Introduction

• The entire criminal law is based on the concept of mens rea or mental element of the offender.
• Mens rea, of the offender, is a culpable state of mind capable of committing the crime.
  • To commit a crime, there should be the presence of bad or malign intention. 

Facts

• Mayer Hans George, a German smuggler, left Zurich by plane on 27th November 1962 with 34 kilos of gold concealed on his person to deliver it in Manila.
• The plane arrived at Bombay on 28th of November.
• George did not come out of the plane.
• The Customs Authorities examined the aircraft to see if any gold was consigned by any passenger and found George.
• On removing the jacket which George was wearing, it was found to have 28 specially made compartments, 9 of which were empty and the remaining 19 pockets had 34 bars each weighing approximately 1 kg and seized it.
• George was convicted by the Presidency Magistrate of Bombay and sentenced to rigorous imprisonment for one year.
• After the appeal in High Court, HC acquitted George allowing the legal defence that he raised.
• An appeal by state was filed as a Special Leave Petition under Article 136 of the Constitution of India, 1950.
• The bench was comprised of Hon’ble Justice K. Subbarao, Hon’ble Justice N. Rajgopala Ayyangar and Hon’ble Justice R. Mudholkar.
• The pivotal issue in the case was whether mens rea is an essential ingredient in respect of the offence charged under Section 23(1)(a) of the Foreign Exchange Regulation Act, 1947 (FERA).
• The respondent (George) sought to support the judgment of the High Court by contending that mens rea was an essential ingredient of the offence charged.

Issues Involved

1. Whether mens rea is an essential ingredient in respect of an offence under Section 23(1A) of the Act?
2. Whether the respondent is liable for bringing gold to India under Sub Section 8(1) and 23(1-A) of the FERA which was published in the Gazette of India on 24th November 1962?
3. What was the scope of ban imposed by the Central Government and the Central Board of Revenue in exercise of the power granted under Section 8 of the Foreign Exchange Regulation Act, 1947, against person transporting prohibited goods through the vicinity of India?

Observations

• The following test was propounded by the court to ascertain whether mens rea can be imputed on any provision, which is silent on the same:
  • Firstly, where the statute does not contain the word “knowingly”, the first thing to do is to examine the statute to see whether the ordinary presumption that mens rea is required applies or not.
  • Secondly, the court of law is required to have regard to the subject matter of the legislation.
• The court applied the above test on the facts of the present case as follows:
  • The interpretation of the main provisions involved in the case implies that there is no scope for the invocation of the rule of mens rea.
  • The Act is designed to safeguard and conserve foreign exchange which is essential to the economic life of a developing country.
    • The provisions must therefore be stringent and so framed as to prevent unauthorized and unregulated transactions which might upset the scheme underlying the controls.
    • The penal provisions are aimed at eliminating smuggling which is a concomitant of controls over the free movement of goods or currencies.
  • Thus, the fact 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 will frustrate the purpose of the act.
• The Court referred to the cases of Bruhn v. King (1909), Regina v. St Margarets Trust Ltd. (1958) and Indo-China Steam Navigation Co. Ltd. v. Jasjit Singh, Addl. Collector of Customs, Calcutta (1964) etc.

Conclusion

On 24th August,1964, the appeal was allowed, and the conviction of the respondent was restored but sentence imposed was reduced to the period already undergone.

Note

Section 8(1) of Foreign Exchange Regulation Act, 1947: The Central Government may, by notification in the Official Gazette, order that, subject to such exemptions, if any, as may be contained in the notification, no person shall, except with the general or special permission of the Reserve Bank and on payment of the fee, if any prescribed, bring or send into India any gold or silver or any currency notes or bank notes or coin whether Indian or foreign.

Explanation. —The bringing or sending into any port or place in India, of any such article as aforesaid intended to be taken out of India without being removed from the ship or conveyance in which it is being carried shall nonetheless be deemed to be a bringing or as the case may be, sending into India of that article for the purposes of this section.

Section 8 has to be read in conjunction with Section 23 (1-A) of Foreign Exchange Regulation Act, 1947 which imposes penalties on persons contravening the provisions of the Act.

Sub-section (1) penalises the contravention of the provisions of certain named sections of the Act which do not include Section 8, and this is followed by sub-section (1-A) which is residuary and is directly relevant in the present context and it reads:

Sub-section (1-A) whoever contravenes— (a) any of the provisions of this Act or of any rule, direction or order made thereunder, other than those referred to in sub-section (1) of this section and Section 19 shall, upon conviction by a Court, be punishable with imprisonment for a term which may extend to two years, or with fine, or with both; (b) any direction or order made under Section 19 shall, upon conviction by a Court be punishable with fine which may extend to two thousand rupees.

hese have to be read in conjunction with the rule as to onus of proof laid down in Section 24(1) of FERA which enacts: (1) Where any person is prosecuted or proceeded against for contravening any provisions of this Act or of any rule, direction or order made thereunder which prohibits him from doing an act without permission, the burden of proving that he had the requisite permission shall be on him.

The Reserve Bank by a notification of even date (August 25, 1948) granted a general permission in these terms: The Reserve Bank of India is hereby pleased to give general permission to the bringing or sending of any gold or any such silver by sea or air into any port in India:

Provided that the gold or silver

(a) is on through transit to a place which is outside both

(i) the territory of India.

(ii) The Portuguese territories which are adjacent to or surrounded by the territory of India and

(b) is not removed from the carrying ship or aircraft except for the purpose of transhipment. On November 8, 1962, however, the Reserve Bank of India in supersession of the notification just now read, published a notification (and this is the one which was in force at the date relevant to this case) giving general permission to the bringing or sending of gold, gold-coin etc. into any port or place in India when such article is on through transit to a place which is outside the territory of India: Provided that such articles if not removed from the ship or conveyance in which it is being carried except for the purpose of transhipment:

Provided further that it is declared in the manifest for transit as same bottom cargo or transhipment cargo.

This notification was published in the Gazette of India on November 24, 1962.