnesses. The examination also did not attract the protection against self-incrimination on the facts found.
Conclusion: The examination under Section 107 was valid and the statement recorded from the appellant was admissible.
Issue (ii): Whether Rule 126P(2)(ii) of the Defence of India Rules, 1962 applies to possession of smuggled or undeclared gold.
Analysis: The rule was construed broadly to advance the gold-control policy embodied in the Defence of India Rules. Possession or control of gold in contravention of the relevant provisions was sufficient, and the fact that the gold was smuggled did not take it outside the language of the rule. The indigenous gold recovered from the residence was also held to be within the prohibition because no declaration had been made.
Conclusion: The possession of the gold amounted to a contravention under Rule 126P(2)(ii).
Issue (iii): Whether the conviction and sentence called for interference on the facts.
Analysis: The findings of possession and incriminating circumstances were concurrent and were supported by the evidence, including the recovery of foreign-marked gold, the domestic recovery, and the appellant's statement. The Court declined to reappraise the evidence in the absence of any grave perversity. On sentence, the Court emphasised the seriousness of economic offences and the need for deterrence in cases of gold smuggling.
Conclusion: No interference was warranted with either the conviction or the sentence.
Final Conclusion: The prosecution case was upheld in full, and the criminal liability for smuggling-related possession of gold remained intact with deterrent punishment affirmed.
Ratio Decidendi: The words "any person" in Section 107 of the Customs Act, 1962 are wide enough to include a person who is later prosecuted, and possession of gold in contravention of the gold-control provisions attracts liability even where the gold is smuggled.
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