1. HAMOOI)UR RAHMAN, C. J.-This is an appeal from an order of a Division Bench of the former High Court of West Pakistan, Karachi Seat, dismissing in limine a writ petition filed to call in question an order of the Customs Authorities confiscating a pick-up belonging to the Qadri Silk Mills Ltd. Of which the appellant is the Managing Director.
2. The said pick-up bearing No. KAP-7149, according to the authorities, was intercepted by the staff' of the Directorate of Customs Intelligence and Investigation acting in pursuance of an information, in the early hours of the 7th of June 1965, while travelling at a high speed from the side of Fish Harbour, at the crossing of Dock Yard Road and Road No. 1 near A.I Autos Ltd., West Wharf, Karachi.
3. The three occupants of the vehicle jumped down from the vehicle and disappeared. In the jeep was, however, found seven gunny bags containing cloth of foreign origin, the import of which was restricted under Commerce Division's Notification No. 335/260/24 dated 12th June 1951.
4. On the same day, which happened to be a Monday, a first information report was lodged by the appellant herein at Kharadar police-station, West Karachi, alleging that the said pick-up had been stolen by somebody unknown.
5. According to this report, the pick-up was left at 7 p.m. Of 5-6 65 (Saturday) by driver Mohammad Hussain near Gordhandas Market off Swaleh Mohammad Street, Karachi. It was to be taken over by driver Hashim Khan of the night shift but the latter did not turn up and the vehicle remained standing on Swaleh Mohammad Street. Next day being Sunday, nobody noticed the loss of the pick-up but on Monday when the morning shift driver Mohammad Hussain again arrived he found the pick-up missing. Enquiries were made from driver Hashim Khan who reported that he had not taken over the vehicle on Saturday evening. Hence the informa--petition about the theft of the jeep was lodged at 12-30 p.m.
6. The case about the loss of the pick-up was enquired into and after complete investigation the Police reported on the 24th of October 1965, that the case "was found to be true but the culprits could not be traced."
7. A day before this, however, on the 23rd of October 1965, the Customs Authorities by a notice in writing called upon the appellant under section 177-A of the Sea Customs Act to produce evidence in support of the legal import and possession of the goods recovered and seized from the pick-- up, failing which to show cause why action should not he taken against him under section 167 (81) of the Sea Customs Act. He was also required by the same notice to show cause as to why the vehicle used for the removal of contraband goods should not be confiscated under section 168 of the Sea Customs Act.
8. The appellant submitted a written statement stating that he had no knowledge as to the circumstances in which the contraband goods came to be found in his vehicle as it was stolen from outside his factory premises presumably during the night of the 5th of June 1965. The Collector of Customs, however, by his order of the 23rd of November 1965, ordered the confiscation of the contraband goods as well as of the pick-up. The owner was, however, given the option to pay a penalty of Rs. 25,000 in lieu of confiscation of the vehicle. The Collector passed this order, because, in his view "the mere registration of theft report with the police regarding his pick--up and disclaiming the goods does not absolve Haji Razzak of the charges against him". Nevertheless, no action was taken personally against the appellant either under section 167 (8) or under section 167
(81) of the Sea Customs Act The appellant went up in appeal to the Central Board of Revenue against the order confiscating the pick-up, The Board took the view that the vehicle had been rightly confiscated by the Collector as the vehicle was involved in the act of carriage of contraband goods but reduced the penalty in lieu of confiscation from Rs. 25,000 to Rs. 15,000.
9. The appellant then went up in revision to the Government of Pakistan but the Second Secretary, Government of Pakistan, Central Board of Revenue, dismissed the revision holding that there was "nothing in section 168 of the Sea Customs Act in accordance with which possession and/ or connivance of the vehicle has to be proved." It was according to the Government sufficient that the vehicle was involved in the carrying of contraband goods. If there had been "any indication that the owner of the vehicle was also involved then apart from the confiscation of the vehicle the owner could also have been proceeded against in a Court of law as provided under section 167 (81) of the Sea Customs Act".
10. Thereafter, the Police also started a case against the appellant for lodging a false information report under section 182 of the Pakistan Penal Code, but the City Additional Magistrate of Karachi acquitted the appellant.
11. The appellant then sought to challenge the order of confiscation by a Writ Petition in the High Court, but the same was dismissed in limine, because, in the view of the High Court after "the finding that the vehicle was involved and in fact used for the removal of the goods it was clearly liable to confiscation as has been done in this case".
12. Leave was granted to the petitioner to consider whether in the facts and circumstances of this case section 168 of the Sea Customs Act was at all applicable and whether "the Collector acted beyond his power in confiscating the vehicle of the petitioner when he was not a party to the smuggling and had also no knowledge that his vehicle was used for the said purposes".
13. Section 168 of the Sea Customs Act reads as follows :- "Packages and contents included in confiscation of goods.-The confisca--petition of any goods under this Act includes any package in which they are found, and all the other contents thereof.
14. Also conveyances and animals used in removal.-Every vessel, cart or other means of conveyance, and every horse or other animal, used in the removal of any goods liable to confiscation under this Act shall in like manner be liable to confiscation.
15. Tackle, etc. Included in confiscation of vessels.-The confiscation of any vessel under this Act includes her tackle, apparel and furniture."
16. Learned counsel appearing in support of this appeal has contended that the Customs Authorities and the High Court had erred in taking the view that any vehicle used in the removal of any goods liable to confiscation under the Sea Customs Act was liable to be confiscated automatically.
17. According to the learned counsel, the words "shall in like manner be liable to confisca--petition" merely give a discretion to the authorities to confiscate but this discretion has to be exercised like every other judicial or quasi-judicial discretion upon sound principles. One of the accepted principles for the imposition of a penalty is that there must be some culpa--bility or negligence in the person sought to be made liable. Therefore, if the property of a wholly innocent person had been used without his consent, connivance or even knowledge, it would be grossly unjust to confiscate his property. It could not possibly have been the intention of a Legislature to penalise wholly innocent persons far less could persons be deprived of their property used by others after obtaining possession of same by unlawful means or under circumstances over which they could not possibly have any control.
18. Could it be said that if contraband goods were found being carried in a railway carriage, the railway carriage would be liable to confiscation ; or, if contraband goods were carried in a Government truck, the Government truck would be liable for confiscation ? The logical result of the reasoning adopted by the Customs Authorities and the High Court would indeed be that even such properties would not be immune from the liability of confiscation. This may indeed result in grave consequences which could not have been intended by the Legislature.
19. Learned counsel has placed strong reliance on a decision of a learned Single Judge of the Lahore Seat of the former High Court of West Pakistan in the case of Suleman vThe State (PLD 1962 Lah.
20. 11where it was held that the words "shall likewise be liable to confiscation" in section 11 of the Opium Act do not mean the same thing as the words "shall be confiscated". The learned Judge very aptly remarked in this case as follows :- "Supposing a person is going in his car and he is stopped at the road--side by a waiting passenger who requests for a lift to the next city and the owner of the car agrees to give him a lift gratuitously.
21. Passenger may be carrying illicit opium on his person and if it is detected, according to the interpretation given by the learned Judge, it would be imperative for the Court to order the confiscation of the car. This could never have been the intention of the Legislature. I am afraid the learned Judge has given wrong meanings to the words "shall be liable to confiscation".
22. That was a case in which a car not belonging to the accused in the case was confiscated as it was found to have been used for transporting non-excise opium. This was done without any notice to the owner of the car. The latter challenged this order first before the Sessions Judge but failed. Then he came up before the High Court which directed the District Magistrate to take fresh proceedings as regards the confiscation of the car after notice to the owner thereof.
23. Learned counsel has also referred to a case from the Indian jurisdiction, namely, Shew Pujan R.I Indrasan R.I Ltd. v. Collector of Customs and others (AIR 1952 Cal. 789This was a case in which the confiscation of the smuggled goods seized by the Customs Authorities was held to be bad, because, the option given in lieu of confiscation was not in accordance with the provisions of section 183 of the Sea Customs Act and, because, the action taken under section 182 of the said Act, in the facts and circumstances of that case, had prejudiced the person concerned by preventing him from taking advantage of the procedure provided under section 23 of the Indian Foreign Exchange Act.
24. The next case relied upon by the learned counsel is a decision of this Court in the case of Hafeez- ur-Rahman v. The State PLD 1970 SC 282). This was a case in which the appellant concerned was found guilty and convicted under section 167, item (8) (a), of the Sea Customs Act for having been found in possession of 7520 tolas of gold-thread being carried in the boot of a car No. LEB-2121 which was owned by Ch. Eid Muhammad. The findings of fact on which the conviction of the appellant was based were that he was concerned in the offence of unauthorised importation of prohibited article. This Court also found, after considering the facts, that these did give rise to a reasonable inference that the appellant was in league with the driver of the vehicle employed and knew that the contraband goods were being carried in the boot of the car without any licence or permit.
25. Learned counsel has referred to this case merely, for the purpose of showing that this Court took the view that knowledge was an essential ingredient and, therefore, since the appellant was found to have had know--ledge about the presence of the contraband goods in the boot of the car, he must have been in league with the driver of the car.
26. The learned Attorney-General, appearing on behalf of the State, concedes that the words "liable to confiscation" do not mean automatic confiscation and that they do vest the authorities with a judicial discretion which must be exercised upon correct principles, but he contends that the use of the words "in like manner" seem to indicate that the liability is co--extensive with the liability for confiscation of the goods themselves. Thus, if the goods are liable to be confiscated, the vehicle in which they are being conveyed is also liable to be confiscated in the same manner and to the same extent. It has further been contended on behalf of the State that proof of knowledge is not necessary, because, if knowledge is established, then the person would even be liable to prosecution under item 81 of section 167 itself. It is suggested that a reasonable suspicion is enough and that it is not necessary to prove that the owner of the vehicle either connived in the use of his vehicle for the purpose of smuggling goods or that he had knowledge that his vehicle would be used for such a nefarious purpose. A reasonable suspicion, it is said, is enough and this was sufficiently manifested in the facts of the present case, because the loss of the vehicle was reported after it was seized by the Police. If the loss had been genuine, then one would have expected the owner of the vehicle to report the loss immediately or latest on Monday morning, as soon as the discovery was made, that the pick-up was missing.
27. Everett Orient Line Incorporated v. Jasjit Singh (AIR 1959 Cal. 237In this case, the question that arose was as to whether the ship contravening the provisions of section 52-A of the Sea Customs Act was liable to confiscation under section 167 without proof of knowledge or intention of the owner of the vessel. The learned Judge took the view that under item (12-A) of section 167 of the Sea Customs Act, the words "liable to confiscation" do not mean that confiscation must follow automatically. Under the Sea Customs Act, there was no obligation in the Customs Authorities to con--fiscate in the first instance. It was open to them to consider all mitigating circumstances at the earliest possible moment and to do justice between the parties. From this point of view there was "no prohibition upon the Customs Authorities to consider every kind of mitigating circumstance, which will include a plea on behalf of the owners as to their absence of knowledge and complicity in the commission of the offence and the impos--sibility, or an enormous difficulty in ensuring a vessel from being tainted altogether and at all times." This, according to the learned Judge, was the position even though the offence was committed as soon as the tainted vessel entered a prohibited area in that condition, without proof of knowledge, intention or complicity of the owners of the vehicle.
28. It appears to us that there is a great deal of force in the reasoning of the learned Judge in this case. If the words "liable to confiscation" give a discretion to the confiscating authority to deprive a person of his property, then it follows that this discretion must be exercised upon the principles of natural justice; that is to say, the persons sought to be deprived of the property must be given notice to show cause, they must be furnished with adequate opportunity of putting forward their point of view and the same must receive due consideration. Furthermore, according to one of the f principles now well-accepted, no person should be deprived of his property by way of penalty unless it is clear that he is in some measure responsible for assisting or furthering the commission of the offence committed.
29. No innocent person should be unjustly punished or deprived of his property. This was the cardinal principle which was followed by the learned Judge of the Calcutta High Court in the last mentioned case. We too think that this was the correct principle upon which the authorities should proceed.
30. The question is whether that has been done in this case. The learned Attorney-General maintains that this has been done, but we are unable to agree with him, for, in the findings of the Government itself, involvement of the appellant in the act "was not proved by the Department".
31. Indeed, there was no indication even that the owner of the vehicle was also involved. If that be so, then it is difficult to appreciate on what basis even a reasonable suspicion could arise as to the complicity of the appellant. The mere fact) that the F. I. R. About the theft of the vehicle was lodged after the! Vehicle had been seized at another place by the Customs authorities does not' mean that the appellant must have had earlier knowledge of the illegal or t' improper use of the vehicle.
32. The authorities should have made some attempt to show at least that the knowledge of the seizure had been conveyed to the appellant before he lodged the report at the police-station.
33. There will, however, be no order as to costs in this case.
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