Landmark Judgements

State of Maharashtra v. MH George,1965 SCR (1) 123

Facts:

In this case, a German dealer was traveling from Zurich to Manila via Bombay with 34 kilos of gold covered on his person. The Indian Government had regulations in place under the Foreign Exchange Regulation Act, stating that gold could not be brought into or sent out of India without permission from the Reserve Bank of India (RBI). However, there was a general permission granted by the RBI for the transit of gold intended for destinations outside of India.

On November 8, 1962, the RBI issued a new notification with additional restrictions on the transit of gold, requiring it to be declared in the manifest as "same bottom cargo" or "transhipment cargo." When the respondent's plane reached Bombay, he did not disembark. Customs authorities checked the manifest but found no entry related to gold dispatch by any traveller. They then searched the plane, found the gold on the respondent, and seized it. The respondent was charged with offenses under the Foreign Exchange Regulation Act and the Sea Customs Act, based on the RBI notification. Initially, the Magistrate sentenced the respondent, but the High Court later acquitted him. The state has now appealed to the Supreme Court to reinstate the conviction.

Issues:

Is mens rea an essential element in establishing an offense under section 23(1A) of the Foreign Exchange Regulation Act?

Does the respondent bear liability for bringing gold into India under sections 8(1) and 23(1A) of the Foreign Exchange Regulation Act (7 of 1947), which was published in the Gazette of India on November 24, 1962?

Decision:

The Court ruled that mens rea, or a specific mental state, is not required to establish an offense under section 23(1A) of the Foreign Exchange Regulation Act. The Court emphasized that the Act's objective is to prevent smuggling, and imposing a knowledge requirement would frustrate this purpose. Therefore, the plain language of section 8(1) read with section 24(1) of the Act establishes an absolute prohibition on bringing gold into India without permission. The Court also held that the publication of notifications in the Official Gazette serves as sufficient notice, regardless of the accused's knowledge. The Court further clarified that remaining on an aircraft without disembarking does not absolve the accused of liability if they carried gold, as the act of bringing the gold into India is deemed to have occurred. Ultimately, the Court concluded that the accused was guilty of contravening the Act, and the conviction was restored.

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